CORRECTION: Guardforce AI Reports Revenue of $34.5 Million for 2022; Robotics AI Solutions Revenue Increases 245.1%

This release acts as a correction to the release posted on 04/21/2023 from Guardforce AI to certain figures in the financial statements including consolidated balance sheets and statements of cash flows

NEW YORK, May 01, 2023 (GLOBE NEWSWIRE) — Guardforce AI Co., Limited (“Guardforce AI” or the “Company”) (NASDAQ:GFAI, GFAIW), an integrated security provider specializing in secured logistics, Artificial Intelligence (AI) and Robot-as-a-Service (RaaS), today announced financial results and provided a business update for the year ended December 31, 2022.

Lei (Olivia) Wang, Chairwoman and Chief Executive Officer of Guardforce AI, stated, “2022 was an important year for Guardforce AI. We made significant strides in building our integrated AI and robotics business while strengthening our well-established secured logistics business. Due to the impact of COVID-19 and the shutdown of certain customers’ facilities in the secured logistics business segment during the year, we experienced a slight decrease in revenue of less than 2.0%. Even though the robotic AI segment revenue is still a relatively small percentage of the total revenue, it grew by 245.1% in 2022.

“In our secured logistic business, we made progress in diversifying our services by targeting the retail sector, including food and beverage businesses, which handle large amounts of cash. These businesses are also potential targets for our robotics business. Notably, we secured a 5-year contract with the Bank of Thailand to operate Consolidated Cash Centers (CCCs) in the cities of Ubonratchathani and Phitsanulok in Thailand. Currently, Guardforce AI’s subsidiary operates four CCC centers, covering 31 of Thailand’s 76 provinces. At the beginning of 2023, we secured two long-term contracts with pre-existing clients: a 3-year contract with a renowned retail chain store in Thailand and a 5-year contract with a tollway company, for our secured logistics and cash handling services, further strengthening Guardforce AI’s leading position in Thailand.

“We continue to strengthen our presence in the Asia Pacific region, as we expanded into mainland China, one of the largest and fastest-growing markets for robotics and security solutions. During 2022, we completed three acquisitions in China, providing us with immediate access to thousands of valuable clients. In February 2023, we acquired key assets from Shenzhen Kewei Robot Technology Company Ltd (“Kewei”) in China, which provided us rights to the permanent use of Kewei’s patents and expanded our customer base, including premier Fortune 500 clients. This acquisition further strengthens our capabilities in developing robotic solutions for our customers. As a growing RaaS solution provider, our goal is to capture a significant share of the rapidly growing, multi-billion-dollar RaaS market.

“With an expanded global footprint and growing AI resources, we are expanding our RaaS solutions, such as Artificial Intelligence of Things (AIoT) robot advertising, AI-based support for hotels, and other uses of AI services. We are witnessing particularly strong demand within the tourism industry. Towards that end, we have made significant progress in developing the Guardforce AI Intelligent Cloud Platform (GFAI ICP) and successfully set up three main hubs for the GFAI ICP in Mainland China, the United States, and Hong Kong, each with the ability to manage well over 10,000 robots. We also launched our AIoT Robot Advertising (RA) model and its mobile application, GFAI AD, on the Apple App Store in Asia. The AIoT RA model enables advertisers to publish advertisements on Guardforce AI’s robots and make more informed marketing decisions with data feedback from the GFAI ICP.

“The hospitality industry is an important and major market for our robotic solutions. Towards that end, we partnered with Blue Pin (HK) Limited and launched the Smart AI Hotel solution, initially in Hong Kong, which allows customers to use our concierge robots to make bookings online, check-in, and check-out. Additionally, we partnered with Riversoft Inc. to co-develop a contactless travel robotic solution known as Robot Travel Agency (“RTA”). Our goal for the RTA is to help travelers find exclusive local promotions for restaurants, events, and stores. In 2023, we will continue to enhance and develop our robotic solutions for the hospitality industry and look forward to accelerated growth through our Smart AI Solution and AIoT RA model.

“In summary, we have built a highly scalable business model and expect to resume strong organic revenue growth in 2023, in addition to accelerating the rollout of our RaaS platform through both acquisitions and organic growth strategies,” concluded Ms. Wang.

Financial Overview

Net revenue decreased by $0.68 million, or 1.9%, to $34.5 million for 2022, compared to $35.2 million for 2021. This decrease was primarily due to continued disruptions due to COVID-19 and the shutdown of certain customer facilities to curtail the spread of the coronavirus. As a percentage of revenue, gross profit margin increased from 11.6% for 2021 to 12.3% for 2022, primarily due to cost control initiatives. Operating loss was $16.9 million for 2022, compared to $3.7 million for 2021. The increase reflects higher selling, distribution, and administrative (SD&A) to support the Company’s long-term growth strategy and the provision of obsolete of inventory and impairment of robotics fixed assets recognized in 2022. A majority of the increase in operating loss is additional expenses incurred on setting up new international offices to expand and grow the Company’s robotics business, including staff expenses, rental expenses, marketing expenses, and developing related technologies capabilities. Operating loss included an approximate $0.9 million provision of obsolete inventory and $4.4 million impairment of robotics fixed assets impairment. Net loss was $18.7 million for 2022 compared to $5.5 million for 2021, or net loss per share of $14.97 (post-consolidation) for 2022 compared to $11.90 (post-consolidation) for 2021. As of December 31, 2022, and 2021, the Company had cash and cash equivalents (including restricted cash) of approximately $8.2 million and $15.9 million, respectively.

About Guardforce AI Co., Ltd.

Guardforce AI Co., Ltd. (NASDAQ: GFAI, GFAIW) is a global security solutions provider, building on its legacy secured logistic business, while expanding and transforming into an integrated AI and Robot-as-a-Service (RaaS) business. With more than 40 years of professional experience and a strong customer foundation, Guardforce AI is developing RaaS solutions that improve operational efficiency, quickly establishing its presence in the Asia Pacific region, while expanding globally. For more information, visit www.guardforceai.com Twitter:Â@Guardforceai

Safe Harbor Statement

This press release contains statements that do not relate to historical facts but are “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements can generally (although not always) be identified by their use of terms and phrases such as anticipate, appear, believe, continue, could, estimate, expect, indicate, intend, may, plan, possible, predict, project, pursue, will, would and other similar terms and phrases, as well as the use of the future tense. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on current beliefs, expectations and assumptions regarding the future of the business of the Company, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control, including the risks described in our registration statements and reports under the heading “Risk Factors” as filed with the Securities and Exchange Commission. Actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Forward-looking statements in this press release speak only as of the date hereof. Unless otherwise required by law, we undertake no obligation to publicly update or revise these forward-looking statements, whether because of new information, future events or otherwise.

Investor Relations:
David Waldman or Natalya Rudman
Crescendo Communications, LLC
Email: [email protected]
Tel: 212-671-1020

Guardforce AI Corporate Communications
Hu Yu
Email: [email protected]Â

(tables follow)

Guardforce AI Co., Limited and Subsidiaries
Consolidated Statements of Profit and Loss
(Expressed in U.S. Dollars)

Guardforce AI Co., Limited and Subsidiaries
Consolidated Balance Sheets
(Expressed in U.S. Dollars)

Guardforce AI Co., Limited and Subsidiaries
Consolidated Statements of Cash Flows
(Expressed in U.S. Dollars)

Non-IFRS Financial Measures

To supplement our unaudited interim condensed consolidated financial statements, which are prepared and presented in accordance with IFRS, we use the non-IFRS adjusted EBITDA as financial measures for our consolidated results.

We believe that adjusted EBITDA helps identify underlying trends in our business that could otherwise be distorted by the effect of certain income or expenses that we include in income (loss) from operations and net income (loss). We believe that these non-IFRS measures provide useful information about our core operating results, enhance the overall understanding of our past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making. We present the non-IFRS financial measures in order to provide more information and greater transparency to investors about our operating results.

EBITDAÂrepresents net (loss) income before (i) finance costs, income tax benefit and depreciation of fixed assets and amortization of intangible assets, which we do not believe are reflective of our core operating performance during the periods presented.

Non-IFRS adjusted net (loss) incomeÂrepresents net (loss) income before (i) finance costs, income tax benefit and depreciation of fixed assets and amortization of intangible assets, (ii) certain non-cash expenses, consisting of stock-based compensation expense, allowance for and write off of withholding tax receivables, provision for obsolete inventory and impairment loss on fixed assets.

Non-IFRS (loss) earnings per shareÂrepresents non-IFRS net (loss) income attributable to ordinary shareholders divided by the weighted average number of shares outstanding during the periods.ÂNon-IFRS diluted (loss) earnings per shareÂrepresents non-IFRS net (loss) income attributable to ordinary shareholders divided by the weighted average number of shares outstanding during the periods on a diluted basis.

The table below is a reconciliation of our net income to EBITDA and non-IFRS net income for the periods indicated:

Â