Taoping Stock Falls 5% on Poor Annual Results

The advertising solutions provider has yet to regain compliance with the minimum bid requirement per the Nasdaq's listing rules.

Author: Anthony Russo   

The stock in Taoping Inc. (Nasdaq: TAOP) plunged 5% to 40 cents per American depositary share on weak financials as the company faces compliance issues with the Nasdaq.

The Shenzhen-based advertising solutions provider said in a statement today that in the 12 months through December its revenues plummeted 33% year-over-year to $13.8 million. Net loss was $3.6 million in contrast to a net income of $1.9 million in the prior year.

Taoping attributed the revenue decrease to an "unfavorable macro-economic environment" and a weak out-of-home advertising market in China in 2019. 

In trading, TAOP stock has been trading below $1 per share for at least a year; its 52-week high is at 84 cents per share. As a result, the stock exchange warned the company of a potential delisting in December, giving it until June 15 to regain compliance. However, under the new rule the Nasdaq has implemented in April, giving companies additional time to regain compliance in light of the Covid-19 hardships, the company could have an additional 60 days starting July 1. Taoping has said that it would carry out a reverse stock split if needed. 

On the bright side, at the end of the year, Taoping's network doubled its network to near 200 cities compared with the beginning of 2019.

"Currently, we are providing technical operations of Taoping Network and Taoping e-Stores for free," Jianghuai Lin, the chief executive officer and chairman of Taoping, said in a statement today.

He added,  "As part of our growth strategy, we expect to share advertisement revenues and transaction revenues with our city partners sometime in the future or to exercise our right to acquire our city partners, and to continue the expansion of our network to reach more low-tier cities."

Operating for more than 25 years, Taoping provides smart display terminals for targeted advertising and online retail with the goal to make advertising and branding "affordable and effective for everyone."

Lin said, "Though we experienced adverse impacts from the coronavirus pandemic, we are focusing our development efforts on intelligent connections with all major online advertising platforms in China. As China is opening for business, we are experiencing recovery of demands."

As of December, Taoping had cash and cash equivalents of $1.5 million. Shares in Taoping are down 27% year-to-date.