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 October 2022

 

Commission File Number: 001-40543

 

Pop Culture Group Co., Ltd

 

3rd Floor, No. 168 Fengqi Road

Jimei District, Xiamen City, Fujian Province

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: October 28, 2022 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 2022 Financial Results

 

XIAMEN, China, October 28, 2022 /PRNewswire/ -- Pop Culture Group Co., Ltd (“Pop Culture” or the “Company”) (Nasdaq: CPOP), a hip-pop culture company in China, today reported its financial results for the fiscal year ended June 30, 2022.

 

Fiscal Year 2022 Financial Highlights

 

  ● Total revenue was $32.28 million, an increase of 26% from $25.53 million in fiscal year 2021.

 

  ● Revenue from event hosting was $14.71 million, a decrease of 2% from $14.98 million in fiscal year 2021.

 

  ● Revenue from brand promotion was $8.73 million, an increase of 1,064% from $0.75 million in fiscal year 2021.

 

  ● Revenue from event planning and execution was $8.42 million, a decrease of 8% from $9.20 million in fiscal year 2021.

 

  ● Gross profit was $6.25 million, a decrease of 14% from $7.22 million in fiscal year 2021.

 

  ● Net income was $0.69 million, compared with $4.27 million in fiscal year 2021.

 

  ● Basic and diluted earnings per share were $0.04, compared with $0.25 in fiscal year 2021.

 

Fiscal Year 2022 Operational Highlights

 

  ● The Company’s concerts and hip-hop events generated an aggregate attendance of 203,233 during the fiscal year ended June 30, 2022.

 

  ● The Company’s online hip-hop programs generated over 210 million views during the fiscal year ended June 30, 2022.

 

  ● The Company served 21 clients in 56 events with respect to event planning and execution during the fiscal year ended June 30, 2022.

 

Mr. Zhuoqin Huang, Chairman and Chief Executive Officer of Pop Culture, commented, “We continued to deliver recorded performance during fiscal year 2022, as our revenue reached $32.28 million, representing an increase of 26% from fiscal year 2021, despite the challenging and uncertainty macroeconomic headwinds. Our brand promotion business generated an increase of 1,064% in revenue from fiscal year 2021. Our strong financial performance during this year reflected the continued success of our high-quality services to help clients achieve their goals, our expertise and deep understanding of hip-hop culture, and our strong capabilities to meet the needs of our clients.”

 

Mr. Huang continued, “We developed several strategic initiatives to gain competitive edges on the market. We aim to benefit more street dance organizations through our software-as-a-service (SaaS) platform. There were over 60,000 students using the SaaS platform provided by our subsidiary, Shenzhen Jam Box Technology Co., Ltd., as of June 30, 2022, and we expect to continue to upgrade the SaaS platform, implement horizontal growth strategy, and further provide services to companies from the education and training industry. Also, the development of metaverse-related business remains our priority, we will continue to make investment in metaverse-related business to provide a comprehensive of hip-hop experience to users. Looking forward, we aim to leverage the strengths of our intellectual property portfolio and services to strengthen our existing customer base, attract new customers, and enhance our market position. We believe our solid business model and strategic development plan position us well to capture the growth opportunity in the market and maintain our momentum. As we look to fiscal year 2023, we are excited to deliver innovative content and experience to users and generate long-term value for our shareholders.”

 

 

 

Fiscal Year 2022 Financial Results  

 

Revenue

 

Following table presents the Company’s revenue by revenue source and by proportion:

 

   For the Fiscal Years Ended June 30,   Change 
   2022   %   2021   %   Amount   % 
Event Hosting  $14,711,787    46%  $14,978,643    59%  $(266,856)   (2)%
Brand Promotion   8,733,764    27%   750,315    3%   7,983,449    1,064%
Event Planning and Execution   8,420,328    26%   9,196,773    36%   (776,445)   (8)%
Other Services   415,664    1%   600,826    2%   (185,162)   (31)%
Total revenue  $32,281,543    100%  $25,526,557    100%  $6,754,986    26%

 

Total revenue increased by $6.75 million, or 26%, to $32.28 million in fiscal year 2022, from $25.53 million in fiscal year 2021.

 

Revenue from event hosting decreased by $0.27 million, or 2%, to $14.71 million in fiscal year 2022, from $14.98 million in fiscal year 2021. The decrease was primarily because the Company’s PRC operating entities postponed most of their Move It campaigns until July 2022 due to the Covid-19 pandemic.

 

Revenue from brand promotion increased by $7.98 million, or 1,064%, to $8.73 million in fiscal year 2022, from $0.75 million in fiscal year 2021. The increase was generated from clients’ increasing investment in online platforms like TikTok, Kuaishou, and Xigua.

 

Revenue from event planning and execution decreased by $0.78 million, or 8%, to $8.42 million in fiscal year 2022, from $9.20 million in fiscal year 2021. The decrease was primarily attributable to a decrease in the number and size of the events the Company’s PRC operating entities undertook.

 

In fiscal year 2022, other service revenue included music recording service income, digital collection sales income, and SaaS software service income. Other service revenue was $415,664 in fiscal year 2022, a decrease of 31% from fiscal year 2021. Compared with fiscal year 2021, the Company’s PRC operating entities generated revenue from certain newly developed businesses, including $350,886 from music recording services, $55,536 from digital collection sales, and $9,242 from SaaS software services in fiscal year 2022. In fiscal year 2021, the Company’s PRC operating entities generated advertisement distribution service revenue of $616,292, while they did not generate such revenue in fiscal year 2022.

 

Cost of Revenue

 

The cost of revenue increased by $7.73 million, or 42%, to $26.04 million in fiscal year 2022, from $18.30 million in fiscal year 2021.

  

The cost of revenue was derived from the following sources:

 

   For the Fiscal Years Ended June 30,   Change 
   2022   %   2021   %   Amount   % 
Event Hosting  $9,853,996    38%  $10,345,925    56%  $(491,929)   (5)%
Brand Promotion   1,358,040    5%   366,433    2%   991,607    271%
Event Planning and Execution   7,332,011    28%   7,553,522    41%   (221,511)   (3)%
Other Services   7,491,964    29%   36,614    1%   7,455,350    20,362%
Total Cost of Revenue  $26,036,011    100%  $18,302,494    100%  $7,733,517    42%

 

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Gross Profit and Gross Margin

 

Gross profit decreased by $0.98 million, or 14%, to $6.25 million in fiscal year 2022, from $7.22 million in fiscal year 2021. Gross margin was 19% in fiscal year 2022, compared with 28% in fiscal year 2021.

 

The following table displays the gross profit:

 

   For the Fiscal Years Ended June 30,     
   2022   2021   Change 
   Amount   %   GP%   Amount   %   GP %   Amount   % 
Event Hosting  $4,857,791    78%   33%  $4,632,718    64%   31%  $225,073    5%
Brand Promotion   7,375,724    118%   84%   383,882    5%   51%   6,991,842    1821%
Event Planning and Execution   1,088,317    17%   13%   1,643,251    23%   18%   (554,934)   (34)%
Other Services   (7,076,300)   (113)%   (1702)%   564,212    8%   94%   (7,640,512)   (1354)%
Total gross profit  $6,245,532    100%   19%  $7,224,063    100%   28%  $(978,531)   (14)%

 

Operating Expenses

 

Total operating expenses increased by $3.44 million, or 247%, to $4.83 million in fiscal year 2022, from $1.39 million in fiscal year 2021. Operating expenses as a percentage of total revenue increased to 15.0% in fiscal year 2022 from 5.5% in the same period of last year.

 

Selling and marketing expenses increased by $0.25 million, or 185%, to $0.38 million in fiscal year 2022, from $0.13 million in fiscal year 2021. The increase was primarily due to sales and marketing staff recruitment and compensation for business development.

 

General and administrative expenses increased by $3.19 million, or 253%, to $4.45 million in fiscal year 2022, from $1.26 million in fiscal year 2021. The increase was mainly driven by two factors: management bonus for calendar year 2021 was issued in the first quarter of fiscal year 2022; and a majority of legal fees occurred in fiscal year 2021 was IPO-related, thus offset as equity-settled capital reserve, while legal fees in fiscal year 2022 were recorded as administrative expenses.

 

Income from Operations

 

Income from operations was $1.42 million in fiscal year 2022, compared to $5.83 million in fiscal year 2021.

 

Income Tax Expenses

 

Income tax expenses were $871,231 and $1,416,872 for fiscal year 2022 and 2021, respectively. The decrease was primarily from accrued regular income tax in fiscal year 2020 and a preferential tax rate that Company’s subsidiaries were entitled to.

 

Net Income

 

Net income was $0.69 million in fiscal year 2022, compared with $4.27 million in fiscal year 2021. Net income attributable to the Company’s shareholders was $0.79 million in the fiscal year 2022, compared with $4.27 million in fiscal year 2021.

 

3

 

 

Basic and Diluted Earnings per Share

 

Basic and diluted earnings per share were $0.04 in fiscal year 2022, compared with basic and diluted earnings per share of $0.25 in fiscal year 2021.

 

Cash Flows

 

Net cash used in operating activities was $19.37 million in fiscal year 2022, compared to $4.04 million in fiscal year 2021. Net cash used in investing activities was $0.80 million in fiscal year 2022, compared to $nil in fiscal year 2021. Net cash provided by financing activities was $33.06 million for fiscal year 2022, compared to $3.95 million in fiscal year 2021.

 

Cash and Cash Equivalents

 

As of June 30, 2022, the Company had cash and cash equivalents of $14.40 million, compared to $1.32 million as of June 30, 2021.

   

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, 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 brand promotion 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.cpop.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@cpop.cn

 

Ascent Investors Relations LLC

Tina Xiao 

President

Phone: 917-609-0333

Email: tina.xiao@ascent-ir.com   

 

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POP CULTURE GROUP CO., LTD

CONSOLIDATED BALANCE SHEETS

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

 

   As of June 30, 
   2022   2021 
ASSETS        
CURRENT ASSETS:        
Cash  $14,396,032   $1,319,977 
Accounts receivable, net   26,278,634    25,537,236 
Advance to suppliers   9,351,431    1,999,876 
Prepaid expenses and other current assets   805,427    3,553,028 
TOTAL CURRENT ASSETS   50,831,524    32,410,117 
Property and equipment, net   71,763    48,393 
Intangible asset, net   2,204,411    1,635,321 
Operating right-of-use asset   461,399    194,747 
Prepaid Taxes   332,022    - 
Deferred tax assets   457,649    140,757 
Other non-current assets   10,009,200    - 
TOTAL ASSETS  $64,367,968   $34,429,335 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
CURRENT LIABILITIES:          
Short-term bank loans  $3,792,121   $5,140,990 
Accounts payable   966,822    1,900,883 
Deferred revenue   47,710    1,648,847 
Taxes payable   4,697,267    4,232,391 
Due to a related party   149,296    225,000 
Accrued liabilities and other payables   229,209    77,567 
Operating lease liability – current   208,926    98,427 
TOTAL CURRENT LIABILITIES   10,091,351    13,324,105 
Long-term bank loans   1,254,087    1,672,370 
Operating lease liability - non-current   250,178    104,755 
TOTAL LIABILITIES   11,595,616    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, 2021 and 2022; 12,086,923 and 18,286,923 Class A ordinary shares issued and outstanding as of June 30, 2021 and 2022, respectively; 6,000,000 Class B ordinary shares authorized, 5,763,077 Class B ordinary shares issued and outstanding as of June 30, 2021 and 2022) *   24,050    17,850 
Subscription receivable   (15,441)   (15,441)
Additional paid-in capital   40,158,643    6,643,118 
Statutory reserve   1,499,369    1,241,573 
Retained earnings   11,028,345    10,498,183 
Accumulated other comprehensive (loss) income   69,019    942,822 
TOTAL POP CULTURE GROUP CO., LTD SHAREHOLDERS’ EQUITY   52,763,985    19,328,105 
Non-controlling interests   8,367    - 
TOTAL SHAREHOLDERS’ EQUITY   52,772,352    19,328,105 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY  $64,367,968   $34,429,335 

 

* Certain shares are related to the reorganization for the founding shareholders and are presented on a retroactive basis to reflect the reorganization.

 

5

 

 

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, 
   2022   2021   2020 
REVENUE, NET  $32,281,543   $25,526,557   $15,688,080 
Cost of revenue   26,036,011    18,302,494    11,158,847 
GROSS PROFIT   6,245,532    7,224,063    4,529,233 
         　      
Selling and marketing   380,723    133,387    110,132 
General and administrative   4,448,342    1,258,750    1,256,954 
Total operating expenses   4,829,065    1,392,137    1,367,086 
         　      
INCOME FROM OPERATIONS   1,416,467    5,831,926    3,162,147 
         　      
Other (expenses) income:        　      
Interest expenses, net   (235,327)   (243,458)   (125,560)
Other (expenses) income, net   377,979    95,946    46,235 
Total other expenses, net   142,652    (147,512)   (79,325)
         　      
INCOME BEFORE INCOME TAX PROVISION   1,559,119    5,684,414    3,082,822 
         　      
PROVISION FOR INCOME TAXES   871,231    1,416,872    457,005 
         　      
NET INCOME   687,888    4,267,542    2,625,817 
Less: net income attributable to non-controlling interests   (100,070)   -    189,996 
NET INCOME ATTRIBUTABLE TO POP CULTURE GROUP CO., LTD SHAREHOLDERS   787,958    4,267,542    2,435,821 
         　      
Other comprehensive (loss) income:               
Foreign currency translation adjustment   (873,803)   1,335,757    (241,839)
COMPREHENSIVE INCOME   (185,915)   5,603,299    2,383,978 
Less: comprehensive income attributable to non-controlling interest   (100,070)   -    174,392 
COMPREHENSIVE INCOME ATTRIBUTABLE TO POP CULTURE GROUP CO., LTD SHAREHOLDERS  $(85,845)  $5,603,299   $2,209,586 
         　      
Net income per share        　      
Basic and diluted  $0.04   $0.25   $0.16 
         　      
Weighted average shares used in calculating net income per share *        　      
Basic and diluted   20,950,000    17,228,698    14,881,478 

 

* Certain shares are related to the reorganization for the founding shareholders and are presented on a retroactive basis to reflect the reorganization.

  

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POP CULTURE GROUP CO., LTD

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In U.S. dollars)

 

   For the years ended June 30, 
   2022   2021   2020 
Cash flows from operating activities:            
Net Income  $687,888   $4,267,542   $2,625,817 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:               
Allowance for doubtful accounts   1,307,518    195,187    324,345 
Depreciation and amortization   310,343    243,905    233,353 
Deferred tax benefit   (334,045)   (47,802)   (84,246)
Non-cash lease expense   84,552    107,139    89,977 
Loss/(gain) from disposal of property and equipment   (1,237)   -    19,300 
Changes in assets and liabilities:               
Accounts receivable   (3,001,954)   (9,259,862)   (5,672,992)
Advance to suppliers   (7,542,591)   1,440,794    (2,531,334)
Amounts due from related parties   -    -    153,586 
Prepaid expenses and other current assets   1,533,471    (1,504,345)   (44,002)
Operating lease right-of-use assets   (563,300)   -    - 
Other non-current assets   (10,050,789)   268,433    (252,816)
Accounts payable   (898,452)   (1,130,593)   49,588 
Deferred revenue   (1,599,990)   (275,888)   1,762,730 
Taxes payable   295,333    1,592,715    721,743 
Accrued liabilities and other payables   156,840    (52,007)   54,234 
Due to a related party   (225,000)   225,000    - 
Operating lease liability   476,367    (107,550)   (54,112)
Net cash provided by (used in) operating activities   (19,365,046)   (4,037,332)   (2,604,829)
                
CASH FLOWS FROM INVESTING ACTIVITIES:               
Purchase of property and equipment   (82,733)   -    (1,716)
Proceed from disposal of property and equipment   -    -    4,977 
Purchase of intangible asset   (720,000)   -    - 
Net cash (used in) provided by investing activities   (802,733)   -    3,261 
         　      
CASH FLOWS FROM FINANCING ACTIVITIES:        　      
Proceeds from short-term bank loans   3,433,810    6,341,729    1,838,833 
Repayments of short-term bank loans   (4,956,629)   (3,472,851)   (1,981,799)
Proceeds from long-term bank loans   (245,791)   1,811,922    - 
Repayments of long-term bank loans        -    - 
Proceeds from issuance of shares   33,630,162    -    3,817,842 
Payment for deferred offering costs   1,197,380    (729,977)   (409,743)
Net cash provided by financing activities   33,058,932    3,950,823    3,265,133 
         　      
Effect of exchange rate changes   184,902    47,349    40,083 
                
Net increase (decrease) in cash   13,076,055    (39,160)   703,648 
Cash at beginning of year   1,319,977    1,359,137    655,489 
Cash at end of year  $14,396,032   $1,319,977   $1,359,137 
                
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:               
Income tax paid  $398,370   $34,765   $17,408 
Interest expense paid  $56,733   $235,361   $126,095 

 

 

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