LongFin Corp. Going Bankrupt, Its Stock Heading To Zero Soon

[desiboys]

LongFin Corp. Going Bankrupt, Its Stock Heading To Zero Soon

Jun. 4, 2018 4:10 PM•LFIN

Summary

• Cash of $4.4 million should run out very soon.
• LFIN doesn't appear to have enough employees and resources to fight several lawsuits, SEC investigations, and material weaknesses in financial controls.
• Creditor has declared event of default and immediate repayment of $10.1 million.
• Auditors require disclosure of substantial doubt to continue as a going concern.  The Nasdaq lists the company's financial viability as one reason they intended to delist LFIN.
• Sensational highlights of one of the greatest stock market fiascoes in history.

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Before getting into the sensational highlights of what will soon be a postmortem of one of the greatest stock market fiascoes in history, let's focus on the reality of numbers and disclosures from the 10-Q just filed by LongFin Corp. (OTCPK:LFIN) for the quarter ended March 31, 2018:

• Total revenues, besides commodities bought and sold at minimal margins, of $1.74 million.
• Total expenditures on operations, employees and administration, of $2.28 million.
• Net loss of ($7.4 million) and an accumulated loss in their 14 months of publicly available income statements of ($33.8 million).
• Free cash flow of ($2.76 million).

LongFin should run out of cash quickly and declare bankruptcy. It has cash of $4.4M as of March 31, 2018, but its cash burn rate from the first quarter was ($11.04 million) annualized. Their cash use in the second quarter is likely greater than in the first because they need a lot of additional work done by outside lawyers, accountants and consultants to fight a number of shareholder lawsuits, SEC investigations and lawsuit, a disclosed "material weakness in financial controls" (more on this later), and their just surrendered battle with the Nasdaq to keep their stock listing.

Perhaps the most imminent need of cash is to pay a $10.1 million convertible note payable, because the creditor has declared an event of default and is demanding repayment. LFIN's investor relations firm Dragon Gate Investment Partners LLC said the company is still attempting to negotiate with this creditor. I asked LFIN's IR representative if the company had any other sources of liquidity or way of paying the $10.1 million. They didn't provide any sources of liquidity, but asked me to email them questions they couldn't answer and they would consult with management. They haven't responded to those questions.

The 10-Q discloses "substantial doubt regarding the company's ability to continue as a going concern," and "if the company is unable to obtain the monies from the note financing, its business and operations will be negatively impacted and could also lead to the reduction or suspension of the company's operation and ultimately force the company to cease operations." Despite this reality, even at a stock price of $4.50 stockholders are still holding a market capitalization of $335 million that has a high likelihood of going to zero. On page 34 of the 10-K filed on April 2 for the year ended Dec. 31, 2017, LFIN states: "We believe our existing cash … will not be sufficient to meet our needs for the foreseeable future."

[Pumpuhaar]

ppl made lot of money out of this stock 

[Hitman]

30 minutes ago, Pumpuhaar said:

ppl made lot of money out of this stock 

Ppl lost lot of money out of this stock tooo