WEB NEWS Comments & Business Outlook
PHYSICAL PROPERTY HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended March 31,
2015
2016
2016
HK$’000
HK$’000
US$’000
Operating Revenues
Rental income
288
294
38
Total operating revenues
288
294
38
Operating Expenses
Rent and related expenses
(40
)
(42
)
(5
)
Depreciation
(71
)
(71
)
(9
)
Other selling and administrative expenses
(290
)
(310
)
(40
)
Total operating expenses
(401
)
(423
)
(54
)
Loss from operations
(113
)
(129
)
(16
)
Non-operating expenses
Interest expenses
(41
)
(38
)
(5
)
Total non-operating expenses
(41
)
(38
)
(5
)
Loss before income taxes
(154
)
(167
)
(21
)
Provision for income taxes
--
--
--
Net loss and total comprehensive loss
(154
)
(167
)
(21
)
Loss per share of common stock (in cents) - Basic and diluted
(0.17
)
(0.19
)
(0.02
)
Weighted average number of shares of common stock outstanding
90,000,000
90,000,000
90,000,000
Comments & Business Outlook
PHYSICAL PROPERTY HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended September 30,
Nine months ended September 30,
2014
2015
2015
2014
2015
2015
HK$’000
HK$’000
US$’000
HK$’000
HK$’000
US$’000
Operating Revenues
Rental income
265
254 33
785
776 99
Total operating revenues
265
254 33
785
776 99
Operating Expenses
Rent and related expenses
(32
)
(31
)
(4
)
(94
)
(101
)
(13
)
Depreciation
(71
)
(71
)
(9
)
(223
)
(213
)
(27
)
Other selling and administrative expenses
(288
)
(299
)
(38
)
(936
)
(899
)
(115
)
Total operating expenses
(391
)
(401
)
(51
)
(1,253
)
(1,213
)
(155
)
Loss from operations
(126
)
(147
)
(18
)
(468
)
(437
)
(56
)
Non-operating expenses
Other income
--
--
--
--
1 --
Interest expenses
(43
)
(39
)
(5
)
(130
)
(120
)
(15
)
Total non-operating expenses
(43
)
(39
)
(5
)
(130
)
(119
)
(15
)
Loss before income taxes
(169
)
(186
)
(23
)
(598
)
(556
)
(71
)
Provision for income taxes
--
-- --
--
-- --
Net loss and total comprehensive loss
(169
)
(186
)
(23
)
(598
)
(556
)
(71
)
Loss per share of common stock (in cents) – Basic and diluted
(0.19
)
(0.21
)
(0.02
)
(0.92
)
(0.62
)
(0.08
)
Weighted average number of shares of common stock outstanding
90,000,000
90,000,000 90,000,000
64,874,922
90,000,000 90,000,000
Management Discussion and Analysis
OPERATING REVENUES. Operating revenues for the third quarter of 2015 totaled HK$254,000 (US$33,000) compared to HK$265,000 for the corresponding period in 2014. This represented a decrease of 4% mainly due to a unit being vacant for two months in the third quarter of 2015.
NET LOSS AND TOTAL COMPREHENSIVE LOSS. The Company has recorded a net loss and total comprehensive loss of HK$186,000 (US$23,000) for the third quarter of 2015, compared to a net loss and total comprehensive loss of HK$169,000 for the third quarter of 2014. This represented an increase in loss of 10% due to the effect of the decrease in rental income and increase in operating expenses as mentioned above.
Comments & Business Outlook
PHYSICAL PROPERTY HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended June 30,
Six months ended June 30,
2014
201 5
201 5
2014
2015
2015
HK$’000
HK$’000
US$’000
HK$’000
HK$’000
US$’000
Operating Revenues
Rental income
243
234 30
520
522 67
Total operating revenues
243
234 30
520
522 67
Operating Expenses
Rent and related expenses
(32
)
(30
)
(4
)
(62
)
(70
)
(9
)
Depreciation
(71
)
(71
)
(9
)
(152
)
(142
)
(18
)
Other selling and administrative expenses
(348
)
(310
)
(40
)
(648
)
(600
)
(77
)
Total operating expenses
(451
)
(411
)
(53
)
(862
)
(812
)
(104
)
Loss from operations
(208
)
(177
)
(23
)
(342
)
(290
)
(37
)
Non-operating expenses
Other income
--
1 --
--
1 --
Interest expenses
(43
)
(40
)
(5
)
(87
)
(81
)
(10
)
Total non-operating expenses
(43
)
(39
)
(5
)
(87
)
(80
)
(10
)
Loss before income taxes
(251
)
(216
)
(28
)
(429
)
(370
)
(47
)
Provision for income taxes
--
-- --
--
-- --
Net loss and total comprehensive loss
(251
)
(216
)
(28
)
(429
)
(370
)
(47
)
Loss per share of common stock (in cents) – Basic and diluted
(0.33
)
(0.24
)
(0.03
)
(0.82
)
(0.41
)
(0.05
)
Weighted average number of shares of common stock outstanding
76,295,412
90,000,000 90,000,000
52,312,382
90,000,000 90,000,000
Management Discussion and Analysis
OPERATING REVENUES. Operating revenues for the second quarter of 2015 totaled HK$234,000 (US$30,000) compared to HK$243,000 for the corresponding period in 2014. This represented a decrease of 4% mainly due to a unit being vacant in the second quarter of 2015.
NET LOSS AND TOTAL COMPREHENSIVE LOSS. The Company has recorded a net loss and total comprehensive loss of HK$216,000 (US$28,000) for the second quarter of 2015, compared to a net loss and total comprehensive loss of HK$251,000 for the second quarter of 2014. This represented a decrease in loss of 14% due to the effect of the decrease in rental income and decrease in operating expenses as mentioned above.
Comments & Business Outlook
PHYSICAL PROPERTY HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended March 31,
201 4
201 5
201 5
HK$’000
HK$’000
US$’000
Operating Revenues
Rental income
277
288
37
Total operating revenues
277
288
37
Operating Expenses
Rent and related expenses
(30
)
(40
)
(5
)
Depreciation
(81
)
(71
)
(9
)
Other selling and administrative expenses
(300
)
(290
)
(37
)
Total operating expenses
(411
)
(401
)
(51
)
Loss from operations
(134
)
(113
)
(14
)
Non-operating expenses
Interest expenses
(44
)
(41
)
(5
)
Total non-operating expenses
(44
)
(41
)
(5
)
Loss before income taxes
(178
)
(154
)
(19
)
Provision for income taxes
--
--
--
Net loss and total comprehensive loss
(178
)
(154
)
(19
)
Loss per share of common stock (in cents) - Basic and diluted
(0.63
)
(0.17
)
(0.02
)
Weighted average number of shares of common stock outstanding
28,329,353
90,000,000
90,000,000
Management Discussion and Analysis
OPERATING REVENUES. Operating revenues for the first quarter of 2015 totaled HK$288,000 (US$37,000) compared to HK$277,000 for the corresponding period in 2014. This represented an increase of 4% mainly due to rental increases for the properties.
NET LOSS AND TOTAL COMPREHENSIVE LOSS. The Company has recorded a net loss and total comprehensive loss of HK$154,000 (US$19,000) for the first quarter of 2015, compared to a net loss and total comprehensive loss of HK$178,000 for the first quarter of 2014. This represented a decrease in loss of 13% due to the effect of the increase in rental income and the decrease in operating expenses as mentioned above.
Comments & Business Outlook
Physical Property Holdings Inc. and Subsidiaries
Consolidated Statements of Operations
Year ended December 31,
201 4
201 4
2013
Note
US$’000
HK$’000
HK$’000
Operating revenues
Rental income
135 1,053
1,058
Operating expenses
Rent and related expenses
(17
)
(134
)
(113
)
Depreciation
(38
)
(293
)
(344
)
Other selling and administrative expenses
(163
)
(1,275
)
(877
)
Total operating expenses
(218
)
(1,702
)
(1,334
)
Loss from operations
(83
)
(649
)
(276
)
Non-operating expenses
Interest expenses
(22
)
(171
)
(183
)
Total non-operating expenses
(22
)
(171
)
(183
)
Loss before income taxes
(105
)
(820
)
(459
)
Provision for income taxes
6 - -
-
Net loss and total comprehensive loss
(105
)
(820
)
(459
)
Loss per share of common stock (in cents) - Basic and diluted
(0.15
)
(1.15
)
(1.62
)
Weighted average number of shares of common stock outstanding
71,156,191 71,156,191
28,329,353
Management Discussion and Analysis
OPERATING REVENUES. Operating revenues for the fiscal year ended December 31, 2014 totaled HK$1,053,000 (US$135,000) compared to HK$1,058,000 the previous year. This represented a slight decrease of 1%, mainly due to a longer vacancy period than last year despite rental increases upon signing of new leases.
NET LOSS AND TOTAL COMPREHENSIVE LOSS. The Company has recorded a net loss and total comprehensive loss of HK$820,000 (US$105,000) for the fiscal year ended December 31, 2014, compared to a net loss and total comprehensive loss of HK$459,000 for 2013. This represented an increase in loss of 79% due to the combined effect of the decrease in rental income and the increase in expenses as mentioned above.
Comments & Business Outlook
PHYSICAL PROPERTY HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended September 30,
Nine months ended September 30,
2013
2014
2014
2013
2014
2014
HK$’000
HK$’000
US$’000
HK$’000
HK$’000
US$’000
Operating Revenues
Rental income
278
265 34
781
785 101
Total operating revenues
278
265 34
781
785 101
Operating Expenses
Rent and related expenses
(30
)
(32
)
(4
)
(84
)
(94
)
(12
)
Depreciation
(85
)
(71
)
(9
)
(257
)
(223
)
(29
)
Other selling and administrative expenses
(160
)
(288
)
(37
)
(524
)
(936
)
(120
)
Total operating expenses
(275
)
(391
)
(50
)
(865
)
(1,253
)
(161
)
Profit (Loss) from operations
3
(126
)
(16
)
(84
)
(468
)
(60
)
Non-operating expenses
Interest expenses
(46
)
(43
)
(6
)
(139
)
(130
)
(17
)
Total non-operating expenses
(46
)
(43
)
(6
)
(139
)
(130
)
(17
)
Loss before income taxes
(43
)
(169
)
(22
)
(223
)
(598
)
(77
)
Provision for income taxes
--
-- --
--
-- --
Net loss and total comprehensive loss
(43
)
(169
)
(22
)
(223
)
(598
)
(77
)
Loss per share of common stock (in cents) – Basic and diluted
(0.15
)
(0.19
)
(0.02
)
(0.79
)
(0.92
)
(0.12
)
Weighted average number of shares of common stock outstanding
28,329,353
90,000,000 90,000,000
28,329,353
64,874,922 64,874,922
Management Discussion and Analysis
OPERATING REVENUES. Operating revenues for the third quarter of 2014 totaled HK$265,000 (US$34,000) compared to HK$278,000 for the corresponding period in 2013. This represented a decrease of 5% mainly due to a tenant vacating a unit in the last month of the third quarter of 2014.
NET LOSS AND TOTAL COMPREHENSIVE LOSS. The Company has recorded a net loss and total comprehensive loss of HK$169,000 (US$22,000) for the third quarter of 2014, compared to a net loss and total comprehensive loss of HK$43,000 for the third quarter of 2013. This represented an increase in loss of 293% due to the effect of the decrease in rental income and the increase in operating expenses as mentioned above.
Comments & Business Outlook
PHYSICAL PROPERTY HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended June 30,
Six months ended June 30,
2013
2014
2014
2013
2014
2014
HK$’000
HK$’000
US$’000
HK$’000
HK$’000
US$’000
Operating Revenues
Rental income
275
243
31
503
520
67
Total operating revenues
275
243
31
503
520
67
Operating Expenses
Rent and related expenses
(30
)
(32
)
(4
)
(54
)
(62
)
(8
)
Depreciation
(86
)
(71
)
(9
)
(172
)
(152
)
(19
)
Other selling and administrative expenses
(156
)
(348
)
(45
)
(364
)
(648
)
(84
)
Total operating expenses
(272
)
(451
)
(58
)
(590
)
(862
)
(111
)
Profit (Loss) from operations
3
(208
)
(27
)
(87
)
(342
)
(44
)
Non-operating expenses
Interest expenses
(46
)
(43
)
(6
)
(93
)
(87
)
(11
)
Total non-operating expenses
(46
)
(43
)
(6
)
(93
)
(87
)
(11
)
Loss before income taxes
(43
)
(251
)
(33
)
(180
)
(429
)
(55
)
Provision for income taxes
--
--
--
--
--
--
Net loss and total comprehensive loss
(43
)
(251
)
(33
)
(180
)
(429
)
(55
)
Loss per share of common stock (in cents) – Basic and diluted
(0.15
)
(0.33
)
(0.04
)
(0.64
)
(0.82
)
(0.11
)
Weighted average number of shares of common stock outstanding
28,329,353
76,295,412
76,295,412.
28,329,353
52,312,382
52,312,382
Management Discussion and Analysis
OPERATING REVENUES. Operating revenues for the second quarter of 2014 totaled HK$243,000 (US$31,000) compared to HK$275,000 for the corresponding period in 2013. This represented a decrease of 12% mainly due to a short period of vacancy for replacement of a tenant in the second quarter of 2014.
NET LOSS AND TOTAL COMPREHENSIVE LOSS. The Company has recorded a net loss and total comprehensive loss of HK$251,000 (US$33,000) for the second quarter of 2014, compared to a net loss and total comprehensive loss of HK$43,000 for the second quarter of 2013. This represented an increase in loss of 484% due to the effect of the decrease in rental income and the increase in operating expenses as mentioned above.
Deal Flow
Item 3.02 Unregistered Sales of Equity Securities.
Chairman and President of the Registrant (“Luk”), relating to the sale of a total of 61,670,647 shares of its common stock, $.001 par value (the “Common Stock”), in consideration for the cancellation of $61,670.65 of indebtedness owed by the Registrant to Luk. The shares were issued at an effective price of $.001 per share, which the Board of Directors determined to be good and valuable consideration and fair to the Registrant.
The issuance was exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Regulation 506 and Section 4(6) under the Securities Act, Section 4(2) under the Securities Act and Regulation S under the Securities Act. The Registrant relied upon, among other things, representations from Luk that he was an “accredited investor” within the meaning of Rule 501(a) under the Securities Act as the basis for the Regulation 506 and Section 4(6) exemptions. In addition, the Registrant relied upon, among other things, the fact that Luk was a sophisticated investor, could bear the risk of the investment from a financial point of view, and was given access to information about the Registrant. Finally, the Registrant relied upon the fact that the investor was not a “U.S. Person,” in concluding that it was entitled to rely upon the exemption provided by Regulation S.
The shares will be issued by the Registrant’s transfer agent as promptly as practicable bearing a restrictive legend. As a result of the issuance, the Registrant will have 90,000,000 issued and outstanding shares of Common Stock, and Luk’s 85,048,716 shares will represent 94.5% of the total issued and outstanding number of shares.
Comments & Business Outlook
Physical Property Holdings Inc. and Subsidiaries
Consolidated Statements of Operations
Year ended December 31,
2013
2013
2012
Note
US$’000
HK$’000
HK$’000
Operating revenues
Rental income
136 1,058
841
Operating expenses
Rent and related expenses
(14
)
(113
)
(97
)
Depreciation
(44
)
(344
)
(344
)
Other selling and administrative expenses
(113
)
(877
)
(719
)
Total operating expenses
(171
)
(1,334
)
(1,160
)
Loss from operations
(35
)
(276
)
(319
)
Non-operating expenses
Interest expenses
(24
)
(183
)
(195
)
Total non-operating expenses
(24
)
(183
)
(195
)
Loss before income taxes
(59
)
(459
)
(514
)
Provision for income taxes
6 - -
-
Net loss and total comprehensive loss
(59
)
(459
)
(514
)
Loss per share of common stock (in cents) - Basic and diluted
(0.21
)
(1.62
)
(1.81
)
Weighted average number of shares of common stock outstanding
28,329,353 28,329,353
28,329,353
Management Discussion and Analysis
FISCAL YEAR ENDED DECEMBER 31, 2013 COMPARED TO FISCAL YEAR ENDED DECEMBER 31, 2012
OPERATING REVENUES. Operating revenues for the fiscal year ended December 31, 2013 totaled HK$1,058,000 (US$136,000) compared to HK$841,000 the previous year. This represented an increase of 26% mainly due to the rental increases for the properties.
NET LOSS AND TOTAL COMPREHENSIVE LOSS. The Company has recorded a net loss and total comprehensive loss of HK$459,000 (US$59,000) for the fiscal year ended December 31, 2013, compared to a net loss and total comprehensive loss of HK$514,000 for 2012. This represented a decrease in loss of 11% due to the net effect of the increase in rental income and the increase in expenses as mentioned above.
Comments & Business Outlook
PHYSICA L PROPERTY HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended March 31,
2011
2012
2012
HK$’000
HK$’000
US$’000
Operating Revenues
Rental income
193
231
30
Total operating revenues
193
231
30
Operating Expenses
Rent and related expenses
(22
)
(25
)
(3
)
Depreciation
(86
)
(86
)
(11
)
Other selling and administrative expenses
(184
)
(167
)
(22
)
Total operating expenses
(292
)
(278
)
(36
)
Loss from operations
(99
)
(47
)
(6
)
Non-operating expenses
Interest expenses
(53
)
(50
)
(6
)
Total non-operating expenses
(53
)
(50
)
(6
)
Loss before income taxes
(152
)
(97
)
(12
)
Provision for income taxes
--
--
--
Net loss and total comprehensive loss
(152
)
(97
)
(12
)
Loss per share of common stock (in cents) - Basic and diluted
(0.54
)
(0.34
)
(0.04
)
Weighted average number of shares of common stock outstanding
28,329,353
28,329,353
28,329,353
Translation of amounts from Hong Kong Dollars ("HK$") into United States Dollars ("US$") for the convenience of the reader has been made at the exchange rate of US$1.00 = HK$7.8. No representation is made that the Hong Kong Dollar amounts could have been, or could be, converted into United States Dollars, at that rate on March 31, 2012 or at any other certain rate.
Investor Alert
On or about October 22, 2007, the Securities and Exchange Commission (the “SEC”) sent a “voluntary request letter ” seeking certain information and documents about the Company and another company known as Score One, Inc, in connection with an investigation into alleged spam e-mail campaigns and potential securities fraud violations.
On February 1, 2011, the SEC filed a complaint in US District Court, Eastern District of Michigan, Southern District, SEC v. Gregg M.S. Berger, et al., for securities fraud involving spamming stock, pump and dump schemes, misleading press releases, violation of numerous SEC rules governing the issuance of S-8 stock, misleading reverse mergers, etc. The Company and its officers and directors were not named as defendants in the case.
Liquidity Requirements
Management believes that cash flow generated from the operations of the Company, the tight cost and cash flow control measures and the existing cash and bank balances on hand should be sufficient to satisfy the working capital requirement of the Company for at least the next 12 months as the Principal Stockholder has confirmed his intention to make available adequate funds to the Company as and when required to maintain the Company as a going concern.
