GOK Ginsms Inc

GINSMS Inc. (TSXV: GOK) (“GINSMS” or the “Corporation”) has announced its financial results for the fourth quarter and twelve months ended December 31, 2024.

The annual audited financial statements of the Corporation for the twelve months ended December 31, 2024 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”) within 120 days after the end of its year end of December 31, 2024.

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, 2024 is prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS Accounting Standards”). All amounts are expressed in Canadian Dollars unless otherwise noted.

Highlights include:

• Revenue of $2,506,107 for the twelve-month period ended December 31, 2024 as compared to revenue of $3,188,505 for the twelve-month period ended December 31, 2023.
• Revenue of $459,833 for the three-month period ended December 31, 2024 as compared to revenue of $755,164 for the three-month period ended December 31, 2023.
• Gross Profit of $1,154,956 for the twelve-month period ended December 31, 2024 as compared to gross profit of $1,316,952 for the twelve-month period ended December 31, 2023.
• Gross Profit of $194,057 for the three-month period ended December 31, 2024 as compared to gross profit of $347,799 for the three-month period ended December 31, 2023.
• Operating expenses and finance costs of $1,131,005 for the twelve-month period ended December 31, 2024 decreased from $1,450,602 for the twelve-month period ended December 31, 2023.
• Operating expenses and finance costs of $418,574 for the three-month period ended December 31, 2024 decreased from $636,353 for the three-month period ended December 31, 2023.
• Net profit of $21,485 for twelve-month period ended December 31, 2024 as compared to a net loss of $129,656 for twelve-month period ended December 31, 2023.
• Net loss of $224,541 for three-month period ended December 31, 2024 as compared to a net loss of $280,939 for three-month period ended December 31, 2023.

Selected Profit and Loss Information

Financial Highlights	Three-month period ended December 31, 2024 (Unaudited)		Three-month period ended December 31, 2023 (Unaudited)		Twelve-month period ended December 31, 2024 (Unaudited)		Twelve-month period ended December 31, 2023 (Audited)
Revenues $
A2P Messaging Service	92,877		162,229		715,934		986,715
Software Products & Services	366,956		592,935		1,790,173		2,201,790
	459,833		755,164		2,506,107		3,188,505
Cost of sales $
A2P Messaging Service	58,517		90,242		344,322		661,385
Software Products & Services	207,259		317,123		1,006,829		1,210,168
	265,776		407,365		1,351,151		1,871,553
Gross profit $
A2P Messaging Service	34,360		71,987		371,612		325,330
Software Products & Services	159,697		275,812		783,344		991,622
	194,057		347,799		1,154,956		1,316,952
Gross margin %
A2P Messaging Service	37.0%		44.4%		51.9%		33.0%
Software Products & Services	43.5%		46.5%		43.8%		45.0%
	42.2%		46.1%		46.1%		41.3%
Adjusted EBITDA(1) $Adjusted EBITDA margin	(129,990)(28.3)%		(264,350)(35.0)%		188,6617.5%		(38,624)(1.2)%
Net (loss)/profit $Net (loss)/profit margin	(224,541)(48.8)%		(280,939)(37.2)%		21,4850.9%		(129,656)(4.1)%
Net (loss)/earnings per share $	(0.119)		(0.149)		0.012		(0.069)
Basic and Diluted (in Canadian cents)

(1) Adjusted EBITDA is a non-IFRS measure which does not have any standardized meaning under IFRS Accounting Standards. Adjusted EBITDA is related to cash earnings and is defined for these purposes as earnings before income taxes, depreciation and amortisation (in both cost of sales and general and administration expenses), interest expenses and also excludes certain non-recurring or non-cash expenditure and income. This non-IFRS measure is not recognised under IFRS Accounting Standards and accordingly, shareholders are cautioned that this measure should not be construed as an alternative to net income determined in accordance with IFRS Accounting Standards. The non-IFRS measure presented is unlikely to be comparable to similar measure presented by other issuers. The Corporation believes that Adjusted EBITDA is a meaningful financial metric as it measures cash generated from operations which the Corporation can use to fund working capital requirements, service interest and principal debt repayment and fund future growth initiatives.

Cost of Sales

	Three-month period ended December 31, 2024 (Unaudited)	Three-month period ended December 31, 2023 (Unaudited)	Twelve-month period ended December 31, 2024(Unaudited)	Twelve-month period ended December 31, 2023 (Audited)
Depreciation- Property, plant and equipment	11,243	11,340	44,891	40,610
Salaries and wages	186,670	283,763	906,724	1,118,788
Subcontractor costs	60,257	102,769	367,611	673,912
Software and hardware	-	-	-	1,951
Others	7,606	9,493	31,925	36,292
	265,776	407,365	1,351,151	1,871,553

Operating Expenses and Finance Costs

	Three-month period ended December 31, 2024 (Unaudited)	Three-month period ended December 31, 2023 (Unaudited)	Twelve-month period ended December 31, 2024(Unaudited)	Twelve-month period ended December 31, 2023 (Audited)
Salaries and wages	130,414	343,367	377,658	617,261
Directors’ fees	10,000	10,000	40,000	40,000
Professional fees	69,928	61,517	301,269	271,009
Foreign currency exchange loss	44,998	34,650	3,913	50,584
Other general & administrative expenses	46,018	69,289	254,414	312,666
Allowance for doubtful debts	33,932	104,666	33,932	104,666
Research & development costs	69,184	-	69,184	-
Depreciation
- Property, plant and equipment	265	86	778	356
- Right-of-use assets	12,273	11,542	46,250	46,901
Lease interests on lease liabilities	1,562	1,236	3,607	7,159
	418,574	636,353	1,131,005	1,450,602

Selected Balance Sheet Information

The figures reported below are based on the unaudited consolidated financial statements of the Corporation which have been prepared in accordance with IFRS Accounting Standards.

			December 31, 2024(Unaudited)$		December 31, 2023(Audited)$
Current Assets
Accounts receivable			671,730		635,568
Deposits and prepayments			68,360		63,439
Current tax assets			156		330
Bank and cash balances			191,903		239,824
			932,149		939,161
Non-Current Assets
Property, plant and equipment			48,375		83,061
Right-of-use assets			81,912		30,954
TOTAL ASSETS			1,062,436		1,053,176
Current Liabilities
Accounts payable and accrued liabilities			719,374		827,380
Advances from related parties			780,755		698,935
Loans from related parties			1,453,662		1,390,642
Promissory note payable			580,000		580,000
Lease liabilities			49,116		25,354
Current tax liabilities			-		3,972
			3,582,907		3,526,283
Non-Current Liabilities
Lease liabilities			25,874		-
TOTAL LIABILITIES			3,608,781		3,526,283
Equity
Share capital			15,148,160		15,148,160
Deficit			(17,891,667)		(17,913,638)
Accumulated other comprehensive income			212,655		307,289
Total deficiency attributable to equity shareholders			(2,530,852)		(2,458,189)
Non-controlling interests			(15,493)		(14,918)
TOTAL DEFICIENCY			(2,546,345)		(2,473,107)
TOTAL LIABILITIES & EQUITY			1,062,436		1,053,176

Total assets of GINSMS including bank and cash balances, accounts receivable, deposits and prepayments, current tax assets, property, plant and equipment and right-of-use assets as at December 31, 2024 amounted to $1,062,436 compared to $1,053,176 as at December 31, 2023. Bank and cash balances amounted to $191,903 as at December 31, 2024, an decrease of 20.0% compared to $239,824 as at December 31, 2023. The decrease was mainly due to more net cash outflow from operating activities offset with net cash inflow from financing activities during the year.

Selected Liquidity and Capital Resources Information

Financial Highlights	Three-month period ended December 31, 2024(Unaudited)$		Three-month period ended December 31, 2023(Unaudited)$		Twelve-month period ended December 31, 2024(Unaudited)$		Twelve-month period ended December 31, 2023(Audited)$
Cash, beginning of period/year	240,595		115,252		239,824		191,126
Operating activities
Net (loss)/profit before tax	(224,517)		(288,554)		23,951		(133,650)
Interest expenses	1,562		1,236		3,607		7,159
Foreign currency exchange loss	44,998		34,650		3,913		50,584
Allowance for doubtful debts	33,932		104,666		33,932		104,666
Depreciation of property, plant and equipment	11,508		11,426		45,669		40,966
Depreciation of right-of-use assets	12,273		11,542		46,250		46,901
Changes in working capital items	30,447		294,595		(400,792)		41,902
Interest expenses on lease liabilities	(1,562)		(1,236)		(3,607)		(7,159)
Income tax (paid)/refunded	(57)		5		(6,180)		884
Net cash (used in)/generated from operating activities	(91,416)		168,330		(253,257)		152,253
Financing activities
Advances from related parties	134,207		55,470		406,621		431,853
Repayment of advances from related parties	(77,654)		(75,592)		(151,184)		(385,951)
Principal elements of lease payments	(11,770)		(12,058)		(47,504)		(46,816)
Net cash generated from/(used in) financing activities	44,783		(32,180)		207,933		(914)
Investing activities
Purchase of property, plant and equipment	(1,814)		(5,467)		(10,730)		(61,919)
Net cash used in investing activities	(1,814)		(5,467)		(10,730)		(61,919)
Effect of exchange rate changes on cash    held in foreign currencies	(245)		(6,111)		8,133		(40,722)
(Decrease)/increase in cash	(48,692)		124,572		(47,921)		48,698
Cash, end of period/year	191,903		239,824		191,903		239,824

SEGMENTED INFORMATION

a) Revenue by customers

	Twelve-month period ended December 31, 2024 (Unaudited)		Twelve-month period ended December 31, 2023(Audited)
	$	% of total revenue	$	% of total revenue
Customer A	968,700	38.7	1,510,790	47.4
Next five top customers
Customer B	444,531	17.7	478,672	15.0
Customer C	257,135	10.3	123,004	3.9
Customer D	207,539	8.3	148,235	4.6
Customer E	144,888	5.8	40,040	1.3
Customer F	139,432	5.6	65,802	2.1
All other customers	343,882	13.6	821,962	25.7
Total	2,506,107	100.0	3,188,505	100.0

b) Revenue by geographical location (by location of operations)

	Twelve-month period ended December 31, 2024(Unaudited)		Twelve-month period ended December 31, 2023(Audited)
	$	% of totalrevenue	$	% of total revenue
Singapore	1,437,755	57.4	2,013,538	63.1
Indonesia	224,854	9.0	413,811	13.0
Other Asia countries	364,032	14.5	372,061	11.7
Europe	295,536	11.8	200,917	6.3
United States	171,925	6.9	182,531	5.7
Other regions	12,005	0.4	5,647	0.2
Total	2,506,107	100.0	3,188,505	100.0

c) Total non-current assets by geographical location

	As at December 31, 2024 (Unaudited)		As at December 31, 2023 (Audited)
	$	% of total assets	$	% of total assets
Indonesia	122,695	94.2	100,787	88.4
Other Asia countries	7,592	5.8	13,228	11.6
Total	130,287	100.0	114,015	100.0

d) Financial information by business segments

	Messaging		Software products and services		Unallocated		Total
	$		$		$		$
Twelve-month period ended    December 31, 2024 (Unaudited)
Revenue	715,934		1,790,173		-		2,506,107
Intersegment revenue	19,071		302,548		-		321,619
Amortisation and depreciation	8,694		83,225		-		91,919
Other material items of income and expense:
Staff costs	206,528		1,077,854		-		1,284,382
Interest income	727		394		-		1,121
Interest and finance expenses	87		3,520		-		3,607
Income tax expense	-		2,466		-		2,466
Segment profits/(losses)	133,324		121,387		(233,226)		21,485
Additions to segment non-current assets	6,846		99,566		-		106,412
At December 31, 2024 (Unaudited)
Segment assets	111,865		931,267		19,304		1,062,436
Segment liabilities	(400,999)		(1,597,481)		(1,610,301)		(3,608,781	)

	Messaging		Software products and services		Unallocated		Total
	$		$		$		$
Twelve-month period ended December 31, 2023 (Audited)
Revenue	986,715		2,201,790		-		3,188,505
Intersegment revenue	35,469		273,994		-		309,463
Amortisation and depreciation	19,391		68,476		-		87,867
Other material items of income and expense:
Staff costs	278,633		1,457,416		-		1,736,049
Interest income	314		524		-		838
Interest and finance expenses	1,504		5,655		-		7,159
Income tax credit	(893	)	(3,101	)	-		(3,994	)
Segment (losses)/profits	(200,021	)	334,643		(264,278	)	(129,656	)
Additions to segment non-current assets	14,066		47,853		-		61,919
At December 31, 2023 (Audited)
Segment assets	180,759		847,329		25,088		1,053,176
Segment liabilities	(520,019	)	(1,665,304	)	(1,340,960	)	(3,526,283	)

Outlook

The Corporation announces its financial forecasts for the next twelve months ending December 31, 2025. The information included in this news release represents management’s guidance as approved on February 13, 2025. 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:

1. Continued business from the Corporation’s major customers. The actual gross margin of the Software Products and Services segment achieved 43.8% for the year ended December 31, 2024 and with the expected decrease in revenue earned from business with key customers of the Corporation, the forecasted gross margin of 37.7% in 2025 is reasonable and achievable. The man-hour rates in 2024 were in line with prevailing market rates hence the increment in man-hour rates in 2025 will be at reduced rate while the salary increments are factored in the 2025 budget. Management believes that the forecast revenue and gross margin is conservative and reasonable.
2. The actual traffic growth rate of A2P business for the year ended December 31, 2024 increased by 1.5% compared to the year ended December 31, 2023. All the regions suffered lower growth due to stiff competition. The Corporation also adjusted the prices of its products and services to maintain gross margin. Revenue of A2P business for the year ended December 31, 2024 decreased by 27.4% while annual gross margin of 51.9% is higher than gross margin of 33.0% for the year ended December 31, 2023 due to strengthening of USD against Euro.
3. 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 notes a and b above.
4. Timely completion and launch of certain additional value-added services for the Corporation’s customers.
5. 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.

Financial Highlights	Forecast		Forecast		Forecast		Forecast
($)	Jan – Mar 2025		Apr – Jun 2025		Jul – Sep 2025		Oct – Dec 2025
Revenues $
A2P Messaging Service	102,217		103,037		103,864		104,697
Software Products & Services	428,279		428,279		428,279		428,279
	530,496		531,316		532,143		532,976
Cost of sales $
A2P Messaging Service	64,451		64,968		65,489		66,014
Software Products & Services	266,933		266,933		266,933		266,933
	331,384		331,901		332,422		332,947
Gross profit $
A2P Messaging Service	37,766		38,069		38,375		38,683
Software Products & Services	161,346		161,346		161,346		161,346
	199,112		199,415		199,721		200,029
Gross margin %
A2P Messaging Service	36.9	%	36.9	%	36.9	%	36.9	%
Software Products & Services	37.7	%	37.7	%	37.7	%	37.7	%
	37.5	%	37.5	%	37.5	%	37.5	%
Selling, general and administrative    expenses	(173,191	)	(173,191	)	(173,191	)	(173,191	)
Operating profit	25,921		26,224		26,530		26,838
Non-operating income (1)	-		-		-		-
Non-operating expenses (1)	(755	)	(755	)	(755	)	(755	)
Ordinary profit	25,166		25,469		25,775		26,083
Extraordinary gains	-		-		-		-
Extraordinary losses	-		-		-		-
Profit before tax and non-controlling interests	25,166		25,469		25,775		26,083
Income taxes	-		-		-		-
Non-controlling interests	-		-		-		-
Net profit for the period	25,166		25,469		25,775		26,083
Adjusted EBITDA (2)	49,281		49,584		49,890		50,198

(1) Non-operating income included interest income and other non-operating income. Non-operating expenses included loss on foreign exchange and interest expense.

(2) Adjusted EBITDA is a non-IFRS measure which does not have any standardized meaning under IFRS Accounting Standards. Adjusted EBITDA is related to cash earnings and is defined for these purposes as earnings before income taxes, depreciation and amortisation (in both cost of sales and general and administration expenses), interest expenses and also excludes certain non-recurring or non-cash expenditure and income. This non-IFRS measure is not recognised under IFRS Accounting Standards and accordingly, shareholders are cautioned that this measure should not be construed as an alternative to net income determined in accordance with IFRS Accounting Standards. The non-IFRS measure presented is unlikely to be comparable to similar measure presented by other issuers. The Corporation believes that Adjusted EBITDA is a meaningful financial metric as it measures cash generated from operations which the Corporation can use to fund working capital requirements, service interest and principal debt repayment and fund future growth initiatives.

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 Statements

Certain 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 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.  The Corporation will explore new customers as the revenue from the key customers is expected to decrease for the software segment. On the other hand, management’s belief that the future growth in messaging is in the area of A2P Messaging Service will be continued to be affected by stiff competition and hence profitability of the business in the future is uncertain.
• 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 2024 financial results, as well as our objectives, strategic priorities and business outlook for fiscal 2025, 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, CEOTel: +65-6441-1029Email: 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.