Binary options and forex broker EZTD Inc. intends to continue with its plans to list its common stock on the NASDAQ, despite an ongoing concern that it may cease to exist due to its bad financial situation, the broker said in its latest quarterly financial report filed with the Securities and Exchange Commission (SEC).
The company’s financial metrics have been worsening over time, ever since its inception and “there is a substantial doubt that the company will continue as a going concern”.
“Although our current anticipated levels of revenues and cash flow are subject to many uncertainties and cannot be assured, we believe that we have sufficient cash to fund our operations for at least the next 12 months” the filing read. “Despite its negative cash flows, the Company has been able to secure financing to support its operations to date based on share issuances and loans.”
EZTD also said that it plans to seek additional funds from equity issuances to secure its operations and that it has not give up on its plans to list on the NASDAQ.
“The Board determined that it was in the best interests of the Company and its stockholders to reduce the number of outstanding shares of its Common Stock as part of its intention to list the Company’s shares of Common Stock on the NASDAQ and the corresponding requirements,” the broker said in the filing. “In order to initially list the Company’s shares on NASDAQ, its Common Stock must have a closing price of at least $3.00 per share. On August 15, 2016, the closing price of our Common Stock was $3.25 per share,” the text continued.
In April, the broker performed a 1-30 reverse stock split and reduced the number of its shares to 10 million. The move was related to its decision to list on the NASDAQ.
EZTD’s revenue falls, loss widens in H1 2016
The broker posted a net loss of $8.3 million in the first half of 2016, which is more than triple the amount a year earlier. In the second quarter of the year alone, its loss widened 284% to $4.9 million at end-June from $1.3 million a year earlier. In comparison, in the first quarter of 2016 the broker’s loss stood at $3.4 million.
Revenues, however were just slightly down by 4.6% on the year to nearly $12 million in the first half of the year. In April-June, they posted a larger annual drop of 8.9%, falling to $4.9 million. Compared to the previous quarter, however, revenue decreased by 30%.
EZTD’s assets, however increased to $8.6 million at end-June from $7.0 million at the end of 2015.
Following is more detailed information about EZTD’s financial performance in Q2 and H1 2016 (in thousands of USD):
EZTD, formerly EZ Trader, operates through several wholly-owned subsidiaries – Israel-based Win Global Markets Inc. (Israel) Ltd., Cyprus-registered WGM Services Ltd., Japan-based EZ Invest Securities Ltd., Belize-incorporated SCGP Investments Ltd., Australia-based EZTD Australia PTY Ltd., and Vanuatu-registered EZ Trader Ltd. Group companies hold licenses by the Cyprus Securities and Exchange Commission (CySEC) and the Financial Services Agency (FSA) of Japan.