Lion Announces Unaudited First Half 2022 Financial Results

HONG KONG, Dec. 3, 2022 /PRNewswire/ — Lion Group Holding Ltd. (“Lion” or “the Company”) (NASDAQ: LGHL), operator of an all-in-one buying and selling platform that gives a large spectrum of services and developer of latest development merchandise that embody SPAC sponsorship, NFT, and metaverse-related initiatives, at this time introduced its unaudited monetary outcomes for the six months ended June 30, 2022.

Mr. Chunning (Wilson) Wang, CEO of Lion, commented, “Our varied enterprise traces continued to be negatively impacted by persisting headwinds in 2022, particularly the sudden and fast decline in financial exercise, triggering unstable world monetary markets mixed with the continued results of COVID-19. We suffered losses in CFD (contract for distinction) and TRS (whole return swap) buying and selling enterprise resulting from unpredictable market occasions, together with China’s stringent zero-Covid coverage, the Russia and Ukraine battle, the vitality disaster, and tense China-US relations. On the optimistic aspect, our futures and securities brokerage providers expanded throughout this era, because of a rise within the variety of executed futures contracts.”

“TRS and CFD buying and selling are main focus areas for Lion, and given the character of TRS and CFD buying and selling, we perceive our enterprise can profit from beneficial properties in good instances and threat losses throughout harder instances.At the identical time, we’re prudently managing assets, whereas specializing in threat administration, strategically lowering prices, and trimming much less significant enterprise areas to assist mitigate the impacts of the harder enterprise atmosphere. On the opposite hand, we’re happy to say that given present visibility and assuming no main macroeconomic surprises, we imagine that we now have seen the underside within the first half and are seeing optimistic indicators of enchancment in our TRS and CFD earnings for the rest of the yr.”

“As we deal with our core enterprise, we’re additionally being conscious of altering enterprise circumstances by working carefully with our clients, whereas remaining laser-focused on our technique and long-term alternatives. We have developed to include NFT and Metaverse into our core enterprise, and we’re happy to see income from the sale of MetaWords NFTs obtain US$0.4 million within the first half of 2022. In addition, we purpose to safe new cooperation settlement in our TRS buying and selling enterprise within the second half of 2022, which might herald new clients because of new synergies. We have additionally added 83 ETFs to the basket of securities eligible for patrons to commerce.”

FINANCIAL RESULTS

For the Six Months Ended June 30, 2022

Revenues

Total income for the six months ended June 30, 2022 was severely affected by buying and selling losses in CFD and TRS buying and selling providers, leading to adverse revenues of US$(4.3) million, in comparison with whole revenues of US$3.6 million for the six months ended June 30, 2021. Total variety of revenue-generating buyer accounts decreased to 4,522 as of June 30, 2022, from 5,261 as of December 31, 2021 because of the decline in Lion’s insurance coverage enterprise.

• CFD Trading Services Income (Losses). Loss generated from CFD buying and selling providers elevated by US$5.8 million from a lack of US$(1.1) million for the six months ended June 30, 2021 to a lack of US$(6.9) million for the six months ended June 30, 2022, primarily attributable to a rise of US$5.4 million in buying and selling losses and a lower of US$0.4 million in fee earnings. The Company has suffered losses from CFD trades within the first half of 2022 because of fluctuation and volatility within the world monetary markets in response to a sequence of unpredictable occasions, such because the Russia and Ukraine battle, Europe’s vitality disaster, surging inflation and rate of interest hikes within the U.S. and Europe, China’s housing market hunch, and so forth., which impacted the main inventory indexes, commodity markets together with crude oil and metals, and the overseas trade market. Market making fee earnings decreased from US$1.0 million for the six months ended June 30, 2021 to US$0.7 million for the six months ended June 30, 2022, which was primarily attributable to China’s tightened restrictions on promotion and commercial associated to on-line monetary services, resulting in the decreased variety of new accounts opened by means of internet advertising. Total revenue-generating CFD buying and selling consumer accounts barely decreased to 2,819 as of June 30, 2022, from 2,866 as of December 31, 2021. CFD buying and selling quantity barely decreased to 110,526 tons for the six months ended June 30, 2022, from 116,726 tons for the six months ended June 30, 2021.

• TRS Trading Services Income (Losses). Revenues generated from TRS buying and selling providers decreased by US$4.4 million from an earnings of US$3.6 million for the six months ended June 30, 2021 to a lack of US$(0.8) million for the six months ended June 30, 2022, because of the buying and selling beneficial properties/(losses) from the Company’s proprietary TRS buying and selling actions decreased by US$6.2 million from an earnings of US$3.2 million to a lack of US$(3.0) million, partially offset by a rise of US$1.5 million in curiosity earnings earned on loans supplied to TRS buying and selling clients and a rise of US$0.3 million in commissions and different earnings. The Company’s proprietary TRS buying and selling actions have been considerably negatively impacted by the extremely unstable Chinese inventory markets within the first half of 2022 attributable to China’s dismal financial outlook, lock-downs in cities throughout China, and heightened geopolitical tensions, and so forth. TRS buying and selling quantity was US$293 million and US$248 million for the six months ended June 30, 2022 and 2021, respectively.

• Futures and Securities Brokerage Services. Revenues from futures and securities brokerage providers elevated from US$1.2 million for the six months ended June 30, 2021 to US$2.0 million for the six months ended June 30, 2022 because of a rise within the variety of executed futures contracts, primarily resulting from Hong Kong’s fast financial rebound because the pandemic subsided domestically in 2021 and complex buyers eager to reap the benefits of the unstable markets elevated allocations to speculative buying and selling. Futures brokerage buying and selling quantity elevated by 76.8% to 795,559 tons from 449,986 tons.

• Others. Other earnings (loss) elevated by US$1.5 million from a lack of US$(0.1) million for the six months ended June 30, 2021, to US$1.4 million for the six months ended June 30, 2022. The improve in different earnings was primarily attributed to buying and selling beneficial properties realized from OTC name choices of US$0.9 million, sale of MetaWords NFTs of US$0.4 million and curiosity, different earnings of US$0.2 million and the lower of buying and selling loss on fairness securities of US$0.2 million generated within the first half of 2022, offset by the lower of US$0.2 million in Bitcoin mining earnings because the Bitcoin mining operation has ceased since October 2021.

Expenses

Total bills have been US$18.0 million for the six months ended June 30, 2022, representing a rise of 31.9% yoy from US$13.7 million within the first half of 2021, primarily resulting from will increase in fee bills, skilled charges, analysis and growth, depreciation and impairment of mining tools, partially offset by the lower in service charges, change in truthful worth of possibility liabilities, change in warrants liabilities, and compensation bills.

• Commission and charges bills elevated by 77.9% to US$2.1 million from US$1.2 million within the prior yr interval, primarily resulting from a rise in futures brokerage fee bills of US$0.6 million and a rise in TRS buying and selling and insurance coverage brokerage fee bills of US$0.3 million, which is consistent with the general trench of such companies.

• Compensation bills decreased by 19.3% to US$1.9 million from US$2.4 million within the prior yr interval, primarily because of the discretionary bonus paid out in 2021.

• Occupancy bills elevated to US$372,628 from US$347,660 within the prior yr interval, primarily because of the new workplace house rented for the Company’s subsidiary in Singapore, partially offset by the rental discount for subsidiaries in Hong Kong because of COVID-19.

• Communication and know-how bills decreased to US$930,518 from US$947,292 within the prior yr interval, remaining akin to the corresponding interval in 2021.

• Cost of crypto mining was US$0.2 million for the six months ended June 30, 2021. There was no crypto mining operation since October 2021.

• General and administrative bills elevated by 8.2% to US$0.7 million from US$0.6 million within the prior yr interval.

• Professional charges elevated to US$3.0 million from US$1.0 million within the prior yr interval, primarily because of the investor relations and consulting service charges we incurred because the Company turned a public firm and expanded into new enterprise traces comparable to TRS buying and selling and NFT.

• Research and growth bills have been US$4.1 million, which have been incurred in reference to creating and enhancing the Company’s Metaverse mission.

• Service charges decreased by 56.7% to US$1.1 million from US$2.5 million within the prior yr interval, resulting from a one-off particular incentive scheme for the six months ended June 30, 2021.

• Interest bills elevated by 8.4% to US$1.0 million from US$0.9 million within the prior yr interval, primarily attributable to a rise of US$0.8 million within the curiosity the Company paid for loans borrowed from its TRS buying and selling service enterprise companions, offset by a lower of US0.7 million within the curiosity and the amortization of debt reductions from convertible debentures.

• Depreciation bills elevated to US$1.2 million from US$0.3 million within the prior yr interval, primarily attributable to the depreciation of acquired copyrighted buying and selling software program applications associated to CFD and TRS buying and selling providers in 2021.

• Marketing bills barely decreased by 29.4% to US$0.4 million from US$0.6 million within the prior yr interval.

• Other bills have been US$(25,689), in comparison with US$312,104 within the prior yr interval.

Income Tax Expenses

Income tax bills decreased from US$54,367 for the six months ended June 30, 2021 to US$3,071 for the six months ended June 30, 2022, primarily because of the taxes paid in 2021 because of IRS examination of Proficient Alpha Acquisition Corp.’s tax return for the interval ended September 30, 2019.

Net (loss) earnings

As a results of the above, internet loss was US$22.4 million within the first half of 2022, in comparison with internet lack of US$10.1 million within the first half of 2021. Diluted internet loss per ADS was US$0.52 within the first half of 2022, in comparison with US$0.47 within the first half of 2021.

In the primary half of 2022, the Company’s weighted common variety of ADSs utilized in calculating diluted internet loss per ADS, was 40,384,040, in comparison with 26,732,397 within the prior yr interval.

Non-GAAP monetary outcomes

Non-GAAP internet loss, which excludes change in truthful worth of warrant liabilities, stock-based compensation bills and amortization of debt reductions, was US$19.5 million within the first half of 2022, in comparison with non-GAAP internet lack of US$6.5 million^[1] within the first half of 2021. Non-GAAP diluted internet loss per ADS was US$0.48, in comparison with non-GAAP diluted internet loss per ADS of US$0.33^[2] within the first half of 2021.

Liquidity

As of June 30, 2022, the Company’s money and restricted money have been US$14.8 million, in comparison with US$15.8 million as of December 31, 2021 and US$15.7 million as of June 30, 2021. Net money utilized in working actions was US$0.9 million. Net money utilized in investing actions was US$3.6 million. Net money supplied by financing actions was US$3.7 million.

Lion commentary on latest challenges in crypto sector

During the months of May by means of November 2022, market volatility within the costs of digital property has been elevated resulting from a wide range of elements, together with, however not restricted to, the macroeconomic atmosphere (excessive inflation and rising rates of interest) in addition to the ‘crypto credit score disaster’ introduced on by the collapse and chapter of numerous key gamers within the sector (cryptocurrency Luna collapse, hedge fund Three Arrows Capital default on loans and submitting for chapter, crypto-lending platform Celsius freezing all withdraws, cryptocurrency lender Voyager Digital submitting for chapter, crypto platform FTX submitting for chapter, crypto platform BlockFi submitting for chapter amongst others). The Company doesn’t have counterparty publicity to any of the foregoing companies affected by the latest crypto credit score disaster nor have its plans for NFT enterprise operation been materially adversely impacted.

Non-GAAP Financial Measures

This press launch consists of reconciliations of probably the most comparable monetary measures calculated and introduced in accordance with accounting rules usually accepted within the U.S. (“GAAP”) to non-GAAP monetary measures. The Company’s calculation of Non-GAAP (loss) earnings (internet loss or earnings earlier than change in truthful worth of warrant liabilities, stock-based compensation, amortization of debt reductions, depreciation bills and impairment of fastened property) and Non-GAAP EPS differs from EPS primarily based on internet (loss) earnings as a result of it doesn’t embody change in truthful worth of warrant liabilities, stock-based compensation, amortization of debt reductions, depreciation bills and impairment of fastened property, that are non-cash prices. The Company believes that these measures assist the administration determine underlying traits within the Company’s enterprise that might in any other case be distorted by the impact of sure bills that the Company consists of in internet loss. The Company believes that these measures present helpful details about its working outcomes, improve the general understanding of its previous efficiency and future prospects, and permit for higher comparability with respect to key metrics utilized by its administration in its monetary and operational decision-making.

For extra data on the non-GAAP monetary measures, please see the desk, titled “Unaudited Reconciliations of Non-GAAP and GAAP Financial Results,” set forth on the finish of this press launch.

About Lion

Lion Group Holding Ltd. (Nasdaq: LGHL) operates an all-in-one, state-of-the-art buying and selling platform that gives a large spectrum of services, together with (i) whole return service (TRS) buying and selling, (ii) contract-for-difference (CFD) buying and selling, (iii) insurance coverage brokerage, and (iv) futures and securities brokerage. In addition, Lion owns knowledgeable and skilled SPAC sponsorship staff to change into a pacesetter within the SPAC area, serving to information non-public firms by means of their itemizing journey whereas creating worth for Lion itself. Lion can also be totally dedicated to constructing the world’s prime one-stop, cross-chain, high-expansion non-fungible token (NFT) market and coming into metaverse house by means of blockchain know-how. Additional data could also be discovered at http://ir.liongrouphl.com.

Forward-Looking Statements

This press launch comprises, “forward-looking statements” throughout the which means of the “secure harbor” provisions of the Private Securities Litigation Reform Act of 1995. Lion’s precise outcomes might differ from their expectations, estimates and projections and consequently, you shouldn’t depend on these forward-looking statements as predictions of future occasions. Words comparable to “count on,” “estimate,” “mission,” “price range,” “forecast,” “anticipate,” “intend,” “plan,” “might,” “will,” “might,” “ought to,” “believes,” “predicts,” “potential,” “may” and “continues,” and related expressions are meant to determine such forward-looking statements. These forward-looking statements embody, however will not be restricted to, statements about: Lion’s objectives and techniques; our capacity to retain and improve the variety of customers, members and promoting clients, and broaden its service choices; Lion’s future enterprise growth, monetary situation and outcomes of operations; anticipated modifications in Lion’s revenues, prices or expenditures; the influence of the COVID-19 pandemic; competitors within the business; related authorities insurance policies and rules regarding our business; normal financial and enterprise circumstances globally and in China; and assumptions underlying or associated to any of the foregoing. Lion cautions that the foregoing listing of things shouldn’t be unique. Lion cautions readers to not place undue reliance upon any forward-looking statements, which converse solely as of the date made. Lion doesn’t undertake or settle for any obligation or endeavor to launch publicly any updates or revisions to any forward-looking statements to replicate any change in its expectations or any change in occasions, circumstances or circumstances on which any such assertion relies, topic to relevant regulation. Additional data regarding these and different elements that will influence our expectations and projections could be present in Lion’s periodic filings with the SEC, together with Lion’s Annual Report on Form 20-F for the fiscal yr ended December 31, 2021. Lion’s SEC filings can be found publicly on the SEC’s web site at www.sec.gov.

Contacts

Lion Group Holding
Tel: +852 2820 9011
Email: [email protected]

ICR, LLC
William Zima
Tel: +1 203 682 8233
Email: [email protected]

SOURCE Lion Group Holding Ltd.