The stock in Taoping Inc. (Nasdaq: TAOP) plunged 5% to 40 cents per American depositary share on reporting weak revenues as the company faces compliance issues with Nasdaq.
The Shenzhen-based advertising solutions provider said in a statement today that in the 12 months through December that its revenues plummeted 33% year-over-year to $13.79 million. Net loss was $3.59 million in contrast to a net income of $1.88 million in the prior year.
Taoping blamed the revenue decrease on an “unfavorable macro-economic environment” and a weak out-of-home advertising market in China in 2019. Things are also not pretty for the company in the stock market, as it has not closed above $1 per share since May 2019.
As a result, Nasdaq has warned Taoping and informed it has until June 15 to regain compliance with the stock exchange’s listing rules. At its current levels, Taoping isn’t even trading close Nasdaq’s minimum required bid price. It has said that it would implement a reverse stock split if needed.
One positive at the end of the year for Taoping was its ability to double its network to around 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."
In addition to the mess Taoping has been in, guidance figures were not included in the company’s financial report today. However, 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 of Taoping are down 27% year-to-date.