LFIN LongFin Corporation (CE)

Longfin Corp. (“Longfin” or the “Company”) (LFIN), a global FinTech company, today released its financial results of the first quarter ended March 31, 2018.

First Quarter 2018 Financial Results

Revenue

For the three months ended March 31, 2018, the Company reported revenue of $54 million. The Company’s revenue consists of the following:

• Physical Commodities

Revenue related to the sale of physical commodities to the Company’s customers was $53 million for the three months ended March 31, 2018.

• Technology

Technology revenue for the three months ended March 31, 2018 consists of $1.61 million and is comprised of fees paid by third parties for using our proprietary risk management and trading infrastructure technology.

• Other Revenue

Other revenue consists of incentive income received from exchanges that is recognized when earned.

Operating Expenses

Operating expenses for the three months ended March 31, 2018 primarily consists of $51 million of expenses directly related to the sale of physical commodities, $1.16 million of fees related to technology revenue, $1.56 million of amortization expense related to the intangible assets acquired with the Longfin Tradex acquisition, $0.7 million of depreciation and amortization related to the Company’s computer equipment, $2 million of other operations and administrative expenses including legal and professional fees, and $0.3 million of employee compensation and payroll taxes.

Other income, net

Other income, net, consists of nominal gains recorded from the Company’s foreign currency transactions.

Net Loss

Net loss attributable to common stockholders was approximately $7.4 million for the three months ended March 31, 2018. $ 5 million loss due to Hudson Bay Note A, OID portion.

Cash and Liquidity Position

As of March 31, 2018, the Company had $4.4 million in cash and $31 million in accounts receivable and total liabilities of $50.6 million. To date the Company has received $3.7 million in net proceeds ($5.0 million net of costs of $1.3 million) related to the Note Financing and will not be able to obtain additional monies through the Note Financing until the Company files a Registration Statement to register the common shares underlying the Notes and Warrant and such Registration Statement is declared effective by the Securities and Exchange Commission. The Company also contemplates raising money through Regulation D offering from the accredited investors.

LONGFIN CORP. AND SUBSIDIARIESCondensed Consolidated Balance Sheet (in thousands, except share data)

		As atMarch 31, 2018$				As atDecember 31, 2017$
						(Audited)
ASSETS
Current assets
Cash and cash equivalents			4,447				2,189
Accounts receivable			31,066				36,805
Due from related parties			3,150				4,721
Derivatives held for trading			107
Other current assets			10,570				336
Total current assets			49,340				44,051
Property, plant and equipment, net			8,688				8,429
Intangibles, net			33,742				35,305
Goodwill			90,474				90,474
Total assets			182,244			$	178,259
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable			20,989			$	21,987
Accrued expenses			304				3,369
Due to related parties			5,957				5,843
Derivatives held for trading			13				-
Income taxes			326				305
Other current liabilities			4,102				-
Unsecured Loans			1,185
Convertible notes payable			10,096				-
Non-current liabilities
Secured Loan			125
Total current liabilities			43,097				31,504
Income taxes			354				354
Deferred taxes			7,158				7,435
Total liabilities			50,609				39,293
Commitments and contingencies
Stockholders’ equity
Class A voting common stock, $0.00001 par value; 200,000,000 shares authorized; and 44,540,989 shares issued and outstanding as of March 31, 2018 and 100,000,000 shares authorized; and 46,540,989 shares issued and outstanding as of December 31, 2017			1				1
Class B voting common stock, $0.00001 par value; 75,000,000 shares authorized; and 30,000,000 shares issued and outstanding as of March 31, 2018 and December 31, 2017			-				-
Class C voting common stock, $0.00001 par value; 25,000,000 shares authorized; and no shares issued and outstanding as of March 31, 2018 and December 31, 2017			-				-
Additional paid-in capital			165,334				165,334
Non-controlling interest			107				-
Accumulated other comprehensive income			(37	)			-
Accumulated deficit			(33,770	)			(26,369	)
Total equity attributable to parent			131,635				138,966
Total liabilities and stockholders’ equity			182,244			$	178,259

  

LONGFIN CORP. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (In thousands, except share and per share amounts)

		Three months ended March 31, 2018$				For the period from February 1, 2017 (inception) through March 31, 2017$
Revenue:
Sale of physical commodities (includes sales to related parties of $10,669 in March 31, 2018 and Nil in March 31, 2017)		$	52,515				-
Technology revenue (includes sales to related parties of $398 in March 31, 2018 and Nil in March 31, 2017)			1,613				702
Other revenue			131				-
Total revenue			54,259				702
Operating expenses:
Cost of physical commodities revenues (includes purchases from related parties of $27,029 in March 31, 2018 and Nil in March 31, 2017)			51,048				-
Cost of technology revenue (includes related party costs of Nil  in March 31, 2018 and $638 in March 31, 2017)			1,161				638
Stock-based compensation			-				-
Employee compensation and payroll taxes			274				-
Operations and administrative			2,003				42
Depreciation and amortization			693				-
Amortization of acquired intangible assets			1,563				-
Total operating expenses			56,742				680
Profit /(Loss) from operations			(2,483	)			22
Other income (expenses)
Other income , net			(5,070	)			-
Total other income, net			(5,070	)			-
Profit/(Loss) before income taxes			(7,553	)			22
Income tax (benefit) expense			(254	)			3
Net profit/(loss) before minority interest		$	(7,299	)		$	19
Non-controlling interest in earnings of subsidiaries			99				-
Net profit/( loss) attributable to common stockholders			(7,398	)			19
Net loss per common share, basic		$	(0.10	)		$	0.003
Net loss per common share, diluted		$	(0.10	)		$	0.003
Weighted average common shares outstanding, basic			76,229,878				7,500,000
Weighted average common shares outstanding, diluted			76,229,878				7,500,000

LONGFIN CORP. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income / (Loss)(in thousands)

		Three months ended March 31, 2018												For the period from February 1, 2017 (inception) through March 31, 2017
		Longfin Corp. $				Non- controlling Interest $				Total$				Longfin Corp.$				Non- controlling Interest $				Total $
Net income / (loss)			(7,398	)			99				(7,299	)			-				-				-
Foreign currency translation adjustments			(37	)			-				(37	)			-				-				-
Comprehensive income (loss)			(7,361	)			99				(7,261	)			-				-				-

LONGFIN CORP. AND SUBSIDIARIES

Condensed Consolidated Statement of Cash Flows(in thousands)

		Three months ended March 31, 2018$				For the period from February 1, 2017 (inception) through March 31, 2017$
Cash flows from operating activities
Net loss		$	(7,299	)		$	19
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization			2,256				-
Other Comprehensive Income			(37	)			-
Note issue expenses			1,292				-
Changes in operating assets and liabilities:
Accounts receivable			5,739				(702	)
Due from related parties			1,604				-
Fair value (gain) / loss on trading securities			(94	)			-
Other current assets			(10,267	)			-
Accounts payable			(998	)			638
Accrued expenses			(3,061	)			-
Due to related parties			110				26
Income taxes			(256	)			3
Other current liabilities			9,199				17
Net cash provided by operating activities			(1,812	)			-
Cash flows from investing activities
Purchase of computer software			(951	)			-
Cash acquired by Longfin Limited (WI) acquisition			3
Net cash (used in) investing activities			(948	)			-
Cash flows from financing activities
Unsecured loan			1,185				-
Secured Loan			125
Proceeds from issuance of stock			-				-
Proceeds from issuance of convertible notes			3,708				-
Net cash provided by financing activities			5,018				-
Net increase in cash and cash equivalents			2,258				-	-
Cash and cash equivalents at the beginning of the period			2,189				-
Cash and cash equivalents at the end of the period		$	4,447			$	-

Safe Harbor StatementCertain 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 Registration statement post qualification Offering Circular (Amendment No. 9) filed with the SEC on November 3, 2017 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 (LFIN) is a US-based, global Fintech 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 the only marketplace for smart contracts powered by Consensus Settlement Algorithm on Ethereum blockchain. Ziddu Ethereum ERC20 blockchain Token uses a technology stack in which Smart Contracts run in distributed virtual machines, which in turn run on a Consensus Settlement Algorithm (CSA) providing solutions to warehouse / international trade financing, micro-lending, FX OTC derivatives, bullion finance, and structured products. Currently, the company has operations in Singapore, Dubai, New York and India.

IR Contact:Dragon Gate Investment Partners LLCTel: +1(646)-801-2803Email: lfin@dgipl.com