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holy moley!!!
http://finance.yahoo.com/q?s=0616.hk
witm's gonna be a ten bagger!!!! wooohoooo!!! sorry. got excited....
put 0616.hk into the ticker for yahoo--should resume trading tonight 1130 eastern time--eager to see what happens...
WITM news--with share exchange, WITM at this moment worth about $7
Wits Basin Precious Minerals Inc
Easyknit Enterprises Agrees to Merge With Prospector Wits Basin
By Kyunghee Park
July 17 (Bloomberg) -- Easyknit Enterprises Ltd., a Hong Kong-based maker of knitted textiles, agreed to merge with Wits Basin Precision Minerals Inc., a Minneapolis-based prospector, as part of the Asian company's plan to diversify its business.
Easyknit will issue 3.35 million shares, valued at HK$8.8 billion ($1.1 billion), to Wits Basin shareholders in the merger, the company said in a statement to the Hong Kong stock exchange today. Easyknit's shares, suspended since April 20, will resume trading tomorrow.
``The merger will allow Easyknit to diversify into mining, a sector in which the directors foresee attractive growth prospects, and reduce its reliance on its current businesses which operate in a highly competitive environment with no significant barriers to entry,'' the company said in the statement.
Easyknit, unprofitable since the first half of its 2005 financial year, said Dec. 1 that it was seeking to enter gold and minerals mining, starting merger talks with Wits Basin. It had also agreed to invest in China's SSC-Sino Gold Consulting Co.
Easyknit International Holdings Ltd., Easyknit Enterprises' largest shareholder, will hold 19 percent of the merged company, the statement said. Wits Basin will be the surviving entity, with its assets the main ones of the merged company, it said.
The shares of Easyknit International, also suspended since April 20, will resume trading tomorrow, the statement said.
To contact the reporter on this story: Kyunghee Park in Hong Kong at kpark3@bloomberg.net
Last Updated: July 17, 2007 08:44 EDT
WITM news--with share exchange, WITM at this moment worth about $7
Wits Basin Precious Minerals Inc
Easyknit Enterprises Agrees to Merge With Prospector Wits Basin
By Kyunghee Park
July 17 (Bloomberg) -- Easyknit Enterprises Ltd., a Hong Kong-based maker of knitted textiles, agreed to merge with Wits Basin Precision Minerals Inc., a Minneapolis-based prospector, as part of the Asian company's plan to diversify its business.
Easyknit will issue 3.35 million shares, valued at HK$8.8 billion ($1.1 billion), to Wits Basin shareholders in the merger, the company said in a statement to the Hong Kong stock exchange today. Easyknit's shares, suspended since April 20, will resume trading tomorrow.
``The merger will allow Easyknit to diversify into mining, a sector in which the directors foresee attractive growth prospects, and reduce its reliance on its current businesses which operate in a highly competitive environment with no significant barriers to entry,'' the company said in the statement.
Easyknit, unprofitable since the first half of its 2005 financial year, said Dec. 1 that it was seeking to enter gold and minerals mining, starting merger talks with Wits Basin. It had also agreed to invest in China's SSC-Sino Gold Consulting Co.
Easyknit International Holdings Ltd., Easyknit Enterprises' largest shareholder, will hold 19 percent of the merged company, the statement said. Wits Basin will be the surviving entity, with its assets the main ones of the merged company, it said.
The shares of Easyknit International, also suspended since April 20, will resume trading tomorrow, the statement said.
To contact the reporter on this story: Kyunghee Park in Hong Kong at kpark3@bloomberg.net
Last Updated: July 17, 2007 08:44 EDT
oops--sorry--that's already been posted--good luck to all longs--looks extremely good right now!
eager to watch 0616.hk tonight!!!!!
Wits Basin Precious Minerals Inc
Easyknit Enterprises Agrees to Merge With Prospector Wits Basin
By Kyunghee Park
July 17 (Bloomberg) -- Easyknit Enterprises Ltd., a Hong Kong-based maker of knitted textiles, agreed to merge with Wits Basin Precision Minerals Inc., a Minneapolis-based prospector, as part of the Asian company's plan to diversify its business.
Easyknit will issue 3.35 million shares, valued at HK$8.8 billion ($1.1 billion), to Wits Basin shareholders in the merger, the company said in a statement to the Hong Kong stock exchange today. Easyknit's shares, suspended since April 20, will resume trading tomorrow.
``The merger will allow Easyknit to diversify into mining, a sector in which the directors foresee attractive growth prospects, and reduce its reliance on its current businesses which operate in a highly competitive environment with no significant barriers to entry,'' the company said in the statement.
Easyknit, unprofitable since the first half of its 2005 financial year, said Dec. 1 that it was seeking to enter gold and minerals mining, starting merger talks with Wits Basin. It had also agreed to invest in China's SSC-Sino Gold Consulting Co.
Easyknit International Holdings Ltd., Easyknit Enterprises' largest shareholder, will hold 19 percent of the merged company, the statement said. Wits Basin will be the surviving entity, with its assets the main ones of the merged company, it said.
The shares of Easyknit International, also suspended since April 20, will resume trading tomorrow, the statement said.
To contact the reporter on this story: Kyunghee Park in Hong Kong at kpark3@bloomberg.net
Last Updated: July 17, 2007 08:44 EDT
easyknit news out--should resume trading tomorrow (18th hk time)
ot -- I'll check it out.
lol--so am I!
if hong kong approves the merger, and easyknit resumes trading, this is gonna fly--and could happen any day
today from alfie on yahoo....
Request for Daily Updates (3 Ratings) 25-Jun-07 08:09 pm Dear Shareholders,
Well, I am very happy to report that the overall effort was successful and we have attained our goals, with a small cushion to spare.
Today, the submission of the new information was made to the HK exchange and we now sit and await the response, which could conceivably come in at any time.
I want to personally thank all of the shareholders that did participate in this effort. You should all be well commended for your proactive participation in this event.
Your work will have an impact upon things, and for that you can be proud.
I will keep all informed as I am able and hopefully soon enough we will have some good news!
Have a nice evening.....
WITM moving...........................................
from yahoo, doug of signature fund:
Re: WITM Questions (Alfie) (3 Ratings) 22-Jun-07 05:08 pm Dear PIP,
Here are your answers:
1. We will reach the goal of having enough shares to qualify for the due diligence request of the HK exchange and so that is no longer an issue. It has never been an issue in my mind, because I am closely in touch with enough shares to accomplish the task on my own. It is now just an issue of getting all to perform as advertised and I believe that this will get done and so this is really a nonissue.
2. I am not aware of any deadline to provide the next round of answers. Regardless we will be able to do so within a very short period of time from today, and so that is not an issue, either, at least as far as I am aware.
3. Yes, WITM could "officially" put out a request, not through a PR, but through its transfer agent. In doing that however, it would necessitate a mass mailing and far more time and effort than has been undertaken by me and a few others. We agreed to step in and assist in order to prevent the time, energy and expense of having to do a general mailing to 4,922 shareholders, when we have been able to accomplish the same effect with far fewer individuals, AND in a far shorter period of time.
4. Yes, the imposition of a "quiet period" is difficult on everyone. However, when the boss speaks, you need to listen, eh?
5. I certainly do not beleive that you are either uneducated or unreasonably negative. However, I do take issue with your characterization that this is "starting to smell bad". I cannot understand how anyone could possibly arrive at that conclusion, save for the fact that they just do not completely understand the series of events that have lead us all to this point.
If you presume, which is very reasonable to do, that the HK exchange has vetted this deal up, down and sideways, and is now comming back with questions and requests of this nature, they could very easily have come up with any number of reasons to deny this merger a very long time ago, had they been so inclined.
The fact that they are now asking for such detailed submissions indicates to me, as someone who has been down this path many, many times before (at least domestically), that they are now down to the proverbial "short hairs" in the process.
Granted there remains a possibilty that the deal will be denied. Granted this is the third time that WITM has answered the so-called last question. But clearly we are well into the vetting process and there is no need for disdain.
I hope that I have answered all of your questions and addressed all of your concerns adequately. I believe that if you look at this objectively you will see that this has really been a very well thought out process and has been conducted far more efficiently and cost effectively than if it had been done in any other manner.
If you have any more questions or concerns I will be most happy to address them as I am available to do so.
Have a very nice day and a peaceful weeked. This has been a very tough but productive week for the WITM shareholders, and I am generally proud of their performance, having answered the call valiantly thusfar.
Keep up the great work everyone, and keep the faith!
yup. that's why some folks are excited! if we get hk approval should be clear sailing, and it's looking good so far..........
"I think they are doing a stellar job to meet my long term goals."
lol
from yahoo--alfie is doug who manages the Signature Fund--
Re: Alfie (Not rated) 18 minutes ago The HK exchange is concerned that there is the possibility of a "change of control" in the offing, relative to the pending merger with EK, despite the assurances of WITM management that this is not in the cards.
The definition of a change of control according to the HK regulators is a grouping of shareholders acting in concert that would constitute a group in excess of 30% of the total amount of the oustanding shares of WITM.
The HK securities commission wants for WITM to provide assurance that there could not possibly be 30% of the outstanding shares of the company that might group together for such purpose.
The insiders of the company do not control enough shares in order to proivde such assurance on their own and therefore need to gather more shares under affidavit in order to satisfy this most recent request.
I have agreed to assist management in this task and that is why I called for the larger shareholders to contact me, under the theory that we could gather the share affidavits needed from them in relatively short order.
We are currently engaged in the proces. If anyone would like to help us in this task, please feel free to contact me and I will put you on the list to receive the new affadavits upon their arrival.
There is nothing untoward or exclusionary about this, I am merely trying to fulfill a request and to assist as I can. Presumably this will not prove to be an overly burdensome challenge and we can move past this in short order, but this is now what we are trying to accomplish.
I hope that this helps to clear up some of the confusion surrounding this matter.
Have a nice day everyone!
ladies and germs, fasten your seatbelts!
waiting now for merge approval by hong kong exchange
WITM set to explode
post on yahoo...
After HKSE Approves Merger... (1 Rating) 6-Jun-07 01:21 am EK investors will be able to trade their stock again for the first time since 2 major events: The definitive agreement for the merger has been finalized at roughly the previously aggreed upon share ratio, and the HKSE will have approved the merger (the single biggest hurdle to implementation of the merger).
These events result in a dramatic reduction in risk (for EK investors) of the merger not happening and the EK share price plunging back to less than .60 HK dollars. Do you know what happens when that level of risk diminishes dramatically?
The risk reward ratio shifts and the share price reacts accordingly to maintain balance; in this case by going up. As I explained in a previous post there is no overhead resistance in the 0616.hk chart until $4.00 HK, which is equivalent to over $10.50 US for WITM shares.
After HKSE Approves the Merger, the HKSE mandated quiet period for WITM will be over. All progress by WITM in coordination with Madarin SSC with regards to LOIs and closure of deals on already known LOI's for production mining properties and any validation of rumours of partnering with a large gold mining company will be made available via press release quickly.
These, by the way, are the only fundamentals for which EK and WITM can justify current valuation of WITM shares post merger and ADR, so it will be extremely imporant that they are making progress in this area. Share prices will reflect this data after HKSE approval has been digested and before ADR is implemented...
So Pete asked what WITM will do after the merger share price wise? Well, 1.40 to 1.80 is a range of resistance, but depending on the force of the move this could be easily broken in the first day or two after the merger approval because it is only 20-30% away from 1.20-1.30 breakout level.
If this occurs there are no more pre-existing share price resistance levels. And mind you, this WITM chart is a traders' dream right now if it breaks out here. WITM does have a history of moving up explosively too... So $2.00, $3.00, $5.00 are reasonable near term prices but it is anybody's guess.
These are my beliefs but please come to your own conclusions and invest accordingly.
WITM chart
WITM moving again.................
WITM chart
chart says next week "could" be huge.....
WITM moving.................
more yahoo
6 Unsecured Promissory Notes (Not rated) 8 minutes ago My guess is that the new company will be incorporated in the BVI through the shell company that exists there. They have zero tax liabilities in the BVI so that would be extremely advantageous. From what I understand about foreign investment in China that the tax rate is currently 11% so it makes great sense to move to the BVI. I also believe that money was funneled to China Global BVI to make some type of earnest money or down payment on the properties in China to take advantage of the foreign investment tax break. Now there were six unsecured promissory notes issued. Why would you need six when you could loan it all out at one time? I think they used these for each property transaction. From what it looks like to me, we still have two more properties we haven't been told about yet.
chart looks like turning positive too today--eager to see if more positive movement tomorrow
nice yahoo post
View all Topics | View all Messages < Newer Topic | Older Topic >
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Messages in Topic Minimum rating: 5 stars 4 stars 3 stars 2 stars + unrated 1 star + unrated What's this? News within the quarterly report (1 Rating) 17-May-07 02:31 pm http://www.secinfo.com/d12TC3.uQ98.htm
Page 14:
In April 2007, we entered into option agreements to acquire from SSC Mandarin Group Limited (“SSC Mandarin Group”) 100% of the equity interest in two corporations, each of which were shell corporations or had nominal assets at the time: (i) China Global Mining Resources Limited, a British Virgin Islands corporation (“China Global BVI”), for $10,000 HK Dollars, and (ii) China Global Mining Resources Limited, a Hong Kong corporation, for $10,000 HK Dollars.
In April and May 2007, we loaned an aggregate of $3,730,000 to China Global BVI under 6 unsecured promissory notes. Each of the promissory notes accrues interest at a rate of 8%, and are payable on June 30, 2007.
Page 17:
We anticipate the rate of spending for the remaining fiscal 2007 exploration expenses will increase due to the additional drill rigs at the Bates-Hunter...
keep accumulating while silence persists imo--notice in 10Q activity behind scenes, buying 2 Hong Kong mining shells as merger looms.....
WITM news morsels in 10Q--buying Chinese shells for merger which appears on track.....
WITM chart
turning up again here..........
WITM chart--turning back up.....
wag... 5/22/07 at 7:23 AM EST
chart holding up well..................
SOYO news
SOYO Group Inc. Reports Results for the 4th Quarter and Year Ended December 31, 2006
Tuesday April 3, 8:00 am ET
Sales Increase 43 Percent and Company Earns .01 Per Share
**Fiscal 2006 Net Sales: $56,758,688 Million
**Fiscal 2006 Net Income: $462,049 Thousand
**Fiscal 2006 Net income Per Share: $.01
ONTARIO, Calif., April 3, 2007 (PRIME NEWSWIRE) -- SOYO Group Inc. (OTC BB:SOYO.OB - News) today reported operating income from continuing operations for the quarter ended December 31, 2006 of $566,706 compared to operating Income from continuing operations of $651,843 for the quarter ended December 31, 2005. The Company earned $0.01 per share in both periods. Net revenues for the quarter ended December 31, 2006 were $24,417,902, an increase of $7,845,131 or 47.3% over revenues of $16,572,771 for the quarter ended December 31, 2005. The increase for the quarter reflects continuing increased sales volume to Chain or Box retailers and the TV Shopping Networks as a result of its continuing rollout of LCD Product lines.
ADVERTISEMENT
The Company reported operating income from continuing operations for the year ended December 31, 2006 of $1,519,271 compared to operating income from continuing operations of $514,920 for year ended December 31, 2005, an increase of 295%. Net revenues for the year ended December 31, 2006 were $56,758,688, an increase of $18,495,656 or 48% over revenues of $38,263,032 for the year ended December 31, 2005. The gross margin was 12.4% for the quarter ended December 31, 2006, compared to 11.5% for the quarter ended December 31, 2005. Gross margin for the year ended December 31, 2006 was 16.3% compared to 12.4% for the year ended December 31, 2005.
Total costs and expenses for the year ended December 31, 2006 increased by $3,527,118 (84%) to $7,705,168 when compared to total costs and expenses of$4,178,050 for the year ended December 31, 2005. The increased costs during the year resulted mainly from mandatory FASB 123 R compliance, increased costs of consultants, increased legal fees, and increased interest expense. Interest expense, net, increased for the year by $772,333 primarily due to new programs the Company began to ensure adequate levels of inventory for sale.
Statements in this press release may be ``forward-looking statements'' within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about the Company's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict.Therefore, actual outcomes and results may, and probably will, differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and those risks discussed from time to time in the Company's filings with the Securities and Exchange Commission filings, including the Risk Factors included in the Form 10-K for the year ended December 31, 2006 and the Management's Discussion and Analysis of Financial Conditions and Results of Operations in the Form 10-K for the year ended December 31, 2006. In addition, general industry and market conditions and growth rates, and general economic conditions could affect such statements. Any forward-looking statements speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statements to reflect events or circumstances after the date of this release.
About SOYO Group Inc.
SOYO Group Inc. is a provider of computer, consumer electronics, and broadband telecommunications products and services. Headquartered in Ontario, California, with additional sales offices in South America, SOYO Group sells its products through an extensive network of authorized distributors, resellers, system integrators, VARs, retailers, mail-order catalogs and e-tailers, including Best Buy, Circuit City, Staples, Micro Center, Target.com, Walmart.com, eCost.com, Fry's Electronics, PC Mall, and Office Depot, among others. Products are sold under the Go Video, Dragon, Onyx, Dymond, Honeywell and SOYO brand names. For more information, please visit http://www.soyogroup.com.
Consolidated Balance Sheets
December 31,
---------------------------------------------------------------------
2006 2005
---------------------------------------------------------------------
ASSETS
---------------------------------------------------------------------
CURRENT
---------------------------------------------------------------------
Cash and cash equivalents $ 1,501,040 $ 828,294
---------------------------------------------------------------------
Accounts receivable, net of
allowance for doubtful
accounts of $388,958 and
$589,224 at December 31, 2006
and 2005 respectively 12,878,732 7,278,520
---------------------------------------------------------------------
Inventories 7,792,621 7,991,030
---------------------------------------------------------------------
Prepaid Expenses 36,633 20,984
---------------------------------------------------------------------
Income tax refund receivable 0 0
---------------------------------------------------------------------
---------------------------------------------------------------------
Total Current Assets 22,209,026 16,118,828
---------------------------------------------------------------------
---------------------------------------------------------------------
Property and Equipment 711,015 867,122
---------------------------------------------------------------------
Less: accumulated depreciation
and amortization (159,300) (115,480)
---------------------------------------------------------------------
551,715 751,642
---------------------------------------------------------------------
Deferred Income Tax Asset 177,177 0
---------------------------------------------------------------------
Deposits 243,095 36,920
---------------------------------------------------------------------
---------------------------------------------------------------------
Total Assets $ 23,181,013 $ 16,907,390
---------------------------------------------------------------------
December 31,
---------------------------------------------------------------------
2006 2005
---------------------------------------------------------------------
LIABILITIES
---------------------------------------------------------------------
CURRENT
---------------------------------------------------------------------
Accounts payable 16,073,617 13,977,579
---------------------------------------------------------------------
Total Accounts Payable 6,073,617 13,977,579
---------------------------------------------------------------------
---------------------------------------------------------------------
Accrued liabilities 539,767 1,287,108
---------------------------------------------------------------------
Advances from officers,
directors and
major shareholder 0 0
---------------------------------------------------------------------
Business Loan 0 0
---------------------------------------------------------------------
Short Term Loan 100,000 165,000
---------------------------------------------------------------------
---------------------------------------------------------------------
Current Liabilities 16,713,384 15,429,687
---------------------------------------------------------------------
---------------------------------------------------------------------
Long Term Payable 3,735,198 0
---------------------------------------------------------------------
Total Liabilities 20,448,582 15,429,687
---------------------------------------------------------------------
EQUITY
---------------------------------------------------------------------
Class B Preferred stock,
$0.001 par value, authorized
- 10,000,000 shares, Issued
and outstanding - 2,797,738
shares in 2006 and 2005 1,918,974 1,702,486
---------------------------------------------------------------------
Preferred Stock Backup
Withholding (149,945) (84,999)
---------------------------------------------------------------------
Common stock, $0.001 par value
Authorized - 75,000,000 shares,
Issued and outstanding -
49,025,511 shares
(48,681,511 shares - 2005) 49,026 48,682
---------------------------------------------------------------------
Additional paid-in capital 17,866,531 17,225,738
---------------------------------------------------------------------
---------------------------------------------------------------------
Accumulated deficit (16,952,155) (17,414,204)
---------------------------------------------------------------------
Total Shareholders' Equity 2,732,431 1,477,703
---------------------------------------------------------------------
Total Liabilities plus
Shareholders' Equity $ 23,181,013 $ 16,907,390
---------------------------------------------------------------------
SOYO Group, Inc. and Subsidiary
Consolidated Statements of Operations
Year Ended December 31,
---------------------------------------------------------------------
2006 2005 2004
---------------------------------------------------------------------
Net revenues $56,758,688 $38,263,032 $ 32,426,414
---------------------------------------------------------------------
Cost of revenues,
including inventory
purchased from SOYO
Computer, Inc. of $0,
$14,004,259 and
$20,188,354
in 2005, 2004 and
2003 respectively 47,534,249 34,905,874 30,210,042
---------------------------------------------------------------------
Prior years'
purchase discounts
and allowances
settled in 2005 0 (1,335,812) 0
---------------------------------------------------------------------
Gross margin 9,224,439 4,692,970 2,216,372
---------------------------------------------------------------------
Costs and expenses:
---------------------------------------------------------------------
Sales and marketing 1,143,475 911,039 1,577,609
---------------------------------------------------------------------
General and
administrative 5,610,810 3,659,338 3,560,710
---------------------------------------------------------------------
Provision for
doubtful
accounts 907,065 34,513 956,738
---------------------------------------------------------------------
Adjustment of
Allowance 0 (462,234) 0
---------------------------------------------------------------------
Depreciation and
amortization:
---------------------------------------------------------------------
Property and
equipment 43,818 35,394 34,998
---------------------------------------------------------------------
Total costs and
expenses 7,705,168 4,178,050 6,130,055
---------------------------------------------------------------------
Income (Loss) from
operations 1,519,271 514,920 (3,913,683)
---------------------------------------------------------------------
Other income (expense):
---------------------------------------------------------------------
Interest income 10,561 5,301 0
---------------------------------------------------------------------
Interest expense (901,900) (129,567) (23,371)
---------------------------------------------------------------------
Other income (expense) (106,262) 150,456 17,609
---------------------------------------------------------------------
Other income (expense),
net (997,601) 26,190 (5,762)
---------------------------------------------------------------------
Income (Loss) before
provision (benefit)
for income taxes 521,670 541,110 (3,919,445)
---------------------------------------------------------------------
Provision for income
taxes
---------------------------------------------------------------------
Current Income Tax
Expense (20,310) 800 800
---------------------------------------------------------------------
Deferred Income Tax
Gain
(Expense) 177,177 -- --
---------------------------------------------------------------------
Net Income (loss) 678,537 540,310 (3,920,245)
---------------------------------------------------------------------
---------------------------------------------------------------------
Less: Dividends on
Convertible
Preferred
Stock (216,488) (1,173,753) (223,733)
---------------------------------------------------------------------
Net income/ (loss)
attributable to
common
shareholders 462,049 (633,443) (4,143,978)
---------------------------------------------------------------------
Net loss per common
share - 0.01 (0.01) (0.10)
Basic and diluted 0.01
---------------------------------------------------------------------
Weighted average
number of
shares of common
stock
outstanding - 49,025,511 48,511,681 40,000,000
Basic and diluted 59,786,042
---------------------------------------------------------------------
---------------------------------------------------------------------
SOYO Group, Inc. and Subsidiary
Consolidated Statements of Shareholders' Equity (Deficit)
Years Ended December 31, 2006, 2005 and 2004
Balance, December 31, 2001
Common Stock Preferred Stock
Par Par
Shares Value Shares Value
28,182,750 28,183 1,000,000 1,000
Shares of common
stock retained
by shareholders
in October 2002
transaction 11,817,250 11,817
Net loss for the
year ended
December 31, 2002 -- -- -- --
---------------------------------------------
Balance,
December 31, 2002 40,000,000 40,000 1,000,000 1,000
---------------------------------------------
Net loss for the
year ended
December 31, 2003 -- -- -- --
---------------------------------------------
Balance, December
31, 2003 40,000,000 40,000 1,000,000 1,000
Issuance of
Preferred Stock
for Long Term Debt 2,500,000 1,304,000
Dividends 114,195 114,195
Accretion of Discount 109,538
Net loss for the
year ended
December 31, 2004 -- --
---------------------------------------------
Balance,
December 31, 2004 40,000,000 40,000 3,614,195 1,528,733
---------------------------------------------
Issuance of Common
Stock for Private
Placement 500,000 500
Issuance of Common
Stock for Payment
of Services 30,000 30
Issuance of Common
Stock for Payment
of Accounts Payable 5,645,330 5,645
Issuance of Common
Stock for Payment
of Loan 1,286,669 1,287
Issuance of Common
Stock for
Conversion of
Preferred Stock 1,219,512 1,220 (1,000,000) (1,000)
Accretion of
Discount 174,753
Preferred Stock
Backup Withholding (84,999)
Net Income
Preferred Stock
Dividends
---------------------------------------------
Balance,
December 31, 2005 48,681,511 48,682 2,614,195 1,617,487
============================================
Issuance of Common
Stock 39,000 39
Issuance of Common
Stock 267,000 267
Issuance of Common
Stock 38,000 38
Accretion of
Discount 216,488
Preferred Stock
Backup Withholding (64,946)
To book FAS 123
adjustment
Misc. Adjustment
Net Income
---------------------------------------------
49,025,511 49,026 2,614,195 1,769,029
============================================
Additional Total Shareholders
Paid In Accumulated
Balance, Capital Deficit Deficiency
December 31, 2001 470,817 (918,737) (418,737)
Shares of common
stock retained
by shareholders
in October 2002
transaction (11,817)
Net loss for the
year ended
December 31, 2002 (10,733,458) (10,733,458)
-------------------------------------------
Balance,
December 31, 2002 459,000 (11,652,195) (11,152,195)
-------------------------------------------
Net loss for the
year ended
December 31, 2003 (984,588) (984,588)
-------------------------------------------
Balance, December
31, 2003 459,000 (12,636,783) (12,136,783)
Issuance of
Preferred Stock
for Long Term Debt 10,696,000 12,000,000
Dividends 114,195
Accretion of Discount 109,538
Net loss for the
year ended
December 31, 2004 (4,143,978) (4,143,978)
-------------------------------------------
Balance,
December 31, 2004 11,155,000 (16,780,761) (4,057,028)
-------------------------------------------
Issuance of Common
Stock for Private
Placement 499,500 500,000
Issuance of Common
Stock for Payment
of Services 30
Issuance of Common
Stock for Payment
of Accounts Payable 3,608,744 3,614,389
Issuance of Common
Stock for Payment
of Loan 963,714 965,001
Issuance of Common
Stock for
Conversion of
Preferred Stock 998,780 999,000
Accretion of
Discount 174,753
Preferred Stock
Backup Withholding (84,999)
Net Income 540,310 540,310
Preferred Stock
Dividends (1,173,753) (1,173,753)
-------------------------------------------
Balance,
December 31, 2005 17,225,738 (17,414,204) 1,477,703
===========================================
Issuance of Common
Stock 24,531 24,570
Issuance of Common
Stock 80,100 80,367
Issuance of Common
Stock 12,502 12,540
Accretion of
Discount 216,488
Preferred Stock
Backup Withholding (64,946)
To book FAS 123
adjustment 506,221 506,221
Misc. Adjustment 17,439 17,439
Net Income 462,049 462,049
-------------------------------------------
17,866,531 (16,952,155) 2,732,431
===========================================
---------------------------------------------------------------------
SOYO Group, Inc. and Subsidiary
Consolidated Statements of Cash Flows
Years Ended December 31,
---------------------------------------------------------------------
2006 2005 2004
---------------------------------------------------------------------
OPERATING ACTIVITIES
---------------------------------------------------------------------
Net Income (loss) $678,537 $540,310 $(3,920,245)
---------------------------------------------------------------------
Adjustments to reconcile
net income (loss) to net
cash provided by (used in)
operating activities:
---------------------------------------------------------------------
Depreciation 43,818 35,394 34,998
---------------------------------------------------------------------
Provision for doubtful
accounts 907,065 34,513 956,738
---------------------------------------------------------------------
Stock compensation for
employees 506,222 -- --
---------------------------------------------------------------------
Stock compensation paid for
professional services 134,915 -- --
---------------------------------------------------------------------
Changes in operating assets
and liabilities:
---------------------------------------------------------------------
(Increase) decrease in:
--------------------------------------- ---------------------- ------
Accounts receivable (6,507,277) (5,236,151) 3,785,110
---------------------------------------------------------------------
Inventories 198,409 (4,128,119) 1,173,214
---------------------------------------------------------------------
Prepaid expenses (15,649) 51,432 18,557
---------------------------------------------------------------------
Deferred Income Tax Asset (177,177) 0 0
---------------------------------------------------------------------
Deposits (206,175) (2,109) (9,776)
---------------------------------------------------------------------
Increase (decrease) in:
---------------------------------------------------------------------
Accounts payable - SOYO
Computer, Inc 0 (1,314,910) (5,242,343)
---------------------------------------------------------------------
Accounts payable - other 2,096,038 9,332,236 2,783,763
---------------------------------------------------------------------
Accrued liabilities (747,341) 509,316 236,059
---------------------------------------------------------------------
---------------------------------------------------------------------
Net cash provided by (used
in) operating activities (3,088,615) (178,088) (183,925)
---------------------------------------------------------------------
---------------------------------------------------------------------
INVESTING ACTIVITIES
---------------------------------------------------------------------
Purchase of property and
equipment (48,891) (621,970) (158,670)
--------------------------------------------------------------------
Disposal of Fixed Assets 205,000
--------------------------------------------------------------------
Net cash Supplied (used) in
investing activities 156,109 (621,970) (158,670)
--------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
FINANCING ACTIVITIES
--------------------------------------------------------------------
Advances from officer,
director and major
shareholder 165,000
---------------------------------------------------------------------
Business Loan 913,750
---------------------------------------------------------------------
Long-term debt 3,735,198
---------------------------------------------------------------------
Repayment of advances to
officer, director and
major shareholder (65,000) (240,000)
---------------------------------------------------------------------
Proceeds from issuance of
common stock 500,000
---------------------------------------------------------------------
Payment of backup
withholding taxes on
accreted dividends
on preferred stock (64,946) (84,999)
---------------------------------------------------------------------
Net cash provided by
financing activities 3,605,252 340,001 913,750
---------------------------------------------------------------------
---------------------------------------------------------------------
CASH AND CASH EQUIVALENTS:
---------------------------------------------------------------------
Net increase (decrease) (672,746) (460,057) 571,155
---------------------------------------------------------------------
At beginning of year 828,294 1,288,351 717,196
---------------------------------------------------------------------
At end of year $1,501,040 $ 828,294 $1,288,351
---------------------------------------------------------------------
---------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
---------------------------------------------------------------------
Cash paid for interest 901,900 97,783 23,371
---------------------------------------------------------------------
Cash paid for income taxes 20,310 800 800
---------------------------------------------------------------------
---------------------------------------------------------------------
NON-CASH INVESTING AND
FINANCING ACTIVITIES
---------------------------------------------------------------------
Settlement of business loan
of $913,750 and accrued
interest of $51,251
through issuance of common
stock 965,001
---------------------------------------------------------------------
Settlement of accounts
payable through issuance
of common stock 3,614,419
---------------------------------------------------------------------
Conversion of Class A
preferred stock to common
stock 1,000
---------------------------------------------------------------------
Accretion of discount on
Class B preferred stock 216,488 174,753 109,538
---------------------------------------------------------------------
Deemed dividend on Class A
preferred stock 999,000
---------------------------------------------------------------------
Noncash dividend on Class B
preferred stock -- 114,195
---------------------------------------------------------------------
Contact:
SOYO Group Inc.
Eric Strasser
(909) 292-2518
--------------------------------------------------------------------------------
Source: SOYO Group Inc.
SOYO Group Inc. Reports Results for the 4th Quarter and Year Ended December 31, 2006
Tuesday April 3, 8:00 am ET
Sales Increase 43 Percent and Company Earns .01 Per Share
**Fiscal 2006 Net Sales: $56,758,688 Million
**Fiscal 2006 Net Income: $462,049 Thousand
**Fiscal 2006 Net income Per Share: $.01
ONTARIO, Calif., April 3, 2007 (PRIME NEWSWIRE) -- SOYO Group Inc. (OTC BB:SOYO.OB - News) today reported operating income from continuing operations for the quarter ended December 31, 2006 of $566,706 compared to operating Income from continuing operations of $651,843 for the quarter ended December 31, 2005. The Company earned $0.01 per share in both periods. Net revenues for the quarter ended December 31, 2006 were $24,417,902, an increase of $7,845,131 or 47.3% over revenues of $16,572,771 for the quarter ended December 31, 2005. The increase for the quarter reflects continuing increased sales volume to Chain or Box retailers and the TV Shopping Networks as a result of its continuing rollout of LCD Product lines.
ADVERTISEMENT
The Company reported operating income from continuing operations for the year ended December 31, 2006 of $1,519,271 compared to operating income from continuing operations of $514,920 for year ended December 31, 2005, an increase of 295%. Net revenues for the year ended December 31, 2006 were $56,758,688, an increase of $18,495,656 or 48% over revenues of $38,263,032 for the year ended December 31, 2005. The gross margin was 12.4% for the quarter ended December 31, 2006, compared to 11.5% for the quarter ended December 31, 2005. Gross margin for the year ended December 31, 2006 was 16.3% compared to 12.4% for the year ended December 31, 2005.
Total costs and expenses for the year ended December 31, 2006 increased by $3,527,118 (84%) to $7,705,168 when compared to total costs and expenses of$4,178,050 for the year ended December 31, 2005. The increased costs during the year resulted mainly from mandatory FASB 123 R compliance, increased costs of consultants, increased legal fees, and increased interest expense. Interest expense, net, increased for the year by $772,333 primarily due to new programs the Company began to ensure adequate levels of inventory for sale.
Statements in this press release may be ``forward-looking statements'' within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about the Company's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict.Therefore, actual outcomes and results may, and probably will, differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and those risks discussed from time to time in the Company's filings with the Securities and Exchange Commission filings, including the Risk Factors included in the Form 10-K for the year ended December 31, 2006 and the Management's Discussion and Analysis of Financial Conditions and Results of Operations in the Form 10-K for the year ended December 31, 2006. In addition, general industry and market conditions and growth rates, and general economic conditions could affect such statements. Any forward-looking statements speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statements to reflect events or circumstances after the date of this release.
About SOYO Group Inc.
SOYO Group Inc. is a provider of computer, consumer electronics, and broadband telecommunications products and services. Headquartered in Ontario, California, with additional sales offices in South America, SOYO Group sells its products through an extensive network of authorized distributors, resellers, system integrators, VARs, retailers, mail-order catalogs and e-tailers, including Best Buy, Circuit City, Staples, Micro Center, Target.com, Walmart.com, eCost.com, Fry's Electronics, PC Mall, and Office Depot, among others. Products are sold under the Go Video, Dragon, Onyx, Dymond, Honeywell and SOYO brand names. For more information, please visit http://www.soyogroup.com.
Consolidated Balance Sheets
December 31,
---------------------------------------------------------------------
2006 2005
---------------------------------------------------------------------
ASSETS
---------------------------------------------------------------------
CURRENT
---------------------------------------------------------------------
Cash and cash equivalents $ 1,501,040 $ 828,294
---------------------------------------------------------------------
Accounts receivable, net of
allowance for doubtful
accounts of $388,958 and
$589,224 at December 31, 2006
and 2005 respectively 12,878,732 7,278,520
---------------------------------------------------------------------
Inventories 7,792,621 7,991,030
---------------------------------------------------------------------
Prepaid Expenses 36,633 20,984
---------------------------------------------------------------------
Income tax refund receivable 0 0
---------------------------------------------------------------------
---------------------------------------------------------------------
Total Current Assets 22,209,026 16,118,828
---------------------------------------------------------------------
---------------------------------------------------------------------
Property and Equipment 711,015 867,122
---------------------------------------------------------------------
Less: accumulated depreciation
and amortization (159,300) (115,480)
---------------------------------------------------------------------
551,715 751,642
---------------------------------------------------------------------
Deferred Income Tax Asset 177,177 0
---------------------------------------------------------------------
Deposits 243,095 36,920
---------------------------------------------------------------------
---------------------------------------------------------------------
Total Assets $ 23,181,013 $ 16,907,390
---------------------------------------------------------------------
December 31,
---------------------------------------------------------------------
2006 2005
---------------------------------------------------------------------
LIABILITIES
---------------------------------------------------------------------
CURRENT
---------------------------------------------------------------------
Accounts payable 16,073,617 13,977,579
---------------------------------------------------------------------
Total Accounts Payable 6,073,617 13,977,579
---------------------------------------------------------------------
---------------------------------------------------------------------
Accrued liabilities 539,767 1,287,108
---------------------------------------------------------------------
Advances from officers,
directors and
major shareholder 0 0
---------------------------------------------------------------------
Business Loan 0 0
---------------------------------------------------------------------
Short Term Loan 100,000 165,000
---------------------------------------------------------------------
---------------------------------------------------------------------
Current Liabilities 16,713,384 15,429,687
---------------------------------------------------------------------
---------------------------------------------------------------------
Long Term Payable 3,735,198 0
---------------------------------------------------------------------
Total Liabilities 20,448,582 15,429,687
---------------------------------------------------------------------
EQUITY
---------------------------------------------------------------------
Class B Preferred stock,
$0.001 par value, authorized
- 10,000,000 shares, Issued
and outstanding - 2,797,738
shares in 2006 and 2005 1,918,974 1,702,486
---------------------------------------------------------------------
Preferred Stock Backup
Withholding (149,945) (84,999)
---------------------------------------------------------------------
Common stock, $0.001 par value
Authorized - 75,000,000 shares,
Issued and outstanding -
49,025,511 shares
(48,681,511 shares - 2005) 49,026 48,682
---------------------------------------------------------------------
Additional paid-in capital 17,866,531 17,225,738
---------------------------------------------------------------------
---------------------------------------------------------------------
Accumulated deficit (16,952,155) (17,414,204)
---------------------------------------------------------------------
Total Shareholders' Equity 2,732,431 1,477,703
---------------------------------------------------------------------
Total Liabilities plus
Shareholders' Equity $ 23,181,013 $ 16,907,390
---------------------------------------------------------------------
SOYO Group, Inc. and Subsidiary
Consolidated Statements of Operations
Year Ended December 31,
---------------------------------------------------------------------
2006 2005 2004
---------------------------------------------------------------------
Net revenues $56,758,688 $38,263,032 $ 32,426,414
---------------------------------------------------------------------
Cost of revenues,
including inventory
purchased from SOYO
Computer, Inc. of $0,
$14,004,259 and
$20,188,354
in 2005, 2004 and
2003 respectively 47,534,249 34,905,874 30,210,042
---------------------------------------------------------------------
Prior years'
purchase discounts
and allowances
settled in 2005 0 (1,335,812) 0
---------------------------------------------------------------------
Gross margin 9,224,439 4,692,970 2,216,372
---------------------------------------------------------------------
Costs and expenses:
---------------------------------------------------------------------
Sales and marketing 1,143,475 911,039 1,577,609
---------------------------------------------------------------------
General and
administrative 5,610,810 3,659,338 3,560,710
---------------------------------------------------------------------
Provision for
doubtful
accounts 907,065 34,513 956,738
---------------------------------------------------------------------
Adjustment of
Allowance 0 (462,234) 0
---------------------------------------------------------------------
Depreciation and
amortization:
---------------------------------------------------------------------
Property and
equipment 43,818 35,394 34,998
---------------------------------------------------------------------
Total costs and
expenses 7,705,168 4,178,050 6,130,055
---------------------------------------------------------------------
Income (Loss) from
operations 1,519,271 514,920 (3,913,683)
---------------------------------------------------------------------
Other income (expense):
---------------------------------------------------------------------
Interest income 10,561 5,301 0
---------------------------------------------------------------------
Interest expense (901,900) (129,567) (23,371)
---------------------------------------------------------------------
Other income (expense) (106,262) 150,456 17,609
---------------------------------------------------------------------
Other income (expense),
net (997,601) 26,190 (5,762)
---------------------------------------------------------------------
Income (Loss) before
provision (benefit)
for income taxes 521,670 541,110 (3,919,445)
---------------------------------------------------------------------
Provision for income
taxes
---------------------------------------------------------------------
Current Income Tax
Expense (20,310) 800 800
---------------------------------------------------------------------
Deferred Income Tax
Gain
(Expense) 177,177 -- --
---------------------------------------------------------------------
Net Income (loss) 678,537 540,310 (3,920,245)
---------------------------------------------------------------------
---------------------------------------------------------------------
Less: Dividends on
Convertible
Preferred
Stock (216,488) (1,173,753) (223,733)
---------------------------------------------------------------------
Net income/ (loss)
attributable to
common
shareholders 462,049 (633,443) (4,143,978)
---------------------------------------------------------------------
Net loss per common
share - 0.01 (0.01) (0.10)
Basic and diluted 0.01
---------------------------------------------------------------------
Weighted average
number of
shares of common
stock
outstanding - 49,025,511 48,511,681 40,000,000
Basic and diluted 59,786,042
---------------------------------------------------------------------
---------------------------------------------------------------------
SOYO Group, Inc. and Subsidiary
Consolidated Statements of Shareholders' Equity (Deficit)
Years Ended December 31, 2006, 2005 and 2004
Balance, December 31, 2001
Common Stock Preferred Stock
Par Par
Shares Value Shares Value
28,182,750 28,183 1,000,000 1,000
Shares of common
stock retained
by shareholders
in October 2002
transaction 11,817,250 11,817
Net loss for the
year ended
December 31, 2002 -- -- -- --
---------------------------------------------
Balance,
December 31, 2002 40,000,000 40,000 1,000,000 1,000
---------------------------------------------
Net loss for the
year ended
December 31, 2003 -- -- -- --
---------------------------------------------
Balance, December
31, 2003 40,000,000 40,000 1,000,000 1,000
Issuance of
Preferred Stock
for Long Term Debt 2,500,000 1,304,000
Dividends 114,195 114,195
Accretion of Discount 109,538
Net loss for the
year ended
December 31, 2004 -- --
---------------------------------------------
Balance,
December 31, 2004 40,000,000 40,000 3,614,195 1,528,733
---------------------------------------------
Issuance of Common
Stock for Private
Placement 500,000 500
Issuance of Common
Stock for Payment
of Services 30,000 30
Issuance of Common
Stock for Payment
of Accounts Payable 5,645,330 5,645
Issuance of Common
Stock for Payment
of Loan 1,286,669 1,287
Issuance of Common
Stock for
Conversion of
Preferred Stock 1,219,512 1,220 (1,000,000) (1,000)
Accretion of
Discount 174,753
Preferred Stock
Backup Withholding (84,999)
Net Income
Preferred Stock
Dividends
---------------------------------------------
Balance,
December 31, 2005 48,681,511 48,682 2,614,195 1,617,487
============================================
Issuance of Common
Stock 39,000 39
Issuance of Common
Stock 267,000 267
Issuance of Common
Stock 38,000 38
Accretion of
Discount 216,488
Preferred Stock
Backup Withholding (64,946)
To book FAS 123
adjustment
Misc. Adjustment
Net Income
---------------------------------------------
49,025,511 49,026 2,614,195 1,769,029
============================================
Additional Total Shareholders
Paid In Accumulated
Balance, Capital Deficit Deficiency
December 31, 2001 470,817 (918,737) (418,737)
Shares of common
stock retained
by shareholders
in October 2002
transaction (11,817)
Net loss for the
year ended
December 31, 2002 (10,733,458) (10,733,458)
-------------------------------------------
Balance,
December 31, 2002 459,000 (11,652,195) (11,152,195)
-------------------------------------------
Net loss for the
year ended
December 31, 2003 (984,588) (984,588)
-------------------------------------------
Balance, December
31, 2003 459,000 (12,636,783) (12,136,783)
Issuance of
Preferred Stock
for Long Term Debt 10,696,000 12,000,000
Dividends 114,195
Accretion of Discount 109,538
Net loss for the
year ended
December 31, 2004 (4,143,978) (4,143,978)
-------------------------------------------
Balance,
December 31, 2004 11,155,000 (16,780,761) (4,057,028)
-------------------------------------------
Issuance of Common
Stock for Private
Placement 499,500 500,000
Issuance of Common
Stock for Payment
of Services 30
Issuance of Common
Stock for Payment
of Accounts Payable 3,608,744 3,614,389
Issuance of Common
Stock for Payment
of Loan 963,714 965,001
Issuance of Common
Stock for
Conversion of
Preferred Stock 998,780 999,000
Accretion of
Discount 174,753
Preferred Stock
Backup Withholding (84,999)
Net Income 540,310 540,310
Preferred Stock
Dividends (1,173,753) (1,173,753)
-------------------------------------------
Balance,
December 31, 2005 17,225,738 (17,414,204) 1,477,703
===========================================
Issuance of Common
Stock 24,531 24,570
Issuance of Common
Stock 80,100 80,367
Issuance of Common
Stock 12,502 12,540
Accretion of
Discount 216,488
Preferred Stock
Backup Withholding (64,946)
To book FAS 123
adjustment 506,221 506,221
Misc. Adjustment 17,439 17,439
Net Income 462,049 462,049
-------------------------------------------
17,866,531 (16,952,155) 2,732,431
===========================================
---------------------------------------------------------------------
SOYO Group, Inc. and Subsidiary
Consolidated Statements of Cash Flows
Years Ended December 31,
---------------------------------------------------------------------
2006 2005 2004
---------------------------------------------------------------------
OPERATING ACTIVITIES
---------------------------------------------------------------------
Net Income (loss) $678,537 $540,310 $(3,920,245)
---------------------------------------------------------------------
Adjustments to reconcile
net income (loss) to net
cash provided by (used in)
operating activities:
---------------------------------------------------------------------
Depreciation 43,818 35,394 34,998
---------------------------------------------------------------------
Provision for doubtful
accounts 907,065 34,513 956,738
---------------------------------------------------------------------
Stock compensation for
employees 506,222 -- --
---------------------------------------------------------------------
Stock compensation paid for
professional services 134,915 -- --
---------------------------------------------------------------------
Changes in operating assets
and liabilities:
---------------------------------------------------------------------
(Increase) decrease in:
--------------------------------------- ---------------------- ------
Accounts receivable (6,507,277) (5,236,151) 3,785,110
---------------------------------------------------------------------
Inventories 198,409 (4,128,119) 1,173,214
---------------------------------------------------------------------
Prepaid expenses (15,649) 51,432 18,557
---------------------------------------------------------------------
Deferred Income Tax Asset (177,177) 0 0
---------------------------------------------------------------------
Deposits (206,175) (2,109) (9,776)
---------------------------------------------------------------------
Increase (decrease) in:
---------------------------------------------------------------------
Accounts payable - SOYO
Computer, Inc 0 (1,314,910) (5,242,343)
---------------------------------------------------------------------
Accounts payable - other 2,096,038 9,332,236 2,783,763
---------------------------------------------------------------------
Accrued liabilities (747,341) 509,316 236,059
---------------------------------------------------------------------
---------------------------------------------------------------------
Net cash provided by (used
in) operating activities (3,088,615) (178,088) (183,925)
---------------------------------------------------------------------
---------------------------------------------------------------------
INVESTING ACTIVITIES
---------------------------------------------------------------------
Purchase of property and
equipment (48,891) (621,970) (158,670)
--------------------------------------------------------------------
Disposal of Fixed Assets 205,000
--------------------------------------------------------------------
Net cash Supplied (used) in
investing activities 156,109 (621,970) (158,670)
--------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
FINANCING ACTIVITIES
--------------------------------------------------------------------
Advances from officer,
director and major
shareholder 165,000
---------------------------------------------------------------------
Business Loan 913,750
---------------------------------------------------------------------
Long-term debt 3,735,198
---------------------------------------------------------------------
Repayment of advances to
officer, director and
major shareholder (65,000) (240,000)
---------------------------------------------------------------------
Proceeds from issuance of
common stock 500,000
---------------------------------------------------------------------
Payment of backup
withholding taxes on
accreted dividends
on preferred stock (64,946) (84,999)
---------------------------------------------------------------------
Net cash provided by
financing activities 3,605,252 340,001 913,750
---------------------------------------------------------------------
---------------------------------------------------------------------
CASH AND CASH EQUIVALENTS:
---------------------------------------------------------------------
Net increase (decrease) (672,746) (460,057) 571,155
---------------------------------------------------------------------
At beginning of year 828,294 1,288,351 717,196
---------------------------------------------------------------------
At end of year $1,501,040 $ 828,294 $1,288,351
---------------------------------------------------------------------
---------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
---------------------------------------------------------------------
Cash paid for interest 901,900 97,783 23,371
---------------------------------------------------------------------
Cash paid for income taxes 20,310 800 800
---------------------------------------------------------------------
---------------------------------------------------------------------
NON-CASH INVESTING AND
FINANCING ACTIVITIES
---------------------------------------------------------------------
Settlement of business loan
of $913,750 and accrued
interest of $51,251
through issuance of common
stock 965,001
---------------------------------------------------------------------
Settlement of accounts
payable through issuance
of common stock 3,614,419
---------------------------------------------------------------------
Conversion of Class A
preferred stock to common
stock 1,000
---------------------------------------------------------------------
Accretion of discount on
Class B preferred stock 216,488 174,753 109,538
---------------------------------------------------------------------
Deemed dividend on Class A
preferred stock 999,000
---------------------------------------------------------------------
Noncash dividend on Class B
preferred stock -- 114,195
---------------------------------------------------------------------
Contact:
SOYO Group Inc.
Eric Strasser
(909) 292-2518
--------------------------------------------------------------------------------
Source: SOYO Group Inc.
SOYO news
SOYO Group Inc. Reports Results for the 4th Quarter and Year Ended December 31, 2006
Tuesday April 3, 8:00 am ET
Sales Increase 43 Percent and Company Earns .01 Per Share
**Fiscal 2006 Net Sales: $56,758,688 Million
**Fiscal 2006 Net Income: $462,049 Thousand
**Fiscal 2006 Net income Per Share: $.01
ONTARIO, Calif., April 3, 2007 (PRIME NEWSWIRE) -- SOYO Group Inc. (OTC BB:SOYO.OB - News) today reported operating income from continuing operations for the quarter ended December 31, 2006 of $566,706 compared to operating Income from continuing operations of $651,843 for the quarter ended December 31, 2005. The Company earned $0.01 per share in both periods. Net revenues for the quarter ended December 31, 2006 were $24,417,902, an increase of $7,845,131 or 47.3% over revenues of $16,572,771 for the quarter ended December 31, 2005. The increase for the quarter reflects continuing increased sales volume to Chain or Box retailers and the TV Shopping Networks as a result of its continuing rollout of LCD Product lines.
ADVERTISEMENT
The Company reported operating income from continuing operations for the year ended December 31, 2006 of $1,519,271 compared to operating income from continuing operations of $514,920 for year ended December 31, 2005, an increase of 295%. Net revenues for the year ended December 31, 2006 were $56,758,688, an increase of $18,495,656 or 48% over revenues of $38,263,032 for the year ended December 31, 2005. The gross margin was 12.4% for the quarter ended December 31, 2006, compared to 11.5% for the quarter ended December 31, 2005. Gross margin for the year ended December 31, 2006 was 16.3% compared to 12.4% for the year ended December 31, 2005.
Total costs and expenses for the year ended December 31, 2006 increased by $3,527,118 (84%) to $7,705,168 when compared to total costs and expenses of$4,178,050 for the year ended December 31, 2005. The increased costs during the year resulted mainly from mandatory FASB 123 R compliance, increased costs of consultants, increased legal fees, and increased interest expense. Interest expense, net, increased for the year by $772,333 primarily due to new programs the Company began to ensure adequate levels of inventory for sale.
Statements in this press release may be ``forward-looking statements'' within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about the Company's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict.Therefore, actual outcomes and results may, and probably will, differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and those risks discussed from time to time in the Company's filings with the Securities and Exchange Commission filings, including the Risk Factors included in the Form 10-K for the year ended December 31, 2006 and the Management's Discussion and Analysis of Financial Conditions and Results of Operations in the Form 10-K for the year ended December 31, 2006. In addition, general industry and market conditions and growth rates, and general economic conditions could affect such statements. Any forward-looking statements speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statements to reflect events or circumstances after the date of this release.
About SOYO Group Inc.
SOYO Group Inc. is a provider of computer, consumer electronics, and broadband telecommunications products and services. Headquartered in Ontario, California, with additional sales offices in South America, SOYO Group sells its products through an extensive network of authorized distributors, resellers, system integrators, VARs, retailers, mail-order catalogs and e-tailers, including Best Buy, Circuit City, Staples, Micro Center, Target.com, Walmart.com, eCost.com, Fry's Electronics, PC Mall, and Office Depot, among others. Products are sold under the Go Video, Dragon, Onyx, Dymond, Honeywell and SOYO brand names. For more information, please visit http://www.soyogroup.com.
Consolidated Balance Sheets
December 31,
---------------------------------------------------------------------
2006 2005
---------------------------------------------------------------------
ASSETS
---------------------------------------------------------------------
CURRENT
---------------------------------------------------------------------
Cash and cash equivalents $ 1,501,040 $ 828,294
---------------------------------------------------------------------
Accounts receivable, net of
allowance for doubtful
accounts of $388,958 and
$589,224 at December 31, 2006
and 2005 respectively 12,878,732 7,278,520
---------------------------------------------------------------------
Inventories 7,792,621 7,991,030
---------------------------------------------------------------------
Prepaid Expenses 36,633 20,984
---------------------------------------------------------------------
Income tax refund receivable 0 0
---------------------------------------------------------------------
---------------------------------------------------------------------
Total Current Assets 22,209,026 16,118,828
---------------------------------------------------------------------
---------------------------------------------------------------------
Property and Equipment 711,015 867,122
---------------------------------------------------------------------
Less: accumulated depreciation
and amortization (159,300) (115,480)
---------------------------------------------------------------------
551,715 751,642
---------------------------------------------------------------------
Deferred Income Tax Asset 177,177 0
---------------------------------------------------------------------
Deposits 243,095 36,920
---------------------------------------------------------------------
---------------------------------------------------------------------
Total Assets $ 23,181,013 $ 16,907,390
---------------------------------------------------------------------
December 31,
---------------------------------------------------------------------
2006 2005
---------------------------------------------------------------------
LIABILITIES
---------------------------------------------------------------------
CURRENT
---------------------------------------------------------------------
Accounts payable 16,073,617 13,977,579
---------------------------------------------------------------------
Total Accounts Payable 6,073,617 13,977,579
---------------------------------------------------------------------
---------------------------------------------------------------------
Accrued liabilities 539,767 1,287,108
---------------------------------------------------------------------
Advances from officers,
directors and
major shareholder 0 0
---------------------------------------------------------------------
Business Loan 0 0
---------------------------------------------------------------------
Short Term Loan 100,000 165,000
---------------------------------------------------------------------
---------------------------------------------------------------------
Current Liabilities 16,713,384 15,429,687
---------------------------------------------------------------------
---------------------------------------------------------------------
Long Term Payable 3,735,198 0
---------------------------------------------------------------------
Total Liabilities 20,448,582 15,429,687
---------------------------------------------------------------------
EQUITY
---------------------------------------------------------------------
Class B Preferred stock,
$0.001 par value, authorized
- 10,000,000 shares, Issued
and outstanding - 2,797,738
shares in 2006 and 2005 1,918,974 1,702,486
---------------------------------------------------------------------
Preferred Stock Backup
Withholding (149,945) (84,999)
---------------------------------------------------------------------
Common stock, $0.001 par value
Authorized - 75,000,000 shares,
Issued and outstanding -
49,025,511 shares
(48,681,511 shares - 2005) 49,026 48,682
---------------------------------------------------------------------
Additional paid-in capital 17,866,531 17,225,738
---------------------------------------------------------------------
---------------------------------------------------------------------
Accumulated deficit (16,952,155) (17,414,204)
---------------------------------------------------------------------
Total Shareholders' Equity 2,732,431 1,477,703
---------------------------------------------------------------------
Total Liabilities plus
Shareholders' Equity $ 23,181,013 $ 16,907,390
---------------------------------------------------------------------
SOYO Group, Inc. and Subsidiary
Consolidated Statements of Operations
Year Ended December 31,
---------------------------------------------------------------------
2006 2005 2004
---------------------------------------------------------------------
Net revenues $56,758,688 $38,263,032 $ 32,426,414
---------------------------------------------------------------------
Cost of revenues,
including inventory
purchased from SOYO
Computer, Inc. of $0,
$14,004,259 and
$20,188,354
in 2005, 2004 and
2003 respectively 47,534,249 34,905,874 30,210,042
---------------------------------------------------------------------
Prior years'
purchase discounts
and allowances
settled in 2005 0 (1,335,812) 0
---------------------------------------------------------------------
Gross margin 9,224,439 4,692,970 2,216,372
---------------------------------------------------------------------
Costs and expenses:
---------------------------------------------------------------------
Sales and marketing 1,143,475 911,039 1,577,609
---------------------------------------------------------------------
General and
administrative 5,610,810 3,659,338 3,560,710
---------------------------------------------------------------------
Provision for
doubtful
accounts 907,065 34,513 956,738
---------------------------------------------------------------------
Adjustment of
Allowance 0 (462,234) 0
---------------------------------------------------------------------
Depreciation and
amortization:
---------------------------------------------------------------------
Property and
equipment 43,818 35,394 34,998
---------------------------------------------------------------------
Total costs and
expenses 7,705,168 4,178,050 6,130,055
---------------------------------------------------------------------
Income (Loss) from
operations 1,519,271 514,920 (3,913,683)
---------------------------------------------------------------------
Other income (expense):
---------------------------------------------------------------------
Interest income 10,561 5,301 0
---------------------------------------------------------------------
Interest expense (901,900) (129,567) (23,371)
---------------------------------------------------------------------
Other income (expense) (106,262) 150,456 17,609
---------------------------------------------------------------------
Other income (expense),
net (997,601) 26,190 (5,762)
---------------------------------------------------------------------
Income (Loss) before
provision (benefit)
for income taxes 521,670 541,110 (3,919,445)
---------------------------------------------------------------------
Provision for income
taxes
---------------------------------------------------------------------
Current Income Tax
Expense (20,310) 800 800
---------------------------------------------------------------------
Deferred Income Tax
Gain
(Expense) 177,177 -- --
---------------------------------------------------------------------
Net Income (loss) 678,537 540,310 (3,920,245)
---------------------------------------------------------------------
---------------------------------------------------------------------
Less: Dividends on
Convertible
Preferred
Stock (216,488) (1,173,753) (223,733)
---------------------------------------------------------------------
Net income/ (loss)
attributable to
common
shareholders 462,049 (633,443) (4,143,978)
---------------------------------------------------------------------
Net loss per common
share - 0.01 (0.01) (0.10)
Basic and diluted 0.01
---------------------------------------------------------------------
Weighted average
number of
shares of common
stock
outstanding - 49,025,511 48,511,681 40,000,000
Basic and diluted 59,786,042
---------------------------------------------------------------------
---------------------------------------------------------------------
SOYO Group, Inc. and Subsidiary
Consolidated Statements of Shareholders' Equity (Deficit)
Years Ended December 31, 2006, 2005 and 2004
Balance, December 31, 2001
Common Stock Preferred Stock
Par Par
Shares Value Shares Value
28,182,750 28,183 1,000,000 1,000
Shares of common
stock retained
by shareholders
in October 2002
transaction 11,817,250 11,817
Net loss for the
year ended
December 31, 2002 -- -- -- --
---------------------------------------------
Balance,
December 31, 2002 40,000,000 40,000 1,000,000 1,000
---------------------------------------------
Net loss for the
year ended
December 31, 2003 -- -- -- --
---------------------------------------------
Balance, December
31, 2003 40,000,000 40,000 1,000,000 1,000
Issuance of
Preferred Stock
for Long Term Debt 2,500,000 1,304,000
Dividends 114,195 114,195
Accretion of Discount 109,538
Net loss for the
year ended
December 31, 2004 -- --
---------------------------------------------
Balance,
December 31, 2004 40,000,000 40,000 3,614,195 1,528,733
---------------------------------------------
Issuance of Common
Stock for Private
Placement 500,000 500
Issuance of Common
Stock for Payment
of Services 30,000 30
Issuance of Common
Stock for Payment
of Accounts Payable 5,645,330 5,645
Issuance of Common
Stock for Payment
of Loan 1,286,669 1,287
Issuance of Common
Stock for
Conversion of
Preferred Stock 1,219,512 1,220 (1,000,000) (1,000)
Accretion of
Discount 174,753
Preferred Stock
Backup Withholding (84,999)
Net Income
Preferred Stock
Dividends
---------------------------------------------
Balance,
December 31, 2005 48,681,511 48,682 2,614,195 1,617,487
============================================
Issuance of Common
Stock 39,000 39
Issuance of Common
Stock 267,000 267
Issuance of Common
Stock 38,000 38
Accretion of
Discount 216,488
Preferred Stock
Backup Withholding (64,946)
To book FAS 123
adjustment
Misc. Adjustment
Net Income
---------------------------------------------
49,025,511 49,026 2,614,195 1,769,029
============================================
Additional Total Shareholders
Paid In Accumulated
Balance, Capital Deficit Deficiency
December 31, 2001 470,817 (918,737) (418,737)
Shares of common
stock retained
by shareholders
in October 2002
transaction (11,817)
Net loss for the
year ended
December 31, 2002 (10,733,458) (10,733,458)
-------------------------------------------
Balance,
December 31, 2002 459,000 (11,652,195) (11,152,195)
-------------------------------------------
Net loss for the
year ended
December 31, 2003 (984,588) (984,588)
-------------------------------------------
Balance, December
31, 2003 459,000 (12,636,783) (12,136,783)
Issuance of
Preferred Stock
for Long Term Debt 10,696,000 12,000,000
Dividends 114,195
Accretion of Discount 109,538
Net loss for the
year ended
December 31, 2004 (4,143,978) (4,143,978)
-------------------------------------------
Balance,
December 31, 2004 11,155,000 (16,780,761) (4,057,028)
-------------------------------------------
Issuance of Common
Stock for Private
Placement 499,500 500,000
Issuance of Common
Stock for Payment
of Services 30
Issuance of Common
Stock for Payment
of Accounts Payable 3,608,744 3,614,389
Issuance of Common
Stock for Payment
of Loan 963,714 965,001
Issuance of Common
Stock for
Conversion of
Preferred Stock 998,780 999,000
Accretion of
Discount 174,753
Preferred Stock
Backup Withholding (84,999)
Net Income 540,310 540,310
Preferred Stock
Dividends (1,173,753) (1,173,753)
-------------------------------------------
Balance,
December 31, 2005 17,225,738 (17,414,204) 1,477,703
===========================================
Issuance of Common
Stock 24,531 24,570
Issuance of Common
Stock 80,100 80,367
Issuance of Common
Stock 12,502 12,540
Accretion of
Discount 216,488
Preferred Stock
Backup Withholding (64,946)
To book FAS 123
adjustment 506,221 506,221
Misc. Adjustment 17,439 17,439
Net Income 462,049 462,049
-------------------------------------------
17,866,531 (16,952,155) 2,732,431
===========================================
---------------------------------------------------------------------
SOYO Group, Inc. and Subsidiary
Consolidated Statements of Cash Flows
Years Ended December 31,
---------------------------------------------------------------------
2006 2005 2004
---------------------------------------------------------------------
OPERATING ACTIVITIES
---------------------------------------------------------------------
Net Income (loss) $678,537 $540,310 $(3,920,245)
---------------------------------------------------------------------
Adjustments to reconcile
net income (loss) to net
cash provided by (used in)
operating activities:
---------------------------------------------------------------------
Depreciation 43,818 35,394 34,998
---------------------------------------------------------------------
Provision for doubtful
accounts 907,065 34,513 956,738
---------------------------------------------------------------------
Stock compensation for
employees 506,222 -- --
---------------------------------------------------------------------
Stock compensation paid for
professional services 134,915 -- --
---------------------------------------------------------------------
Changes in operating assets
and liabilities:
---------------------------------------------------------------------
(Increase) decrease in:
--------------------------------------- ---------------------- ------
Accounts receivable (6,507,277) (5,236,151) 3,785,110
---------------------------------------------------------------------
Inventories 198,409 (4,128,119) 1,173,214
---------------------------------------------------------------------
Prepaid expenses (15,649) 51,432 18,557
---------------------------------------------------------------------
Deferred Income Tax Asset (177,177) 0 0
---------------------------------------------------------------------
Deposits (206,175) (2,109) (9,776)
---------------------------------------------------------------------
Increase (decrease) in:
---------------------------------------------------------------------
Accounts payable - SOYO
Computer, Inc 0 (1,314,910) (5,242,343)
---------------------------------------------------------------------
Accounts payable - other 2,096,038 9,332,236 2,783,763
---------------------------------------------------------------------
Accrued liabilities (747,341) 509,316 236,059
---------------------------------------------------------------------
---------------------------------------------------------------------
Net cash provided by (used
in) operating activities (3,088,615) (178,088) (183,925)
---------------------------------------------------------------------
---------------------------------------------------------------------
INVESTING ACTIVITIES
---------------------------------------------------------------------
Purchase of property and
equipment (48,891) (621,970) (158,670)
--------------------------------------------------------------------
Disposal of Fixed Assets 205,000
--------------------------------------------------------------------
Net cash Supplied (used) in
investing activities 156,109 (621,970) (158,670)
--------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
FINANCING ACTIVITIES
--------------------------------------------------------------------
Advances from officer,
director and major
shareholder 165,000
---------------------------------------------------------------------
Business Loan 913,750
---------------------------------------------------------------------
Long-term debt 3,735,198
---------------------------------------------------------------------
Repayment of advances to
officer, director and
major shareholder (65,000) (240,000)
---------------------------------------------------------------------
Proceeds from issuance of
common stock 500,000
---------------------------------------------------------------------
Payment of backup
withholding taxes on
accreted dividends
on preferred stock (64,946) (84,999)
---------------------------------------------------------------------
Net cash provided by
financing activities 3,605,252 340,001 913,750
---------------------------------------------------------------------
---------------------------------------------------------------------
CASH AND CASH EQUIVALENTS:
---------------------------------------------------------------------
Net increase (decrease) (672,746) (460,057) 571,155
---------------------------------------------------------------------
At beginning of year 828,294 1,288,351 717,196
---------------------------------------------------------------------
At end of year $1,501,040 $ 828,294 $1,288,351
---------------------------------------------------------------------
---------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
---------------------------------------------------------------------
Cash paid for interest 901,900 97,783 23,371
---------------------------------------------------------------------
Cash paid for income taxes 20,310 800 800
---------------------------------------------------------------------
---------------------------------------------------------------------
NON-CASH INVESTING AND
FINANCING ACTIVITIES
---------------------------------------------------------------------
Settlement of business loan
of $913,750 and accrued
interest of $51,251
through issuance of common
stock 965,001
---------------------------------------------------------------------
Settlement of accounts
payable through issuance
of common stock 3,614,419
---------------------------------------------------------------------
Conversion of Class A
preferred stock to common
stock 1,000
---------------------------------------------------------------------
Accretion of discount on
Class B preferred stock 216,488 174,753 109,538
---------------------------------------------------------------------
Deemed dividend on Class A
preferred stock 999,000
---------------------------------------------------------------------
Noncash dividend on Class B
preferred stock -- 114,195
---------------------------------------------------------------------
Contact:
SOYO Group Inc.
Eric Strasser
(909) 292-2518
--------------------------------------------------------------------------------
Source: SOYO Group Inc.
SOYO news
SOYO Group Inc. Reports Results for the 4th Quarter and Year Ended December 31, 2006
Tuesday April 3, 8:00 am ET
Sales Increase 43 Percent and Company Earns .01 Per Share
**Fiscal 2006 Net Sales: $56,758,688 Million
**Fiscal 2006 Net Income: $462,049 Thousand
**Fiscal 2006 Net income Per Share: $.01
ONTARIO, Calif., April 3, 2007 (PRIME NEWSWIRE) -- SOYO Group Inc. (OTC BB:SOYO.OB - News) today reported operating income from continuing operations for the quarter ended December 31, 2006 of $566,706 compared to operating Income from continuing operations of $651,843 for the quarter ended December 31, 2005. The Company earned $0.01 per share in both periods. Net revenues for the quarter ended December 31, 2006 were $24,417,902, an increase of $7,845,131 or 47.3% over revenues of $16,572,771 for the quarter ended December 31, 2005. The increase for the quarter reflects continuing increased sales volume to Chain or Box retailers and the TV Shopping Networks as a result of its continuing rollout of LCD Product lines.
ADVERTISEMENT
The Company reported operating income from continuing operations for the year ended December 31, 2006 of $1,519,271 compared to operating income from continuing operations of $514,920 for year ended December 31, 2005, an increase of 295%. Net revenues for the year ended December 31, 2006 were $56,758,688, an increase of $18,495,656 or 48% over revenues of $38,263,032 for the year ended December 31, 2005. The gross margin was 12.4% for the quarter ended December 31, 2006, compared to 11.5% for the quarter ended December 31, 2005. Gross margin for the year ended December 31, 2006 was 16.3% compared to 12.4% for the year ended December 31, 2005.
Total costs and expenses for the year ended December 31, 2006 increased by $3,527,118 (84%) to $7,705,168 when compared to total costs and expenses of$4,178,050 for the year ended December 31, 2005. The increased costs during the year resulted mainly from mandatory FASB 123 R compliance, increased costs of consultants, increased legal fees, and increased interest expense. Interest expense, net, increased for the year by $772,333 primarily due to new programs the Company began to ensure adequate levels of inventory for sale.
Statements in this press release may be ``forward-looking statements'' within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about the Company's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict.Therefore, actual outcomes and results may, and probably will, differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and those risks discussed from time to time in the Company's filings with the Securities and Exchange Commission filings, including the Risk Factors included in the Form 10-K for the year ended December 31, 2006 and the Management's Discussion and Analysis of Financial Conditions and Results of Operations in the Form 10-K for the year ended December 31, 2006. In addition, general industry and market conditions and growth rates, and general economic conditions could affect such statements. Any forward-looking statements speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statements to reflect events or circumstances after the date of this release.
About SOYO Group Inc.
SOYO Group Inc. is a provider of computer, consumer electronics, and broadband telecommunications products and services. Headquartered in Ontario, California, with additional sales offices in South America, SOYO Group sells its products through an extensive network of authorized distributors, resellers, system integrators, VARs, retailers, mail-order catalogs and e-tailers, including Best Buy, Circuit City, Staples, Micro Center, Target.com, Walmart.com, eCost.com, Fry's Electronics, PC Mall, and Office Depot, among others. Products are sold under the Go Video, Dragon, Onyx, Dymond, Honeywell and SOYO brand names. For more information, please visit http://www.soyogroup.com.
Consolidated Balance Sheets
December 31,
---------------------------------------------------------------------
2006 2005
---------------------------------------------------------------------
ASSETS
---------------------------------------------------------------------
CURRENT
---------------------------------------------------------------------
Cash and cash equivalents $ 1,501,040 $ 828,294
---------------------------------------------------------------------
Accounts receivable, net of
allowance for doubtful
accounts of $388,958 and
$589,224 at December 31, 2006
and 2005 respectively 12,878,732 7,278,520
---------------------------------------------------------------------
Inventories 7,792,621 7,991,030
---------------------------------------------------------------------
Prepaid Expenses 36,633 20,984
---------------------------------------------------------------------
Income tax refund receivable 0 0
---------------------------------------------------------------------
---------------------------------------------------------------------
Total Current Assets 22,209,026 16,118,828
---------------------------------------------------------------------
---------------------------------------------------------------------
Property and Equipment 711,015 867,122
---------------------------------------------------------------------
Less: accumulated depreciation
and amortization (159,300) (115,480)
---------------------------------------------------------------------
551,715 751,642
---------------------------------------------------------------------
Deferred Income Tax Asset 177,177 0
---------------------------------------------------------------------
Deposits 243,095 36,920
---------------------------------------------------------------------
---------------------------------------------------------------------
Total Assets $ 23,181,013 $ 16,907,390
---------------------------------------------------------------------
December 31,
---------------------------------------------------------------------
2006 2005
---------------------------------------------------------------------
LIABILITIES
---------------------------------------------------------------------
CURRENT
---------------------------------------------------------------------
Accounts payable 16,073,617 13,977,579
---------------------------------------------------------------------
Total Accounts Payable 6,073,617 13,977,579
---------------------------------------------------------------------
---------------------------------------------------------------------
Accrued liabilities 539,767 1,287,108
---------------------------------------------------------------------
Advances from officers,
directors and
major shareholder 0 0
---------------------------------------------------------------------
Business Loan 0 0
---------------------------------------------------------------------
Short Term Loan 100,000 165,000
---------------------------------------------------------------------
---------------------------------------------------------------------
Current Liabilities 16,713,384 15,429,687
---------------------------------------------------------------------
---------------------------------------------------------------------
Long Term Payable 3,735,198 0
---------------------------------------------------------------------
Total Liabilities 20,448,582 15,429,687
---------------------------------------------------------------------
EQUITY
---------------------------------------------------------------------
Class B Preferred stock,
$0.001 par value, authorized
- 10,000,000 shares, Issued
and outstanding - 2,797,738
shares in 2006 and 2005 1,918,974 1,702,486
---------------------------------------------------------------------
Preferred Stock Backup
Withholding (149,945) (84,999)
---------------------------------------------------------------------
Common stock, $0.001 par value
Authorized - 75,000,000 shares,
Issued and outstanding -
49,025,511 shares
(48,681,511 shares - 2005) 49,026 48,682
---------------------------------------------------------------------
Additional paid-in capital 17,866,531 17,225,738
---------------------------------------------------------------------
---------------------------------------------------------------------
Accumulated deficit (16,952,155) (17,414,204)
---------------------------------------------------------------------
Total Shareholders' Equity 2,732,431 1,477,703
---------------------------------------------------------------------
Total Liabilities plus
Shareholders' Equity $ 23,181,013 $ 16,907,390
---------------------------------------------------------------------
SOYO Group, Inc. and Subsidiary
Consolidated Statements of Operations
Year Ended December 31,
---------------------------------------------------------------------
2006 2005 2004
---------------------------------------------------------------------
Net revenues $56,758,688 $38,263,032 $ 32,426,414
---------------------------------------------------------------------
Cost of revenues,
including inventory
purchased from SOYO
Computer, Inc. of $0,
$14,004,259 and
$20,188,354
in 2005, 2004 and
2003 respectively 47,534,249 34,905,874 30,210,042
---------------------------------------------------------------------
Prior years'
purchase discounts
and allowances
settled in 2005 0 (1,335,812) 0
---------------------------------------------------------------------
Gross margin 9,224,439 4,692,970 2,216,372
---------------------------------------------------------------------
Costs and expenses:
---------------------------------------------------------------------
Sales and marketing 1,143,475 911,039 1,577,609
---------------------------------------------------------------------
General and
administrative 5,610,810 3,659,338 3,560,710
---------------------------------------------------------------------
Provision for
doubtful
accounts 907,065 34,513 956,738
---------------------------------------------------------------------
Adjustment of
Allowance 0 (462,234) 0
---------------------------------------------------------------------
Depreciation and
amortization:
---------------------------------------------------------------------
Property and
equipment 43,818 35,394 34,998
---------------------------------------------------------------------
Total costs and
expenses 7,705,168 4,178,050 6,130,055
---------------------------------------------------------------------
Income (Loss) from
operations 1,519,271 514,920 (3,913,683)
---------------------------------------------------------------------
Other income (expense):
---------------------------------------------------------------------
Interest income 10,561 5,301 0
---------------------------------------------------------------------
Interest expense (901,900) (129,567) (23,371)
---------------------------------------------------------------------
Other income (expense) (106,262) 150,456 17,609
---------------------------------------------------------------------
Other income (expense),
net (997,601) 26,190 (5,762)
---------------------------------------------------------------------
Income (Loss) before
provision (benefit)
for income taxes 521,670 541,110 (3,919,445)
---------------------------------------------------------------------
Provision for income
taxes
---------------------------------------------------------------------
Current Income Tax
Expense (20,310) 800 800
---------------------------------------------------------------------
Deferred Income Tax
Gain
(Expense) 177,177 -- --
---------------------------------------------------------------------
Net Income (loss) 678,537 540,310 (3,920,245)
---------------------------------------------------------------------
---------------------------------------------------------------------
Less: Dividends on
Convertible
Preferred
Stock (216,488) (1,173,753) (223,733)
---------------------------------------------------------------------
Net income/ (loss)
attributable to
common
shareholders 462,049 (633,443) (4,143,978)
---------------------------------------------------------------------
Net loss per common
share - 0.01 (0.01) (0.10)
Basic and diluted 0.01
---------------------------------------------------------------------
Weighted average
number of
shares of common
stock
outstanding - 49,025,511 48,511,681 40,000,000
Basic and diluted 59,786,042
---------------------------------------------------------------------
---------------------------------------------------------------------
SOYO Group, Inc. and Subsidiary
Consolidated Statements of Shareholders' Equity (Deficit)
Years Ended December 31, 2006, 2005 and 2004
Balance, December 31, 2001
Common Stock Preferred Stock
Par Par
Shares Value Shares Value
28,182,750 28,183 1,000,000 1,000
Shares of common
stock retained
by shareholders
in October 2002
transaction 11,817,250 11,817
Net loss for the
year ended
December 31, 2002 -- -- -- --
---------------------------------------------
Balance,
December 31, 2002 40,000,000 40,000 1,000,000 1,000
---------------------------------------------
Net loss for the
year ended
December 31, 2003 -- -- -- --
---------------------------------------------
Balance, December
31, 2003 40,000,000 40,000 1,000,000 1,000
Issuance of
Preferred Stock
for Long Term Debt 2,500,000 1,304,000
Dividends 114,195 114,195
Accretion of Discount 109,538
Net loss for the
year ended
December 31, 2004 -- --
---------------------------------------------
Balance,
December 31, 2004 40,000,000 40,000 3,614,195 1,528,733
---------------------------------------------
Issuance of Common
Stock for Private
Placement 500,000 500
Issuance of Common
Stock for Payment
of Services 30,000 30
Issuance of Common
Stock for Payment
of Accounts Payable 5,645,330 5,645
Issuance of Common
Stock for Payment
of Loan 1,286,669 1,287
Issuance of Common
Stock for
Conversion of
Preferred Stock 1,219,512 1,220 (1,000,000) (1,000)
Accretion of
Discount 174,753
Preferred Stock
Backup Withholding (84,999)
Net Income
Preferred Stock
Dividends
---------------------------------------------
Balance,
December 31, 2005 48,681,511 48,682 2,614,195 1,617,487
============================================
Issuance of Common
Stock 39,000 39
Issuance of Common
Stock 267,000 267
Issuance of Common
Stock 38,000 38
Accretion of
Discount 216,488
Preferred Stock
Backup Withholding (64,946)
To book FAS 123
adjustment
Misc. Adjustment
Net Income
---------------------------------------------
49,025,511 49,026 2,614,195 1,769,029
============================================
Additional Total Shareholders
Paid In Accumulated
Balance, Capital Deficit Deficiency
December 31, 2001 470,817 (918,737) (418,737)
Shares of common
stock retained
by shareholders
in October 2002
transaction (11,817)
Net loss for the
year ended
December 31, 2002 (10,733,458) (10,733,458)
-------------------------------------------
Balance,
December 31, 2002 459,000 (11,652,195) (11,152,195)
-------------------------------------------
Net loss for the
year ended
December 31, 2003 (984,588) (984,588)
-------------------------------------------
Balance, December
31, 2003 459,000 (12,636,783) (12,136,783)
Issuance of
Preferred Stock
for Long Term Debt 10,696,000 12,000,000
Dividends 114,195
Accretion of Discount 109,538
Net loss for the
year ended
December 31, 2004 (4,143,978) (4,143,978)
-------------------------------------------
Balance,
December 31, 2004 11,155,000 (16,780,761) (4,057,028)
-------------------------------------------
Issuance of Common
Stock for Private
Placement 499,500 500,000
Issuance of Common
Stock for Payment
of Services 30
Issuance of Common
Stock for Payment
of Accounts Payable 3,608,744 3,614,389
Issuance of Common
Stock for Payment
of Loan 963,714 965,001
Issuance of Common
Stock for
Conversion of
Preferred Stock 998,780 999,000
Accretion of
Discount 174,753
Preferred Stock
Backup Withholding (84,999)
Net Income 540,310 540,310
Preferred Stock
Dividends (1,173,753) (1,173,753)
-------------------------------------------
Balance,
December 31, 2005 17,225,738 (17,414,204) 1,477,703
===========================================
Issuance of Common
Stock 24,531 24,570
Issuance of Common
Stock 80,100 80,367
Issuance of Common
Stock 12,502 12,540
Accretion of
Discount 216,488
Preferred Stock
Backup Withholding (64,946)
To book FAS 123
adjustment 506,221 506,221
Misc. Adjustment 17,439 17,439
Net Income 462,049 462,049
-------------------------------------------
17,866,531 (16,952,155) 2,732,431
===========================================
---------------------------------------------------------------------
SOYO Group, Inc. and Subsidiary
Consolidated Statements of Cash Flows
Years Ended December 31,
---------------------------------------------------------------------
2006 2005 2004
---------------------------------------------------------------------
OPERATING ACTIVITIES
---------------------------------------------------------------------
Net Income (loss) $678,537 $540,310 $(3,920,245)
---------------------------------------------------------------------
Adjustments to reconcile
net income (loss) to net
cash provided by (used in)
operating activities:
---------------------------------------------------------------------
Depreciation 43,818 35,394 34,998
---------------------------------------------------------------------
Provision for doubtful
accounts 907,065 34,513 956,738
---------------------------------------------------------------------
Stock compensation for
employees 506,222 -- --
---------------------------------------------------------------------
Stock compensation paid for
professional services 134,915 -- --
---------------------------------------------------------------------
Changes in operating assets
and liabilities:
---------------------------------------------------------------------
(Increase) decrease in:
--------------------------------------- ---------------------- ------
Accounts receivable (6,507,277) (5,236,151) 3,785,110
---------------------------------------------------------------------
Inventories 198,409 (4,128,119) 1,173,214
---------------------------------------------------------------------
Prepaid expenses (15,649) 51,432 18,557
---------------------------------------------------------------------
Deferred Income Tax Asset (177,177) 0 0
---------------------------------------------------------------------
Deposits (206,175) (2,109) (9,776)
---------------------------------------------------------------------
Increase (decrease) in:
---------------------------------------------------------------------
Accounts payable - SOYO
Computer, Inc 0 (1,314,910) (5,242,343)
---------------------------------------------------------------------
Accounts payable - other 2,096,038 9,332,236 2,783,763
---------------------------------------------------------------------
Accrued liabilities (747,341) 509,316 236,059
---------------------------------------------------------------------
---------------------------------------------------------------------
Net cash provided by (used
in) operating activities (3,088,615) (178,088) (183,925)
---------------------------------------------------------------------
---------------------------------------------------------------------
INVESTING ACTIVITIES
---------------------------------------------------------------------
Purchase of property and
equipment (48,891) (621,970) (158,670)
--------------------------------------------------------------------
Disposal of Fixed Assets 205,000
--------------------------------------------------------------------
Net cash Supplied (used) in
investing activities 156,109 (621,970) (158,670)
--------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
FINANCING ACTIVITIES
--------------------------------------------------------------------
Advances from officer,
director and major
shareholder 165,000
---------------------------------------------------------------------
Business Loan 913,750
---------------------------------------------------------------------
Long-term debt 3,735,198
---------------------------------------------------------------------
Repayment of advances to
officer, director and
major shareholder (65,000) (240,000)
---------------------------------------------------------------------
Proceeds from issuance of
common stock 500,000
---------------------------------------------------------------------
Payment of backup
withholding taxes on
accreted dividends
on preferred stock (64,946) (84,999)
---------------------------------------------------------------------
Net cash provided by
financing activities 3,605,252 340,001 913,750
---------------------------------------------------------------------
---------------------------------------------------------------------
CASH AND CASH EQUIVALENTS:
---------------------------------------------------------------------
Net increase (decrease) (672,746) (460,057) 571,155
---------------------------------------------------------------------
At beginning of year 828,294 1,288,351 717,196
---------------------------------------------------------------------
At end of year $1,501,040 $ 828,294 $1,288,351
---------------------------------------------------------------------
---------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
---------------------------------------------------------------------
Cash paid for interest 901,900 97,783 23,371
---------------------------------------------------------------------
Cash paid for income taxes 20,310 800 800
---------------------------------------------------------------------
---------------------------------------------------------------------
NON-CASH INVESTING AND
FINANCING ACTIVITIES
---------------------------------------------------------------------
Settlement of business loan
of $913,750 and accrued
interest of $51,251
through issuance of common
stock 965,001
---------------------------------------------------------------------
Settlement of accounts
payable through issuance
of common stock 3,614,419
---------------------------------------------------------------------
Conversion of Class A
preferred stock to common
stock 1,000
---------------------------------------------------------------------
Accretion of discount on
Class B preferred stock 216,488 174,753 109,538
---------------------------------------------------------------------
Deemed dividend on Class A
preferred stock 999,000
---------------------------------------------------------------------
Noncash dividend on Class B
preferred stock -- 114,195
---------------------------------------------------------------------
Contact:
SOYO Group Inc.
Eric Strasser
(909) 292-2518
--------------------------------------------------------------------------------
Source: SOYO Group Inc.
looks good!