SGOCO Group, Ltd (NASDAQ:SGOC)

HONG KONG, Dec. 20, 2018 /PRNewswire/ -- SGOCO Group, Ltd. (SGOC) ("SGOCO" or the "Company"), a company focused on (a) Virtual Reality device and technologies research and development (b) environmental protection, energy saving technologies, equipment development and applications (c) money lending business in Hong Kongproviding mortgage loans to high quality target borrowers with low credit risk who are able to provide mortgage collateral and/or third-party guarantee and (d) property investment to generate additional rental income to further boost the group's cashflow over the long term, today announced that the company received a deficiency letter from The Nasdaq Stock Market ("Nasdaq") on December 19, 2018, stating that, because the Company has not maintained a minimum closing bid price of $1.00 for the last 30 consecutive business days, the Company is no longer in compliance with Nasdaq Listing Rule 5550(a)(2).

The Nasdaq letter states that the Company will be afforded 180 calendar days, or until June 17, 2018, to regain compliance with the minimum bid price requirement. In order to regain compliance, the Company must have a closing bid price of $1.00 or more for a minimum of 10 consecutive business days. If at any time during this 180-day period the Company's closing bid price meets or exceeds $1.00 for a minimum of 10 consecutive business days, Nasdaq will provide written confirmation of compliance and the matter will be closed. If the Company has not regained compliance by the expiration of the initial 180 calendar days, Nasdaq will then provide written notification to the Company that its ordinary shares are subject to delisting. At that time, the Company may appeal Nasdaq's delisting determination to a Nasdaq Listing Qualifications Panel.

The deficiency notification described above will have no immediate effect on the listing of the Company's ordinary shares, pending the expiration of the relevant grace period stated above. The Company is currently considering its options in order to comply with the minimum bid price rule within the aforementioned grace period. The Company will seek to regain compliance within the grace period and is considering various measures to address compliance with the continued listing standards of Nasdaq. There can be no assurances that the Company will be able to satisfy the above described deficiency, and that its ordinary shares will not be delisted.

HONG KONG, Dec. 20, 2018 /PRNewswire/ -- SGOCO Group, Ltd. (Nasdaq: SGOC) ("SGOCO" or the "Company"), a company focused on (a) Virtual Reality device and technologies research and development (b) environmental protection, energy saving technologies, equipment development and applications (c) money lending business in Hong Kong providing mortgage loans to high quality target borrowers with low credit risk who are able to provide mortgage collateral and/or third-party guarantee and (d) property investment to generate additional rental income to further boost the group's cashflow over the long term, today announced that the company received a deficiency letter from The Nasdaq Stock Market ("Nasdaq") on December 19, 2018, stating that, because the Company has not maintained a minimum closing bid price of $1.00 for the last 30 consecutive business days, the Company is no longer in compliance with Nasdaq Listing Rule 5550(a)(2).

The Nasdaq letter states that the Company will be afforded 180 calendar days, or until June 17, 2018, to regain compliance with the minimum bid price requirement. In order to regain compliance, the Company must have a closing bid price of $1.00 or more for a minimum of 10 consecutive business days. If at any time during this 180-day period the Company's closing bid price meets or exceeds $1.00 for a minimum of 10 consecutive business days, Nasdaq will provide written confirmation of compliance and the matter will be closed. If the Company has not regained compliance by the expiration of the initial 180 calendar days, Nasdaq will then provide written notification to the Company that its ordinary shares are subject to delisting. At that time, the Company may appeal Nasdaq's delisting determination to a Nasdaq Listing Qualifications Panel.

The deficiency notification described above will have no immediate effect on the listing of the Company's ordinary shares, pending the expiration of the relevant grace period stated above. The Company is currently considering its options in order to comply with the minimum bid price rule within the aforementioned grace period. The Company will seek to regain compliance within the grace period and is considering various measures to address compliance with the continued listing standards of Nasdaq. There can be no assurances that the Company will be able to satisfy the above described deficiency, and that its ordinary shares will not be delisted.

HONG KONG, Dec. 1, 2017 /PRNewswire/ -- SGOCO Group, Ltd. (SGOC) ("SGOCO" or the "Company"), a company focused on product design, distribution and brand development in the Chinese display, computer and virtual reality ("VR") product markets, as well as energy saving products and services, today announced its unaudited operating results for the six months ended June 30, 2017.

2017 Interim Results Overview

• Interim revenues decreased 99.6% to $0.02 million for the first six months of this year (the "1H 2017"), as compared to $4.7 million for the first six months of 2016.
• Gross profit decreased by 98.9% to $0.01 million in the 1H 2017, from $0.2 million for the same period in 2016.
• Net loss for the 1H 2017 was $2.4 million, compared to net loss of $2.7 million during the same period in 2016.
• Basic and diluted loss per share was $0.24 for the 1H 2017, as compared to $0.42 loss per share in the same period in 2016.

Revenue

Our total revenues decreased by 99.6% to $0.02 million for the 1H 2017, as compared to $4.7 million for the first six months of 2016.

Cost of Goods Sold

Cost of goods sold decreased by 99.7% to $0.02 million in the 1H of 2017 from $4.5 million in the same period of 2016. The decrease was consistent with the decrease in revenue.

Gross margin

In 1H 2017, the gross profit of the Company decreased by 98.9% to $0.01 million from $0.2 million in the same period of 2016. The overall gross margin for the 1H 2017 was 11.8%, as compared with 4.0% during the same period of 2016.

Operating loss and expenses

The Company recorded a $2.9 million operating loss in the 1H 2017, as compared to an operating loss of $1.3 million in the first six months of 2016. Operating expenses in the 1H 2017 increased by 99.5% to $2.9 million, compared to operating expenses of $1.5 million in the first six months of 2016. The increase in general and administrative expenses was mainly due to an increase in employee share-based compensation and amortization of intangible assets of our recently acquired subsidiaries.

Net loss and loss per share

Net loss for the 1H 2017 was $2.4 million, compared to a net loss of $2.7 million for the same period in 2016. Basic and diluted loss per share was $0.24 in the 1H 2017 based on a weighted average number of outstanding ordinary shares of 10,312,893, as compared to basic and diluted loss per share of $0.42 based on a weighted average number of outstanding ordinary shares of 6,476,467 for the first half of 2016.

Cash and working capital

SGOCO held $0.1 million cash and cash equivalents as of June 30, 2017, compared to $0.03 million as of December 31, 2016. Working capital decreased to a negative of $0.8 million as of June 30, 2017 from a negative of $0.7 million as of December 31, 2016.

HONG KONG, June 20, 2017 /PRNewswire/ -- SGOCO Group, Ltd. (SGOC) ("SGOCO" or the "Company"), a company focused on product design, distribution, and brand development in the display and computer product market in China as well as energy saving products and services worldwide, today announced that BOCA International Limited ("BOCA"), a wholly owned subsidiary of the Company, has signed a Performance Agreement (the "Agreement") with Hong Kong Aircraft Engineering Company Limited ("HAECO"), a subsidiary of Swire Group. Pursuant to the Agreement, HAECO engaged BOCA to design, supply and install a new Ultra-High Efficiency BOCA Hybrid Power Chiller Plant (the "Project") on a 10 years performance contract for HAECO's facility at the Hong Kong International Airport.

Dr. Richard Chan, the Chief Technology Officer of BOCA estimated that the annual electricity running cost saving through the Project is approximately 30~40% of the existing chiller plant annual energy cost. Expect this can contribute a reduction of 4,212,000kg CARON EMISSION.

BOCA has successfully installed and operated BocaPCM- TES for a number of real estate projects worldwide, including in the United Kingdom, Italy, Australia, Malaysia and Hong Kong. Regarding this new project of BOCA which the Company acquired at the end of 2015, Mr. Shi-Bin Xie, Chief Executive Officer of SGOCO, commented, "We are pleased to see the initial results of the integration of Boca and Company grows the energy saving and environmental protection business. The Company will continue its efforts to further develop such new business and achieve our goals. "

HONG KONG, April 12, 2017 /PRNewswire/ -- SGOCO Group, Ltd. (NASDAQ: SGOC), a company focused on product design, distribution and brand development in the Chinese display and computer product market as well as energy saving products and services worldwide, today announced the closing of its previously announced $1,000,000 registered direct offering. As previously disclosed, SGOCO Group, Ltd. (the "Company") sold to certain institutional investors (the "Investors") up to $1,000,000 of our ordinary shares and warrants for a per share purchase price of $2.30. The warrants to purchase our ordinary shares are being issued to Investors in amount equal to 75% of the shares purchased by each Investor. The warrants are exercisable beginning on the date of issuance, and at any time up to four years from the date of issuance. Each warrant represents the right to purchase one ordinary share at an initial exercise price equal to $2.75 per share. The initial exercise price and the amount of shares issuable under the warrants are subject to adjustment upon the occurrence of certain events; provided that in no event will the exercise price per share be lower than $1.00.

The securities were offered and sold by the Company pursuant to an effective shelf registration statement on Form F-3 (File No. 333-214141), which was originally filed with the Securities and Exchange Commission on October 17, 2016, amended on December 23, 2016, and was declared effective on January 4, 2017, and a related prospectus and prospectus supplement.

HONG KONG, Dec. 19, 2016 /PRNewswire/ -- SGOCO Group, Ltd. (Nasdaq: SGOC) ("SGOCO" or the "Company"), a company focused on product design, distribution, and brand development in the display and computer product market in China as well as energy saving products and services worldwide, today announced that BOCA International Limited ("BOCA"), a wholly owned subsidiary of the Company, has signed a Project Development Agreement with Nano and Advanced Materials Institute Ltd. in Hong Kong("NAMI"). Pursuant to the agreement, parties agree to work together to research and develop a new "Micro Encapsulated Phase Change Material (mPCM) for Chiller Plant Thermal Energy Storage System", and the project deliverables shall be the property of BOCA. The Agreement is still subject to Hong Kong government's approval before it could become effective.

The mPCM has advantages for the better performance of Chiller Plant Thermal Energy Storage System (the "System"). For example, the mPCM does not need large external tank for the System. It reduces building weight and can be installed to the old buildings. Additionally, it has faster response time and more efficient heat-exchange capacity. It provides new applications in high performance systems such as cooling of data centers.

According to BOCA's Chief Technology Officer - Dr. Richard Chan, this is an innovative design and product, and no similar product has been created up to this date based on our limited patent research. The installation cost can reduce more than 30% by using new mPCM, and the mPCM Thermal Energy Storage system validity period will be increase up to 20 years from the date of installation. By using mPCM, we do not need to install Thermal Storage Tanks, and there will be no extra structural load and no need for plant space to be added in the building. This innovation will lead the saving energy industry to a higher level and create the new market by new applications.

Regarding this agreement of BOCA which the Company acquired at the end of last year, Mr. Shi-Bin Xie, Chief Executive Officer of SGOCO, commented, "We are pleased to see the initial results of the integration of Boca and transformation of the Company to the energy saving and environmental protection business. The Company will continue its efforts to further develop such new technology and achieve our goals".

HONG KONG, Nov. 11, 2016 /PRNewswire/ -- SGOCO Group, Ltd. (SGOC) ("SGOCO" or the "Company"), a company focused on product design, distribution, and brand development in the display and computer product market in China as well as energy saving products and services worldwide, today announced that BOCA International Limited ("BOCA"), a wholly owned subsidiary of the Company, has signed a BocaPCM-TES Contract (the "Contract") with Differ Commercial Management Ltd. ("Differ"). Pursuant to the Contract, BOCA will supply and install a set of BocaPCM-TES to Differ in Xiamen City, China, for RMB 23.6 million (approximately $3.4 million).

BocaPCM-TES uses a salt based aqueous solution that is environmentally friendly, which allows the freezing point and solidification point of the eutectic salts to be manipulated to desired temperature. The system have similar characteristics as ice or water thermal energy storage systems, however it allows a wider range of temperature for the solidification process. BocaPCM-TES allows an even and controllable energy usage, drawing energy from the storage directly during peak hour, which ultimately reduces the operating costs.

As a company committed to environmentally friendly energy-saving products, Boca will install BocaPCM-TES for Differ real estate projects by using optimal control methods that most likely will cut the power usage in half, which will also reduce power facilities investment and construction costs for Differ as well as benefit the community with lower energy consumption and costs.

BOCA has successfully installed and operated BocaPCM-TES for a number of real estate projects worldwide, including the United Kingdom, Italy, Australia, Malaysia and Hong Kong. Regarding this new project of BOCA which the Company acquired at the end of last year, Mr. Shi-Bin Xie, Chief Executive Officer of SGOCO, commented, "We are pleased to see the initial results of the integration of Boca and transformation of the Company to the energy saving and environmental protection business. The company will continue its efforts to further develop such new business and achieve our goals. And now, we are happy to enter into the energy saving market in mainland China through this Contract."

HONG KONG, September 22, 2016 /PRNewswire/ -- SGOCO Group, Ltd. (Nasdaq: SGOC) ("SGOCO" or the "Company"), a company focused on product design, distribution and brand development in the Chinese display and computer product market as well as energy saving products and services, today announced the appointment of DCAW (CPA) Limited ("DCAW") as the Company's independent registered public accounting firm to perform independent audit services for the year ended December 31, 2016.

On September 19, 2016, SGOCO Group, Ltd. (the "Company") was advised that the Company's independent registered public accounting firm, Crowe Horwath (HK) CPA Limited("CHHK"), will no longer provide audit and assurances services to public companies subject to the statutes and regulations of the United States effective as of October 1, 2016. Accordingly, the Company, with the approval of its audit committee and board of directors, terminated the services of CHHK effective September 19, 2016, and retained the services of DCAW as its new independent registered public accounting firm, effective September 19, 2016.

The director formerly responsible for the Company's account at CHHK will join the Company's new audit firm, DCAW, and will be the director responsible for the Company's account at the new firm.

CHHK's reports on the financial statements of the Company for the fiscal years ended December 31, 2014 and 2015 did not contain an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles, except that its report for the fiscal year ended December 31, 2015 contained an emphasis of matter paragraph regarding the Company's ability to continue as a going concern. During the Company's fiscal years ended December 31, 2014 and 2015 and through September 19, 2016, there were no disagreements between the Company and CHHK on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which disagreements, if not resolved to CHHK's satisfaction, would have caused CHHK to make reference to the subject matter of the disagreements in their reports on the Company's consolidated financial statements for such periods. Furthermore, no reportable events as that term is defined in Item 16F(a)(1)(v) of Form 20-F, occurred within the periods covered by CHHK's reports on the Company's consolidated financial statements, or subsequently up to the date of CHHK's dismissal.

The Company has provided CHHK with a copy of the foregoing disclosures and has requested that CHHK review such disclosures and provide a letter addressed to the Securities and Exchange Commission ("SEC") as specified by Item 16F(a)(3) of Form 20-F. Attached as Exhibit 99.1 is a copy of CHHK's letter addressed to the SEC relating to the statements made by the Company in this Report on Form 6-K.

During the Company's two most recent fiscal years ended December 31, 2014 and 2015 and through September 19, 2016, neither the Company nor anyone on its behalf has consulted DCAW regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or on the type of audit opinion that might be rendered on the consolidated financial statements of the Company, and neither a written report nor oral advice was provided to the Company that DCAW concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement or a reportable event as described above.

HONG KONG, Aug. 19, 2016 /PRNewswire/ -- SGOCO Group, Ltd. (SGOC) ("SGOCO" or the "Company"), a company focused on product design, distribution and brand development in the Chinese display and computer product market as well as energy saving products and services, today announced the Company has effected an increase in its authorized share capital and authorized ordinary shares by shareholders' resolution at the Company's annual shareholders meeting held on August 10, 2016.

The shareholders of the Company approved an increase in the authorized share capital of the Company from US$49,000 divided into 12,500,000 ordinary shares of par value US$0.004 and 1,000,000 preferred shares of par value US$0.001 each to US$201,000 by the creation of 37,500,000 ordinary shares of par value US$0.004 each such that the share capital of the Company shall be divided into 50,000,000 ordinary shares of par value US$0.004 and 1,000,000 preferred shares of par value US$0.001, at an Annual General Meeting held on August 10, 2016.

HONG KONG, May 11, 2016 /PRNewswire/ -- SGOCO Group, Ltd. (Nasdaq: SGOC) ("SGOCO" or the "Company"), a company focused on product design, distribution and brand development in the Chinese display and computer product market as well as energy saving products and services, today announced the Company signed a Share Purchase Agreement (the "Agreement") with certain investor (the "Investor") for a private placement of unregistered ordinary shares of the Company on May 9, 2016.

Subject to the terms and conditions of the Agreement, the Company will issue and sell to the Investor 1,900,000 shares (the "Shares") of unregistered ordinary shares of the Company. The total purchase price for the Shares is US$ 7 million and the price per share is approximately US$3.68.

SHENZHEN, China, January 26, 2016 /PRNewswire/ -- SGOCO Group, Ltd. (Nasdaq: SGOC) ("SGOCO" or the "Company"), a company focused on product design, distribution and brand development in the Chinese display and computer product market, today announced that BOCA International Limited ("BOCA"), the Company's recently-acquired subsidiary, has signed a long-term, primary and exclusive agency agreement with Macau Jinyi Technology Co., Ltd ("Macau Jinyi"). Under the terms of the agreement, BOCA authorized Macau Jinyi to exclusively develop and marketing the BOCA branded energy saving and environmental protection products and technologies in Macau, China.

Macau Jinyi is an affiliate of Macau Far East International Group which is a real-estate developer in Macau. As an important part of Macau Far East, Macau Jinyi is currently promoting its electric tour bus plan to Macau government and local casinos and resorts in an endeavor to replace the traditional buses and thus reduce the carbon-dioxide emission and improve the air quality in Macau. This is a niche market for SGOCO to generate sizable revenue.

BOCA collaborates Macau Jinyi in the development of a cooling and heating system that is an energy saving and environmentally friendly technology which could massively reduce the pollution emission at hotels and commercial buildings as well as cut down the expense on electricity. To date, BOCA provided the technology to various clients like government administration buildings, hospitals, resorts, shopping malls and indoor infrastructure. According to preliminary statistics, some large resorts spent $100-150 million to pay their electricity bills annually and BOCA saves more than 30% on energy expenditures with its advanced technology. The lifetime of the product is 15 years and then they can be recycled which provides economic benefits.

SGOCO could generate a total estimated value of at least $77 million in revenue within the next 3 years by providing services to casinos and resorts, government buildings and shopping malls in Macau.

Regarding the acquisition of BOCA, Mr. Shi-Bin Xie, Chief Executive Officer of SGOCO, commented, "We achieved initial results at the business transformation level and the company will continue to up its head to the energy saving and environmental protection target."

SHENZHEN, China, Jan. 22, 2016 /PRNewswire/ -- SGOCO Group, Ltd. (Nasdaq: SGOC) ("SGOCO" or the "Company"), a company focused on product design, distribution and brand development in the Chinese display and computer product market, today announced Company has effected a 1-for-4 reverse stock split of the Company's authorized ordinary shares, accompanied by a corresponding decrease in the Company's issued and outstanding shares of ordinary shares and an increase of the par value of each ordinary share from $0.001 to $0.004 (the "Reverse Stock Split") on January 19, 2016.

The shareholders of the Company approved the share consolidation or reverse stock split, of the Company's ordinary shares, par value $0.001 per share, at a ratio of one-for specific ratio to be determined by the Board of Directors (the "Board") in its sole discretion within the range of one-for-two to one-for-five, such that the number of the Company's authorized ordinary shares is decreased and the par value of each ordinary share is increased by that ratio, at a special shareholders meeting held on September 21, 2015.

On January 15, 2016 by unanimous written consent, the Board authorized the 1-for-4 Reverse Stock Split.

The Company's  ordinary shares will begin to trade on the NASDAQ Stock Market on the post-Reverse Stock Split basis under the symbol "SGOC" on January 25, 2016.  The new CUSIP number for the Company's ordinary shares post-Reverse Stock Split is G80751129.

The Company will round up to the next full share of the Company's ordinary shares any fractional shares that result from the Reverse Stock Split and no changes are being made to the number of preferred shares of the Company which remain as 1,000,000 preferred shares as authorized but not issued.

SHENZHEN, China, December 30, 2015 /PRNewswire/ -- SGOCO Group, Ltd. (NASDAQ: SGOC) ("SGOCO" or the "Company"), a company focused on product design, distribution and brand development in the Chinese display and computer product market, today announced the acquisition of 100% of the issued share capital of Boca International Limited. ("Boca"), a private holding company incorporated in Hong Kong, from its sole legal and beneficial owner - Richly Conqueror Limited (the "Vendor"), which develops and manufactures Phase Change Material (PCM-TES) storage system in designs and applying on cooling and heating system.

Boca Phase Change Material (PCM-TES) storage system is completely environmentally friendly and can be used for more than ten years. It is a both cooling and heating system that allows to save more than 50% of energy, which is one of a kind in the market. Electricity consumption is 75% less than the current central air-conditioning units in the market. Boca fully supports energy saving to help control the greenhouse effect and assist cooperation to achieve maximum economic benefit. Additionally, Boca is expecting more than 7,000 projects in the US and over 8,000 new and modifiable projects in China and South East Asia in the near future. Boca, along with its Phase Change Material (PCM-TES) storage system, was valued at approximately USD50 million by an independent third party appraiser.

SGOCO International (HK) Limited, the Company's subsidiary incorporated in Hong Kong (the "Purchaser") entered into a Share Sale and Purchase Agreement (the "SPA") with the Vendor pursuant to which it will acquire all of the issued share capital of Boca (the "Sale Shares"). The total consideration of the Sale Shares includes USD52 million in the form of cash, plus 19.0% new shares in SGOCO (as enlarged by the issuance) or 3.4 million new shares. Under the SPA, closing of the SPA shall take place on or before December 31, 2015.

Payment of the Sale Price is secured by (i) a mortgage of 100% Sale Shares to the Vendor and/or other assignee, (ii) a delivery of Boca's security interest of receivables, cash, and advance payment of the suppliers to the Vendor and/or other assignee before the last day of the accounting period, the total amount of which is equivalent to the Sale Price, and (iii) a guarantee made by the Purchaser to never promote Boca to liquidate the receivables, cash, and advance payment from the supplier etc., to ensure the Purchaser has sufficient funds to make payment to the Vendor.

The SPA also states that the Vendor has a right of first refusal for a period of five years that prohibits the Purchaser from selling, assigning or otherwise transferring any related shares to a third party, without first offering to sell or transfer to the Vendor.

The Vendor, Boca technology owner Dr. Richard Chan Kam Biu, is a professional member of Hong Kong Invention Association and a member of American Society of Heating, Refrigerating & Air-conditioning Engineers, Inc. He is an expert in the area of environmental energy saving and Boca is a company which specializes in R&D and supply "Thermal Energy Storage System by Phase Change Material (PCM-TES)", this innovative technology will dramatically reduce the energy consumption of central chiller and heating plant. The board of directors of the Company reviewed the transaction and approved it by a unanimous vote.

Regarding the acquisition of Boca, Mr. Xie Shi Bin, Chief Executive Officer of SGOCO commented, "We are excited and looking forward to abundant business opportunities brought forth through this acquisition. PCM-TES is the proven technology to install in new building or modify the existing system includes Ice thermal Energy Storage System (ICE-TES) in chiller plant. Boca PCM-TES is the better option to reduce the carbon emissions more than 50% caused by the chiller or heating plants. For example for a typical 30,000 m² air conditioned office/hotel space, the PCM-TES will reduce 2,000 tons of Carbon Dioxide annually."

SHENZHEN, China, December 25, 2015 /PRNewswire/ -- SGOCO Group, Ltd. (Nasdaq: SGOC) ("SGOCO" or the "Company"), a company focused on product design, distribution and brand development in the Chinese display and computer product market, today announced its unaudited operating results for the six months ended June 30, 2015.

2015 Interim Results Overview

Interim revenues decreased 98.5% to $0.5 million for the first six months of this year ("1H"), as compared to $34.1 million for the first six months of 2014.

Basic and diluted loss per share was $0.05 for the 1H 2015, as compared to $0.09 loss per share in the 1H 2014.

Revenue

Due to the increasing popularity of mobile devices, the contraction of the personal computer market demand continued and it adversely impacted the market demand of our major product, flat panel LCD and LED monitors. The drop in market demand also led to intense competition with our peers which has further affected our revenue and gross margins. Our total revenues decreased by 98.5% to $0.5 million, as compared with $34.1 million for the first six months of 2014.

Net loss and loss per share

Net loss for the 1H 2015 was $0.9 million, compared to a net loss of $1.6 million for the same period in 2014. The net margin experienced a loss of 169.4% in the 1H of 2015, as compared to 4.8% during the same period of 2014. Basic and diluted loss per share was $0.05 in the 1H of 2015 based on 17,531,861 weighted average number of common shares, as compared to basic and diluted loss per share of $0.09 based on 17,397,082 weighted average number of common shares for the 1H 2014.

HONG KONG, October 12, 2015 /PRNewswire/ -- SGOCO Group, Ltd. (NASDAQ: SGOC), ("SGOCO" or the "Company") a company focused on product design, distribution and brand development in the Chinese display and computer product market, today announced that its management held a Strategic Cooperation Conference with AMD on August 28th, 2015 in Shenzhen, China.

The conference successfully invited the most of famous network maintenance customers, computer motherboard vendors, storage vendors and peripheral manufactories in China. During the conference, both companies unveiled their new products and announced their future market plan in the Internet cafe industry. SGOCO and AMD's management gave each other an affirmation on future influence on the Internet cafe industry, and both agreed on working to produce a strategic cooperation plan to promote SGOCO's new ultrathin AIO/PIO with AMD Radeon graphics card - series 3 together to the Internet cafe market.

Regarding the cooperating plan agreed with AMD, Mr. Shi-Bin Xie, Chief Executive Officer, commented, "According to the recent market research, the total market capacity of PC/AIO/PIO used in Internet cafe is around 15 million units. Through this strategic cooperation plan with AMD, SGOCO is targeting to increase its market share to reach 10% by selling our new launched AIO with a set of software to the Internet cafe market."

HONG KONG, September 15, 2015 /PRNewswire/ -- SGOCO Group, Ltd. (Nasdaq: SGOC), ("SGOCO" or the "Company") a company focused on product design, distribution and brand development in the Chinese display market, today announced to hold the Special Meeting of Shareholders to approve a share consolidation or reverse stock split, of the Company's ordinary shares, par value $0.001 per share, at a ratio of one-for specific ratio to be determined by the Board of Directors in its sole discretion within the range of one-for-two to one-for-five, inclusive, referred to as the Reverse Stock Split Charter Amendment, such that the number of the Company's authorized ordinary shares is decreased and the par value of each ordinary share is increased by that ratio.

The Company's Special Meeting of Shareholders will be held on September 21, 2015, at 10:00 a.m. local time. The meeting will take place at the Company's Hong Kong office, located at Suite 1503, Sino Plaza, 255-257 Gloucester Road, Causeway Bay, Hong Kong.

The matters to be voted on at the meeting are set forth in the Company's Form 6-K filed with the U.S. Securities and Exchange Commission on August 31, 2015. Shareholders of record on August 31, 2015 will be eligible to vote at this meeting.

HONG KONG, August 19, 2015 /PRNewswire/ -- SGOCO Group, Ltd. (Nasdaq: SGOC), ("SGOCO" or the "Company"), a company focused on product design, distribution and brand development in the China display market, today announced its Board of Directors has appointed Mr. Xiao-Ming Hu to assume the new role as the Interim Chief Financial Officer (CFO) of the Company, effective on July 1, 2015, to replace Mr. Johnson Lau, who had resigned as CFO for personal reasons and confirmed no disagreement with the Company. The Board intends to commence a search for a new CFO in due course.

With over 18 years of experience in Accounting and Finance, specializing in electronic and consumable products, Mr. Xiao-Ming Hu was named as the Interim Chief Financial Officer of SGOCO. He joined the Company in August 2010 as finance manager and was promoted to the Financial controller of Sgoco (Fujian) Electronic Co., Ltd., a former subsidiary of SGOCO, in June 2013. Prior to joining SGOCO, Mr. Hu was the financial controller of Allen International Group, a private group engaged in trading of cosmetic products and services. From 1998 to 2007, he was a finance manager of Hengan Group, a company engaged in manufacturing, distribution, and sale of personal hygiene products and listed in Hong Kong Stock Exchange. In addition, Mr. Hu holds a Diploma of Finance from the South Western University of Finance and Economics in China.

"I am confident that Mr. Hu's history with SGOCO will enable a seamless transition. He has been a tremendous asset to the Company, and I look forward to working closely with him in our efforts to build a high-growth, broad-based business." Mr. Shi-Bin Xie, Chief Executive Officer commented on the new position change. "We would also like to thank Johnson for his contribution during the previous years and wish him all the best in his future endeavors."

Last but not least, the newly appointed Interim CFO Mr. Hu added, "I am honored to take this challenging role and look forward to working more closely with the entire management team. In order to create the best share value and potential growth opportunities, our team will make concerted efforts and mutually cooperate in the foreseeable future to achieve the goals."

HONG KONG, Aug. 13, 2015 /PRNewswire/ -- On August 11, 2015, SGOCO Group, Ltd. (the "Company") received a letter from the NASDAQ Stock Market LLC ("Nasdaq") granting the Company an additional 180 days to regain compliance with the minimum bid price requirement set forth in Nasdaq Rules for continued listing on The Nasdaq Capital Market. 

The Company has until February 8, 2016 to regain compliance. The Company's eligibility for the additional period was based on meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on the Nasdaq Capital Market with the exception of the bid price requirement and the Company's written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split. If at any time during this additional time period, the closing bid price of the Company's common stock is at least $1.00 per share for a minimum of ten consecutive business days, Nasdaq will provide written confirmation of compliance and the matter will be closed. If compliance cannot be demonstrated by February 8, 2016, Nasdaq will provide written notification that the Company's stock will be delisted. At that time, the Company may appeal Nasdaq's determination to a Hearings Panel (the "Panel"). If the Company appeals, it will be asked to provide a plan to regain compliance to the Panel. 

The Company intends to seek stockholder approval of amendments to the Company's Amended and Restated Articles of Association to effect a reverse stock split. If the proposal is approved by the Company's stockholders, it will be implemented by the Company's board of directors if the board of directors determines that a reverse stock split is in the best interests of the Company and its stockholders. There can be no assurance that the proposal will be approved by stockholders, or that the proposal, if approved, would be sufficient to permit the Company to regain compliance with the minimum bid price requirement.

HONG KONG, May 16, 2015 /PRNewswire/ -- SGOCO Group, Ltd. (Nasdaq: SGOC) ("SGOCO" or the "Company"), a company focused on product design, distribution and brand development in display products, today announced its audited financial results for the year ended December 31, 2014 and the unaudited second half financial results of 2014.

2014 Annual Results Overview

The annual results of SGOCO were adversely impacted by the weak industrial growth and increase in competition and in the traditional display industry in China.

• Annual revenues decreased 78.5% to $43.2 million in the year ended December 31, 2014, as compared to $201.0 million year-over-year.
• Gross profit dropped 87.3% year-on-year drop to $2.0 million in the year ended December 31, 2014, from $15.9 million in the same period of 2013.
• Net loss became $2.3 million in the year ended December 31, 2014 as compared to $8.4 million of net income year-over-year.
• Basic and diluted loss per share was $0.13 in the year ended December 31, 2014, as compared to basic and diluted earnings per share of $0.49 in the same period of 2013.

Mr. Shi-bin Xie, President and Chief Executive Officer of SGOCO, commented on the results. "SGOCO has faced a challenged market condition throughout 2014 resulting from the drop of the traditional flat panel display market."

"As a result, the Company decided to further restructure its business by disposing SGOCO (Fujian) Electronic Co., Ltd., a subsidiary engaged in sales and distribution of LED and LCD products in Southern China ("SGOCO (Fujian) "), in December 2014. After that, the Company will decrease the sales of traditional flat panel LCD and LED monitors, but increase the sales of All-In-One ("AIO") and Parts-In-One ("PIO") computers."

Mr. Xie concluded, "In 2015, SGOCO will focus on new investments and exploring new products, including but not limited to acquiring equities of potential target companies related to electronic and internet-related businesses and enriching the our product range."

SGOCO GROUP, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE YEARS ENDED DECEMBER 31, 2014, 2013 AND 2012

(In thousands of U.S. dollars except share and per share data) 

Management Discussion and Analysis

Revenue

Our sales were $43.2 million for the year ended December 31, 2014, which decreased by $157.8 million, or 78.5% from $201.0 million in the year ended December 31, 2013. The decrease in sales revenue was primarily attributable to the decrease in sales volume on weak industry growth of the traditional computer monitor market resulting from the customers' change of consumption preference to the mobile device.

Sales revenue from our top ten customers was approximately $35.4 million, or 82.0% of the total sales for the year ended December 31, 2014, which compared with $143.4 million, or 71.3% of total sales generated from our top ten customers for the year ended December 31, 2013. The top two customers accounted for 51.7% and 36.5% of total sales in 2014 and 2013, respectively. We concentrate our sales efforts in the Tier 3 and Tier 4 cities to large local distributors that include state-owned enterprises, listed companies, and overseas trading companies. We choose our distributors based on selection criteria, which includes their local presence, distribution channels, working capital conditions, and the feasibility of building long-term relationships with the ones with which we are able to negotiate the most favorable terms.

Net (loss) income

As a result of the various factors described above, net loss for the year ended December 31, 2014 was $2.3 million, as compared to net income of $8.4 million for 2013. The net margin experienced a loss of 5.3% for the year ended December 31, 2014, as compared to 4.2% net profit margin during the same period of 2013. The loss margin in 2014 was primarily attributable to drop of revenues and decrease in gross margin of our products sold.

HONG KONG, January 1, 2015 /PRNewswire/ -- SGOCO Group, Ltd. (Nasdaq: SGOC) ("SGOCO" or the "Company"), a company focused on product design, distribution and brand development in display products, today announced the sale of 100% of the equity of SGOCO (Fujian) Electronic Co., Ltd. ("Sgoco Fujian"), a company registered in China, to Apex Flourish Group Limited (the "Purchaser").

Regarding the sale of the SGOCO (Fujian) Electronic Co., Ltd., Mr. Xie Shi Bin, Chief Executive Officer of SGOCO, commented, "Due to the unexpected negative downturn plus outlook of the flat panel LED and LCD display industry in China, the Company considered the need to further reform its business. This transaction is an important step toward achieving the target of reducing the sales proportion of our flat panel LED and LCD products. The demand for flat panel LED and LCD products in China has dropped in recent years due to the increased popularity of portable devices, which affects the sales performance of related products. Sgoco Fujian engaged in sales and distribution of LED and LCD products in Southern China. The transaction will also help to accelerate the transformation of SGOCO to a more flexible company that is able to adjust to the new business environment. After the sale of Sgoco Fujian, the Company will increase the focus on investing and acquiring potential target companies to enrich the Company's product range and business opportunities. We continue to look for new opportunities in electronic and internet-related businesses and have commenced a study of a few potential targets."

The Company entered into an Agreement for Sale and Purchase ("SPA") with the Purchaser pursuant to which it will sell all of the equity of Sgoco Fujian ("Sale Equity"). The sales price for all the Sale Equity shall be equivalent to the net asset value of Sgoco Fujian on December 31, 2014 calculated on the basis of Chinese Accounting Standards. The estimated value is approximately US$10,000,000, and the final amount will be adjusted accordingly. The Purchaser also agreed to acquire Sgoco Fujian to settle the entire balance of accounts payable and other payables (the "Payables") due to SGOCO and its affiliates, which amounts to approximately $83,000,000 and the Purchaser assumed responsibility to pay such Payables. Under the SPA, payments shall be made in several installments upon and after completion of the Sale. Each installment will be 10% of the Sale Price and Payables or RMB 58,000,000 (approximately US$9,300,000) or its equivalent. The first installment will be due fourteen (14) days after the completion of the transaction, and the last installment (approximately 10% of the Sale Price) will be settled prior to June 30, 2015. The transfer of the Sale Equity is expected to be effective on December 31, 2014.

Payment of the Sale Price and Payables are secured by a pledge of the Sale Equity and Sgoco Fujian's assets. There shall be imposed upon the Purchaser a 2% per month liquidated damage charge for any late payment computed upon the amount of any outstanding principal and accrued interest whose payment to the Seller is overdue for more than 30 days under this Agreement. In the event that the Purchaser does not make the installment payments, SGOCO will have the right to take back ownership of the Sale Equity or force the Purchaser to liquidate Sgoco Fujian's cash, accounts receivable and advances to suppliers to have sufficient funds to make the payments to the Seller.

The SPA also states that SGOCO has a right of first refusal for a period of five years that prohibits the Purchaser from selling, assigning or otherwise transferring any material interests, ownership or rights in or related to Sgoco Fujian including any equity, leases, businesses and equipments to a third party, without first offering to sell or transfer to SGOCO.

The Purchaser, Apex Flourish Group Limited, is an independent third party with interests in real estate and forestry products. It previously purchased Honesty Group Holdings Limited, SGOCO's prior manufacturing business, in November 15, 2011. The agreed upon selling price is consistent with Sgoco Fujian's net book value. The board of directors of the Company reviewed the transaction and approved it by a unanimous vote.

Mr. Xie continued, "The transaction will improve our cash flow in the coming year. The capital will be used for new investments and exploring new products, including but not limited to acquiring equities of potential target companies related to electronic and internet-related businesses and enriching the Company's product range. We are excited about the transaction and we are looking forward to the future growth opportunities under our transformation plan in 2015."

HONG KONG, December 20, 2014 /PRNewswire/ -- SGOCO Group, Ltd. (Nasdaq: SGOC) ("SGOCO" or the "Company"), a company focused on product design, distribution and brand development in display products, today announced its unaudited operating results for the six months ended June 30, 2014. The Company also announced that it would report interim results on a half-year basis in the future.

2014 Interim Results Overview

The interim results of SGOCO were adversely impacted by the significant increase in competition and weak industrial growth in the Chinese display industry.

• Interim revenues decreased 70.0% to $34.1 million in the first half of the year ("1H"), as compared to $113.8 million year-over-year.
• Gross profit dropped 80.5% year-on-year to $1.7 million in the 1H 2014, from $8.9 million in the same period of 2013.
• Net loss decreased to $1.6 million in 1H 2014 as compared to $5.1 million of net income year-over-year.
• Basic and diluted loss per share was $0.09 in the 1H 2014, as compared to basic and diluted earnings per share of $0.30 in the 1H 2013.

HONG KONG, August 28, 2014 /PRNewswire/ -- SGOCO Group, Ltd. (Nasdaq: SGOC), ("SGOCO" or the "Company"), a company focused on product design, distribution and brand development in the China display market, today announced a new on-line sales platform on JD.com to accelerate the delivery of high quality service and products. SGOCO takes a significant step towards the development of e-commerce through this arrangement. With the sharing of vision and strengths, the agreement will allow both parties to drive new growth opportunities.

By signing the new distribution agreement, SGOCO agrees to provide the best-priced, exclusive and competitive products to JD.com for online direct sales. The new arrangement enhances the cooperation between these two companies and demonstrates SGOCO's commitment to establish new distribution channels and its vision of offering customers the latest products to satisfy the demand of online trading platforms.

JD.com is one of the largest Chinese based e-commerce platform and online direct sales company in terms of transaction volume. It was listed on NASDAQ in 2014. According to iResearch, it gained 54.3% market share in Chinese online direct sales market in the second quarter of 2014. Its excellent customer service and high reputation in the industry have earned solid customer base and contributed to the popularity in social network.

Regarding the newly launched sales platform, Mr. David Xu, Director, President and CEO of SGOCO, commented, "SGOCO takes a decisive step further towards the implementation of e-commerce and the alliance is a key strategy for the Company. We are excited to cooperate with JD.com and confident that the positive cooperation can create unique and meaningful new growth opportunities. Developing new distribution channels enables our products to be more accessible to our customers and further expand our customer base."

He added, "We are constantly looking for potential e-commerce partners and are happy to team up with JD.com, a reliable and progressive company which will support our strategy initiatives. Consumers can enjoy superior online retail experience and comprehensive customer services with the new distribution channel. In line with our transformation plan, we are eager to increase our participation in the e-commerce market in the future."

Fourth Quarter 2013 Financial Results

• Total revenue for the fourth quarter of 2013 decreased 30.3% to $44.2 million from $63.4 million in the fourth quarter of 2012.
• Basic and diluted EPS were $0.07 for the fourth quarter of 2013, compared to $0.19 in the fourth quarter of 2012.

Mr. David Xu, President and Chief Executive Officer of SGOCO, commented on the results. "We have made some significant strides in the full fiscal year 2013 to transform and expand our business in multiple directions, and our results are tangible proof of our enormous efforts over the past 12 months to execute on these strategic imperatives. Over the year, total revenue increased 20.6%, gross profit rose 27.6% and net income jumped by 100.4%. Our efforts to enrich our pipeline, strengthen our operation and enhance our cost competitiveness have paid off substantially as we ride on some significant momentum into 2014.

"These strategies, designed to position SGOCO for future growth, were executed on several fronts. On the business front, we shifted our product mix towards higher margin products, realigned our offerings for a variety of new distribution channels and strengthened our SGOCO brand pipeline that will provide significant benefits to our top-tier clients. In terms of operations, we have bolstered our R&D capabilities by hiring top new talent near the end of last year, expanded our regional presence to keep abreast of market trends, increased the speed of product launches and strengthened our ability to respond to changing customer needs by accelerating the rate of optimization and upgrades. Also, as announced in an earlier press release, our newly launched display products have led the way for a strong pipeline in 2014 that will consist of smart, solutions-based and application specific products that meet the requirements of high demand markets in China.

"In order to continuously improve our cost competitiveness we have streamlined our management and operational structure to focus on expanding our product portfolio and vertical distribution channels. In light of this, we are also excited to announce the upcoming launch of our e-commerce business. This is a critical move to expand our distribution channels and capture the rapid growth of B2C in China. We have spent a significant amount of time over the past 12 months in preparing this business, including the development of a product line specifically for e-commerce, and have added a sales and operations office in Shenzhen. Our decision to place some of our top talent in this high-demand region has been rewarded, and we are close to announcing a strategic partnership with a leading e-commerce player in China. With these promising results and some significant momentum under our belts, we are extremely excited about SGOCO in the year to come."

Mr. Xu concluded, "Lastly, the Company reiterates that our fourth quarter 2012 exceptional results was due to the ramping up and deferring of revenue from the previous three slow quarters. As the Company is in the process of transforming its business, we believe a full year assessment of its financial performance is a more meaningful way to measure SGOCO's ongoing progress and business performance."

BEIJING, April 9, 2014 /PRNewswire/ -- SGOCO Group, Ltd. (Nasdaq: SGOC) ("SGOCO" or the "Company"), a company focused on product design, distribution and brand development in the display market, today announced the launch of a new flat screen display unit to target high-end markets, along with two upgraded versions of its Parts-In-One PC ("PIO").

The new flat screen display unit conforms to SGOCO's new display design features, emphasizing a stylish, slim appearance while remaining lightweight and affordable for high-end consumers. The 21.5 inch model, framed with precious metals, comes in white, silver or gold.

PIO is a touch-screen, user-friendly PC that is built in to a flat screen monitor. The design is excellent for consumers who wish to enjoy the flexibility to configure and build their own PC system in the same vein as a traditional PC. SGOCO is set to launch two new versions of their PIO in May 2014, and the new version features 27 and 32 inch models. Both models feature a high resolution LED display, support 1080 progressive scanning, a pre-1.3 megapixel camera, high fidelity stereo and surround sound performance, and a high compatibility motherboard that can accommodate Micro ATX and Mini ITX, among others.

Since the soft launch of their All-In-One PC ("AIO") and PIO in June last year, the sleek design of their AIO and PIO has attracted a whole new market for SGOCO's products, and quickly became key drivers for revenue growth and margin expansion in the second half of the year. These new versions of PIO will target China's internet cafes, which number over 100,000, and will be distributed through SGOCO's robust distribution channel to thousands of large-scale computer centers for end-users who prefer to assemble their own PC.

Mr. David Xu, President and CEO of SGOCO commented on the launch. "We are particularly excited about these new launches as they add to our growing line of high-margin, high-value and application specific products. SGOCO is committed to executing its growth strategies to diversify its business from traditional panel-displays to smart value-added display solutions. These product launches are a testament to our determination to succeed in this goal."

Fourth Quarter 2013 Financial Results

• Total revenue decreased 30.3% to US$44.2 million, compared to US$63.4 million in the fourth quarter 2012
• EPS (US$) was 0.07 vs. last years comparable quarter of 0.19. 

Mr. David Xu, President and Chief Executive Officer of SGOCO, commented, "We delivered revenue growth and margin expansion compared with 2012 full year results despite a slowdown in global and China TV growth in 2013. "

Mr. Xu continued, "When reviewing 2013 performance in the context of the past year, it is clear that SGOCO is executing strongly on the right strategy. We took several steps to position SGOCO for future success in the past year. We expanded the scale of our business by adding a sales office in Shenzhen. We strengthened our R&D capability by adding top new talents in late 2013. We increased the speed of product launches, optimization and upgrades to respond to consumer market trends. And more significantly, we differentiated our display products and solution from the competitive low-end display market and gain new market share by developing products featuring designer style, high performance and affordability such as AIO and PIO."

Mr. Xu concluded, "Although visibility of the traditional TV and PC display demand for 2014 is low, we have confidence in our ability to respond to the market with our unmatched display solutions. We plan to have two to three new smart products releases in the first half of the year. In addition, as announced earlier about our management team structure, we are confident that we will be able to optimize our cross-channel synergies by developing more market driven products such as those that combine hardware with software, and intelligent and application specific products that can target both the consumer and commercial markets. We will continue to focus on expanding our distribution channels, bringing ours and our top-tier brand customers' products online and carefully evaluating industry verticals with high growth opportunities to expand our product and service offerings to the commercial markets."

BEIJING, March 10, 2014 /PRNewswire/ -- SGOCO Group, Ltd. (Nasdaq: SGOC) ("SGOCO" or the "Company"), a company focused on product design, distribution and brand development in the display market, today announced three management promotions designed to support SGOCO's ongoing business development. The promotions will bring additional expertise, depth and proven talent to the core management team. Mr. Tony Zhong, Mr. Shibin Xie and Mr. Jinfeng Li were promoted to Vice President of Finance, Vice President of Sales and Vice President of Product Development, respectively, effective from January 1, 2014. Mr. Wei Zhong will report directly to Mr. Johnson Lau, the Chief Financial Officer, and Mr. Shibin Xie and Mr. Jinfeng Li will report directly to Mr. David Xu, the President and Chief Executive Officer.

"These new additions to the management team speak to our ability to develop strong talent from within, and also positions SGOCO for greater success in the near and long-term," said Mr. David Xu, President and CEO of SGOCO. "Having worked with Mr. Zhong, Mr. Xie and Mr. Li in past years, they have been able to prove their exceptional combinations of skill, intelligence, energy and vision, I believe this move will expedite our business goals to expand our product portfolio, sales channels and maintain our ambition to lead the industry in profitability. 2013 was a year of transformation and investment for SGOCO, and I believe our talented team will lead SGOCO to the next stage of growth and profitability in 2014 and beyond."

Mr. Tony Zhong joined SGOCO in September 2011 as Finance Manager. Prior to joining SGOCO, Mr. Zhong was a Financial Manager of China Hydroelectric Corporation, an NYSE-listed company, from 2007 to 2011. Mr. Zhong started his career in KPMG in Beijing from 2005 to 2006. He holds a Bachelor of Arts in Finance, Accounting and Management from Nottingham University, UK, and a Bachelor of Science in Applied Accounting from Oxford Brooks University, UK.

Mr. Shi-bin Xie, Vice President of Sales, joined SGOCO in July 2012. Mr. Xie has over 15 years of experience in sales and marketing, specializing in Chinese display products. From 2010 to 2012, Mr. Xie served as Vice President of Sales in Shenzhen Dongqiao Huahan Technology Co., Ltd. From 2005 to 2010, Mr. Xie served as the General Manager of Shenzhen Qinghua Ziguang Technology Co., Ltd. Prior to that, Mr. Xie served sales and marketing manager roles in various companies in China from 1997 to 2005. Mr. Xie holds a Bachelor of Science in Engineering from the East China Institute of Technology.

Mr. Jinfeng Li, Vice President of Product Development, joined SGOCO in October 2013. Mr. Li has over 15 years' experience in the design and engineering of electronic products. From 2010 to 2013, Mr. Li served as Vice President of the Research and Development Centre in Shenzhen Dongqiao Huahan Technology Co., Ltd. Mr. Li served several engineer and product development manager roles in various companies in China from 1997 to 2010. Mr. Li holds a Diploma in Applied Electronics Technology from Central South University.

THIRD QUARTER 2013 FINANCIAL RESULTS

• Total revenue for the third quarter 2013 increased 65.0% to $43.0 million from $26.0 million in the third quarter of 2012. 
• Basic and diluted earnings per share ("EPS") were $0.12 as compared to basic and diluted loss per share of $0.06

Mr. Burnette Or, President and Chief Executive Officer of Sgoco, commented on the results. "Our sales performance over the third quarter remained strong, despite a seasonal slowdown in the flat panel display market over the three months of July to September. This is predominantly as a result of the transition of our business model, designed to move up the value chain with a focus on branding and distribution. This strategic transition has allowed us to mitigate the pricing pressure from the overall display market during this quarter and enabled our margin to stay at a sustainable level.

"During this quarter, we continued to take concrete steps towards our previously mentioned strategic initiatives, primarily strengthening our product portfolio, expanding our sales channels and developing solution-based services for high-growth industries, and our progress in these areas has been encouraging. The development of our new products, including our previously mentioned AIOs and PIOs, have progressed well in demo showcasing and pilot sales programs. We expect some of these new products to begin providing more contributions to revenues in the coming two to three quarters. Over the next few months we will continue to evaluate our strategies for growth while maintaining our ambition to lead the industry in profitability."

Mr. Or concluded, "In the long term, we will strive to make the necessary investments that will grow SGOCO's revenue, by identifying and seizing the abundant opportunities prevalent in the display market. We will leverage on our core competencies to expand and extend our offerings. Our goal is to upgrade ourselves from a product provider to a solution-based enabler, and to serve retail and commercial customers in various industry verticals through our renowned omni channel model. 2013 continues to be a year of transformation and investment for SGOCO, and I believe we will see some significant momentum in 2014 as a result."

SECOND QUARTER 2013 FINANCIAL RESULTS

• Total revenue increased 38.7% year-over-year to $59.2 million
• Gross profit increased 31.5% year-over-year to $5.2 million, gross margin at 8.8% as compared to 9.3%
• Operating income increased 97.3% year-over-year to $4.1 million, operating margin at 6.8% as compared to 4.8%
• Net income increased 175.7% year-over-year to $3.4 million, net margin at 5.7% as compared to 2.9%
• Basic and diluted earnings per share ("EPS") were $0.20 as compared to $0.07

Mr. Burnette Or, President and Chief Executive Officer of SGOCO, commented on the results. "Our performance over the second quarter demonstrated our continued strength in the flat-panel display market, as revenue grew 39% year over year and net earnings increased by 176% from last year. These positive signs are indicative of the success we have achieved in implementing our four-prong strategy to position the Company in a promising direction for the future.

"Our four-prong strategy enables us to focus on strengthening our brand portfolio, specializing in high-growth industry verticals, diversifying our product lines and expanding distribution channels across China's tier three and four cities. These strategies are being well-implemented and we are pleased with the results of our efforts. We have received positive feedback for our newly developed products, the touch-screen Parts-In-One (PIO) and All-In-One (AIO) PC. We expect these new products to further drive our growth in the second half of the year and to facilitate the expansion of our sales and distribution networks in various areas of China. As a result, we are able to strengthen our solid brand portfolio and expand our market share.

"With China's economic focus expected to shift towards tier three and four cities over the next decade, our leading capabilities in product distribution in these cities will come to bear on numerous opportunities and challenges that lie ahead. Over the last three quarters, we have rapidly expanded our coverage of distribution networks in rural areas to most of the provinces, covering a substantial area of China geographically."

Mr. Or concluded, "We have also opened our new sales operation in Shenzhen, one of the most active and demanding cities for innovative electronic devices to accommodate the expansion of sales and services in China, and it will become SGOCO's key sales and operational base going forward. Our focus on geographic and product expansion guarantees SGOCO's success in increasing profitability through the development of new products and opportunistic acquisitions, priming the Company to capitalize on the enormous business opportunities afforded by China's shifting landscape."

BEIJING, July 2, 2013 /PRNewswire/ -- SGOCO Group, Ltd. (NASDAQ: "SGOC")  ("SGOCO" or the "Company"), a company focused on building its own brands and retail distribution network in the Chinese flat panel display market, today announced that its board of directors appointed Mr. Johnson Lau to serve as the Company's Chief Financial Officer ("CFO"), effective immediately, to replace Mr.David Xu. Mr. David Xu will transition his chief financial officer duties to Mr. Lau and serve as the Company's Chief Operating Officer.

Mr. Johnson Lau, age 39, is a Certified Public Accountant of the Hong Kong Institute of Certified Public Accountants and CPA Australia. Mr. Lau has over 17 years of experience in the accounting profession. Mr. Lau started his career in Deloitte in Hong Kongand Beijing from 1997 to 2004. Prior to joining SGOCO, Mr. Lau worked in various public companies in the United States and Englandas Director of Finance and CFO for nine years. He holds a bachelor degree in commerce from Monash University, Australia.

Mr. Burnette Or, President and Chief Executive Officer of SGOCO, commented, "We are delighted to welcome Johnson as our new CFO. We believe Mr. Lau's strong financial management and reporting background as well as his proven skills in communicating with the investor community will make significant contributions to SGOCO's growth and development. "

"We are also delighted to engage our former CFO, Mr. David Xu as our new COO effective immediately. David will be extensively involved in our sales and operations in China in his new role, which allows the management team to be better-positioned in achieving long-term sustainable growth and value creation for our shareholders," Mr. Or continued. 

First Quarter 2013 Financial Results

• Quarterly revenues increased 58.0% to $54.5 million, as compared to $34.5 million year-over-year
• Gross profit increased by 39.6% to $3.7 million, as compared to $2.7 million year-over-year
• Net income increased 87.5% to $1.7 million, as compared to $0.9 million year-over-year
• Basic and diluted earnings per share were $0.10, as compared to $0.05.

Fourth Quarter 2012 Financial Results

• Total revenues increased by 143.5% to $63.4 million from $26.0 million quarter-over-quarter. Of the total revenues, the revenues generated from SGOCO brand sales were $41.1 million, or 64.8% of total revenues, as compared to $22.3 million, or 35.2% of total revenues generated from OEM businesses.
• Net income for the fourth quarter of 2012 was $3.2 million, or 5.0% of total revenues, as compared to a loss of$1.1 million quarter-over-quarter. Diluted earnings per share for the quarter were $0.19, as compared to a diluted loss per share of $0.06 for the third quarter.

Outlook

Mr. Or concluded, "We believe that the operational improvements shown in the fourth quarter of 2012 will continue in 2013, because we will allocate our resources to develop further SGOCO brand products. These include market-oriented, application-specific products customized for large industry end-users. We believe the focused distribution of these higher-margin products will create a foundation for establishing SGOCO as a leading supplier in China's flat-panel display market for years to come. We will continue striving to create long term value for our shareholders."

BEIJING, September 11, 2012 /PRNewswire-FirstCall/ -- SGOCO Group, Ltd. (Nasdaq: SGOC), ("SGOCO" or the "Company"), a company focused on product design and brand development in the Chinese flat panel display market, including LCD/LED monitors, TVs, and application specific products, today made the following disclosure.

SGOCO is listed on The Nasdaq Capital Market. It traded there until Nasdaq halted trading on May 16, 2012 and requested information from SGOCO.

In early January of 2012, SGOCO's former auditor, Grant Thornton China, a member of Grant Thornton International ("Grant Thornton"), received an anonymous, whistleblower letter regarding SGOCO. It contained many allegations, including alleged contradictory securities filing with regulators and double-booking of sales.

Initially, SGOCO's management investigated these allegations. Subsequently, the investigation included work by Grant Thornton and a third-party investigative company. Finally, the investigation was placed in the control of SGOCO'S Audit Committee, which retained Greenberg Traurig, LLP to assist.

One allegation was that SGOCO made filings with securities regulators in China that contained materially different information than what SGOCO filed in the United States with the Securities and Exchange Commission. The independent investigation demonstrated that allegation was false.

Another allegation was that double-booking of sales occurred. The implication was that double-booking of sales occurred frequently during 2009, 2010 and 2011. The independent investigation demonstrated that allegation was completely false for 2009 and 2010.

In addition, there was no double-booking of sales in 2011, except for one such error.

That error was not material regarding earnings, because there was a corresponding double-entry of about the same amount in costs. Consequently, earnings were not materially impacted. This error had been corrected by management of SGOCO immediately upon detection.

In June of 2012, while the Audit Committee was continuing its investigation, SGOCO retained Crowe Horwath (HK) CPA Limited ("Crowe Horwath") as its auditor. Its prior auditor, Grant Thornton, resigned on May 14, 2012. There were no disagreements between Grant Thornton and SGOCO on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure.

On August 30, 2012, Crowe Horwath provided its audit report on SGOCO's financial statements for the year ended December 31, 2011. SGOCO then filed its Annual Report on August 30, 2012.

SGOCO's management has identified that several internal controls over financial reporting were not effective as of December 31, 2011. But, that does not prevent an audit from being conducted. It also does not prevent an audit report from being issued to SGOCO that is part of an Annual Report that complies with Listing Rule 5250(c)(1).

Nasdaq has determined that SGOCO is in compliance with Listing Rule 5250(c)(1). On September 5, 2012, Nasdaq delivered a letter to SGOCO confirming that. Rule 5250(c)(1) requires compliance with the Securities and Exchange Commission's rule regarding filing annual reports.

SGOCO is committed to improving those internal controls over financial reporting. It has retained a firm that specializes in improving internal controls regarding financial matters. This internal control specialist will work with SGOCO's management, the Audit Committee and outside legal counsel to coordinate efforts to improve the effectiveness of the internal controls over financial reporting.

SGOCO also plans to increase the overall ability of its financial personnel regarding internal controls over financial reporting. This will involve several steps, including additional education for some executives, hiring some new executives and, when needed, replacing a few executives.

NEW YORK, Sept. 11, 2012 (GLOBE NEWSWIRE) -- The NASDAQ Stock Market (Nasdaq:NDAQ) announced today that trading in SGOCO Group Ltd. (Nasdaq:SGOC) is scheduled to resume on Tuesday, September 11, 2012 at 9:00 a.m., Eastern Time. Trading in the company's stock was halted on Wednesday, May 16, 2012 at 10:55:28 a.m. Eastern Time.

BEIJING, August 31, 2012 /PRNewswire-Asia/ -- SGOCO Group, Ltd. and its wholly-owned subsidiaries ("SGOCO" or the "Company") (Nasdaq: SGOC), a company focused on product design and brand development in the Chinese flat panel display market, including LCD/LED monitors, TVs, and application specific products, today announced financial results for the fiscal year ended December 31, 2011.

SGOCO achieved record revenues for 2011. Revenues for the year ended December 31, 2011 grew$95.8 million, or 44%, to $313.1 million compared with $217.3 million for 2010. The growth in revenues came from the addition of several large customers as well as increased sales from existing customers. The Company had five customers in 2011 whose sales each exceeded $20 million, up from two customers in 2010 each with sales in excess of $20 million.

The majority of the Company's revenue growth was derived from the China market. SGOCO's Chinasales increased 48.5% to $276.3 million. In 2011, the Company established a subsidiary in the US to explore greater sales opportunities in North and South America.

Full year 2011 gross profit was $33.7 million, or 10.8% of revenue, compared with $32.7 million, or 15.0% in the prior year period. Margin compression occurred in both the Company's branded and OEM business segments and was a result of increased competition and softening demand. The Company saw increased pricing pressure in the Chinese market that was partially in response to the general slowdown in the European monitor market. The lack of demand in Europe drove competitors to maintain unit volume by pushing product into the Chinese market resulting in lower unit prices. The Company's results were further challenged in the second half of 2011 when severe flooding in Thailand created a shortage of computer components. This shortage negatively affected retail sales at Chinese stores specializing in custom-made computers where many of SGOCO's monitors are sold.

Selling, general and administrative expenses for 2011 were $7.5 million, or 2.4% of total revenue compared with $7.1 million, or 3.3% of total revenue, from the prior year period. The majority of the increase came from selling expenses as sales commissions, transportation costs and customs duties were higher than 2010. The Company realized savings in general and administrative expenses in the fourth quarter as professional service fees associated with the Company's 2010 Nasdaq listing did not recur.

Net income for 2011 declined 16.6% to $16.6 million, or $1.02 per diluted share, compared with $19.9 million, or $1.86 per diluted share, in the prior year period. A one-time $5.4 million provision related to the sale of the Company's manufacturing assets adversely impacted net income for 2011. Since certain earn-out milestones were met, shares held in escrow were no longer subject to forfeiture and thus diluted earnings per share was calculated using a weighted average number of ordinary shares outstanding of 16,288,242 for 2011 compared with 10,705,957 for 2010.

The Company's sale of its manufacturing subsidiary, Honesty Group, in the 2011 fourth quarter for $76.0 million in total consideration eliminated SGOCO's bank debt and resulted in a substantial improvement in the Company's liquidity ratios. The Company's current ratio rose to 7.6 on December 31, 2011, from 1.4 at the end of 2010. The Company's debt-to-equity ratio dropped to 0.15 as of December 31, 2011 from 1.52 as of December 31, 2010. As of December 31, 2011 the outstanding balance of the payment owed to SGOCO for the sale of Honesty Group was $57.5 million. The consideration was paid in full by the end of May 2012.

BEIJING, June 12, 2012 /PRNewswire-Asia/ -- SGOCO Group, Ltd. (NASDAQ: SGOC), (the "Company" or "SGOCO"), a company focused on building its own brands and retail distribution network in the Chinese flat panel display market, including LCD/LED monitors, TVs, and application specific products, today announced the appointment of Crowe Horwath (HK) CPA Limited ("Crowe Horwath") as the Company's independent registered public accounting firm to perform independent audit services for the year ended December 31, 2011.

Mr. Burnette Or, President and CEO of SGOCO commented, "We are pleased to announce the hiring of Crowe Horwath as our new independent auditor. They will commence work on the audit of our consolidated financial statements for the 2011 fiscal year, which we hope will be completed as quickly as possible."

BEIJING, June 4, 2012 /PRNewswire-Asia/ -- SGOCO Group, Ltd. (Nasdaq: SGOC), a company focused on building its own brands and retail distribution network in the Chinese flat panel display market, including monitors, TVs, and application specific products, today announced that it received a letter from The Nasdaq Stock Market indicating that as a result of the Company's failure to timely file its Form 20-F for the year ended December 31, 2011, the Company no longer complies with the Nasdaq requirements for continued listing set forth in Nasdaq Marketplace Rule 5250(c)(1), which requires the timely filing of periodic reports.

The Nasdaq Staff has exercised its discretionary authority under Nasdaq Marketplace Rule 5101 and requested the Company to submit its plan to regain compliance by June 12, 2012. The Nasdaq Marketplace Rules provide that the Staff can grant the Company an extension of up to 180 calendar days from the filing's due date to regain compliance. After submission and review of the plan, the Nasdaq Staff will determine whether or not to grant any additional time to file its Form 20-F and regain compliance as permitted under The Nasdaq Marketplace Rules or issue a Staff delist letter.

The Company plans to present its plan of compliance to Nasdaq and request continued listing pending the completion of the plan.

BEIJING, May 21, 2012 /PRNewswire-Asia/ -- SGOCO Group, Ltd. (NASDAQ: SGOC), (the "Company" or "SGOCO"), a company focused on building its own brands and retail distribution network in the Chinese flat panel display market, including LCD/LED monitors, TVs, and application specific products, today announced that its independent auditor, Grant Thornton, the China member firm of Grant Thornton International, has resigned as of May 14, 2012.

SGOCO and members of the Audit Committee of the Board of Directors have been meeting with other qualified independent auditing firms to replace Grant Thornton and will announce the new independent auditor once one is engaged.

As a result of Grant Thornton's resignation, the Company has missed the May 15, 2012 filing deadline for its 2011 annual report on Form 20-F. SGOCO will work diligently with its new auditor to complete the audit of its financial statements for the year 2011 and file its annual report on Form 20-F as soon as practicable.

As a result of the Form 20-F filing delay, Nasdaq halted trading of the Company's ordinary shares. SGOCO is working with its advisors to have Nasdaq resume trading.

SGOCO remains fully operational, continues to make strides with its current business plan and believes its existing and future growth initiatives will maximize SGOCO's performance in 2012 and beyond.

Our premium research emailed to our members on 4/12/2012

Sgoco Group (NASDAQ:SGOC) shares are strong, maybe in anticipation of the closing of the sale of its assets mentioned in its November 16, 2011 announcement. Based on the press release, the deal is slated to be completed by the end of March and translates into a stock price of about $4.40 per share.

“The Company entered into an Agreement for Sale and Purchase (“SPA”) with the Buyer pursuant to which it sold all of the outstanding capital shares of Honesty Group (“Sale Shares”) for cash consideration of US$76 million. The transfer of the Sale Shares was effective on November 15, 2011. The cash consideration will be paid in installments over the next four months.  Payment of the cash consideration is secured by a pledge of the Sale Shares and the Group’s cash, accounts receivable and advances to suppliers.  In the event that the Buyer does not make the installment payments, SGOCO will have the right to take back ownership of the Sale Shares or force the Buyer to liquidate the Group’s cash, accounts receivable and advances to suppliers to have sufficient funds to make the payments to the Seller.”

While we can’t verify the transaction has taken place, our OTGDD has confirmed that SGOC does in fact own a big piece of land, which may justify the price of the SPA transaction on Nov. 16, 2011.  Based on the Nov. 16, 2011 announcement, SGOC should have already received a USD 76 million as cash consideration.   We are waiting for SGOC to issue an update regarding this transaction.

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BEIJING, Feb. 28, 2012 /PRNewswire-Asia/ -- SGOCO Group, Ltd. ("SGOCO," or the "Company") (Nasdaq: SGOC), a company focused on building its own brands and retail distribution network in the Chinese flat panel display market, including LCD/LED monitors, TVs, and application specific products, today announced that the Company has received a letter from Nasdaq, notifying that the Company is no longer deficient in the Minimum Market Value of Publicly Held Shares (MVPHS) requirement as originally reported by the Company on February 3, 2012.

Third Quarter 2011 Results

BEIJING, November 16, 2011 /PRNewswire-Asia/ -- SGOCO Group, Ltd. (NASDAQ: SGOC), (the "Company" or "SGOCO"), a company focused on building its own brands and retail distribution network in the Chinese flat panel display market, including LCD/LED monitors, TVs, and application specific products, today announced the sale of 100% of the shares of its Hong-Kong-based subsidiary, Honesty Group Holdings Ltd. ("Honesty Group") to Apex Flourish Group Limited (the "Buyer"), a BVI company, for US$76.0 million. Honesty Group and its subsidiaries (the "Group") represented SGOCO's core manufacturing facility along with the land, buildings and production equipment.

Mr. Or, President and Chief Executive Officer of SGOCO commented, "We believe the sale of our manufacturing facility is the right step for SGOCO's long-term growth and development. This transaction helps transition our company from a heavy asset business model to a lighter asset model with greater flexibility and scalability."

The Company entered into an Agreement for Sale and Purchase ("SPA") with the Buyer pursuant to which it sold all of the outstanding capital shares of Honesty Group ("Sale Shares") for cash consideration of US$76 million. The transfer of the Sale Shares was effective on November 15, 2011. The cash consideration will be paid in installments over the next four months. Payment of the cash consideration is secured by a pledge of the Sale Shares and the Group's cash, accounts receivable and advances to suppliers. In the event that the Buyer does not make the installment payments, SGOCO will have the right to take back ownership of the Sale Shares or force the Buyer to liquidate the Group's cash, accounts receivable and advances to suppliers to have sufficient funds to make the payments to the Seller.

With the sale of the manufacturing facility, the Company does not anticipate a material adverse impact to SGOCO's revenues. In the near term, the Company anticipates gross margin will be lower as a percent of sales as products will be sourced from Honesty Group, partially offset by reductions in depreciation, interest and general and administration costs. As a result, the Company anticipates that net profit margin as a percent of sales will be lower than recent reporting periods. In the future, gross margins may be higher if outsourcing production to other manufacturers proves more cost effective.

• Total revenues increased by 100% to $85.6 million, compared to $42.9 million;
• Gross profit increased by 68% to $10.7 million, compared to $6.4 million;
• Gross margin was 12.6%, compared to 15.0%;
• Operating income increased by 69% to $8.9 million, compared to $5.3 million;
• Net income increased by 87% to $7.1 million, compared to $3.8 million; and,
• Fully diluted EPS was $0.45, compared to $0.40.

Financial Highlights First Half 2011 vs. First Half 2010:

• Total revenues increased by 177% to $172.6 million, compared to $62.3 million;
• Gross profit increased by 89% to $18.0 million, compared to $9.5 million;
• Gross margin was 10.5%, compared to 15.3%;
• Operating income increased by 109% to $14.6 million, compared to $7.0 million;
• Net income increased by 180% to $12.3 million, compared to $4.4 million;
• Fully diluted EPS was $0.76, compared to $0.48; and,
• The number of SGOCO Image retail partners on June 30, 2011 was 705, compared to 364 a year earlier.

2011 Second Quarter Overview

SGOCO continued to show strong year-on-year growth into the second quarter of 2011. The high quality of SGOCO brands continues to distinguish it from low-end competitors in the marketplace. With continued strong demand from customers and the addition of monitor and TV production capacity over the past year, the Company was able to achieve significantly higher revenues. The Company believes its strategy of multiple brands and multiple channels continues to effectively penetrate the market.

BEIJING--(BUSINESS WIRE)--SGOCO Group, Ltd. (NASDAQ: SGOC), (the “Company” or “SGOCO”), a company focused on building its own brands and retail distribution network in the Chinese flat panel display market, including monitors, TVs, and application specific products, today announced that David Xu has been appointed Chief Financial Officer and Head of its Beijing Office.

David Xu’s career in finance and accounting spans nearly 20 years in both Asia and North America. His experience includes leading finance and risk management positions with some of the world’s best-known organizations such as General Electric and Yum! Brands. His nearly 10 years in GE includes Six Sigma Black Belt experience leading large scale strategic projects. He most recently served as CFO of China Maple Leaf Educational Systems and prior to that, he was CFO of the World Bank IFC/CUNA Mutual Insurance joint venture company. Mr. Xu has also acted as an independent financial reporting consultant advising clients including Manulife Financial, Zurich Financial Services and TD Bank Financial Group. Mr. Xu holds an MBA in Corporate Finance from University of Illinois at Chicago and a Bachelor’s in English and American Literature from Beijing Normal University.

“David brings the CFO expertise and hands-on experience in risk management and financial reporting of Fortune 500 companies," said Mr. Or, SGOCO’s President and CEO. "His strong combination of skills and experience will be an important addition to our executive management team and will support his success as CFO of SGOCO, a financially solid, fast-growing, marketing-driven company with multiple channels, multiple brands, and with a strong focus on retail distribution."

First Quarter Results:

• Total revenues increased by 347% to $87.0 million, compared to $19.5 million;
• Gross profit increased by 133% to $7.3 million, compared to $3.1 million;
• Gross margin was 8.4%, compared to 16.1%;
• Operating income increased by 230% to $5.7 million, compared to $1.7 million;
• Net income increased by 826% to $5.1 million compared to $0.6 million;
• Fully diluted EPS was $0.32, compared to $0.06

Since the close of the first quarter, the Company repurchased and retired a total of 867,177 of its publicly-traded warrants in private transactions, for an aggregate purchase price of $320,610.16 (or $0.37 per warrant). All of the terms of the remaining 0.7 million publicly-traded warrants remain the same. Additionally, the Company, in private transactions, repurchased and retired a total of 31,764 of the warrants issued to its underwriters in the December 2010 offering for an aggregate purchase price of $15,882 (or $0.50 per warrant). All of the terms of the remaining 34,903 warrants issued to its underwriters in the December 2010 offering remain the same. The Company believes that the repurchase and retirement of these warrants benefit shareholders in the long-term as it eliminates the dilution that would have occurred in the event these warrants were exercised.

One of Honesty Group’s subsidiaries, Guanwei, has registered capital of $11,880,000. As of December 31, 2010, $3,130,000 had been invested by Honesty Group in Guanwei. According to an agreement reached with the local government agency, the Jinjiang Bureau of China’s State Administration of Industry and Commerce, or SAIC, the remaining registered capital of $8,750,000 for Guanwei must be contributed by the end of 2011. The SAIC provided Honesty Group with this additional time to make the registered capital payments because Honesty Group is in the process of investing in infrastructure in the region through its investment in the Guanke Technology Park. If Honesty Group is unable to make the registered capital payments during 2011, it believes it will be able to reach agreement with the SAIC to further defer its obligation to pay the remaining registered capital, provided that the SAIC believes Honesty Group is progressing with the timetable for making its infrastructure investments in the Technology Park. If it fails to reach such an agreement for deferral, Honesty Group would have an obligation to fund Guanwei or to apply for a reduction in the remaining registered capital, which may not be granted. If Honesty Group fails to contribute the registered capital, it may be penalized with fines of 5 – 15% over the amount of unpaid capital, and, in certain cases, the business license for Guanwei may be revoked, which may result in its inability to conduct business in China. If Honesty Group is required to fund the remaining registered capital in full, SGOCO or Honesty Group will need to raise external financing, for which they have no commitments.

We have been making these types of credit arrangements since our inception and expect to be able to renew these facilities in the future. Based on our current expectations, we believe the amounts available to us from our credit facilities will be sufficient to fund our operations during the next twelve months. The foregoing assumes that we are able to renew these facilities when they expire, that our accounts receivables are converted to cash on a timely basis and that we do not encounter any unforeseen costs or expenses.

2010 Year End Results:

Third Quarter 2010 vs. Third Quarter 2009

• Total revenue increased by 295.0% to $71.7 million, compared to $18.2 million;

• Gross margin was 13.6%, compared to 24.4%;

• Operating income increased by 114.5% to $8.9 million, compared to $4.2 million;

• Net income increased by 113.2% to $7.5 million compared to $3.5 million.

• Fully diluted EPS was $0.79, as compared to $0.42.

• Non-GAAP(1) diluted EPS, which excludes changes in fair value related to warrant derivative liability, was $0.77 up from $0.42.

"2010 has been a year of transformation as SGOCO became a public company. We have taken several steps to strengthen our position and take advantage of new business opportunities in the Chinese emerging markets. We are thrilled with the performance and strength of our business. The $71.7 million in revenue for the quarter and over $7.5 million in net income, both represent all-time records for SGOCO," said Mr. Or, CEO and President of SGOCO.

"We sold more in the three months ending September 30, 2010 than we did in the entire first six months of 2010.We have increased the number of SGOCO Club partners to 403 stores as of September 30, 2010. This is a proven record of our capability to capitalize on the growth opportunities in the markets. As we remain committed to our strategy of multiple brands and multiple channels, we expect more exciting developments for the remainder of the year," added Mr. Or.

Please note that SGOCO has warrants with an excercise price of $8.00. $5.00 had been the original excercise price.

Hambrecht Asia Acquisition is set to vote on a business combination proposal with the Chinese subsidiaries of Honesty Group: SGOCO Technology Ltd 

Company Snap Shot:

• The company designs and manufactures SGOCO brand LCD products in China
  
• SGOCO currently sells its products via multiple channels including computer stores, distributors and specialty retailers, but is focused on developing a more vertically integrated Direct Store Delivery system, via a strategy referred to as SGOCO Clubs.
• SGOCO currently sells products from two primary branded product lines: SGOCO, which includes high-quality, feature rich LCD products, and Edge 10, a unique line of products currently aimed at the educational marketplace in the U.K.
  
• The principal objective of the Target’s management is for SGOCO to be a leading developer and manufacturer of LCD products and to create a network of SGOCO Clubs in Tier 2, Tier 3 and Tier 4 cities in China to distribute its products. The strategy is to capitalize on SGOCO’s operating strengths, which include a product development program; in-house manufacturing capability; value priced, feature rich products marketed under brands the Target controls; an attractive compensation plan for SGOCO Club members; a scalable business model; and an experienced management team.
  
• Profitable and strong growth since founding in 2006. Strong revenue and profit growth continued in 2009 despite world economic downturn.
  
• Focusing primarily on consumer markets in Tier 2, Tier 3 and Tier 4 cities in China, SGOCO has benefited from the strong economic growth and has been consistently profitable in operating results over the past three years, demonstrated by strong revenue, earnings, and cash flow performance. In 2009, SGOCO’s total sales value has reached $67.9 million, representing a 3-year compound annual growth rate, or CAGR, of 154.3%. SGOCO plans to continue focusing its market penetration in these areas using its brand value strategy offering quality consumer electronic products at affordable pricings with highest customer satisfaction standards.

Post Merger Share Calculation:(Max dilution scenario)

• 4,239,300 : Pre merger outstanding shares
• 4,239,300 : Existing Warrants
•  1,555,000: Management warrants
• 8,500,000 : Newly issued shares of Common Stock )

GeoTeam® best effort calculation of total post reverse merger outstanding shares assuming full conversions:  18,532,600

Note: The share count can diverge from this amount for several reasons

• Decrease as a result of a warrant amendment that gives warrant holders the option to have their warrants redeemed for $0.50.
  
• Decrease if shares have to be redeemed from no-vote shareholders in order to increase the chances of the approval of the proposed merger.
  
• Increase if the company must seek financing, post merger.

Also, keep in mind that the treasury method is normally applied to calculate fully diluted shares outstanding. This would decrease the share calculation assumption.

Financial Snap Shot:

^a EPS figures were not provided by the company. Non-GAAP EPS Figures exclude certain non-operating gains and losses as well as certain non-cash items. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information . For a more complete explanation of the company's definition of non-GAAP please refer to its financial press releases. The GeoTeam® non-GAAP figures may, from time to time, differ from company supplied figures.

^b Note that the company used 13,799,125 shares for its 2009 EPS calculation of $0.52 as it did not factor in any warrant assumption. 2011 share count increase due to incentive shares earned if the company achieves net income targets.

The potential of the warrant strategy we had highlighted has drastically changed due to a proposed amendment to increase the exercise price to $8.00.

Source: SEC Form 6K (February 18, 2010)

We asked Drexion for his take on this deal. Recall, he was very instrumental in helping GeoReaders profit from the CCME warrant arbitrage:

Read through it... So-So terms...

• 12.7M shares outstanding after the transaction (assuming no liquidation in acquisition vote).
• 4.24M warrants -- Let us ignore this for now
• 1.55M management warrants -- Let us ignore this for now

Earn outs:

• 5M if management makes 15M net income in 2010
• 800k if management makes 20M net income in 2010 (or 5.8M if they make 2011 but not 2010 numbers).
  

Even ignoring the warrants, if they make 15M in 2010 their share count will go up to 17.7M.

15/17.7 = $0.847 EPS -- Shares hit in 2011 though, so official 2010 EPS would be 15/12.7 = 1.18.

At the strike of $8 and $0.50 warrant price, that means the break even is roughly P/E of 10X the first EPS above and 7.2X the 'official 2010' EPS.

If they make 2011's earn-out of 20M they get another 800k shares. 20/18.5 = $1.08 EPS -- shares hit in 2012 though, so official 2011 EPS would be 20/17.7 = $1.13

At the strike of $8 and $0.50 warrant price, that means the break even is roughly P/E of 7.9X the first EPS above and 7.5X the 'official 2011' EPS.

Note that the 'official eps' actually went DOWN for 2011 versus 2010, even though net income went from 15M to 20M.

Also note that this does not take into account the 6M warrants which would make the situation worse.

There is one further complication: All warrant holders that do not explicitly choose to keep their shares, will have their warrants redeemed for $0.50 after the acquisition. So if we bought warrants tomorrow, what happens to them? Its too late to vote... Would we buy tomorrow and then suddenly have them be redeemed for $0.50 in a few days?

 5,800,000 newly issued SPAC Shares, will to be held in an escrow account by an affiliate of Honesty Group’s Hong Kong counsel, and delivered to the former shareholders of

Honesty Group if the Combined Company meets certain net income targets contained in the Share Exchange Agreement. The 5,800,000 escrowed SPAC Shares will be delivered to the former shareholders of Honesty Group in 2011 and 2012 as follows:

• 5,000,000 SPAC Shares will be released from escrow if the Combined Company reports income from existing operations of US $15 million for the fiscal year ended December 31, 2010, excluding costs associated with the transactions contemplated by the Share Exchange Agreement.
  
• 800,000 SPAC Shares released from escrow if the Combined Company reports income from existing operations of US $20 million for the fiscal year ended December 31, 2011.

In the event the First Earn-Out Milestone is not met but the Second Earn-Out Milestone is met, all 5,800,000 escrowed SPAC Shares will be released. If neither earn-out milestone is met, then the 5,800,000 escrowed SPAC Shares will be delivered to the Combined Company for cancellation and returned to the status of authorized but unissued SPAC Shares. The Sponsors have also agreed to escrow 311,696 of their shares to be released, if the Target meets the First or Second Earn-Out Milestones. 

Source: SEC Form 6K (February 18, 2010)

At the end of 2009, Honesty Group had $1.5 million remaining under its $7.4 million multi-year technology and manufacturing grant from Jinjiang City. Honesty Group also had $36.2 million in approved credit lines with its various banks. Because of our record of growth, profitability, and technology-based manufacturing, management is confident that the Jinjiang City government and its banking group will continue to support us with needed capital resources in the future.

Two of Honesty Group’s subsidiaries, Guanwei and Guancheng, were formed on June 22, 2007, with registered capital of $11,880,000 and $7,800,000. However, only $3,130,000 and $2,259,970 had been invested by Honesty Group as of December 31, 2009. According to an agreement reached with the local government, the remaining registered capital of $8,750,000 and $5,540,000 must be contributed by the end of 2010. However, Honesty Group believes that as long as the Target does not begin construction on the land held by those two subsidiaries, Honesty Group should be able to reach agreement with the governmental authority to further defer completing its obligation to inject the remaining registered capital. If it fails to reach such an agreement, the Combined Company would have an obligation to fund these two subsidiaries, which would limit the resources available for other working capital purposes.

Source: SEC Form 6K (February 18, 2010)

The GeoTeam® is monitoring the warrants of Hambrecht Asia Acquisition Corp. (OTCBB:HMAQF) and CS China Acquisition Corp. (OTCBB:CSAQF). Both companies have entered into business combination agreements with Asian firms.

We are hoping that the respective warrants will provide similar arbitrage opportunities as TMI and HOL warrants have thus far.

Investors need to be aware of possible amendments that could negatively effect the value of the warrants. One common example is an amendment to increase the warrant exercise price. Also, the arbitrage strategy fails if shareholders do not ultimately approve a business combination within a certain allotted time.

See research note for TMI arbitrage strategy
See research note for HOL arbitrage strategy

Hambrecht Asia Acquisition Details

We have emailed Hambrecht Asia Acquisition Corp. requesting information on its proposed business combination.

Underlying Symbol- HMAQF
Warrant Symbol- HMAWF

Possible arbitrage strategy if shareholders approve the proposed business combination

Data to be considered:

• Current Price of Common Stock: $7.73
• Current Ask Price of Warrants: $0.55 (warrants have a wide bid/ask spread)
• Strike price of Warrants: $5.00
• Implied intrinsic value of warrants: $7.73 - $5.00= $2.73

Strategy

• Buy the warrants at current price of $0.55.
• If the business combination is completed and the warrants become exercisable then the warrants should approach the implied intrinsic value.
• Profit = (New Value of Warrant, Properly Priced) minus $0.55.

CS China Acquisition Details

Underlying Symbol- AERCF
Warrant Symbol- AERLF

Target Firm- Asia Gaming & Resort Limited, (See Release)

Asia Gaming is an investment holding company. The principal business activities of its wholly owned subsidiaries are to hold Profit Agreements with VIP Room gaming promoter companies and to receive 100% of the profit streams from the Promoters. The Promoters currently participate in the promotion of two major luxury VIP gaming facilities in Macau, China, the largest gaming market in the world.

See incentive financial targets.

Possible arbitrage strategy if shareholders approve the proposed business combination

Data to be considered:

• Current Price of Common Stock: $5.70
• Current Ask Price of Warrants: $0.44 (warrants have a wide bid/ask spread)
• Strike price of Warrants: $5.00
• Implied intrinsic value of warrants: $5.70 - $5.00= $0.70

Strategy

• Buy the warrants at current price of $0.44
• If the business combination is completed and the warrants become exercisable then the warrants should approach the implied intrinsic value.
• Profit = (New Value of Warrant, Properly Priced) minus $0.44