UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of November 2021

 

Commission File Number: 001-40543

 

Pop Culture Group Co., Ltd

 

Room 102, 23-1 Wanghai Road

Xiamen Software Park Phase 2

Siming District, Xiamen City, Fujian Province 361008

The People’s Republic of China

(Address of principal executive office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

 

Form 20-F ☒ Form 40-F ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

 

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  Pop Culture Group Co., Ltd
     
Date: November 10, 2021 By:

/s/ Zhuoqin Huang

  Name: Zhuoqin Huang
  Title: Chief Executive Officer, Director, and Chairman of the Board of Directors

 

1

 

 

EXHIBIT INDEX

 

Exhibit No.   Description
99.1   Press Release

 

 

2

 

 

 

 

Exhibit 99.1

 

Pop Culture Group Co., Ltd Reports Fiscal Year 2021 Financial Results

Revenue up 63% Year-over-year

Net Income Attributable to the Company’s Shareholders up 75% Year-over-year

 

XIAMEN, China, Nov. 10, 2021 /PRNewswire/ -- Pop Culture Group Co., Ltd (“Pop Culture” or the “Company”) (Nasdaq: CPOP), a hip-pop culture company in China, today announced its financial results for the fiscal year ended June 30, 2021.

  

Mr. Zhuoqin Huang, Chairman and Chief Executive Officer of Pop Culture, commented, “Despite the short-term impact to some of our businesses caused by the COVID-19 pandemic, we maintained solid upward momentum in fiscal year 2021. Our revenue recorded $25.5 million in fiscal year 2021, representing a 63% year-on-year increase from $15.7 million in fiscal year 2020. As a public company engaged in the hip-hop culture business, our intellectual property content (‘IP content’) is the key driver for our rapid financial growth. Our revenue from event hosting was $15.0 million in fiscal year 2021, an increase of 96% from $7.6 million in fiscal year 2020. At the same time, net income attributable to our shareholders was $4.3 million, an increase of 75% from $2.4 million in fiscal year 2020. Our gross margin and operating margin were 28% and 23%, respectively, in fiscal year 2021, which remained stable as compared to 29% and 20%, respectively, in fiscal year 2020.”

 

Mr. Huang continued, “We are very pleased to see that Pop Culture has achieved such outstanding results in fiscal year 2021, and we are very grateful to our customers and partners for their continued recognition and support. We will continue to focus on the operation and promotion of Chinese hip-hop cultural content. We have developed a new five-year strategic plan for our future development. According to the strategic plan, we will continue to put ‘IP content’ at the core of our business and strive to achieve sustained high growth in our three major businesses by utilizing the advantages of big data and capital markets, with a goal of becoming an industry leader.”

 

    For the fiscal year ended June 30,  
($ millions, except per share data and percentages)   2021     2020     % Change  
Revenue     25.5       15.7       63 %
Event hosting     15.0       7.6       96 %
Event planning and execution     9.2       5.5       67 %
Brand promotion     0.8       2.2       -67 %
Other services     0.6       0.3       87 %
Gross Profit     7.2       4.5       59 %
Gross Margin     28 %     29 %     -1 pp*
Income from Operations     5.8       3.2       84 %
Operating Margin     23 %     20 %     3 pp*
Net Income     4.3       2.6       63 %
Net Income Attributable to the Company’s shareholders     4.3       2.4       75 %
EPS     0.25       0.16       56 %

 

* Notes: pp represents percentage points

 

 

 

Fiscal Year 2021 Financial Highlights

 

● Revenue was $25.5 million, an increase of 63% from $15.7 million in fiscal year 2020.

 

● Gross profit was $7.2 million, an increase of 59% from $4.5 million in fiscal year 2020.

 

● Gross margin was 28% compared with 29% in fiscal year 2020.

 

● Net income attributable to the Company’s shareholders was $4.3 million, an increase of 75% from $2.4 million in fiscal year 2020.
     
● Basic and diluted earnings per share were $0.25 compared with $0.16 in fiscal year 2020.

 

Fiscal Year 2021 Operational Highlights

 

● The Company hosted 35 dance competition events, 29 music festivals and promotional parties, and 4 online hip-hop programs during fiscal year 2021.

 

● The Company executed 60 events during fiscal year 2021.

 

● The Company’s hip-hop events attracted an aggregate of 159,200 attendance and online hip-hop programs generated over 314 million views during fiscal year 2021.

 

Fiscal Year 2021 Financial Results

 

Revenue

 

Revenue increased by $9.8 million, or 63%, to $25.5 million in fiscal year 2021, from $15.7 million in fiscal year 2020.

 

Revenue from event hosting increased by $7.4 million, or 96%, to $15.0 million in fiscal year 2021, from $7.6 million in fiscal year 2020. The increase was primarily due to the increased number of the Company’s live events (dance competitions, musical festivals, and promotional parties) as well as increased average sponsorship fees, and additional revenue from its new online hip-hop business, which attracted more sponsors to promote their brands in the online hip-hop videos.

 

2

 

Revenue from the event planning and execution increased by $3.7 million, or 67%, to $9.2 million in fiscal year 2021, from $5.5 million in fiscal year 2020. The increase was primarily due to the increase in the number and size of the events the Company undertook.

 

Revenue from the brand promotion decreased by $1.4 million, or 67%, to $0.8 million in fiscal year 2021, from $2.2 million in fiscal year 2020. The decrease was mainly due to the sluggish demand for advertising or marketing activities.

 

Revenue from other services increased by $0.3 million, or 87%, to $0.6 million in fiscal year 2021, from $0.3 million in fiscal year 2020.

 

Cost of Revenue

 

Cost of revenue increased by $7.1 million, or 64%, to $18.3 million in fiscal year 2021, from $11.2 million in fiscal year 2020. The increase was proportionally in line with the increase in revenue.

 

Gross Profit and Gross Margin

 

Gross profit increased by $2.7 million, or 59%, to $7.2 million in fiscal year 2021, from $4.5 million in fiscal year 2020. Gross margin slightly decreased by 1 percentage point to 28% in fiscal year 20201 from 29% in fiscal year 2020, primarily due to the decrease in brand promotion business, which has a higher gross margin.

 

Operating Expenses

 

Operating expenses slightly increased by $25,051, or 2%, to $1,392,137 in fiscal year 2021, from $1,367,086 in fiscal year 2020.

 

Selling and marketing expenses increased by $23,255, or 21%, to $133,387 in fiscal year 2021, from $110,132 in fiscal year 2020. The increase was primarily due to increased advertising expenses in the amount of $20,880, expended in order to promote the Company’s business online.

 

General and administrative expenses increased by $1,796 to $1,258,750 in fiscal year 2021, from $1,256,954 in fiscal year 2020. The increase was primarily due to slight increases in various items, including employees’ salaries and business entertainment expenses.

 

3

 

Income Tax Expenses

 

Income tax expenses were $1.4 million and $0.5 million in fiscal year 2021 and 2020, respectively. The increase mainly resulted from the increased taxable income for fiscal year 2021.

 

Net Income

 

Net income increased by 63% to $4.3 million in fiscal year 2021, from $2.6 million in fiscal year 2020. Net income attributable to the Company’s shareholders increased by 75% to $4.3 million in fiscal year 2021, from $2.4 million in fiscal year 2020.

 

Basic and Diluted Earnings per Share

 

Basic and diluted earnings per share were $0.25 in fiscal year 2021, compared with basic and diluted earnings per share of $0.16 in fiscal year 2020.

 

Cash Flow

 

Net cash used in operating activities was $4.0 million in fiscal year 2021, compared with $2.6 million in fiscal year 2020. Net cash provided by investing activities was $nil in fiscal year 2021, compared to $3,261 in fiscal year 2020. Net cash provided by financing activities was $4.0 million in fiscal year 2021, compared with $3.3 million in fiscal year 2020.

 

Balance Sheet

 

As of June 30, 2021, the Company had cash of $1.3 million, compared with $1.4 million as of June 30, 2020.

 

4

 

About Pop Culture Group Co., Ltd

 

Headquartered in Xiamen, China, Pop Culture Group Co., Ltd is a hip-hop culture company. The Company aims to promote hip-hop culture and its values of love, peace, unity, respect, and having fun, and to promote cultural exchanges with respect to hip-hop between the United States and China. With the values of hip-hop culture at its core and the younger generation as its primary target audience, the Company hosts entertainment events, operates hip-hop related online programs, and provides event planning and execution services and marketing services to corporate clients. The Company has in recent years focused on developing and hosting its own hip-hop events. For more information, visit the Company’s website at http://ir.popinter.cn/. 

 

Forward-Looking Statements

 

Certain statements made in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties, including the further spread of the COVID-19 virus or new variants thereof, or the occurrence of another wave of cases and the impact it may have on the Company’s operations and the demand for the Company’s services, and are based on current expectations and projections about future events and financial trends that the Company believes may affect its financial condition, results of operations, business strategy, and financial needs. Investors can identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to,” or other similar expressions. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement and its other filings with the SEC. 

 

For more information, please contact:

 

Pop Culture Group Co., Ltd
Investor Relations Department
Email: ir@520pop.com

 

Ascent Investors Relations LLC

Tina Xiao 

President
Phone: 917-609-0333
Email: tina.xiao@ascent-ir.com 

 

5

 

POP CULTURE GROUP CO., LTD

CONSOLIDATED BALANCE SHEETS

(In U.S. dollars, except share data)

 

    As of June 30,  
    2020     2021  
ASSETS            
CURRENT ASSETS:            
Cash   $ 1,359,137     $ 1,319,977  
Accounts receivable, net     14,810,146       25,537,236  
Advance to suppliers     3,176,527       1,999,876  
Prepaid expenses and other current assets     1,177,947       3,553,028  
TOTAL CURRENT ASSETS     20,523,757       32,410,117  
Property and equipment, net     71,281       48,393  
Intangible asset, net     1,695,215       1,635,321  
Operating right-of-use asset     278,260       194,747  
Deferred tax assets     83,795       140,757  
Other non-current assets     251,464       -  
TOTAL ASSETS   $ 22,903,772     $ 34,429,335  
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY                
CURRENT LIABILITIES:                
Short-term bank loans   $ 1,838,833     $ 5,140,990  
Accounts payable     2,795,508       1,900,883  
Deferred revenue     1,764,608       1,648,847  
Taxes payable     2,374,093       4,232,391  
Due to a related party     -       225,000  
Accrued liabilities and other payables     119,573       77,567  
Operating lease liability - current     96,357       98,427  
TOTAL CURRENT LIABILITIES     8,988,972       13,324,105  
Long-term bank loans     -       1,672,370  
Operating lease liability - non-current     189,994       104,755  
TOTAL LIABILITIES     9,178,966       15,101,230  
                 
Commitments and contingencies                
                 
SHAREHOLDERS’ EQUITY                
Ordinary shares (par value $0.001 per share; 44,000,000 Class A ordinary shares authorized as of June 30, 2020 and 2021; 11,021,834 and 12,086,923 Class A ordinary shares issued and outstanding as of June 30, 2020 and 2021, respectively; 6,000,000 Class B ordinary shares authorized, 5,763,077 Class B ordinary shares issued and outstanding as of June 30 2020 and 2021, respectively) *     16,785       17,850  
Subscription receivable     (15,441 )     (15,441 )
Additional paid-in capital     5,813,745       6,643,118  
Statutory reserve     779,094       1,241,573  
Retained earnings     6,693,120       10,498,183  
Accumulated other comprehensive (loss) income     (367,581 )     942,822  
TOTAL POP CULTURE GROUP CO., LTD SHAREHOLDERS’ EQUITY     12,919,722       19,328,105  
Non-controlling interests     805,084       -  
TOTAL SHAREHOLDERS’ EQUITY     13,724,806       19,328,105  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   $ 22,903,772     $ 34,429,335  

 

6

 

POP CULTURE GROUP CO., LTD

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(In U.S. dollars, except share data)

 

 

    For the years ended June 30,  
    2019     2020     2021  
REVENUE, NET   $ 19,031,766     $ 15,688,080     $ 25,526,557  
Cost of revenue     13,158,537       11,158,847       18,302,494  
GROSS PROFIT     5,873,229       4,529,233       7,224,063  
      　               　  
Selling and marketing     133,332       110,132       133,387  
General and administrative     492,733       1,256,954       1,258,750  
Total operating expenses     626,065       1,367,086       1,392,137  
      　               　  
INCOME FROM OPERATIONS     5,247,164       3,162,147       5,831,926  
      　               　  
Other (expenses) income:     　               　  
Interest expenses, net     (123,833 )     (125,560 )     (243,458 )
Other (expenses) income, net     (2,591 )     46,235       95,946  
Total other expenses, net     (126,424 )     (79,325 )     (147,512 )
      　               　  
INCOME BEFORE INCOME TAX PROVISION     5,120,740       3,082,822       5,684,414  
      　               　  
PROVISION FOR INCOME TAXES     1,288,982       457,005       1,416,872  
      　               　  
NET INCOME     3,831,758       2,625,817       4,267,542  
Less: net income attributable to non-controlling interests     247,244       189,996       -  
NET INCOME ATTRIBUTABLE TO POP CULTURE GROUP CO., LTD SHAREHOLDERS     3,584,514       2,435,821       4,267,542  
      　               　  
Other comprehensive (loss) income:                        
Foreign currency translation adjustment     (162,850 )     (241,839 )     1,335,757  
COMPREHENSIVE INCOME     3,668,908       2,383,978       5,603,299  
Less: comprehensive income attributable to non-controlling interest     236,737       174,392       -  
COMPREHENSIVE INCOME ATTRIBUTABLE TO POP CULTURE GROUP CO., LTD SHAREHOLDERS   $ 3,432,171     $ 2,209,586     $ 5,603,299  
      　               　  
Net income per share     　               　  
Basic and diluted   $ 0.27     $ 0.16     $ 0.25  
                      　  
Weighted average shares used in calculating net income per share *     　               　  
Basic and diluted     13,425,911       14,881,478       17,228,698  

 

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POP CULTURE GROUP CO., LTD

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In U.S. dollars)

 

    For the years ended June 30,  
    2019     2020     2021  
Cash flows from operating activities:                  
Net Income   $ 3,831,758     $ 2,625,817     $ 4,267,542  
Adjustments to reconcile net income to net cash provided by (used in) operating activities:                        
Allowance for doubtful accounts     24,227       324,345       195,187  
Depreciation and amortization     159,352       233,353       243,905  
Deferred tax benefit     (8,053 )     (84,246 )     (47,802 )
Non-cash lease expense     86,047       89,977       107,139  
Loss from disposal of property and equipment     21,596       19,300       -  
Changes in assets and liabilities:                        
Accounts receivable     (6,123,120 )     (5,672,992 )     (9,259,862 )
Advance to suppliers     (630,184 )     (2,531,334 )     1,440,794  
Amounts due from related parties     (158,279 )     153,586       -  
Prepaid expenses and other current assets     395,198       (44,002 )     (1,504,345 )
Other non-current assets     -       (252,816 )     268,433  
Accounts payable     2,166,329       49,588       (1,130,593 )
Deferred revenue     (247,929 )     1,762,730       (275,888 )
Taxes payable     1,376,248       721,743       1,592,715  
Accrued liabilities and other payables     14,057       54,234       (52,007 )
Due to a related party     -       -       225,000  
Operating lease liability     (86,047 )     (54,112 )     (107,550 )
Net cash provided by (used in) operating activities     821,200       (2,604,829 )     (4,037,332 )
                         
CASH FLOWS FROM INVESTING ACTIVITIES:                        
Purchase of property and equipment     (11,436 )     (1,716 )     -  
Proceed from disposal of property and equipment     20,957       4,977       -  
Purchase of intangible asset     (2,086,819 )     -       -  
Net cash (used in) provided by investing activities     (2,077,298 )     3,261       -  
                      　  
CASH FLOWS FROM FINANCING ACTIVITIES:                     　  
Proceeds from short-term bank loans     1,905,209       1,838,833       6,341,729  
Repayments of short-term bank loans     (316,930 )     (1,981,799 )     (3,472,851 )
Proceeds from long-term bank loans     -       --       1,811,922  
Repayments of long-term bank loans     (89,195 )     -       -  
Proceeds from issuance of shares     -       3,817,842       -  
Payment for deferred offering costs     -       (409,743 )     (729,977 )
Net cash provided by financing activities     1,499,084       3,265,133       3,950,823  
                      　  
Effect of exchange rate changes     (16,984 )     40,083       47,349  
                         
Net increase (decrease) in cash     226,002       703,648       (39,160 )
Cash at beginning of year     429,487       655,489       1,359,137  
Cash at end of year   $ 655,489     $ 1,359,137     $ 1,319,977  
                         
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                        
Income tax paid   $ 45,805     $ 17,408     $ 34,765  
Interest expense paid   $ 122,153     $ 126,095     $ 235,361  

 

 

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