GINSMS Announces Financial Results for the Three and Twelve Months Ended December 31, 2020 and Provides Financial Forecasts for Year 2021

CALGARY, Alberta, Feb. 11, 2021 (GLOBE NEWSWIRE) — GINSMS Inc. (TSXV: GOK) (“GINSMS” or the “Corporation”) has announced its financial results for the fourth quarter and twelve months ended December 31, 2020.The annual audited financial statements of the Corporation for the twelve months ended December 31, 2020 are currently under audit and in the process of preparation. As required under Canadian securities law regulations, the Corporation will be disclosing and filing on SEDAR its annual audited financial statements and the related management’s discussion and analysis (“MD&A”) of the Corporation will be ready within 120 days after the end of its year end of December 31, 2020.This financial disclosure was done in advance of the filing of the audited financial statements of the Corporation to allow GINSMS’ ultimate holding company, Beat Holdings Limited (“BHL”), a public company in Japan, to use certain of GINSMS’ financial information in the preparation of BHL’s financial statements and announcements.The Corporation’s financial information for the twelve months ended December 31, 2020 is prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).Highlights include:Revenue of $2,823,335 for the twelve-month period ended December 31, 2020 as compared to $2,638,717 for the twelve-month period ended December 31, 2019.Revenue of $684,260 for the three-month period ended December 31, 2020 as compared to Revenue of $633,951 for the three-month period ended December 31, 2019Gross Profit of $1,031,565 for the twelve-month period ended December 31, 2020 as compared to gross profit of $726,394 for the twelve-month period ended December 31, 2019.Gross Profit of $281,754 for the three-month period ended December 31, 2020 as compared to gross profit of $228,164 for the three-month period ended December 31, 2019.Operating expenses and finance costs decreased from $1,041,952 for the twelve-month period ended December 31, 2019 to $1,034,124 for the twelve-month period ended December 31, 2020.Operating expenses and finance costs decreased from $316,617 for the three-month period ended December 31, 2019 to $194,419 for the three-month period ended December 31, 2020.Net loss of $3,508 for twelve-month period ended December 31, 2020 as compared to a net loss of $315,311 for twelve-month period ended December 31, 2019.Net profit of $85,094 for three-month period ended December 31, 2020 as compared to a net loss of $87,334 for three-month period ended December 31, 2019 .Selected Profit and Loss Information
 Cost of SalesOperating Expenses and Finance CostsSelected Balance Sheet InformationThe figures reported below are based on the unaudited consolidated financial statements of the Corporation which have been prepared in accordance with IFRS.Total assets of GINSMS including cash, accounts receivable, other receivables, prepayment and deposits, property, plant and equipment and right-of-use assets as at December 31, 2020 amounted to $1,044,052 compared to December 31, 2019 amounted to $808,673. Bank and cash balances amounted to $296,312 as at December 31, 2020 an increase of 52.4% compared to $194,411 as at December 31, 2019. This increase was mainly due to decrease of cash flow used in the operation of the Corporation. The cash flow used in operating activities is $7,787 for the twelve months ended December 31, 2020 against the cash flow used in operating activities of $477,633 for the twelve months ended December 31, 2019. The lower cashflow used in the operating activities is partially offset by the lower cash flow generated from financing activities which was $166,183 for the twelve months ended December 31, 2020 as compared to $469,503 for the twelve months ended December 31, 2019.Selected Liquidity and Capital Resources Information

SEGMENTED INFORMATIONa) Revenue by customersb) Revenue by geographical location (by location of operations)c) Total assets by geographical locationd) Financial information by business segments
OutlookThe Corporation announces its financial forecasts for the twelve months ending December 31, 2021. The information included in this news release represents management’s guidance as approved on February 11, 2021. The financial outlook was prepared for BHL, the ultimate holding company of the Corporation, for its public company reporting obligations in Japan.The material factors and assumptions used to develop the financial outlook include:Continued business from the Corporation’s major customers. The actual gross margin of Software Products and Services achieved 36.5% for the year ended December 31, 2020 and with the expected decrease in revenue earned from business with key customers of the Corporation, the forecasted gross margin of 22.3% in 2021 is reasonable and achievable. The man-hour rates in 2020 have been adjusted substantially to be in line with prevailing market rates hence the increment in man-hour rates in 2021 will be at reduced rate while the salary increments factored in the 2021 budget. Management believes that the forecast revenue and gross margin is conservative and reasonable.
The actual traffic growth rate of A2P business for the year ended December 31, 2020 declined by 40.3% compared to the year ended December 31, 2019. Both the North Asia and South East Asia region experienced stiff competition and the growth from this region was affected. The Corporation also adjusted the prices to improve gross margin but that also resulted in a decrease in traffic from customers. Revenue for the year ended December 31, 2020 decreased by 12.8% but annual gross margin increased marginally to 20.5% compared with gross margin of 18.7% for the year ended December 31, 2019. The actual gross margin for the quarter ended December 31, 2020 of 9.0% showed that the gross margin declined steeply as the Corporation experienced delayed impact of the coronavirus (COVID-19) outbreak in the second half year of 2020. The extent that the coronavirus (COVID-19) outbreak will spread widely and its impact on our result will depend on future developments, which are highly uncertain and unpredictable. Although uncertain at this time, the outbreak could impede our ability to sell, grow and attract new customers. A number of our employees travel frequently to establish and maintain relationships with our customers. Although we continue to monitor the situation and may adjust our current policies as more information and guidance become available, suspending travel, not doing business in-person, and employees government imposed quarantined or sanitary public health authority imposed closures could negatively impact our operations and marketing efforts and also challenge our ability to enter into new customer contracts in a timely manner, which in turn could harm our business performance.
No significant changes in the environment (including competition) where the Corporation operates that will significantly affect the pricing of the Corporation’s services resulting in changes of the gross margin for the various business segments, except what is disclosed in note b above.
Timely completion and launch of certain additional value-added services for the Corporation’s customers.
The related parties agreed to convert their interest-bearing loans and notes payable to interest-free loans with effect from the year 2019 / 2020, no interest expense expected in 2021.Continued ability to obtain financing through loans and cash advances to support the sales operations of the Corporation.
The purpose of this financial outlook is to allow the Corporation’s ultimate holding company, BHL, to make reference and/or to use such outlook in its own financial disclosure. The operation of GINSMS is a major part of the growth strategy of BHL. As such, BHL believes that disclosing such information would be useful for its shareholders. Consequently readers of this press release are cautioned that the financial outlook of GINSMS concerning its expected gross margin and revenue is forward looking information and may not be appropriate for other purposes.
About GINSMS
GINSMS is a mobile technology and services company focusing on 2 areas namely its A2P Messaging Service and its Software Products and Services. GINSMS operates a cloud-based A2P messaging service that allows the termination of SMS to mobile subscribers of more than 200 mobile operators globally. GINSMS also develops and distribute innovative software products and services for mobile operators and enterprises and have successfully deployed more than 100 solutions worldwide. GINSMS has offices in China, Singapore, Hong Kong, Malaysia and Indonesia.Forward Looking StatementsCertain information included in this press release may contain forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may”, ”could”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, or “continue” or the negative thereof or variations thereon or similar terminology. These statements are not historical facts, but reflect management’s current beliefs and are based on information currently available to management regarding future results and events. Particularly, these forward-looking statements are based on management’s estimate of future events based on technological advances relating to the Corporation’s services, current market conditions and past experiences of management in relation to how certain contracts will affect revenues. Forward-looking statements, by their very nature, involve significant risks, uncertainties and assumptions.A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to dependence on major customers, system failures, delays and other problems, increasing competition, security and privacy breaches, dependence on third-party software and equipment, adequacy of network reliance, network diversity and backup systems, loss of significant information, insurance coverage, capacity limits, rapid technology changes, market acceptance, decline in volume of attractions, retention of key members of the management team, success of expansion into Chinese and other Asian markets, credit risk, consolidation of existing customers, dependence on required licenses, economy and politics in countries where the Corporation operates, conflicts of interest, effect of the COVID-19 and residency of directors and officers. Although the Corporation has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Although the forward-looking statements contained herein are based upon what management believes to be reasonable assumptions, the Corporation cannot assure the reader that actual results will be consistent with these forward-looking statements.In particular, forward-looking statements include the following assumptions:Management’s belief that the Corporation’s software products and services are expected to take on a different focus based on an outsourcing model approach leveraging on the lower cost base in Indonesia and Malaysia.  Therefore the revenue for the software segment in Indonesia and Malaysia should continue to increase. Management’s belief that the future growth in messaging is in the area of A2P Messaging Service and the Corporation’s investment in this area will create a viable and profitable business in the future.Management’s belief that the Corporation is able to generate sufficient amounts of cash through operations and financing activities to fulfil the working capital requirements of its present operations.These forward-looking statements are made as of the date of this press release and the Corporation assumes no obligation to update or revise them to reflect new events or circumstances except as may be required by law. Accordingly, readers should not place undue reliance on the forward-looking statements. Forward looking statements are presented in this news release for the purpose of assisting investors and others in understanding certain key elements of our expected fiscal 2020 and 2021 financial results, as well as our objectives, strategic priorities and business outlook for fiscal 2020 and 2021, and in obtaining a better understanding of the Corporation’s anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes. All forward-looking statements contained in this press release are qualified by this cautionary statement.For further information, please contact:GINSMS Inc.
Joel Chin, CEO
Tel: +65-6441-1029
Email: investor.relations@ginsms.com NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.