Longfin Corp. Reports 2017 Financial Results
03 Aprile 2018 - 5:50PM
Longfin Corp. (“Longfin” or the “Company”) (NASDAQ CM: LFIN), a
finance and technology company, released its financial results for
the period ended December 31, 2017.
Highlights
- Consolidated revenue of $75.0 million for the
period commencing February 1, 2017 (inception) and ending December
31, 2017 (“Fiscal 2017”).
Fiscal 2017 Results
Revenue
For Fiscal 2017, the Company reported
revenue of $75.0 million, consisting of:
- Physical Commodities - Revenue primarily consisted of $66.6
million related to the sale of physical commodities, including
$12.2 million of sales to related parties.
- Technology - Technology revenue of $8.4 million comprised of
fees paid by third parties for using the Company’s proprietary risk
management and trading infrastructure technology.
- Other Revenue - Other revenue consisted of incentive income
from trading exchanges for transaction execution, recognized when
earned.
Operating Expenses
Operating expenses primarily consisted of $65.1
million of expenses directly related to the Company’s sale of
physical commodities (including $10.0 million of related party
purchases), $33.3 million of employee related expenses consisting
of $26.0 million of one-time non-cash stock-based compensation
expense and $0.4 million of wages and benefits, $3.8 million of
fees related to the Company’s technology revenue, $3.3 million of
amortization expense related to the intangible assets acquired with
the Stampede acquisition, $1.3 million of depreciation and
amortization related to the Company’s computer equipment, and $0.8
million of other operations and administrative expenses including
legal and professional fees.
Income tax expense
Income tax expense of $0.7 million includes
current tax expense of $0.5 million which includes U.S. federal
income tax expense of $0.6 million related to the treatment of
foreign income upon transition to a participation exemption system
of taxation (“Transition Tax”) offset a by foreign tax benefit of
$0.1 million and deferred tax expense of $0.2 million related to
foreign deferred tax liabilities.
Net Loss
The Company has net loss of approximately
$(26.4) million for the year ended December 31, 2017, due primarily
to one-time employee stock compensation charges.
Cash and Liquidity Position
As of December 31, 2017, the Company had $2.2
million in cash and $36.8 million in accounts receivable and total
liabilities of $39.3 million. In management’s opinion, the
Company’s cash position, the initial $5.0 million and the remaining
expected amounts to be received of $42.6 million pursuant to the
January 2018 convertible note financing and forecasted cash
generated from operations is sufficient to fund the Company’s
expenses and growth strategy over the next year.
LONGFIN CORP. AND
SUBSIDIARIES
Consolidated Statement of
Operations
For the period from February 1, 2017
(inception) through December 31, 2017
(In thousands, except share and per share
amounts)
Revenue: |
|
|
|
Sale of
physical commodities (includes sales to related parties of
$12,249) |
|
$ |
66,603 |
|
Technology revenue |
|
|
8,413 |
|
Other
revenue |
|
|
32 |
|
Total
revenue |
|
|
75,048 |
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
Cost of
physical commodities revenues (includes related parties purchases
of $10,047) |
|
|
65,062 |
|
Cost of
technology revenue (includes related party cost of $3,838) |
|
|
3,840 |
|
Stock-based compensation |
|
|
25,986 |
|
Employee
compensation and payroll taxes |
|
|
409 |
|
Operations and administrative |
|
|
786 |
|
Depreciation and amortization |
|
|
1,308 |
|
Amortization of acquired intangible assets |
|
|
3,295 |
|
Total operating
expenses |
|
|
100,686 |
|
|
|
|
|
|
Loss from
operations |
|
|
(25,638 |
) |
|
|
|
|
|
Other income
(expenses) |
|
|
|
|
Other
income , net |
|
|
5 |
|
Total other
income, net |
|
|
5 |
|
Loss before income taxes |
|
|
(25,633 |
) |
Income tax expense |
|
|
736 |
|
Net loss |
|
$ |
(26,369 |
) |
|
|
|
|
|
Net loss per common
share, basic |
|
$ |
(0.58 |
) |
Net loss per common
share, diluted |
|
$ |
(0.58 |
) |
|
|
|
|
|
Weighted average common
shares outstanding, basic |
|
|
45,236,287 |
|
Weighted average common
shares outstanding, diluted |
|
|
45,236,287 |
|
Consolidated Balance
SheetDecember 31, 2017(in thousands,
except share data)
ASSETS |
|
|
|
Current assets |
|
|
|
|
Cash and
cash equivalents |
|
$ |
2,189 |
|
Accounts
receivable |
|
|
36,805 |
|
Due from
related parties |
|
|
4,721 |
|
Other
current assets |
|
|
336 |
|
Total current
assets |
|
|
44,051 |
|
Property, plant and
equipment, net |
|
|
8,429 |
|
Intangibles, net |
|
|
35,305 |
|
Goodwill |
|
|
90,474 |
|
Total
assets |
|
$ |
178,259 |
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
Current
liabilities |
|
|
|
|
Accounts
payable |
|
$ |
21,987 |
|
Accrued
expenses |
|
|
3,369 |
|
Due to
related parties |
|
|
5,843 |
|
Income
taxes |
|
|
305 |
|
Total current
liabilities |
|
|
31,504 |
|
Income
taxes |
|
|
354 |
|
Deferred
taxes |
|
|
7,435 |
|
Total
liabilities |
|
|
39,293 |
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
Stockholders’
equity |
|
|
|
|
Class A
voting common stock, $0.00001 par value; 100,000,000 shares
authorized; 46,540,989 shares issued and outstanding as of December
31, 2017 |
|
|
1 |
|
Class B
voting common stock, $0.00001 par value; 75,000,000 shares
authorized; 30,000,000 shares issued and outstanding as of December
31, 2017 |
|
|
- |
|
Class C
voting common stock, $0.00001 par value; 25,000,000 shares
authorized; no shares issued and outstanding as of December 31,
2017 |
|
|
- |
|
Additional paid-in capital |
|
|
165,334 |
|
Accumulated deficit |
|
|
(26,369 |
) |
Total
stockholders’ equity |
|
|
138,966 |
|
Total
liabilities and stockholders’ equity |
|
$ |
178,259 |
|
Consolidated Statement of Cash
FlowsFor the period from February 1, 2017
(inception) through December 31, 2017(in thousands)
Cash flows from
operating activities |
|
|
|
Net loss |
|
$ |
(26,369 |
) |
Adjustments to
reconcile net loss to net cash provided by operating
activities: |
|
|
|
|
Depreciation and
amortization |
|
|
4,603 |
|
Deferred income tax
expense |
|
|
286 |
|
Stock compensation |
|
|
25,986 |
|
Changes in operating
assets and liabilities: |
|
|
|
|
Accounts
receivable |
|
|
(24,871 |
) |
Due from related
parties |
|
|
(3,512 |
) |
Other current
assets |
|
|
(106 |
) |
Accounts payable |
|
|
21,312 |
|
Accrued expenses |
|
|
3,332 |
|
Due to related
parties |
|
|
2,413 |
|
Income taxes |
|
|
451 |
|
Other current
liabilities |
|
|
(16 |
) |
Net cash provided by
operating activities |
|
|
3,509 |
|
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
Purchase of computer
software (includes $4,515 from a related party) |
|
|
(6,283 |
) |
Cash acquired from
Stampede acquisition |
|
|
14 |
|
Net cash (used in)
investing activities |
|
|
(6,269 |
) |
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
Proceeds from public
offering, net of cash expenses |
|
|
4,949 |
|
Net cash provided by
financing activities |
|
|
4,949 |
|
|
|
|
|
|
Net increase in cash
and cash equivalents |
|
|
2,189 |
|
Cash and cash
equivalents at the beginning of the period |
|
|
- |
|
Cash and cash
equivalents at the end of the period |
|
$ |
2,189 |
|
|
|
|
|
|
Supplemental
disclosure of cash flow information: |
|
|
|
|
Cash paid for income
taxes |
|
$ |
- |
|
|
|
|
|
|
Supplemental
disclosure of noncash investing and financing
activities: |
|
|
|
|
Investment in Stampede,
net of cash acquired |
|
|
|
|
Accounts
receivable |
|
$ |
11,934 |
|
Due from
related parties |
|
|
1,209 |
|
Property,
plant and equipment |
|
|
3,454 |
|
Intangible assets |
|
|
38,600 |
|
Goodwill |
|
|
90,474 |
|
Other
assets |
|
|
231 |
|
Accounts
payable |
|
|
(675 |
) |
Accrued
expenses |
|
|
(37 |
) |
Due to
related parties |
|
|
(3,431 |
) |
Accrued
income taxes |
|
|
(208 |
) |
Other
current liabilities |
|
|
(16 |
) |
Deferred
tax liability |
|
|
(7,149 |
) |
|
|
$ |
134,386 |
|
|
|
|
|
|
Equity issuance costs
for public offering |
|
$ |
4,192 |
|
|
|
|
|
|
Class A and B common
shares issued for Stampede acquisition |
|
$ |
134,400 |
|
Safe Harbor Statement
Certain information in this communicative
statement contains “forward-looking statements” about the Company,
as defined within the Private Securities Litigation Reform Act of
1995 or under Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended (collectively, “forward-looking statements”); these may not
be based on historical fact, but instead relate to future events.
Forward-looking statements are generally identified by words such
as “projects,” “may,” “will,” “could,” “would,” “should,”
“believes,” “expects,” “anticipates,” “estimates,” “intends,”
“plans,” “potential” or similar expressions. Such forward-looking
statements include, without limitation, statements regarding new
and existing services, technologies and opportunities, statements
regarding market and industry segment growth and demand and
acceptance of new and existing services, any projections of sales,
earnings, revenue, margins or other financial items, any statements
of the plans, strategies and objectives of management for future
operations, any statements regarding future economic conditions,
regulatory environment or performance, any statements of belief or
intention, and any statements or assumptions underlying any of the
foregoing. Risk factors and other material information concerning
the Company are described in the Annual Report on Form 10-K filed
with the SEC on April 2, 2018 and other Company filings, including
subsequent current and periodic reports, information statements and
registration statements filed with the SEC. You are cautioned to
review such reports and other filings at www.sec.gov. Given these
risks, uncertainties and factors, you are cautioned not to place
undue reliance on such forward-looking statements and information,
which are qualified in their entirety by this cautionary statement.
All forward-looking statements and information made herein are
based on the Company’s current expectations and does not undertake
an obligation to revise or update such forward-looking statements
and information to reflect subsequent events or circumstances,
except as required by law.
About Longfin Corp.
Longfin Corp (NASDAQ CM: LFIN) is a finance and
technology company powered by artificial intelligence (AI) and
machine learning. The Company, through its wholly-owned subsidiary,
Longfin Tradex Pte. Ltd, delivers FX and alternative finance
solutions to importers/exporters and SME’s. Ziddu.com owned by the
company is a marketplace for smart contracts on Ethereum
blockchain. Ziddu Ethereum ERC20 blockchain Token uses a technology
stack running in distributed virtual machines, and is being
designed to provide solutions to warehouse / international trade
financing, micro-lending, FX OTC derivatives, bullion finance, and
structured products. Currently, the company has operations in
Singapore and New York.
IR Contact:
Dragon Gate Investment Partners LLC
Tel: +1(646)-801-2803
Email: lfin@dgipl.com
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