New York, April 03, 2018 (GLOBE NEWSWIRE) -- 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 Sheet
December 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 Flows
For 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