UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period endedJune 30, ~~2018~~2019

☐☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _____________

Commission File Number:~~000-10822~~001-36530

One Horizon Group, Inc.

(Exact name of registrant as specified in its charter)

Delaware

46-3561419

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

~~34 South Molton~~649 NE 81^st Street, ~~London~~ ~~W1K 5RG, UK~~Miami FL		33138
(Address of principal executive offices)		(Zip Code)

~~+44(0)20 7409 5248~~(305) 420-6640

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
N/A		N/A		N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑þ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Website, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☑þ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐þ	Smaller reporting company	☑þ
~~(Do not check if smaller reporting company)~~		Emerging growth company ☐		☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑þ

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. As of August ~~08, 2018, 51,347,022~~19, 2019, 95,766,169 shares of the registrant’s common stock, par value $0.0001 per share, were outstanding.

TABLE OF CONTENTS

Part I – FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	42

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1912

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	14

Item 4.	Controls and Procedures	14

~~Item 3.~~		~~Quantitative and Qualitative Disclosures about Market Risk~~	23

~~Item 4.~~	~~Controls and Procedures~~	23

Part II – OTHER INFORMATION

Item 1.	Legal Proceedings	2415

Item 1A.	Risk Factors	2515

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2515

Item 3.	Defaults Upon Senior Securities	15

Item 4.	Mine Safety Disclosures	15

Item 5.	Other Information	15

Item 6.	Exhibits	15

~~Item 3.~~SIGNATURES		~~Defaults Upon Senior Securities~~	25

~~Item 4.~~	~~Mine Safety Disclosures~~	25

~~Item 5.~~	~~Other Information~~	25

~~Item 6.~~	~~Exhibits~~	25

~~SIGNATURES~~		2616

CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

The statements made in this Report, and in other materials that the Company has filed or may file with the Securities and Exchange Commission, in each case that are not historical facts, contain “forward-looking information” within the meaning of the Private Securities Litigation Reform Act of 1995, and Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, which can be identified by the use of forward-looking terminology such as “may,” “will,” “anticipates,” “expects,” “projects,” “estimates,” “believes,” “seeks,” “could,” “should,” or “continue,” the negative thereof, and other variations or comparable terminology as well as any statements regarding the evaluation of strategic alternatives. These forward-looking statements are based on the current plans and expectations of management and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those reflected in such forward-looking statements. ~~Among these~~These risks include, but are not limited to, risks and uncertainties ~~are the competition we face;~~relating to our current cash position and our need to raise additional capital in order to be able to continue to fund our operations; our ability to retain ~~customers~~our managerial personnel and to attract ~~new customers;~~additional personnel; competition; our ability to establish and expand strategic alliances; governmental regulation and related actions in our international operations including changes in taxes and currency restrictions; increased market and competitive risks, risks related to the acquisition or integration of future businesses or joint ventures; our ability to obtain or maintain relevantprotect intellectual property ~~rights; failure to protect our trademarks~~rights, and ~~internally developed software; security breaches~~any and other ~~compromises~~factors, including the risk factors identified in the documents we have filed, or will file, with the Securities and Exchange Commission.

In light of these assumptions, risks and uncertainties, the results and events discussed in the forward-looking statements contained in this report or in any document incorporated herein by reference might not occur. Investors are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the respective dates of this report or the date of the document incorporated by reference in this report. We expressly disclaim any obligation to update or alter any forward-looking statements, whether as a result of new information, ~~security; our dependence on third party facilities, equipment, systems and services; system disruptions~~future events or ~~flaws in our technology and systems; fraudulent use of our name or services; our ability to maintain data security; and our ability to obtain additional financing if required;~~ otherwise, except as required by federal securities laws.

These and other matters the Company discusses in this Report, or in the documents it incorporates by reference into this Report, may cause actual results to differ from those the Company describes. The Company assumes no obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

~~SPECIAL NOTE REGARDING NASDAQ NOTIFICATION~~

On May 10, 2018, the Company received written notification from NASDAQ that the minimum bid price per share for its common share was below $1.00 for a period of 30 consecutive business days and that the Company did not meet the minimum bid price requirement set forth in NASDAQ Listing Rule 5550 (a)(2). The notification does not impact the Company’s listing on The Nasdaq Capital Market at this time.

~~The Company has a period of 180 calendar days to regain compliance with NASDAQ’s minimum bid price requirement.~~To regain compliance, the Company’s common shares must have a closing bid price of at least $1.00 for a minimum of 10 consecutive business days. The Company will work to regain compliance during the 180-day compliance period. In the event the Company does not regain compliance during the 180-day period, the Company may be eligible for additional time to regain compliance.

PART I – FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS (UNAUDITED)

ONE HORIZON GROUP, INC.

Condensed Consolidated Balance Sheets

June 30, ~~2018~~2019 and December 31, ~~2017~~2018

(in thousands, except share data)

	June 30,			December 31,
	2018 (unaudited)			2017			June 30, 2019 (unaudited)			December 31, 2018
Assets

Current assets:
Cash	$	604		$	763		$	847		$	353
Accounts receivable, net		352			102			244			325
Prepaid compensation		550			550			550			550
Amounts due from related parties		46			—
Other assets		920			28
Total current assets		2,472			1,443
Investment								100			100
Other receivable								510			2,022
Advances to acquisition target								196			70
Deferred production costs								19			87
Other current assets								454			386
								2,920			3,893
Current assets of discontinued items								-			129
								2,920			4,022

Property and equipment, net		39			2			37			3
Intangible assets, net		17,392			5,340			2,924			3,184
Goodwill		1,223			—			2,213			2,213
Prepaid compensation, net of current portion		1,742			2,017			1,192			1,467

Non current assets of discontinued operations								-			36
Total assets	$	22,868		$	8,802		$	9,286		$	10,925

Liabilities and Stockholders’ Equity

Current liabilities:
Accounts payable	$	385		$	167		$	430		$	334
Accrued expenses		60			55			315			156
Accrued compensation		215			251			203			181
Deferred income								15			177
Notes payable								121			101
Amount due to related parties		—			32			205			205
Convertible notes, net of debt discount		—			45
Promissory notes, related parties								1,500			1,000
								2,789			2,154
Current liabilities of discontinued operations								-			301
Total current liabilities		660			550			2,789			2,455

Long-term liabilities

Promissory notes, related parties		1,000			1,000
Equipment note payable								28			-

Total liabilities		1,660			1,550			2,817			2,455

Equity
Temporary Equity– redeemable common stock outstanding 848,611								605			605

Stockholders’ Equity
Preferred stock:
$0.0001 par value, authorized 50,000,000; No shares issued and outstanding		—			—			—			—
Common stock:
$0.0001 par value, authorized 200,000,000 shares issued and outstanding 51,347,022 shares as of June 30, 2018 (December 2017 - 30,255,123)		4			3
$0.0001 par value, authorized 200,000,000 shares issued and outstanding 94,609,731 shares as of June 30, 2019 (December 2018 – 87,559,672)								9			8
Additional paid-in capital		62,627			48,356			62,876			62,600

Accumulated Deficit		(46,841	)		(41,085	)
Stock subscription receivable		(370	)		—
Share subscription receivable								(1,425	)		(1,425	)
Accumulated (Deficit)								(56,594	)		(54,854	)
Accumulated other comprehensive income		(36	)		(22	)		(24	)		(35	)
Total One Horizon Group, Inc., stockholders’ equity		15,384			7,252
Total One Horizon Group, Inc. stockholders’ equity								4,842			6,294
Non-controlling interest		5,824			—			1,022			1,571
Total stockholders’ equity		21,208			7,252			5,864			7,865

Total liabilities and equity	$	22,868		$	8,802
Total liabilities and stockholders’ equity							$	9,286		$	10,925

See accompanying notes to unaudited condensed consolidated financial statements.

ONE HORIZON GROUP, INC.

Condensed Consolidated Statements of Operations

For the three and six months ended June 30, ~~2018~~2019 and ~~2017~~2018

(in thousands, except per share data)

(unaudited)

Three Months ended June 30, Six Months ended June 30,
2018
audited 2017 2018
unaudited 2017

Revenue $ 294 $ 110 $ 568 $ 117

Cost of revenue - Hardware, calls and network charges 111 — 111 —
- Amortization of intangible assets 824 22 1,229 44
935 22 1,340 44

Gross margin (deficiency) (641 ) 88 (772 ) 73

Expenses:
General and administrative 1,773 265 3,183 573
Depreciation 2 7 2 14
Acquisition services 1,094 — 1,874 —

2,869 272 5,059 587

Loss from operations (3,510 ) (184 ) (5,831 ) (514 )

Other income and expense:
Interest expense (17 ) (176 ) (390 ) (356 )
Foreign exchange (1 ) (2 ) (1 ) —

(18 ) (178 ) (391 ) (356 )

Loss before income taxes (3,528 ) (362 ) (6,222 ) (870 )

Income tax benefit — — — —

Loss on continuing operations (3,528 ) (362 ) (6,222 ) (870 )

Loss from discontinued operations — (1,408 ) — (2,184)

Net loss for the period (3,528 ) (1,770 ) (6,222 ) (3,054 )
Net loss attributable to non-controlling interest 346 — 466 —

Net loss attributable to One Horizon Group Inc. common stockholders $ (3,182 ) $ (1,770 ) $ (5,756 ) $ (3,054 )

Earnings per share

Basic and diluted net loss per share – continuing operations $ (0.09 ) $ (0.06 ) $ (0.17 ) $ (0.15 )

Basic and diluted net loss per share – discontinued operations $ — $ (0.24 ) $ — $ (0.37 )

Weighted average number of shares outstanding
Basic and diluted 41,366 5,864 36,902 5,861

Three Months Ended
June 30, Six Months Ended
June 30,
2019 2018 2019 2018

Revenue $ 253 $ 270 $ 454 $ 544

Cost of revenue:
Software and production costs 88 17 170 17
Amortization of intangible assets 215 656 375 1,061
303 673 545 1,078

Gross deficit (50 ) (403 ) (91 ) (534 )

Expenses:
General and administrative 1,078 1,716 2,262 3,126
Depreciation 5 1 6 1
Acquisition services - 1,094 - 1,874

1,083 2,811 2,268 5,001

Loss from operations (1,133 ) (3,214 ) (2,359 ) (5,535 )

Other income and expense:
Interest expense (16 ) (17 ) (32 ) (390 )
Foreign exchange (1 ) (1 ) (2 ) (1 )
Other income - - 553 -
(17 ) (18 ) 519 (391 )

Loss on continuing operations (1,150 ) (3,232 ) (1,840 ) (5,926 )

Loss from discontinued operations - (296 ) - (296 )

Net loss for the period (1,150 ) (3,528 ) (1,840 ) (6,222 )
Net loss attributable to non-controlling interest 66 346 100 466

Net loss attributable to One Horizon Group Inc. common stockholders $ (1,084 ) $ (3,182 ) $ (1,740 ) $ (5,756 )

Earnings per share

Basic and diluted net loss per share – continuing operations $ (0.01 ) $ (0.08 ) $ (0.02 ) $ (0.16 )

Basic and diluted net loss per share – discontinued operations $ - $ (0.01 ) $ - $ (0.01 )

Weighted average number of shares outstanding
Basic and diluted 90,028 41,366 89,223 36,902
See accompanying notes to unaudited condensed consolidated financial statements.

ONE HORIZON GROUP, INC.
Condensed Consolidated Statements of Comprehensive Loss
For the three and six months ended June 30, ~~2018~~2019 and ~~2017~~2018
(in thousands)
(unaudited)
Three Months ended June 30, Six Months ended June 30,
2018
unaudited 2017 2018
unaudited 2017

Net loss $ (3,182 ) $ (1,770 ) $ (5,756 ) $ (3,054 )
Other comprehensive income:
Foreign currency translation adjustment loss 13 475 (14 ) 157
Total Comprehensive loss $ (3,169 ) $ (1,295 ) $ (5,770 ) $ (2,897 )

Three Months Ended
June 30, Six Months Ended
June 30,
2019 2018 2019 2018

Net loss $ (1,084 ) $ (3,182 ) $ (1,740 ) $ (5,756 )
Other comprehensive income:
Foreign currency translation adjustment loss - - 11 (14 )
Total comprehensive loss $ (1,084 ) $ (3,182 ) $ (1,729 ) $ (5,770 )
See accompanying notes to unaudited condensed consolidated financial statements

ONE HORIZON GROUP, INC.
Condensed Consolidated ~~Statement~~Statements of Equity
For the six months ended June 30, 2019 and 2018
(in thousands)
(unaudited)

Number
of
Shares Amount Additional
Paid-in
Capital Accumulated
deficit Accumulated
Other
Comprehensive
Income
(Loss) Stock subscription receivable Non-controlling
interest Total
Equity Mezzanine Equity Common Stock Additional Stock Subscription Accumulated Accumulated Stock subscription Non-Controlling Total
Stockholders’
Shares Amount Shares Amount Paid-In Receivable Deficit OCI receivable Interest Equity
Balance December 31, 2017 30,255 $ 3 $ 48,356 $ (41,085 ) $ (22 ) $ — $ — $ 7,252

Balances, January 1, 2018     - $     - 30,255 $     3 $ 48,356 $     - $ (41,085 ) $ (22 ) $     - $     - $ 7,252

Net loss — — — (5,756 ) — — (466 ) (6,222 ) - - - - - - (2,574 ) - (120 ) (2,694 )
Foreign currency translations — — — — (14 ) — — (14 )

Foreign currency translation - - - - - - - (1 ) - (1 )

Issuance of shares for services 5,095 — 3,625 — — — — 3,625 171 199 476 - 728 - - - - 728

Issuance of shares for acquisitions 10,127 1 7,929 — — — 6,290 14,220 - - 2,333 - 2,507 - - - 1,353 3,860
Issuance of shares for exercise of convertible promissory notes 677 — 406 — — — — 406

Issuance of shares for exercise of warrants 3,450 — 1,358 — — (370 ) — 988 - - 750 - 563 - - - - - 563
Increase in service compensation due to change in exercise price 403 403

Issuance of shares for conversion of debt 677 406 - - - - - - - -

Conversion benefit on convertible notes — — 200 — — — 200 - - - - 200 - - - - 200

Increase in service compensation due to change in change in exercise price - - - - - - - - - - -

Issuance of shares for cash 1,750 — 350 — — — 350 - - - - - - - - - - -

Balance June 30, 2018 51,354 $ 4 $ 62,627 $ (46,841 ) $ (36 ) $ (370 ) $ 5,824 $ 21,208
Balances, March 31, 2018 848 605 33,814 3 52,354 - (43,659 ) (23 ) - 1,233 9,908

Net loss - - - - - - (3,182 ) - - (346 ) (3,528 )

Foreign currency translation - - - - - - - (13 ) - - (13 )

Issuance of shares for services - - 4,619 - 2,897 - - - - - 2,897

Issuance of shares for acquisitions - - 7,794 1 5,422 - - - - 4,937 10,360

Issuance of shares for exercise of warrants - - 2,700 - 795 - - - (370 ) - 425

Increase in service compensation due to change in change in exercise price - - - - 403 - - - - - 403

Issuance of shares for cash - - 1,750 - 350 - - - - - 350

Issuance of shares for exercise of convertible promissory notes - - 677 - 406 - - - - - 406

Balances, June 30, 2018 848 $ 605 51,354 $ 4 $ 62,627 $ - $ (46,841 ) $ (36 ) $ (370 ) $ 5,824 $ 21,208

Balances, January 1, 2019 848 $ 605 87,560 $ 8 $ 62,600 $ (1,425 ) $ (54,854 ) $ (35 ) $ - $ 1,571 $ 7,865

Net loss - - - - - - (656 ) - - (34 ) (690 )

Foreign currency translation - - - - - - - 11 - - 11

Disposal of equity in Banana Whale Studios PTE Limited - - - - - - - - - (449 ) (449 )

Balances, March 31, 2019 848 605 87,560 8 62,600 (1,425 ) (55,510 ) (24 ) - 1,088 6,737

Net loss - - - - - - (1,084 ) - (66 ) (1,150 )

Shares issuance for contract modification - - 2,049 - 127 - - - - - 127

Shares issued for services to be provided - - 5,000 1 149 - - - - - 150

Balances, June 30, 2019 848 605 94,609 9 62,876 (1,425 ) (56,594 ) (24 ) - 1,022 5,864

See accompanying notes to unaudited condensed consolidated financial statements

ONE HORIZON GROUP, INC.
Condensed Consolidated Statements of Cash Flows
For the six months ended June 30, ~~2018~~2019 and ~~2017~~2018
(in thousands)
(unaudited)
2018
(unaudited) 2017
Cash flows from operating activities:

Net loss for the period $ (6,222 ) $ (870 )

Adjustment to reconcile net loss for the period to net cash flows from operating activities:
Depreciation of property and equipment 2 14
Amortization of intangible assets 1,229 44

Amortization of debt issue costs — 68
Amortization of beneficial conversion feature 355 50
Amortization of debt discount — 100
Shares issued for services 3,282 —
Warrants issued for services — 123
Amortization of shares issued for services 624 43
Options issued for services — 118
Changes in operating assets and liabilities:
    Accounts receivable (250 ) —
    Other assets (476 ) (28 )
Accounts payable and accrued expenses (63 ) 650
  Net cash flows from continuing operating activities (1,519 ) 312

  Net cash flows from discontinued operating activities — (353 )
  Net cash flows from total operating activities (1,519 ) (41 )

Cash used in investing activities:

Cash consideration on acquisitions (net of cash acquired) (108 ) —
Acquisition of fixed assets (2 ) —
Net cash flows from investing activities – continuing operations (110 ) —

   Net cash flows from investing activities – discontinued operations — (261 )
   Net cash flows from total investing activities (110 ) (261 )

Cash flows from financing activities:

Proceeds from issuance of shares 350 —
Proceeds from exercise of warrants 988 102
Proceeds from issuance of convertible notes 200 —
Repayment of advances from related parties (net) (78 )
Net cash flows from continuing operations and total financing activities 1,460 102

Decrease in cash during the period (169 ) (200 )
Foreign exchange effect on cash 10 9

Cash at beginning of the period – continuing operations 763 106
Cash at beginning of the period – discontinued operations — 154

Cash at end of the period $ 604 $ 69
2019 2018
Cash flows from operating activities:

Net loss for the period $ (1,840 ) $ (5,926 )

Adjustment to reconcile net loss for the period to net cash flows from operating activities:
Depreciation of property and equipment 6 1
Amortization of intangible assets 375 1,061
Gain on sale of interest in subsidiary (553 ) -
Amortization of beneficial conversion feature - 355
Shares issued for services - 3,282
Shares issued for contract modification 127 -
Amortization of shares issued for services 423 624
Changes in operating assets and liabilities:
Deferred production costs 68 -
Accounts receivable 71 (237 )
Other assets (75 ) (476 )
Deferred revenue (290 ) -
Accounts payable and accrued expenses 287 (66 )
Net cash flows from continuing operating activities (1,401 ) (1,382 )

Net cash flows from discontinued operating activities - (137 )
Net cash flows from total operating activities (1,401 ) (1,519 )

Cash used in investing activities:

Cash advances to acquisition target (126 ) -
Proceeds from sale of interest in subsidiary 1,500 -
Cash consideration on acquisitions (net of cash acquired) - (108 )
Acquisition of fixed assets (40 ) (1 )
Net cash flows from continuing investing activities 1,334 (109 )

Net cash flows from discontinued investing activities - (1 )
Net cash flows from total investing activities 1,334 (110 )

Cash flows from financing activities:

Proceeds from issuance of shares - 350
Proceeds from exercise of warrants - 988
Proceeds from issuance of convertible notes - 200
Proceeds from loan 500 -
Proceeds from finance contracts 51 -
Repayment of advances from related parties (net) - (78 )
Net cash flows from financing activities 551 1,460

Increase (decrease) in cash during the period 484 (169 )
Foreign exchange effect on cash 10 10

Cash at beginning of the period 353 763

Cash at end of the period $ 847 $ 604

Supplementary Information:

Non-cash financing transactions:
Common stock issued for business combinations - 14,220
Common stock issued for conversion of debt - 406

~~Supplementary Information:~~
2018 2017

Non-cash financing transactions:
Common stock issued for business combinations 14,220 —
Common stock issued for conversion of debt 406 —
See accompanying notes to unaudited condensed consolidated financial statements.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, ~~2018~~2019

Note 1. Description of Business, Organization and Principles of Consolidation

Description of Business

One Horizon Group, Inc (“the Company”) has ~~four~~the following three core businesses following the acquisition of 123Wish Inc., Love Media House, Inc (formerly called C-Rod, Inc.) and Banana Whale Studios PTE Ltd in the six months ended June 30, 2018 (See Note 3). The core trading businesses are:businesses:

(i) ~~Secure Messaging – offers digitally secure messaging software and sells licenses primarily into the gaming, security and educational markets.~~
~~(ii)~~ 123Wish, Inc. (“123Wish”) – an experience based platform where subscribers have a chance to play and win experiences from celebrities, athletes and artists.
~~(iii)~~(ii) Love Media House, ~~(formerly called C-Rod)~~Inc. formerly known as C-Rod, Inc. (“Love Media House”) -a full-service music production, artist representation and digital media ~~business.~~business that providesa broad range of entertainment services including branding and advertising, video and photo production, recording (including music production, arranging, mixing and mastering), songwriting (arranging writing sessions with experienced and multi-platinum writers), artist development, digital distribution, billboard chart promotion, and consulting and life coaching. The entertainment marketplace is highly competitive. The team at Love Media House, headed by Chis Rodriguez, has worked with many famous artists and achieved many Billboard numbers and giving Love Media House an important edge in promoting new talent.
~~(iv)~~(iii) ~~Banana Whale Studios –~~Browning Productions & Entertainment, Inc. (“Browning Productions”) - a ~~B2B software provider~~full service video production company and executive producer for all entertainment projects. Browning distributes content on a proprietary Internet/Over-The-Top (“OTT”) content platform that operates in ~~the online gaming industry that develops~~conjunction with Verizon Digital Media Services (“VDMS”). Browning has produced and ~~supplies online games~~has ownership rights to ~~Asian gaming platforms.~~several national and international television programs currently airing on a number of acclaimed television networks. Browning’s team is comprised of award-winning professionals and offers end-to-end marketing services.
In February 2019, the Company entered into an agreement to acquire a majority interest in Maham LLC, an innovative, technology driven yoga studio concept, which the Company expects to close during the third quarter of 2019.

The Company is based in the United States of America, Hong Kong, Singapore, China and the United Kingdom.

Interim Period Financial Statements

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and with the Securities and Exchange Commission’ instructions. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. The results of operations reflect interim adjustments, all of which are of a normal recurring nature and, in the opinion of management, are necessary for a fair presentation of the results for such interim period. The results reported in these interim condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. Certain information and note disclosure normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the Securities and Exchange Commission’s rules and regulations. These unaudited interim ~~condensed~~ consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2017,~~2018, as filed with the Securities and Exchange Commission on April ~~2, 2018.~~15, 2019.

Current Structure of the Company

The Company has the following subsidiaries:
Subsidiary name % Owned
~~Subsidiary name~~ ~~% owned~~
● 123Wish, Inc. ~~51%~~ 51 %
● ~~Global Phone Credit Ltd~~ ~~100%~~
● One Horizon Hong Kong Ltd ~~100%~~ 100 %
● Horizon Network Technology Co. Ltd ~~100%~~ 100 %
● Love Media House, Inc ~~100%~~ 100 %
● Browning Productions & Entertainment, Inc. ● ~~Banana Whale Studios PTE Ltd~~ ~~51%~~51 %

In addition to the subsidiaries listed above, Suzhou Aishuo Network Information Co., Ltd (“Suzhou Aishuo”) is a limited liability company, organized in China and controlled by usthe Company via various contractual arrangements. Suzhou Aishuo is treated as one of our subsidiaries for financial reporting purposes in accordance with GAAP.

All significant intercompany balances and transactions have been eliminated in consolidation.

7
Note 2. Summary of Significant Accounting Policies

Liquidity and Capital Resources

Historically, the Company has incurred net losses and negative cash flows from ~~operations.~~operations which raise substantial doubt about the Company’s ability to continue as a going concern. The Company has principally financed these losses from the sale of equity securities and the issuance of debt instruments.
~~During the three months ended June 30, 2018 the Company issued additional shares of common stock for cash totaling $405,000.~~

The Company may be required to raise additional funds through various sources, such as equity and debt financings. While the Company believes it is probable that such financings could be secured, there can be no assurance the Company will be able to secure additional sources of funds to support its operations, or if such funds are available, that such additional financing will be sufficient to meet the Company’s needs or on terms acceptable to us.

At June 30, ~~2018~~2019, the Company had cash of approximately$~~604,000. In addition,~~847,000. Together with the Company’s current operational plan and budget, the Company believes that it is probable that it will ~~receive $370,000 from shares subscribed in June~~have sufficient cash to fund its operations into at least the fourth quarter of 2020. However, actual results could differ materially from the ~~exercise~~Company’s projections.
On August 5^th, 2019 the Company entered into an Equity Purchase agreement with Crown Bridge Partners, LLC (“Crown”), whereby Crown are committed to purchase up to $10.0 million of ~~additional~~new common stock ~~warrants. Further fundraising in the region of $2.0 million will be undertaken in August/September 2018 which is expected to give~~from the Company ~~sufficient cash resources~~at the Company’s option during the next three years. The amount is determined by the market value of trades and priced at an 18% discount to ~~cover forecasted expenditure~~average market price. As of today no shares have been sold under the Crown Equity Purchase plan. In coordination with the Equity Purchase agreement the Company entered into a six month loan with Labrys Fund, LP of $180,000 issued at a 10% original issue discount, the ~~first quarter~~Company therefore received net proceeds of ~~2019.~~$162,000. and an annual coupon rate of 12%.

However, actual results could materially differ from the Company’s projections. Accordingly, the Company may be required to raise additional funds through various sources. While the Company believes it is probable that such financings could be secured, there can be no assurance that the Company will be able to secure additional sources of funds to support its operations, or if such funds are available, that such additional financing will be sufficient to meet the Company’s needs or on terms acceptable to us.

Foreign Currency Translation

The reporting currency of the Company is the United States dollar. Assets and liabilities other than those denominated in U.S. dollars, primarily in Singapore, the United Kingdom and China, are translated into United States dollars at the rate of exchange at the balance sheet date. Revenues and expenses are translated at the average rate of exchange throughout the period. Gains or losses from these translations are reported as a separate component of other comprehensive income (loss) until all or a part of the investment in the subsidiaries is sold or liquidated. The translation adjustments do not recognize the effect of income tax because the Company expects to reinvest the amounts indefinitely in operations.

Transaction gains and losses that arise from exchange-rate fluctuations on transactions denominated in a currency other than the functional currency are included in general and administrative expenses.

Accounts ~~receivable, revenue recognition~~Receivable, Revenue Recognition and ~~concentrations~~Concentrations

~~New Accounting Standard~~ - In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“Topic 606”). Topic 606 supersedes the revenue recognition requirements in ASU Topic 605, Revenue Recognition (“Topic 605”), and requires the recognition of revenue when promised goods or services are transferred to customers in an amount that reflects the considerations to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 also includes Subtopic 340-40,~~Other Assets and Deferred Costs- Contracts with Customers~~, which discussed the deferral of incremental costs of obtaining a contract with a customer, including the period of amortization of such costs. The new standard was adopted by the Company in our fiscal year beginning January 1, 2018. The two permitted transition methods under the new standard are the full retrospective method, in which the new standard would be applied to each prior reporting period presented and the cumulative effect of applying the new standard would be recognized at the earliest period shown, or the modified retrospective method, in which the cumulative effect of applying the new standard would be recognized at the date of initial application. Based on our assessment, the impact of the new standard on our revenue recognition in prior periods is not significant; accordingly, while the Company would have used the modified retrospective method of adoption of the new standard, there was no cumulative effect of adoption on January 1, 2018 retained earnings.
Performance Obligations- A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account under the ~~new~~ revenue recognition standard. The transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company’s contracts do not typically have variable consideration that needs to be considered when the contract consideration is allocated to each performance obligation.

Revenue Recognition– We recognize revenues from each business segment ~~under ASC 606~~ as described below:

1. Digital secure messaging revenue involves the sale of user licenses, at a fixed price per license, to the customers, which is our sole performance obligation under the existing licensing agreements. The Company recognizes the revenue from the sale of the user licenses when the valid licenses have been delivered to the customer’s server in useable form.
2. 123Wish derives income from user subscriptions, sale of merchandise, sale of tickets for experiences with social media influencers and artists, and the sale of corporate sponsorships, each of which is a separate performance obligation. User subscriptions cover a defined period of time (typically one month) and the revenue is recognized as the Company satisfies the requisite performance obligation (over the defined subscription period). Sale of merchandise and tickets are recognized when the customer has paid for the item and when the merchandise and/or ticket has been delivered to the customer. Corporate sponsorship packages are non-refundable and relate to brand association. The Company has no further service deliverable to the sponsor and the revenue is recognized when the agreement is entered into by both parties and the required marketing materials have been delivered to the corporate sponsor for their use.

3.2. Love Media House derives income from recording and video services. Income is recognized when the recording and video services are performed and the final customer product is ~~delivered.~~delivered and the point at which the performance obligation is satisfied. These revenues are non-refundable.
3.
4. ~~Banana Whale~~Browning Production & Entertainment, Inc derives income primarily through licensing arrangements with gaming customers. Under these arrangements, Banana Whale provides the customers with a license (functional IP), implementation services and ad-hoc support, which may include unspecified upgrades and enhancements. The Company has determined that these promised goods and services represent one combined performance obligation since the individual promised goods or services are not distinct in the context of the contract. The revenues earned from the ~~arrangements are primarily~~advertising associated with the airing of television series produced by BP&E and also license income from the show of series on certain channels based on ~~usage-based royalties. As~~ the ~~Company has determined that~~number of viewers attracted. Advertising revenue is recognized when the ~~license is the predominant item~~series to which the ~~royalty~~advertising relates ~~revenues are recognized when the related sale or usage by the customer occurs.~~is aired.
8

The Company does not have off-balance sheet credit exposure related to its customers. As of June 30, ~~2018 two~~2019 three customers accounted for ~~50.4%~~76% of the accounts receivable balance and as of December 31, ~~2017, one customer~~2018, three customers accounted for ~~100%~~68% of the accounts receivable balance. ~~Two~~Three customers accounted for ~~60%~~34% of the revenue for the six months ended June 30, ~~2018~~2019 and one customer accounted for ~~85%~~82% of the revenue for the ~~quarter~~six months ended June 30, ~~2017.~~
10
~~Research and Development Expenses~~2018.

Research and development expenses include all direct costs, primarily salaries for Company personnel and outside consultants, costs related to the development of new products, significant enhancements to existing products, and the portion of costs of development of internal-use software required to be expensed. Research and development costs are charged to operations as incurred with the exception of those software development costs that may qualify for capitalization.
Income Taxes

The Company continually evaluates its uncertain income tax positions and may record a liability for any unrecognized tax benefits resulting from uncertain income tax positions taken or expected to be taken in an income tax return. Estimated interest and penalties are recorded as a component of interest expense and other expense, respectively.

Because tax laws are complex and subject to different interpretations, significant judgment is required. As a result, the Company makes certain estimates and assumptions in: (1) calculating its income tax expense, deferred tax assets, and deferred tax liabilities; (2) determining any valuation allowance recorded against deferred tax assets; and (3) evaluating the amount of unrecognized tax benefits, as well as the interest and penalties related to such uncertain tax positions. The Company’s estimates and assumptions may differ significantly from tax benefits ultimately realized. Historically the Company has not filed income tax returns and the related required informational filings in the US. Certain informational filings if not filed contain ~~penalties.~~penalties and such penalties could be material. The Company is currently addressing this issue with advisors to determine the amount, if any, of potential payments due. Given the complexity of the issue the Company is unable to quantify a range of potential loss, if any. Accordingly no liability has been recorded in the accompanying consolidated balance sheets in respect of this ~~matter~~ matter.
11

Net Loss per Share

Basic net loss per share is calculated by dividing the net loss attributable to common shareholders by the weighted average number of common shares outstanding in the period. Diluted loss per share takes into consideration common shares outstanding (computed under basic loss per share) and potentially dilutive securities. For the three and six month periods ended June 30, ~~2018~~2019 and ~~2017,~~2018, outstanding warrants are antidilutive because of net losses, and as such, their effect has not been included in the calculation of diluted net loss per share. Common shares issuable are considered outstanding as of the original approval date for purposes of earnings per share computations.

~~Accumulated Other Comprehensive Income (Loss)~~
Other comprehensive income (loss), as defined, includes net loss, foreign currency translation adjustments, and all changes in equity (net assets) during a period from non-owner sources. To date, the Company has not had any significant transactions that are required to be reported in other comprehensive income (loss), except for foreign currency translation adjustments.
Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the fiscal period. The Company makes estimates for, among other items, useful lives for depreciation and amortization, determination of future cash flows associated with impairment testing for long-lived assets, determination of the fair value of stock options and warrants, determining fair values of assets acquired and liabilities assumed in business combinations, valuation allowance for deferred tax assets, allowances for doubtful accounts, and potential income tax assessments and other contingencies. The Company bases its estimates on historical experience, current conditions, and other assumptions that it believes to be reasonable under the circumstances. Actual results could differ from those estimates and assumptions.

Recently Adopted Accounting Pronouncements
In February 2016, the FASB issued ASU 2016-02, “Leases,” which created a new Topic, ASC Topic 842 and established the core principle that a lessee should recognize the assets, representing rights-of-use, and liabilities to make lease payments, that arise from leases. For leases with a term of 12 months or less, a lessee is permitted to make an election under which such assets and liabilities would not be recognized, and lease expense would be recognized generally on a straight-line basis over the lease term. This standard is effective for the Company beginning in 2019 and was adopted by the Company for the year beginning January 1, 2019. The Company has evaluated the impact of this revised guidance on its financial statements and determined it had no material impact, as the Company has no leasing arrangements with terms greater than one year.
Share-Based Compensation

The Company accounts for stock-based awards at fair value on date of grant and recognition of compensation over the service period for awards expected to vest.  The fair value of stock options is determined using the Black-Scholes option pricing model, which includes subjective judgements about the expected life of the awards, forfeiture rates and stock price volatility.

~~Fair Value Measurements~~ Note 3. Discontinued operations

~~GAAP establishes~~In November 2018 the management of the Company’s then 51% controlled subsidiary, Banana Whale Studios PTE Ltd. (“BWS”), entered into discussions whereby the Company would sell its shares of BWS to a ~~fair value hierarchy~~third party. Under the agreement, which ~~prioritizes~~has an effective date of January 1, 2019, the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilitiesCompany received cash of $1,500,000 and a promissory note of $500,000 and the ~~lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by GAAP are described below:~~
● ~~Level 1 - Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.~~
● ~~Level 2 - Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.~~
● ~~Level 3 - Pricing inputs that are generally observable inputs and not corroborated by market data.~~
The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurementreturn of the ~~instrument.~~

7,383,000 Company shares issued on acquisition. The ~~Company’s Level 3 financial liabilities consist~~Company shares are held in Escrow for a minimum of ~~contingent consideration relating~~three months to ~~the acquisition of 123Wish, LMH and Banana Whale which requires significant judgment or estimation (see Note 3).~~
~~Note 3. Acquisitions~~
~~123Wish, Inc.~~
~~On January 31, 2018~~secure certain warranties given by the Company completed the acquisition of a 51% controlling interest in 123 Wish, Inc. (formerly Once in a Lifetime LLC) a Delaware corporation in exchange for the issuance of 1,333,334 fully paid and non-assessable shares of common stock with a fair value of $1.39 million. In addition, the Company shall issue fully paid and non-assessable shares of common stock equal to 2.5 times of the net, after tax, earnings of 123 Wish for the six month period after the date of acquisition and fully paid and non-assessable shares of common stock equal to 4.5 times the net, after tax, earnings of 123 Wish for the second six month period after the date of acquisition. 123 Wish, Inc. has proprietary applications which use the social media aspect of the internet.   on closure.

The ~~following table summarizes~~Company realized a gain of $553,000 on the ~~consideration paid and~~sale of its 51% interest is BWS during the ~~fair value~~six months ended June 30, 2019.
Note 4. Intangible Assets
Intangible assets consists of the ~~assets acquired and liabilities assumed as~~following (in thousands):
June 30 December 31
2019 2018

Horizon software $ 567 $ 548
Social online application software 2,307 2,307
Customer lists 997 900

3,871 3,755
Less accumulated amortization (947 ) (571 )

Intangible assets, net $ 2,924 $ 3,184
Note 5. Goodwill
Goodwill consists of ~~February 22, 2018 (In~~the following (in thousands):

June 30 December 31
2019 2018

123Wish, Inc. $ 419 $ 419
Love Media House, Inc. 1,172 1,172
Browning Productions & Entertainment, Inc. 622 622
$ 2,213 $ 2,213
~~Consideration Paid:~~
Note 6. Equipment Note Payable

Common stock $ 1,387
Non controlling interest 1,353
$ 2,740

Fair values of identifiable assets acquired and liabilities assumed:

Assets acquired:
Cash $ 14
Other intangible assets 2,307
Goodwill 419

Net Assets Acquired $ 2,740
During the six months ended June 30, 2019, the Company financed the purchase of certain production equipment through a five year finance contract payable at $830 per month including interest of approximately 20% per annum.

The consideration paid was 1,333,334 common shares valued at $1.04 per share. Separately identifiable intangible assets include technology which were valued by management using discounted cash flow and replacement cost approaches. Management’s analysis is provisional in nature and is subjectNote 7. Amounts due to ~~change based on the availability of new information about facts and circumstances that existed as of the acquisition date.~~Related Parties

As of June 30, 2019, amounts totaling $205,000 (December 31, 2018 ~~the Company has estimated that no additional share amounts will need~~- $205,000) were owed to ~~be issued as contingent consideration and therefore is not included in the Company’s allocation~~certain members of the ~~purchase price in the table above.~~management at subsidiary companies. The ~~financial statements of 123 Wish, Inc.~~amounts are unsecured, interest free and have been included in the Company’s condensed consolidated financial statements and the amount of stockholders’ equity and net loss attributable to the non-controlling interest has been recorded as a separate line item in the accompanying statements of operations and stockholders’ equity.
~~Love Media House, Inc. (formerly C-Rod, Inc.)~~
On February 26, 2018 the Company completed the acquisition of 100% ownership of Love Media House, Inc. (“LMH”) a Florida corporation in exchange for $150,000 cash and 1,376,147 fully paid and non-assessable shares of common stock with a fair value of $1,541,285. LMH is in the music and video content business. The financial statements of LMH have been included in the condensed consolidated financial statements from the date of acquisition.no specified repayment dates.

~~The following table summarizes the consideration paid and the fair value of the assets acquired and liabilities assumed as of February 26, 2018 (In thousands):~~Note 8. Notes Payable

~~Consideration Paid:~~
Cash $ 150
Common stock 1,541
$ 1,691

Fair values of identifiable assets acquired and liabilities assumed:

Assets acquired:
Cash $ 5
Other intangible assets 910
Goodwill 804
Total assets acquired 1,719

Liabilities assumed:
Accounts payable 28
Total Liabilities Assumed 28

Net Assets Acquired $ 1,691
The consideration paid was 1,376,000 common shares plus $150,000 in cash. Separately identifiable intangible assets were customer relationships and were valued by management. The customer relationships were valued using discounted cash flow and replacement cost approaches. Management’s analysis is provisional in nature and is subject to change based on the availability of new information about facts and circumstances that existed as of the acquisition date.
As of June 30, 2018, the Company has estimated that no additional share amounts will need to be issued as contingent consideration and therefore is not included in the Company’s allocation of the purchase price in the table above. The financial statements of LMH have been included in the Company’s condensed consolidated financial statements.
~~Banana Whale Studios PTE Ltd~~
On May 24, 2018 the Company completed the acquisition of 51% ownership of Banana Whale Studios PTE Ltd (“Banana Whale”) a Singapore corporation in exchange for an initial allocation of 7,383,000 fully paid shares of common stock with a fair value of $4,983,000. The acquisition of Banana Whale is based on an earnout formula solely and should Banana Whale fail to reach forecasted profit numbers during the first 24 months then some, or all of the shares allocated would be refundable to the Company. Banana Whale develops and supplies online games to Asian gaming platforms on a B2B basis with their revenue generated on a revenue share basis. The financial statements of Banana Whale have been included in the condensed consolidated financial statements from the date of acquisition.a) Promissory notes.

The ~~following table summarizes the consideration paid~~promissory notes due to Zhanming Wu ($500,000) and the ~~fair value~~Company’s CEO, Mark White ($500,000), both considered related parties, including accrued interest of ~~the assets acquired and liabilities assumed as of May 24, 2018 (In thousands):~~7% per annum from issuance, are due for repayment on August 31, 2019.

~~Consideration Paid:~~b) Short term loan
Common stock $ 4,983
Non-controlling interest 4,937
$ 9,920

~~Fair values of identifiable assets acquired and liabilities assumed:~~

Assets acquired:
Cash $ 42
Accounts receivable 53
Equipment 37
Other intangible assets 10,076
Total assets acquired 10,208

Liabilities assumed:
Accounts and advances payable 288
Total Liabilities Assumed 288

Net Assets Acquired $ 9,920

The consideration paid was 7,383,000 common shares valued at $0.675 per share. Separately identifiable intangible assets include technology which were valued by management using discounted cash flow and replacement cost approaches. Management’s analysis is provisionalloan payable in ~~nature and is subject to change based on the availability of new information about facts and circumstances that existed as of the acquisition date.~~
As of June 30, 2018, the Company has estimated that no additional share amounts will need to be issued (or refunded) as contingent consideration and therefore is not included in the Company’s allocation of the purchase price in the table above. The financial statements of Banana Whale have been included in the Company’s condensed consolidated financial statements and the amount of ~~stockholders’ equity~~$500,000 is due to Century River, a company controlled by the Company’s CEO, Mark White. This loan is due on demand and ~~net loss attributable to the non-controlling~~bears interest ~~has been recorded as a separate line item in the accompanying statements~~ of ~~operations and stockholders’ equity.~~3% per annum.

~~Note 4. Intangible Assets~~c) Other notes payable.

~~Intangible assets consist primarily~~Notes payable by Browning Productions & Entertainment, Inc. totaling $121,000 are due to unrelated parties and are repayable on demand and interest bearing at average rates of software development costs, acquired gaming software and customer and reseller relationships which are amortized over the estimated useful life, generally on a straight-line basis with the exception of customer relationships, which are generally amortized over the greater of straight-line or the related asset’s pattern of economic benefit.~~(in thousands)~~
June 30 December 31
2018 2017

Horizon software $ 6,527 $ 6,527
Social online application software 2,210 —
Customer lists 997 —
Gaming software 10,076 —
19,810 6,527
Less accumulated amortization (2,418 ) (1,187 )

Intangible assets, net $ 17,392 $ 5,340

~~Amortization of intangible assets for each of the next five years is estimated to be $3,900,000~~5.4% per year.

Note ~~5. Goodwill~~9. Share Capital

~~The following is the detail of the Goodwill that arose on acquisitions described in Note 3:~~
June 30 December 31
2018 2017

123Wish, Inc. $ 419 $ —
Love Media House, Inc. (formerly C. Rod, Inc.) 804 —
$ 1,223 $ —
~~Note 6. Convertible notes~~
In February 2018 the convertible note holders converted their notes into common stock, together with the interest accrued thereon. The amounts converted at $0.60 per share totaled $405,833 giving rise to 676,389 new shares of common stock.
~~Note 7. Share Capital~~
Common Stock

The Company is authorized to issue 200 million shares of common stock, par value of ~~$0.0001 per share.~~$0.0001.

During the six months ended June 30, ~~2018~~2019 the ~~Company:~~Company issued shares of common stock as follows:

●· ~~Issued 225,000 shares of common stock for services with a fair value of $357,750~~
● ~~Issued 1,333,334~~2,048,334 shares of common stock, with a fair value of ~~$1.4 million, for the~~$126,760, as additional compensation related to acquisition of ~~51% of Once in a Lifetime~~Browning Production & Entertainment.
●· ~~Issued 100,000 shares of common stock for services provided with a fair value of $204,000~~
● ~~Issued 504,167 shares of common stock for conversion of convertible note and accrued interest in the amount of $302,500~~
● ~~Issued 172,222 shares of common stock for conversion of convertible note and accrued interest in the amount of $103,000~~
● ~~Issued 172,222 shares of common stock for services provided with a fair value of $200,000~~
● ~~Issued 750,000 shares of common stock for exercise of warrants at a price of $0.75 per share.~~
● ~~Issued 50,000 shares of common stock for services provided with a fair value of $80,000.~~
● ~~Issued 1,376,147~~5,000,000 shares of common stock, with a fair value of ~~$1,541,285, as part consideration~~$150,000, for ~~the acquisition of C-Rod, Inc.~~
● ~~Issued 100,000 shares of common stock for~~consulting services to be ~~provided with a fair value of $85,000.~~
● ~~Issued 225,000 shares of common stock for services to be provided with a fair value of $168,750~~
● ~~Issued 850,000 shares of common stock for services provided with a fair value of $425,000~~
● ~~Issued 7,383,000 shares of common stock, with a fair value of $4,983,000, for the acquisition of 51% of Banana Whale Studios Pte., Ltd~~
● ~~Issued 1,575,000 shares of common stock for services provided with a fair value of $787,500~~
● ~~Issued 850,000 shares of common stock for exercise of warrants at a price of $0.50 per share~~
● ~~Issued 600,000 shares of common stock for services provided with a fair value of $306,000~~
● ~~Issued 300,000 shares of common stock for services provided with a fair value of $150,000~~
● ~~Issued 1,750,000 shares of common stock for cash of $0.20 per share~~

● ~~Issued 1,850,000 shares of common stock for exercise of warrants at a price of $0.20 per share~~
● ~~Issued 35,000 shares of common stock, with a fair value of $18,200, for an option to acquire an interest in an acquisition target.~~provided.

Stock Purchase Warrants

As at June 30, ~~2018,~~2019, the Company had reserved ~~1,461,387~~185,169 shares of its common stock for the outstanding warrants with weighted average exercise price of ~~$10.80.~~$0.80. Such warrants expire at various times ~~up to~~through July 2020.

During the six months ended June 30, ~~2018,~~2019, no warrants were issued, forfeited or ~~issued, and 3,450,000 warrants were exercised for proceeds of $1,357,500.~~exercised.

Note 10. Stock-Based Compensation
The shareholders approved a stock option plan on August 6, 2013, the 2013 Equity Incentive Plan (“2013 Plan”). The 2013 Plan is for the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalents, cash bonuses and other stock-based awards to employees, directors and consultants of the Company.
There have been no options issued in the six months ended June 30, 2019 and 2018 and there are no options outstanding as at June 30, 2019.
In March 2018 the Company adopted an Equity Incentive Plan (“the 2018 Plan”) to provide additional incentives to the employees, directors and consultants of the Company to promote the success of the Company’s business. During the six months ended June 30, ~~2018, the Company agreed to reduce the exercise price on 2.7 million outstanding warrants, which resulted in additional compensation cost of $403,000, in order to obtain additional funding.~~
~~Note 8. Segment Information~~
~~The Company has the following business segments for the six months ended June 30, 2018 and 2017.~~
~~The Company’s revenues were generated in the following business segments (in thousands)~~
June 30 June 30
2018 2017

Sale of secure messaging licenses $ 178 $ 117
123Wish (from January 2018) 105 —
Love Media House (from March 2018) 261 —
Banana Whale (from May 2018) 24 —
Total $ 568 $ 117
~~The following is a detail of the Company’s general and administrative expenses by business segment:~~
June 30 June 30
2018 2017

Sale of secure messaging licenses $ 96 $ —
123Wish (from January 2018) 573 —
Love Media House (from March 2018) 126 —
Banana Whale (from May 2018) 57 —
Corporate costs 2,331 573
Total $ 3,183 $ 573
~~The following is a detail of the net income (loss) by business segment:~~
June 30 June 30
2018 2017

Sale of secure messaging licenses $ 81 $ 102
123Wish (from January 2018) (468 ) —
Love Media House (from March 2018) 13 —
Banana Whale Studios (from May 2018) (295 ) —
Corporate costs, discontinued operations and acquisition costs (5,553 ) (3,156 )
Total $ (6,222 ) $ (3,054 )

~~Note 9. Employment Agreements~~
In connection with the acquisitions described in Note 3, the Company has entered into Employment Agreements (the “Agreements”) with three members of management of 123Wish and C-Rod. The Agreements have an initial employment period of two years and are automatically renewed annually thereafter. The Agreements entitle the members of management to a fixed base salary, along with incentive compensation that is calculated using pre-tax earnings and is payable in shares of the Company’s common stock.
~~Note 10. Legal proceedings~~
~~On May 30, 2018, Zhanming Wu (“Wu”), the record owner of 15,000,000 shares of~~2019, no common stock of ~~One Horizon Group, Inc. (the “Company”), commenced an action in the Court of Chancery of the State of Delaware [Case No.2018-0387-JRS] against~~ the Company ~~and its directors and officers (collectively,~~was issued under the ~~“Director Defendants”):~~2018 Plan.

~~(i)~~ alleging Breach of Contract on the basis that Wu believes that pursuant to an ‘Approval Right Side Letter’ between Dachao Asset Management (Shanghai) Co., Ltd. (“Dachao”) and the Company and Wu’s agreement not to demand repayment of a Convertible Debenture in place on or prior to October 1, 2017, Wu would have the right to pre-approve certain actions to be taken by the Company for so long as Dachao beneficially owned more than thirty percent (30%) of the outstanding shares of the Company; (ii) seeking Specific Performance and/or Rescission against the Company to affirm his alleged right to compel the Company to submit the recent acquisition of fifty-one percent (51%) of Banana Whale Studios Pte. Ltd. (“Banana Whale”) and the related stock issuance to him for approval or an order rescinding the Banana Whale transaction and awarding him damages;
~~(ii)~~ seeking Promissory Estoppel against the Company with respect to the Approval Right Side Letter in so far as Wu alleges that he relied on purported promises of the Company that such Letter and related agreements would be retitled in the name of Wu rather than Dachao in exchange for Dachao’s agreement not to demand repayment of the Convertible Debenture on or prior to October 1, 2017;
~~(iii)~~ alleging Breach of Contract and seeking Specific Performance against the Company on the basis that Wu asserts pursuant to the debt conversion/exchange agreement that the Company agreed to first give Dachao, then ultimately Wu, the right to appoint four (4) directors to the Company Board so long as Dachao, then Wu, beneficially owned more than thirty percent (30%) of the outstanding shares of the Company;
~~(iv)~~ alleging Breach of the Implied Covenant of Good Faith and Fair Dealing against the Company insofar as Wu asserts that the Company owes Wu a duty of good faith and fair dealing implied in all contracts and Wu believes that the Company has taken steps to attempt to dilute his holdings of Company common stock below the thirty percent (30%) ownership threshold in order to enter into transactions without Wu’s prior approval; and
~~(v)~~ alleging Breach of Fiduciary Duty against the Director Defendants by: (a) purportedly making false representations, misleading statements and omitting material information when communicating with Wu regarding the Company’s intent to close the Banana Whale transaction; (b) disseminating false representations, misleading statements, and omitting material information in the 8-K filed by the Company on May 18, 2018, with respect to the Banana Whale transaction insofar as Section 3.02 of the 8-K states that there are no agreements to which the Company is a party, or has knowledge of, that conflict with the debt exchange/conversion agreement or would prohibit its consummation, to the extent Wu asserts that he had a right of prior approval based on the Approval Right Side Letter, which he asserts pertains to his holdings of Company common stock, which Letter he filed as an exhibit to his Schedule 13D filing with the SEC on April 10, 2018; (c) alleging that the Director Defendants breached their fiduciary duties to Wu and Company stockholders by issuing 7,383,000 shares of Company common stock to Banana Whale to the extent possession of these shares grant full voting and economic rights to the stockholders of Banana Whale while there is also a twenty-four (24) month earn-out structure as part of the definitive transaction agreements between the Company and Banana Whale; and (d) asserting that the Director Defendants breached their fiduciary duties to Wu and Company stockholders by entering into transactions including Banana Whale that Wu alleges were designed to preclude Wu from appointing four (4) additional directors to the Company Board by diluting his ownership below the thirty percent (30%) mark.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our unaudited condensed consolidated financial statements for the three and six months ended June 30, ~~2018~~2019 and ~~2017~~2018 and notes thereto contained elsewhere in this Report, and our annual report on Form 10-K for the twelve months ended December 31, ~~2017~~2018 including the consolidated financial statements and notes thereto. The following discussion and analysis contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements. See “Cautionary Note Concerning Forward-Looking Statements.”

Overview

Business

During the three months ended June 30, ~~2018~~2019, the Company ~~executed~~consolidated its ownership and the ~~following acquisitions:~~performance of particularly Browning Productions & Entertainment, Inc. and invested in the Touchpoint brand, bringing fans closer to celebrities by providing access to proprietary content, and livestream events, as well as exclusive merchandise. The platform is optimized for iOS and Android, as well as internet and TV-based applications.

~~Majority interest in Banana Whale Studios PTE Ltd a company a B2B software provider in the online gaming industry.~~Results of Operations

In addition to this acquisition the Company has an Asian based digitally secure messaging software business that sells user licenses primarily to companies in the security, gaming and education sectors together with a US based experience based platform where subscribers have a chance to play and win experiences from celebrities, athletes and artists. In addition the Company has~~a full-service music production, artist representation and digital media business.~~

~~Results of Operations~~
Comparison of three months ended June 30, ~~2018~~2019 and ~~2017~~2018

The following table sets forth key components of our results of operations for the periods.

(All amounts, other than percentages, in thousands of U.S. dollars)

Three Months Ended
June 30,
Change
Three Months Ended
June 30,
Change
2018 2017 Increase/
(decrease) Percentage
Change 2019 2018 Increase/
(decrease) Percentage
Change

Revenue $ 294 $ 110 $ 184 167.3 $ 253 $ 270 $ (17 ) (6.3 )

Cost of revenue 935 22 913 4150 303 673 (370 ) (54.8 )

Gross margin (641 ) 88 (729 ) (828.4 )
Gross deficit (50 ) (403 ) 353 87.3

Operating expenses:

General and administrative 1,773 265 1,508 417.0 1,078 1,716 (638 ) (37.2 )
Depreciation 2 7 (5 ) (71.4 ) 5 1 4 400.0
Acquisition costs 1,094 — 1,094 N/A - 1,094 (1,094 ) N/A

Total operating expenses 2,869 272 2,597 954.8 1,083 2,811 (1,728 ) (61.5 )

Loss from operations (3,510 ) (184 ) (3,326 ) (1,807.6 ) (1,133 ) (3,214 ) 2,081 64.7

Other expense (18 ) (178 ) 160 89.9
Other income(expense) (17 ) (18 ) 1 0.6
Loss for the period for continuing operations (3,528 ) (362 ) (3,166 ) (874.6 ) (1,150 ) (3,232 ) 2,082 64.4

Loss for discontinued operations — (1,408 ) 1,418 N/A - (296 ) 296 100.0
Total net loss (3,528 ) (1,770 ) (1,758 ) (99.3 ) $ (1,150 ) $ (3,528 ) $ 2,378 67.4

Revenue: Our revenue for the three months ended June 30, ~~2018 was split between our operations as follows:~~2019 decreased by approximately $17,000 over the same period in 2018.

● ~~Secure messaging - $75,000 for the sale of user licenses~~
● ~~123Wish - $7,000 for subscriptions and sponsorships~~
● ~~LMH - $186,000 for music and video production services~~
● ~~Banana Whale - $26,000 for B2B software provided in the online gaming industry.~~
Gross ~~Margin~~Deficit: Gross margin deficit for the three months ended June 30, ~~2018~~2019 was approximately ~~$641,000~~$50,000 as compared to ~~$88,000~~$403,000 margin ~~gain~~deficit for the three months ended June 30, ~~2017,~~2018, due to the ~~increase~~decrease in amortization of software development ~~costs, offset by increased revenues.~~costs.

Operating Expenses: General and administrative expenses, acquisition related costs and depreciation ~~were approximately $2.87 million and $0.27 million~~incurred during the three months ended June 30, ~~2018 and 2017, respectively.  The major costs included~~2019 were approximately $1.1 million, a significant reduction of approximately $1.7 million when compared to the approximate figure of $2.8 million incurred in the three months ended June 30, ~~2018 were~~2018.  The major reduction in costs related to consulting costs, ~~including~~ due diligence and advisory costs incurred in the acquisitions ~~strategy of the Company.~~undertaken in 2018.

Net Loss: Net ~~Loss~~loss for the three months ended June 30, ~~2018~~2019 was approximately ~~$3.5~~$1.2 million as compared to net loss of approximately ~~$0.4~~$3.5 million for the same period in ~~2017.~~2018. The ~~increase~~decrease in ~~the losses~~net loss is attributable mainly to the ~~increase~~decrease in ~~General~~general and ~~Administrative~~administrative expenses, ~~offset by an increase in revenue,~~ as discussed above.

Comparison of six months ended June 30, ~~2018~~2019 and ~~2017~~2018

The following table sets forth key components of our results of operations for the periods indicated.

(All amounts, other than percentages, in thousands of U.S. dollars)

Six Months Ended
June 30,
Change
Six Months Ended
June 30,
Change
2018 2017 Increase/
(decrease) Percentage
Change 2019 2018 Increase/
(decrease) Percentage
Change

Revenue $ 568 $ 117 $ 451 385.5 $ 454 $ 544 $ (90 ) (16.5 )

Cost of revenue 1,340 44 (1,296 ) (2,945.5 ) 545 1,078 (533 ) (49.4 )

Gross margin (772 ) 73 (845 ) (1,157.6 )
Gross deficit (91 ) (534 ) 443 82.8

Operating expenses:

General and administrative 3,183 573 (2,610 ) (455.5 ) 2,262 3,126 (864 ) (27.6 )
Acquisition costs 1,874 — (1,874 ) N/A - 1,874 (1,874 ) (100.0 )
Depreciation 2 14 12 85.7 6 1 5 500.0

Total operating expenses 5,059 587 4,472 761.8 2,268 5,001 (2,733 ) (54.6 )

Loss from operations (5,831 ) (514 ) (5,317 ) 1,034.462 (2,359 ) (5,535 ) 3,175 57.4

Other income (expense) (391 ) (356 ) (35 ) (9.8 ) 519 (391 ) 910 232.7
Loss for the period for continuing operations (6,222 ) (870 ) (5,352 ) 615.2 (1,840 ) (5,926 ) 4,085 68.9

Loss for discontinued operations — (2,184 ) (2,184 ) N/A - (296 ) 296 100.0
Net loss (6,222 ) (3,054 ) (3,168 ) (103.7 ) $ (1,840 ) $ (6,222 ) $ 4,381 70.4

Revenue:Our revenue for the six months ended June 30, ~~2018~~2019 was approximately ~~$568,000~~$454,000 as compared to approximately ~~$117,000~~$544,000 for the six months ended June 30, ~~2017, an increase~~2018, a decrease of approximately ~~$451,000,~~$90,000, or ~~385.5%~~16.5%. The ~~increase~~decrease was due to the ~~increases~~reduction in license sales ~~together with~~and LMH sales, offset by the revenue generated by ~~the newly acquired subsidiaries.~~Browning.

Cost of Revenue:Cost of revenue was approximately ~~$1,340,000~~$545,000 for the six months ending June 30, ~~2018~~2019 as compared to ~~$44,000~~$1,078,000 for the six months ended June 30, ~~2017.~~2018. The main reason for the ~~increase~~decrease was the reduction in the amortization charge of ~~$1,229,000~~$686,000 relating to software development costs.

Gross ~~Margin~~Deficit:Gross margin deficit for the six months ended June 30, ~~2018~~2019 was approximately ~~$772,000~~$91,000 as compared to a ~~gain~~deficit of ~~$73,000~~$534,000 for the six months ended June 30, ~~2017,~~2018, a decrease of approximately ~~$1,413,000.~~$443,000. The decrease was mainly due to the reduction in amortization charge of ~~$1,229,000, offset by increased revenues,~~$686,000 as set forth ~~above herein.~~above.

Operating Expenses: Operating expenses, including general and administrative expenses, depreciation and acquisition costs were approximately ~~$5.1~~$2.3 million and ~~$0.6~~$5.0 million during the six months ended June 30, ~~2018~~2019 and ~~2017,~~2018, respectively. The ~~Company~~reduction in operating costs primarily related to the acquisition costs and fundraising costs incurred in 2018 that were not incurred in the ~~increased costs as a result of the strategy of business acquisitions and the operational costs relating thereto.~~same period in 2019.

Net Loss:Net ~~Loss~~loss for the six months ended June 30, ~~2018~~2019 was approximately ~~$6.2~~$1.8 million as compared to loss of approximately ~~$3.1~~$6.2 million for the same period in ~~2017.~~2018. The ~~increase in~~net loss decrease was primarily due to the ~~increase~~decrease in amortization charges, non-cash general and administrative expenses, and fundraising and acquisition ~~costs offset by an increase in revenues mentioned above.~~costs.

Liquidity and Capital Resources

Six Months Ended June 30, ~~2018~~2019 and June 30, ~~2017~~2018

The following table sets forth a summary of our net cash flows for the periods indicated:

For the Six Months Ended
June 30, 2018
(in thousands)

For the Six Months Ended
June 30
(in thousands)

2018 2017 2019 2018
Net cash flows from total operating operations (1,519 ) (41 ) (1,401 ) (1,519 )
Net cash flows from total investing activities (110 ) (261 ) 1,334 (110 )
Net cash flows from total financing activities 1,460 102 551 1,460

Net cash used by operating activities ~~was approximately $1,519,000~~of continuing operations decreased to $1,401,000 for the six months ended June 30, ~~2018~~2019 from $1,519,000 for the same period in 2018.
Net cash raised from investing activities was approximately $1,334,000 in the six months ended June 30, 2019 as compared to net cash used of $110 in ~~operating activities of approximately $41,000 for~~ the ~~same~~comparative period in ~~2017.~~2018. The ~~increase in cash used by operations~~difference was primarily ~~due to~~ the ~~cost~~$1,500,000 raised from the initial proceeds on the sale of ~~pursuing~~ the ~~acquisition strategy.~~
~~Net cash used~~Company’s holding in investing activities was approximately $110,000 and $261,000 for the six months ended June 30, 2018 and 2017, respectively. Net cash used in investing activities for the six months ended June 30, 2018 related to cash consideration in the acquisition of LMH offset by the cash acquired in the Banana Whale ~~acquisition.~~Studios Pte Ltd.

Net cash generated in financing activities was approximately $551,000 for the six months ended June 30, 2019 as compared to $1,460,000 for the six months ended June 30, ~~2018 as compared to $102,000 for~~2018. The cash generated from financing activities in the six months ended June 30, ~~2017. The cash generated from financing activities~~2019 was primarily from the ~~proceeds~~loan from a related party whereas the net cash generated in the comparative period in 2018 was primarily generated from the sale of new shares of common stock, the exercise of common stock warrants and proceeds from convertible ~~debt during the six months ended~~debt.
At June 30, ~~2018.~~
At~~June 30, 2018~~2019, the Company had cash of ~~$604,000. In addition, the Company will receive further investment from the exercise of additional common stock warrants in the third quarter of 2018 for net proceeds of $370,000.~~approximately $847,000.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES.

(a) Evaluation of Disclosure Controls and Procedures

Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Report, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our ~~current~~ chief executive officer and chief financial officer (our “Certifying Officers”), the effectiveness of our disclosure controls and procedures as of June 30, ~~2018,~~2019, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, as of June 30, ~~2018,~~2019, our disclosure controls and procedures were not effective. This was due to certain deficiencies in our controls over financial reporting. In particular a lack of accounting personnel has resulted in an inability to segregate various accounting ~~functions~~functions.

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

(b) Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter covered by this report that ~~has~~have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

~~On May 30, 2018, Zhanming Wu (“Wu”),~~We are not a party to any material legal proceedings and no material legal proceedings have been threatened by us or, to the ~~record owner~~best of ~~15,000,000 shares of common stock of One Horizon Group, Inc. (the “Company”), commenced an action in the Court of Chancery of the State of Delaware [Case No.2018-0387-JRS]~~our knowledge, against ~~the Company and its directors and officers (collectively, the “Director Defendants”):~~us.

~~(i)~~ alleging Breach of Contract on the basis that Wu believes that pursuant to an ‘Approval Right Side Letter’ between Dachao Asset Management (Shanghai) Co., Ltd. (“Dachao”) and the Company and Wu’s agreement not to demand repayment of a Convertible Debenture in place on or prior to October 1, 2017, Wu would have the right to pre-approve certain actions to be taken by the Company for so long as Dachao beneficially owned more than thirty percent (30%) of the outstanding shares of the Company; (ii) seeking Specific Performance and/or Rescission against the Company to affirm his alleged right to compel the Company to submit the recent acquisition of fifty-one percent (51%) of Banana Whale Studios Pte. Ltd. (“Banana Whale”) and the related stock issuance to him for approval or an order rescinding the Banana Whale transaction and awarding him damages;
~~(ii)~~ seeking Promissory Estoppel against the Company with respect to the Approval Right Side Letter in so far as Wu alleges that he relied on purported promises of the Company that such Letter and related agreements would be retitled in the name of Wu rather than Dachao in exchange for Dachao’s agreement not to demand repayment of the Convertible Debenture on or prior to October 1, 2017;
~~(iii)~~ alleging Breach of Contract and seeking Specific Performance against the Company on the basis that Wu asserts pursuant to the debt conversion/exchange agreement that the Company agreed to first give Dachao, then ultimately Wu, the right to appoint four (4) directors to the Company Board so long as Dachao, then Wu, beneficially owned more than thirty percent (30%) of the outstanding shares of the Company;
~~(iv)~~ alleging Breach of the Implied Covenant of Good Faith and Fair Dealing against the Company insofar as Wu asserts that the Company owes Wu a duty of good faith and fair dealing implied in all contracts and Wu believes that the Company has taken steps to attempt to dilute his holdings of Company common stock below the thirty percent (30%) ownership threshold in order to enter into transactions without Wu’s prior approval; and
~~(v)~~ alleging Breach of Fiduciary Duty against the Director Defendants by: (a) purportedly making false representations, misleading statements and omitting material information when communicating with Wu regarding the Company’s intent to close the Banana Whale transaction; (b) disseminating false representations, misleading statements, and omitting material information in the 8-K filed by the Company on May 18, 2018, with respect to the Banana Whale transaction insofar as Section 3.02 of the 8-K states that there are no agreements to which the Company is a party, or has knowledge of, that conflict with the debt exchange/conversion agreement or would prohibit its consummation, to the extent Wu asserts that he had a right of prior approval based on the Approval Right Side Letter, which he asserts pertains to his holdings of Company common stock, which Letter he filed as an exhibit to his Schedule 13D filing with the SEC on April 10, 2018; (c) alleging that the Director Defendants breached their fiduciary duties to Wu and Company stockholders by issuing 7,383,000 shares of Company common stock to Banana Whale to the extent possession of these shares grant full voting and economic rights to the stockholders of Banana Whale while there is also a twenty-four (24) month earn-out structure as part of the definitive transaction agreements between the Company and Banana Whale; and (d) asserting that the Director Defendants breached their fiduciary duties to Wu and Company stockholders by entering into transactions including Banana Whale that Wu alleges were designed to preclude Wu from appointing four (4) additional directors to the Company Board by diluting his ownership below the thirty percent (30%) mark.

ITEM 1A. RISK FACTORS

Reference is made to the risks and uncertainties disclosed in Item 1A (“Risk Factors”) of our Annual Report on Form 10-K for the year ended December 31, ~~2017~~2018 (the ~~“2017~~“2018 Form 10-K”) ~~and under the caption “Risk Factors” in our Registration Statement on Form S-3 (Registration No. 333-225945)~~ filed ~~on June 28, 2018 and declared effective on August 7, 2018,~~April 15, 2019, which sections are incorporated by reference into this report. Prospective investors are encouraged to consider the risks described in our ~~2017~~2018 Form 10-K, ~~the Registration Statement,~~and our Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Report and other information publicly disclosed or contained in documents we file with the Securities and Exchange Commission before purchasing our securities.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~In the three months ended June 30, 2018 the following shares of common stock were issued;~~None.

1. 850,000 shares of common stock to an accredited investor, upon exercise of warrants at an exercise price of $0.50 per share. The issuance of the shares was exempt from the registration requirements of the Securities Act under Rule 506 of Regulation D and Section 4(a)(2) of the Securities Act. The certificates representing the shares were endorsed with the customary Securities Act legend.
2. 225,000 shares of common stock to a consultant for services having a fair value of $168,750. The issuance of the shares was exempt from the registration requirements of the Securities Act under Section 4(a)(2) of the Securities Act. The certificates representing the shares were endorsed with the customary Securities Act legend.
3. 850,000 shares of common stock to a consultant for services having a fair value of $425,000. The issuance of the shares was exempt from the registration requirements of the Securities Act under Section 4(a)(2) of the Securities Act. The certificates representing the shares were endorsed with the customary Securities Act legend.
4. 1,575,000 shares of common stock to a consultant for services having a fair value of $787,500. The issuance of the shares was exempt from the registration requirements of the Securities Act under Section 4(a)(2) of the Securities Act. The certificates representing the shares were endorsed with the customary Securities Act legend.
5. 300,000 shares of common stock to a consultant for services having a fair value of $150,000. The issuance of the shares was exempt from the registration requirements of the Securities Act under Section 4(a)(2) of the Securities Act. The certificates representing the shares were endorsed with the customary Securities Act legend.
6. 600,000 shares of common stock to a consultant for services provided with a fair value of $306,000. The issuance of the shares was exempt from the registration requirements of the Securities Act under Section 4(a)(2) of the Securities Act. The certificates representing the shares were endorsed with the customary Securities Act legend.
7. 500,000 shares of common stock to a consultant for services rendered having a fair value of $265,000 pursuant to a Documentary Rights Agreement. The issuance of the shares was exempt from the registration requirements of the Securities Act under Section 4(a)(2) of the Securities Act. The certificates representing the shares were endorsed with the customary Securities Act legend.
8. 1,750,000 shares of our common stock to an accredited investor, as defined in Rule 501 of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”), for gross proceeds of $350,000 (the “Private Placement”). The issuance and sale of the shares sold in the Private Placement was exempt from the registration requirements of the Securities Act under Rule 506 of Regulation D and Section 4(a)(2) of the Securities Act. The certificates representing the shares were endorsed with the customary Securities Act legend.
9. 1,850,000 shares of common stock to an accredited investor, upon exercise of warrants at an exercise price of $0.20 per share. The issuance of the shares was exempt from the registration requirements of the Securities Act under Rule 506 of Regulation D and Section 4(a)(2) of the Securities Act. The certificates representing the shares were endorsed with the customary Securities Act legend.
10. 35,000 shares of common stock having a fair value of $18,200 for an option to acquire an interest in an acquisition target. The issuance of the shares was exempt from the registration requirements of the Securities Act under Section 4(a)(2) of the Securities Act. The certificates representing the shares were endorsed with the customary Securities Act legend.
~~Except as previously reported in the reports we have filed under the Exchange Act, we have not issued or sold any other unregistered equity securities during the period by this report.~~
ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

~~Item~~
None.
ITEM 6. ~~Exhibits~~EXHIBITS

~~10.1~~Exhibit No. Subscription Agreement with BK Consulting Group, LLC (incorporated herein by reference to Exhibit 10.3 to the Company’s Registration Statement on Form S-3 (Registration No. 333-225945) filed on June 28, 2018 and declared effective on August 7, 2018).
~~10.2~~ ~~Verified Complaint in the Wu Litigation (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 7, 2018).~~
~~10.3~~ ~~Exchange Agreement with stockholders of Banana Whale Studios Pte. Ltd. (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on form 8-K filed on May 18, 2018).~~
~~10.4~~ Escrow Agreement between the Company and the stockholders of Banana Whale Studios Pte. Ltd. (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 10, 2018).
~~31.1~~ ~~Certification of principal executive officer pursuant to Rule 13a-14 or Rule 15d-14 of Exchange Act. Exchange Act of 1934.~~ Description

~~31.2~~31.1 Rule 13a-14(a)/15d-14(a) Certification of ~~principal financial officer pursuant to Rule 13a-14 or Rule 15d-14 of the Exchange Act.~~  Chief Executive Officer

~~32.1~~31.2 Rule 13a-14(a)/15d-14(a) Certification of ~~principal executive officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).~~Chief Financial Officer

~~32.2~~32.1 Section 1350 Certification of ~~principal financial officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).~~Chief Executive Officer

32.2 Section 1350 Certification of Chief Financial Officer
101.INS XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema
101.CAL XBRL Taxonomy Extension Calculation
101.DEF XBRL Taxonomy Extension Definition
101.LAB XBRL Taxonomy Extension ~~Label~~Labels
101.PRE XBRL Taxonomy Extension Presentation Linkbase

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ONE HORIZON GROUP, INC.

Date: August ~~17, 2018~~19, 2019 By: /s/ Mark White
Mark White
President and Chief Executive Officer ~~and Director~~
(principal executive officer)

By: /s/ Martin Ward
Martin Ward
Chief Financial Officer ~~Principal~~
~~Finance~~(principal financial officer and ~~Accounting Officer and Director~~ principal accounting officer)

16
26

		Three Months ended June 30,						Six Months ended June 30,
		2018 audited			2017			2018 unaudited			2017

Revenue		$	294		$	110		$	568		$	117

Cost of revenue	- Hardware, calls and network charges		111			—			111			—
	- Amortization of intangible assets		824			22			1,229			44
			935			22			1,340			44

Gross margin (deficiency)			(641	)		88			(772	)		73

Expenses:
General and administrative			1,773			265			3,183			573
Depreciation			2			7			2			14
Acquisition services			1,094			—			1,874			—

			2,869			272			5,059			587

Loss from operations			(3,510	)		(184	)		(5,831	)		(514	)

Other income and expense:
Interest expense			(17	)		(176	)		(390	)		(356	)
Foreign exchange			(1	)		(2	)		(1	)		—

			(18	)		(178	)		(391	)		(356	)

Loss before income taxes			(3,528	)		(362	)		(6,222	)		(870	)

Income tax benefit			—			—			—			—

Loss on continuing operations			(3,528	)		(362	)		(6,222	)		(870	)

Loss from discontinued operations			—			(1,408	)		—			(2,184)

Net loss for the period			(3,528	)		(1,770	)		(6,222	)		(3,054	)
Net loss attributable to non-controlling interest			346			—			466			—

Net loss attributable to One Horizon Group Inc. common stockholders		$	(3,182	)	$	(1,770	)	$	(5,756	)	$	(3,054	)

Earnings per share

Basic and diluted net loss per share – continuing operations		$	(0.09	)	$	(0.06	)	$	(0.17	)	$	(0.15	)

Basic and diluted net loss per share – discontinued operations		$	—		$	(0.24	)	$	—		$	(0.37	)

Weighted average number of shares outstanding
Basic and diluted			41,366			5,864			36,902			5,861

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018

Revenue	$	253		$	270		$	454		$	544

Cost of revenue:
Software and production costs		88			17			170			17
Amortization of intangible assets		215			656			375			1,061
		303			673			545			1,078

Gross deficit		(50	)		(403	)		(91	)		(534	)

Expenses:
General and administrative		1,078			1,716			2,262			3,126
Depreciation		5			1			6			1
Acquisition services		-			1,094			-			1,874

		1,083			2,811			2,268			5,001

Loss from operations		(1,133	)		(3,214	)		(2,359	)		(5,535	)

Other income and expense:
Interest expense		(16	)		(17	)		(32	)		(390	)
Foreign exchange		(1	)		(1	)		(2	)		(1	)
Other income		-			-			553			-
		(17	)		(18	)		519			(391	)

Loss on continuing operations		(1,150	)		(3,232	)		(1,840	)		(5,926	)

Loss from discontinued operations		-			(296	)		-			(296	)

Net loss for the period		(1,150	)		(3,528	)		(1,840	)		(6,222	)
Net loss attributable to non-controlling interest		66			346			100			466

Net loss attributable to One Horizon Group Inc. common stockholders	$	(1,084	)	$	(3,182	)	$	(1,740	)	$	(5,756	)

Earnings per share

Basic and diluted net loss per share – continuing operations	$	(0.01	)	$	(0.08	)	$	(0.02	)	$	(0.16	)

Basic and diluted net loss per share – discontinued operations	$	-		$	(0.01	)	$	-		$	(0.01	)

Weighted average number of shares outstanding
Basic and diluted		90,028			41,366			89,223			36,902

	Number of Shares	Amount		Additional Paid-in Capital		Accumulated deficit			Accumulated Other Comprehensive Income (Loss)			Stock subscription receivable			Non-controlling interest			Total Equity			Mezzanine Equity				Common Stock				Additional		Stock Subscription			Accumulated			Accumulated			Stock subscription			Non-Controlling			Total Stockholders’
																					Shares		Amount		Shares		Amount		Paid-In		Receivable			Deficit			OCI			receivable			Interest			Equity
Balance December 31, 2017	30,255	$	3	$	48,356	$	(41,085	)	$	(22	)	$	—		$	—		$	7,252

Balances, January 1, 2018																						-	$	-		30,255	$	3	$	48,356	$	-		$	(41,085	)	$	(22	)	$	-		$	-		$	7,252

Net loss	—		—		—		(5,756	)		—			—			(466	)		(6,222	)		-		-		-		-		-		-			(2,574	)		-						(120	)		(2,694	)
Foreign currency translations	—		—		—		—			(14	)		—			—			(14	)

Foreign currency translation																						-		-		-		-		-		-			-			(1	)					-			(1	)

Issuance of shares for services	5,095		—		3,625		—			—			—			—			3,625			171		199		476		-		728		-			-			-						-			728

Issuance of shares for acquisitions	10,127		1		7,929		—			—			—			6,290			14,220			-		-		2,333		-		2,507		-			-			-						1,353			3,860
Issuance of shares for exercise of convertible promissory notes	677		—		406		—			—			—			—			406

Issuance of shares for exercise of warrants	3,450		—		1,358		—			—			(370	)		—			988			-		-		750		-		563		-			-			-			-			-			563
Increase in service compensation due to change in exercise price					403														403

Issuance of shares for conversion of debt																						677		406		-		-		-		-			-			-						-			-

Conversion benefit on convertible notes	—		—		200		—			—						—			200			-		-		-		-		200		-			-			-						-			200

Increase in service compensation due to change in change in exercise price																						-		-		-		-		-		-			-			-			-			-			-

Issuance of shares for cash	1,750		—		350		—			—						—			350			-		-		-		-		-		-			-			-			-			-			-

Balance June 30, 2018	51,354	$	4	$	62,627	$	(46,841	)	$	(36	)	$	(370	)	$	5,824		$	21,208
Balances, March 31, 2018																						848		605		33,814		3		52,354		-			(43,659	)		(23	)		-			1,233			9,908

Net loss																						-		-		-		-		-		-			(3,182	)		-			-			(346	)		(3,528	)

Foreign currency translation																						-		-		-		-		-		-			-			(13	)		-			-			(13	)

Issuance of shares for services																						-		-		4,619		-		2,897		-			-			-			-			-			2,897

Issuance of shares for acquisitions																						-		-		7,794		1		5,422		-			-			-			-			4,937			10,360

Issuance of shares for exercise of warrants																						-		-		2,700		-		795		-			-			-			(370	)		-			425

Increase in service compensation due to change in change in exercise price																						-		-		-		-		403		-			-			-			-			-			403

Issuance of shares for cash																						-		-		1,750		-		350		-			-			-			-			-			350

Issuance of shares for exercise of convertible promissory notes																						-		-		677		-		406		-			-			-			-			-			406

Balances, June 30, 2018																						848	$	605		51,354	$	4	$	62,627	$	-		$	(46,841	)	$	(36	)	$	(370	)	$	5,824		$	21,208

Balances, January 1, 2019																						848	$	605		87,560	$	8	$	62,600	$	(1,425	)	$	(54,854	)	$	(35	)	$	-		$	1,571		$	7,865

Net loss																						-		-		-		-		-		-			(656	)		-			-			(34	)		(690	)

Foreign currency translation																						-		-		-		-		-		-			-			11			-			-			11

Disposal of equity in Banana Whale Studios PTE Limited																						-		-		-		-		-		-			-			-			-			(449	)		(449	)

Balances, March 31, 2019																						848		605		87,560		8		62,600		(1,425	)		(55,510	)		(24	)		-			1,088			6,737

Net loss																						-		-		-		-		-		-			(1,084	)		-						(66	)		(1,150	)

Shares issuance for contract modification																						-		-		2,049		-		127		-			-			-			-			-			127

Shares issued for services to be provided																						-		-		5,000		1		149		-			-			-			-			-			150

Balances, June 30, 2019																						848		605		94,609		9		62,876		(1,425	)		(56,594	)		(24	)		-			1,022			5,864

	2018 (unaudited)			2017
Cash flows from operating activities:

Net loss for the period	$	(6,222	)	$	(870	)

Adjustment to reconcile net loss for the period to net cash flows from operating activities:
Depreciation of property and equipment		2			14
Amortization of intangible assets		1,229			44

Amortization of debt issue costs		—			68
Amortization of beneficial conversion feature		355			50
Amortization of debt discount		—			100
Shares issued for services		3,282			—
Warrants issued for services		—			123
Amortization of shares issued for services		624			43
Options issued for services		—			118
Changes in operating assets and liabilities:
Accounts receivable		(250	)		—
Other assets		(476	)		(28	)
Accounts payable and accrued expenses		(63	)		650
Net cash flows from continuing operating activities		(1,519	)		312

Net cash flows from discontinued operating activities		—			(353	)
Net cash flows from total operating activities		(1,519	)		(41	)

Cash used in investing activities:

Cash consideration on acquisitions (net of cash acquired)		(108	)		—
Acquisition of fixed assets		(2	)		—
Net cash flows from investing activities – continuing operations		(110	)		—

Net cash flows from investing activities – discontinued operations		—			(261	)
Net cash flows from total investing activities		(110	)		(261	)

Cash flows from financing activities:

Proceeds from issuance of shares		350			—
Proceeds from exercise of warrants		988			102
Proceeds from issuance of convertible notes		200			—
Repayment of advances from related parties (net)		(78	)
Net cash flows from continuing operations and total financing activities		1,460			102

Decrease in cash during the period		(169	)		(200	)
Foreign exchange effect on cash		10			9

Cash at beginning of the period – continuing operations		763			106
Cash at beginning of the period – discontinued operations		—			154

Cash at end of the period	$	604		$	69

	2018		2017

Non-cash financing transactions:
Common stock issued for business combinations		14,220		—
Common stock issued for conversion of debt		406		—

Subsidiary name		% Owned
		~~Subsidiary name~~		~~% owned~~
	●	123Wish, Inc.	~~51%~~		51	%
	●	~~Global Phone Credit Ltd~~	~~100%~~
	●	One Horizon Hong Kong Ltd	~~100%~~		100	%
	●	Horizon Network Technology Co. Ltd	~~100%~~		100	%
	●	Love Media House, Inc	~~100%~~		100	%
● Browning Productions & Entertainment, Inc.	●	~~Banana Whale Studios PTE Ltd~~	~~51%~~51	%

	3.
	4.	~~Banana Whale~~Browning Production & Entertainment, Inc derives income primarily through licensing arrangements with gaming customers. Under these arrangements, Banana Whale provides the customers with a license (functional IP), implementation services and ad-hoc support, which may include unspecified upgrades and enhancements. The Company has determined that these promised goods and services represent one combined performance obligation since the individual promised goods or services are not distinct in the context of the contract. The revenues earned from the ~~arrangements are primarily~~advertising associated with the airing of television series produced by BP&E and also license income from the show of series on certain channels based on ~~usage-based royalties. As~~ the ~~Company has determined that~~number of viewers attracted. Advertising revenue is recognized when the ~~license is the predominant item~~series to which the ~~royalty~~advertising relates ~~revenues are recognized when the related sale or usage by the customer occurs.~~is aired.

	June 30			December 31
	2019			2018

Horizon software	$	567		$	548
Social online application software		2,307			2,307
Customer lists		997			900

		3,871			3,755
Less accumulated amortization		(947	)		(571	)

Intangible assets, net	$	2,924		$	3,184

Common stock	$	1,387
Non controlling interest		1,353
	$	2,740

Fair values of identifiable assets acquired and liabilities assumed:

Assets acquired:
Cash	$	14
Other intangible assets		2,307
Goodwill		419

Net Assets Acquired	$	2,740

Cash	$	150
Common stock		1,541
	$	1,691

Fair values of identifiable assets acquired and liabilities assumed:

Assets acquired:
Cash	$	5
Other intangible assets		910
Goodwill		804
Total assets acquired		1,719

Liabilities assumed:
Accounts payable		28
Total Liabilities Assumed		28

Net Assets Acquired	$	1,691

	●	~~Issued 100,000 shares of common stock for~~consulting services to be ~~provided with a fair value of $85,000.~~
	●	~~Issued 225,000 shares of common stock for services to be provided with a fair value of $168,750~~
	●	~~Issued 850,000 shares of common stock for services provided with a fair value of $425,000~~
	●	~~Issued 7,383,000 shares of common stock, with a fair value of $4,983,000, for the acquisition of 51% of Banana Whale Studios Pte., Ltd~~
	●	~~Issued 1,575,000 shares of common stock for services provided with a fair value of $787,500~~
	●	~~Issued 850,000 shares of common stock for exercise of warrants at a price of $0.50 per share~~
	●	~~Issued 600,000 shares of common stock for services provided with a fair value of $306,000~~
	●	~~Issued 300,000 shares of common stock for services provided with a fair value of $150,000~~
	●	~~Issued 1,750,000 shares of common stock for cash of $0.20 per share~~

	●	~~Issued 1,850,000 shares of common stock for exercise of warrants at a price of $0.20 per share~~
	●	~~Issued 35,000 shares of common stock, with a fair value of $18,200, for an option to acquire an interest in an acquisition target.~~provided.

	Three Months Ended June 30,						Change						Three Months Ended June 30,						Change
	2018			2017			Increase/ (decrease)			Percentage Change			2019			2018			Increase/ (decrease)			Percentage Change

Revenue	$	294		$	110		$	184			167.3		$	253		$	270		$	(17	)		(6.3	)

Cost of revenue		935			22			913			4150			303			673			(370	)		(54.8	)

Gross margin		(641	)		88			(729	)		(828.4	)
Gross deficit														(50	)		(403	)		353			87.3

Operating expenses:

General and administrative		1,773			265			1,508			417.0			1,078			1,716			(638	)		(37.2	)
Depreciation		2			7			(5	)		(71.4	)		5			1			4			400.0
Acquisition costs		1,094			—			1,094			N/A			-			1,094			(1,094	)		N/A

Total operating expenses		2,869			272			2,597			954.8			1,083			2,811			(1,728	)		(61.5	)

Loss from operations		(3,510	)		(184	)		(3,326	)		(1,807.6	)		(1,133	)		(3,214	)		2,081			64.7

Other expense		(18	)		(178	)		160			89.9
Other income(expense)														(17	)		(18	)		1			0.6
Loss for the period for continuing operations		(3,528	)		(362	)		(3,166	)		(874.6	)		(1,150	)		(3,232	)		2,082			64.4

Loss for discontinued operations		—			(1,408	)		1,418			N/A			-			(296	)		296			100.0
Total net loss		(3,528	)		(1,770	)		(1,758	)		(99.3	)	$	(1,150	)	$	(3,528	)	$	2,378			67.4

	●	~~LMH - $186,000 for music and video production services~~
	●	~~Banana Whale - $26,000 for B2B software provided in the online gaming industry.~~

	Six Months Ended June 30,						Change						Six Months Ended June 30,						Change
	2018			2017			Increase/ (decrease)			Percentage Change			2019			2018			Increase/ (decrease)			Percentage Change

Revenue	$	568		$	117		$	451			385.5		$	454		$	544		$	(90	)		(16.5	)

Cost of revenue		1,340			44			(1,296	)		(2,945.5	)		545			1,078			(533	)		(49.4	)

Gross margin		(772	)		73			(845	)		(1,157.6	)
Gross deficit														(91	)		(534	)		443			82.8

Operating expenses:

General and administrative		3,183			573			(2,610	)		(455.5	)		2,262			3,126			(864	)		(27.6	)
Acquisition costs		1,874			—			(1,874	)		N/A			-			1,874			(1,874	)		(100.0	)
Depreciation		2			14			12			85.7			6			1			5			500.0

Total operating expenses		5,059			587			4,472			761.8			2,268			5,001			(2,733	)		(54.6	)

Loss from operations		(5,831	)		(514	)		(5,317	)		1,034.462			(2,359	)		(5,535	)		3,175			57.4

Other income (expense)		(391	)		(356	)		(35	)		(9.8	)		519			(391	)		910			232.7
Loss for the period for continuing operations		(6,222	)		(870	)		(5,352	)		615.2			(1,840	)		(5,926	)		4,085			68.9

Loss for discontinued operations		—			(2,184	)		(2,184	)		N/A			-			(296	)		296			100.0
Net loss		(6,222	)		(3,054	)		(3,168	)		(103.7	)	$	(1,840	)	$	(6,222	)	$	4,381			70.4

	For the Six Months Ended June 30, 2018 (in thousands)						For the Six Months Ended June 30 (in thousands)
	2018			2017			2019			2018
Net cash flows from total operating operations		(1,519	)		(41	)		(1,401	)		(1,519	)
Net cash flows from total investing activities		(110	)		(261	)		1,334			(110	)
Net cash flows from total financing activities		1,460			102			551			1,460

~~10.1~~Exhibit No.	Subscription Agreement with BK Consulting Group, LLC (incorporated herein by reference to Exhibit 10.3 to the Company’s Registration Statement on Form S-3 (Registration No. 333-225945) filed on June 28, 2018 and declared effective on August 7, 2018).
~~10.2~~	~~Verified Complaint in the Wu Litigation (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 7, 2018).~~
~~10.3~~	~~Exchange Agreement with stockholders of Banana Whale Studios Pte. Ltd. (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on form 8-K filed on May 18, 2018).~~
~~10.4~~	Escrow Agreement between the Company and the stockholders of Banana Whale Studios Pte. Ltd. (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 10, 2018).

~~31.1~~	~~Certification of principal executive officer pursuant to Rule 13a-14 or Rule 15d-14 of Exchange Act. Exchange Act of 1934.~~ Description

~~31.2~~31.1		Rule 13a-14(a)/15d-14(a) Certification of ~~principal financial officer pursuant to Rule 13a-14 or Rule 15d-14 of the Exchange Act.~~ Chief Executive Officer

~~32.1~~31.2		Rule 13a-14(a)/15d-14(a) Certification of ~~principal executive officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).~~Chief Financial Officer

~~32.2~~32.1		Section 1350 Certification of ~~principal financial officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).~~Chief Executive Officer

32.2		Section 1350 Certification of Chief Financial Officer

101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema
101.CAL		XBRL Taxonomy Extension Calculation
101.DEF		XBRL Taxonomy Extension Definition
101.LAB		XBRL Taxonomy Extension ~~Label~~Labels
101.PRE		XBRL Taxonomy Extension Presentation Linkbase

	ONE HORIZON GROUP, INC.

Date: August ~~17, 2018~~19, 2019	By:	/s/ Mark White
		Mark White
		President and Chief Executive Officer ~~and Director~~	(principal executive officer)

	By:	/s/ Martin Ward
		Martin Ward
		Chief Financial Officer ~~Principal~~
		~~Finance~~(principal financial officer and ~~Accounting Officer and Director~~	principal accounting officer)