Fintech
Lendified Announces Adverse Effects of COVID-19, Application for Management Cease Trade Order
Toronto, Ontario–(Newsfile Corp. – June 25, 2020) – Lendified Holdings Inc. (formerly, Hampton Bay Capital Inc.) (TSXV: LHI) (the “Company” or “Lendified“) today announced that the outbreak of the Coronavirus (COVID-19) has had an adverse effect on the Company’s business, financial condition and results of operations. The Company had hoped that the effect of COVID-19 on its business and operations would not be overly severe. However, the COVID-19 pandemic has resulted in defaults, disruptions and delays under its loans to Lendified borrowers that have been affected by COVID-19. In addition, the concern that the COVID-19 pandemic might adversely affect the economy and financial markets has had an adverse effect on Lendified’s ability to obtain financing for its business and operations.
Lendified has a history of losses and negative operating cashflows since inception. Its plans are to generate profit and positive operating cashflows; however, it has not yet done so. Lendified relies on debt to fund its ongoing operations and as a result, Lendified continues to carry significant debt. The Company’s ability to operate is dependent on its ability to service that debt. The impact on revenues from the COVID-19 pandemic has had a material negative impact on Lendified’s ability to do so. Lendified is in default in respect of credit facilities with its secured lenders. Forbearance and standstill agreements are being discussed with these senior lenders, with none indicating to date that any enforcement action is expected although each is in a position to do so. However, no formal agreements in this regard have been concluded as of the date hereof. In addition, the COVID-19 pandemic and the Company’s current financial state has caused at least one of its lenders to pause in funding new loans, indicating a desire to reduce its exposure to Lendified in an orderly wind-down of its loan collateral which has also had a negative effect on the Company’s ability to generate revenue. In general, loan funding from third party lenders is expected to be negatively affected by the COVID-19 pandemic and the uncertainty it has created.
The pandemic has also had an adverse effect on the originations aspect of new loans for the Company as a result of the reduced activity of small businesses across Canada. The current environment with businesses reopening and starting to operate again provides an opportunity for the origination activity of new loans to begin to recover. At the same time, the existing loan portfolio of the Company is experiencing increased pressure on repayment of loans by small businesses that have been negatively impacted by the COVID-19 pandemic increasing the likelihood of additional loan loss provisions.
In addition, the Company’s wholly owned subsidiary, Lendified PrivCo Holding Corporation (“Subco“), a wholly-owned subsidiary of the Company acquired through the Company’s qualifying transaction announced on December 24, 2019 (the “Qualifying Transaction“) which, through Lendified Technologies Inc., carries on an automated underwriting and credit risk assessment business based in Vancouver, British Columbia which does business as “Judi.ai” (the “Business“), is not yet cash positive and continues to require cash infusions in the amount of approximately $100,000 per month in order to maintain operations. Its cash reserves at this time are approximately $80,000. At this time, the Company is not in a position to continue to fund the Business and there can be no assurances that it will be able to do so in the future.
As a result, the COVID-19 pandemic has had a disproportionate impact on the Company’s plans for profitability and has resulted in the Company’s current situation where, without finalizing agreements with its lenders to forbear on Lendified’s defaults and an immediate infusion of capital to fund its operations, Lendified will be unable to continue operations. The Company continues to seek financing required to continue operations, but there is no assurance that such financing will be secured. In addition, there can be no assurances that Lendified’s lenders will continue to forbear on enforcing such lenders’ security or otherwise vindicating any legal rights they may have due to such loans being in default, including commencing enforcement proceedings (whether statutory or pursuant to rights to enforce set out in the Company’s credit facilities).
In the event the Company is unable to secure additional financing (please see below) or otherwise increase its revenues, there is significant doubt as to whether the Company can continue as a going concern. The Board of Directors is considering various courses of action to address this problem, including obtaining financing as discussed below, or the sale of assets including the Business in order to raise revenue or to cut costs. There can be no assurances that the Company will be able to secure financing or to find purchasers for its assets which in any case are subject to security interests in favour of its secured lenders as set out above, or be able to avail itself of any other financing options. There can be no assurance that any such actions, if available, will be successful in avoiding insolvency proceedings. There can be no assurance that the steps the Company is considering taking will be successful. Investors are cautioned to consider carefully the Company’s liquidity situation when considering trading in the Company’s securities.
As disclosed in the Company’s press release dated May 19, 2020, the Company announced that it intended to rely on the temporary blanket relief granted by the Ontario Securities Commission in connection with the COVID-19 pandemic pursuant to Ontario Instrument 51 -502 – Temporary Exemption from Certain Corporate Finance Requirements and Ontario Instrument 51-504 – Temporary Exemptions from Certain Requirements to File or Send Securityholder Materials and similar exemptions provided by the other Canadian Securities Regulators due to the challenges the COVID-19 pandemic presents for market participants (the “Temporary Relief“).
The Company is relying on the Temporary Relief in respect of the following requirements (the “Required Filings“) for the Company and Subco:
- the requirement to file Subco’s audited annual financial statements for the year ended December 31, 2019 (the “Subco Annual Financial Statements“) on or before the later of 20 days after the date of the completion of the Qualifying Transaction and 120 days after the end of its financial year as required by National Instrument 51-102 – Continuous Disclosure Obligations (“NI 51-102“);
- the requirement to file Subco’s interim financial report for the three months ended March 31, 2020 (the “Subco Interim Financial Report“) on or before the later of 10 days after the date of the completion of the Qualifying Transaction and 60 days after the end of the interim period as required by NI 51-102;
- the requirement to file the Company’s interim financial report for the three months ended March 31, 2020 (the “Interim Financial Report“) within 60 days after the end of the interim period as required by NI 51-102;
- the requirement to file the Company’s management’s discussion and analysis (the “MD&A“) for the period covered by the Interim Financial Report within 60 days after the end of the interim period as required by NI 51-102; and
- the requirement to file certifications of the Interim Financial Report (collectively with the Interim Financial Report and the MD&A, the “Interim Filings“) pursuant to National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings.
As at the date of such press release announcing reliance on the Temporary Relief, the Company expected to complete the Subco Annual Financial Statements on or before July 2, 2020, and the Subco Interim Financial Report and Interim Filings on or before July 14, 2020. However, the Company no longer believes it will be able to meet these timelines and the filing of the Required Filings will be further delayed.
As a result, in connection with the anticipated delay in filing, Lendified intends to apply the applicable Canadian securities regulators for the issuance of a management cease trade order (the “MCTO“) which would restrict all trading in securities of the Company by the Company’s Chief Executive Officer and Chief Financial Officer (see below) and any other person identified by the securities regulators. The Company is continuing to work through the outstanding items to complete the Required Filings and expects to file them by July 31, 2020.
Lendified intends to satisfy the provisions of the alternative information guidelines set out in sections 4.3 and 4.4 of National Policy 12-203 Cease Trade Orders for Continuous Disclosure Defaults so long as the Required Filings remain outstanding. The Company confirms as of the date of this news release that there is no formal insolvency or security enforcement proceeding against it and there is no other material information concerning the affairs of the Company that has not been generally disclosed. There can be no assurances that the Company will be able to file the Required Filings within the time required by the securities regulators, and if the Company is unable to do so, the securities regulators may undertake enforcement proceedings under applicable securities laws which could include a general cease trade order, among other things.
Lendified further announces that each of Mr. Edward (Ted) Kelterborn and Mr. Benjy Katchen has informed the Company of their resignation from the Company’s board of directors effective immediately. Lendified wishes to express its appreciation to Mr. Kelterborn and Mr. Katchen for their services to the Company and wishes them the best in their future endeavours. In addition, Kevin Clark has notified the Company that he intends to resign effective July 3, 2020. He remains a board member and the President of the Company until that date. The Company is currently searching for qualified replacements for these gentlemen.
Lendified also announces that due to the resignation of Norman Tan as Chief Financial Officer, the Company continues to search for a replacement and will disclose once a suitable person has been retained to fill this role.
The Company is also announcing that Gravitas Securities Inc. has been retained to conduct a brokered private placement for gross proceeds of up to $3m (the “Financing“) on a “best-efforts” basis. The Financing will be comprised of Units consisting of one common share (a “Share“) of the Company (the “Units“) and one half of one common share purchase warrant (each whole warrant, a “Warrant“) with each whole Warrant being exercisable to acquire one Share for a period of three years from the date of issuance. The price of the Units and the exercise price of the Warrants will be priced in context of the market in accordance with applicable TSX Venture Exchange (“TSXV“) policies.
There can be no assurances that the Financing will be completed on the terms set out herein, or at all, or that the proceeds of the Financing will be sufficient for the purposes of the Company or its turnaround efforts. The Financing is subject to the receipt of all regulatory approvals including the approval of the TSXV.
ABOUT LENDIFIED HOLDINGS INC.
Lendified, a company located in Ontario, Canada, is a leading Canadian FinTech company operating both a lending platform which provides working capital loans to small businesses across Canada through its wholly-owned subsidiary, Lendified Inc., as well as a software as a service technology platform providing AI-enabled credit origination and analytics to financial institutions across Canada through its wholly-owned subsidiary, JUDI.AI.
Further Information
For further information regarding Lendified, please contact:
Troy Wright, Chief Executive Officer and Director
(647) 381-9218
[email protected]
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
This news release may contain forward-looking statements which reflect the Company’s current expectations regarding future events. The forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan, “estimate”, “expect”, “intend” and statements that an event or result “may”, “will”, “should”, “could” or “might” occur or be achieved and other similar expressions. These forward-looking statements involve risk and uncertainties, including the difficulty in predicting whether any existing lenders will continue to forbear and consequently cause such lenders to exercise default remedies under their respective credit facilities, whether the Company will be successful in implementing its strategies to place the Company on a better financial footing, whether the securities regulators will grant an MCTO, whether the Financing will be approved or if the proceeds of the Financing will be sufficient for the Company’s purposes, whether the effects of the COVID-19 pandemic will be even more severe than it has been to date, any of which could cause results, performance, or achievements to differ materially from the results discussed or implied in the forward-looking statements. Many risks are inherent in the industries in which the Company participates; others are more specific to the Company. The Company’s ongoing quarterly filings should be consulted for additional information on risks and uncertainties relating to these forward-looking statements. Investors should not place undue reliance on any forward-looking statements. Management assumes no obligation to update or alter any forward-looking statements whether as a result of new information, further events or otherwise.
Fintech is on an accelerated trajectory of investment, collaboration, and innovation. This pulse tracks the most significant developments in the sector, from high-profile investments to global platform expansions. Each update in this briefing serves as a key indicator of where the industry is headed.
1. European Fintechs Face Regulatory Pressures Amid New Investment Surge
The European fintech sector finds itself at a crossroads with increasing scrutiny and rising costs due to stringent regulations. While investments continue to flow into the continent’s financial technology companies, challenges in meeting new compliance requirements, especially around data privacy and cybersecurity, create a complex landscape for scaling. This tension between opportunity and operational limitations might affect European fintechs’ growth strategies.
Source: Financial Times
2. Shopify, Slack Founders Join Peter Thiel in Fintech Investment Push
Tobi Lütke of Shopify and Stewart Butterfield of Slack, along with investor Peter Thiel, have co-invested in a new fintech initiative that aims to bolster small business access to capital. By merging technology with a streamlined funding model, this new initiative targets underserved SMBs, highlighting a broader trend of high-profile tech leaders pivoting to fintech investment. The participation of Lütke and Butterfield signals increased cross-sector collaboration in fintech, bringing expertise from e-commerce and communication technology into the financial arena.
Source: Yahoo Finance
3. Lean Technologies Raises $67.5 Million to Drive Fintech Innovation in the Middle East
Riyadh-based fintech platform Lean Technologies recently secured a $67.5 million Series B investment round, aiming to expand its operations across the Middle East. This funding reflects growing investor interest in emerging markets and the potential of Middle Eastern fintech to bridge regional gaps in financial services access. As Lean Technologies broadens its service offerings, the funding will support further technological integration and scalability across financial ecosystems in the region.
Source: Fintech Global
4. Apollo Global Management Invests in Fintech for Private Offerings Support
Apollo Global Management has taken steps to enhance its services for private offerings by investing in specialized fintech solutions. This development signifies a growing trend among private equity firms to adopt fintech as a core component in their service expansion, particularly for personalized client services. Apollo’s strategy of integrating fintech solutions into private offerings marks a strategic shift toward digitalization within traditional financial sectors.
Source: Bloomberg
5. Juniper Research Names 2025’s Future Leaders in Fintech
Juniper Research has revealed its picks for the top future leaders in fintech for 2025. This list emphasizes innovation in fields such as AI, open banking, and decentralized finance, highlighting startups that exhibit potential for reshaping industry standards. As these up-and-coming firms push the boundaries of traditional finance, they exemplify the rising tide of next-generation financial technology poised to become industry mainstays.
Source: Globe Newswire
Conclusion
The convergence of seasoned tech giants with fintech, new funding rounds for region-specific platforms, and the rise of future industry leaders underscore the momentum of the fintech sector. Each of these stories reflects a broader narrative: fintech is not only diversifying in services but also rapidly integrating into traditional finance and tech, paving the way for a transformative era.
The post Fintech Pulse: Evolving Fintech Investments and Partnerships Signal Industry Transformation appeared first on HIPTHER Alerts.
In this edition of Fintech Pulse, we delve into groundbreaking announcements from the 2024 Hong Kong Fintech Week, spotlight strategic collaborations fostering financial accessibility, and examine significant profit growth in global fintech companies. Here’s our comprehensive breakdown of the latest happenings in fintech.
1. Bairong’s Full-Scenario AI Products Showcase at Hong Kong Fintech Week
Source: PRNewswire
At the 2024 Hong Kong Fintech Week, Bairong showcased its range of AI-driven solutions designed to support the digital transformation of financial institutions. Their new “full-scenario” suite aims to enhance data analysis, financial risk management, and credit scoring. The offering underscores Bairong’s strategic vision to advance financial decision-making with AI technology that serves a variety of sectors, including banking, insurance, and asset management.
This development aligns with broader industry trends emphasizing the power of AI to bridge operational gaps in traditional finance. Bairong’s solutions promise to optimize financial workflows, identifying high-risk factors in real-time. The commitment to developing comprehensive, adaptable AI tools demonstrates Bairong’s ambition to stay at the forefront of AI-powered fintech innovations.
2. SBI and APIX Establish Innovation Hub to Propel Fintech Partnerships
Source: The Paypers
SBI Holdings, Japan’s major financial services group, recently announced the launch of an Innovation Hub in partnership with APIX to advance fintech collaboration and innovation. The hub will serve as a catalyst for startups and financial technology firms to collaborate, leveraging APIX’s open innovation platform for API exchange.
Through this hub, SBI and APIX aim to address critical technological needs in the fintech sector. Startups and established firms can collaborate on new technologies and bring forward interoperable systems for the industry. This initiative marks a new phase in fintech alliances, where regulatory support and open innovation can accelerate fintech growth on a global scale.
3. Wise’s Record Profits Point to Growing Market Dominance
Source: MSN
British fintech giant Wise reported a 55% surge in profits, driven by an expanding customer base and increased market share. The company’s cross-border payment solutions are seeing widespread adoption, as it provides individuals and businesses with affordable currency exchange options, bypassing high fees associated with traditional banks.
Wise’s success underscores the current demand for transparent, low-cost international payments. As the firm continues to focus on product expansion and market penetration, its financial trajectory showcases how fintech firms can challenge the status quo in cross-border transactions, maintaining profitability while serving a rapidly growing user base.
4. Parker Secures $20 Million Series B Funding for Fintech Data Suite
Source: Forbes
Fintech startup Parker raised $20 million in a Series B funding round, with the goal of expanding its suite of financial data tools. Parker’s product range enables small and medium enterprises (SMEs) to gather and analyze data, facilitating more informed financial decisions. This funding reflects investor confidence in the need for specialized financial data tools tailored to SMEs, a sector often underserved in financial innovation.
By addressing the needs of smaller businesses, Parker is positioning itself as a key player in the niche market of financial data, which has typically been dominated by larger corporate-focused platforms. This funding round highlights the growing trend of venture capital backing for niche fintech solutions aimed at smaller, agile businesses.
5. The Payments Group and HubPeople’s Cash Payments Initiative for Online Daters
Source: PRNewswire
The Payments Group, a digital payments solution provider, announced a collaboration with HubPeople, an online dating platform, to integrate cash payment solutions for over 100 million users globally. This partnership aims to reach users who may not have access to traditional banking or prefer alternative payment methods.
The initiative points to the broader trend of payments inclusivity in fintech, whereby payment firms are making financial transactions more accessible for underserved communities. By integrating cash payment solutions, The Payments Group and HubPeople highlight the importance of flexibility in payment options, acknowledging the diverse financial preferences of users worldwide.
Industry Implications and Observations
These stories collectively reveal several key trends and insights about the evolving fintech landscape. The focus on AI, digital collaboration hubs, profitability through transparency, specialized data tools, and inclusive payment solutions are reshaping financial services. Fintech’s current trajectory indicates a robust push towards not only digital transformation but also inclusivity and global accessibility.
As financial technology continues to innovate, these advancements illustrate the increasing overlap between technology and finance, as well as the potential for fintech to foster inclusive growth. With companies like Bairong and Wise setting benchmarks for AI and cross-border payments, respectively, and emerging startups like Parker developing new, data-centric tools, fintech’s future promises a dynamic shift towards improved service and enhanced user engagement.
The post Fintech Pulse: Industry Innovations and Partnerships Drive Global Fintech Forward appeared first on HIPTHER Alerts.
In today’s dynamic fintech landscape, developments range from notable appointments to industry conferences, global ranking achievements, and the ongoing struggle between digital innovation and traditional cash reliance. This op-ed-style daily briefing dives into key updates and their potential impacts on the fintech industry, touching on politics, corporate shifts, and emerging trends.
1. Trump’s Potential Impact on Fintech: Policy Shifts and Market Reactions
As Donald Trump continues to be a central figure in U.S. politics, his stance on financial regulations and fintech could significantly influence the sector’s future. Historically, Trump has advocated for deregulation, which benefited banks and other financial services firms. His policies were known to relax certain compliance requirements, which made it easier for fintech companies to expand.
Under Trump’s administration, fintech firms might anticipate reduced regulatory constraints, particularly for newer sectors such as crypto and online lending. This relaxed stance could lower compliance costs for startups, allowing more resources to flow into technology and product innovation. However, a deregulated environment also increases the risk of market manipulation and consumer harm, raising concerns among advocates for tighter oversight.
The question remains whether a Trump-influenced regulatory environment would favor long-term fintech innovation or lead to an environment that could increase risks for both investors and consumers. As debates continue, fintech companies may need to be agile in adjusting to potential policy changes.
Source: Forbes
2. Hong Kong’s Love for Cash: Fintech Growth Stymied by Cultural Preferences
Hong Kong’s journey toward a cashless society faces a unique cultural hurdle—its residents’ affinity for cash, particularly among taxi drivers. Despite the proliferation of digital wallets and payment platforms in Asia, cash remains king in this metropolis. The attachment to cash among certain groups, especially cab drivers, poses a significant challenge for fintech companies aiming to promote mobile and digital payments in Hong Kong.
This resistance to cashless options highlights the complexities of fintech adoption, where technology alone cannot drive transformation without aligning with user behavior. For Hong Kong, overcoming this challenge may require fintech firms to develop hybrid solutions that incorporate cash with digital functionality or offer incentives for digital adoption. Until then, Hong Kong’s fintech ambitions will remain somewhat constrained by the cultural fondness for cash.
This preference for cash also has implications for Hong Kong’s broader economy. If the city cannot shift toward digital transactions, it may fall behind other financial hubs in terms of fintech innovation and integration.
Source: Bloomberg
3. Dave Inc. Joins the KBW Fintech Conference: Setting the Stage for New Partnerships
Next week, Dave Inc. is set to participate in KBW’s annual Fintech Conference, a major industry event in New York City. Scheduled for November 14, the conference will bring together industry leaders, investors, and innovators. Dave Inc.’s involvement underscores its ongoing commitment to establishing new partnerships and tapping into emerging fintech trends.
For Dave, a prominent U.S.-based neobank, participating in high-profile conferences like this not only enhances visibility but also presents networking opportunities with potential investors and partners. The company’s growth strategy focuses on making financial services more accessible and affordable for underserved communities. With industry leaders present, the conference may foster collaborative efforts, especially in areas such as lending, personal finance, and digital banking.
The KBW Fintech Conference could provide Dave Inc. with critical insights and alliances to further its mission, potentially accelerating product innovation and geographical expansion.
Source: GlobeNewswire
4. MeridianLink’s Recognition in IDC Fintech Rankings: A Boost in Reputation
MeridianLink has recently been recognized in IDC’s Global Fintech Rankings, securing a spot in the Top 50. This accolade acknowledges the company’s commitment to digital transformation within the financial services sector, where it focuses on providing cloud-based software solutions for banks, credit unions, and financial institutions.
Being named to this prestigious list elevates MeridianLink’s reputation within the fintech community. This recognition could help MeridianLink secure more significant contracts with major financial institutions, as industry recognition often leads to increased trust among potential clients. Additionally, this placement in the IDC rankings may serve as a strategic advantage when pursuing funding and partnerships in a competitive market.
This recognition is a testament to MeridianLink’s innovation in fintech, showing how its cloud-based solutions align with industry trends toward digital-first financial services.
Source: Business Wire
5. Leadership Change at Alliant Credit Union: Navigating Transition with New Interim CEO
Alliant Credit Union has named Ken Schaafsma as the interim CEO following the departure of Dennis Devine. Schaafsma, who was previously the CFO, will guide the organization through this transitional phase as it searches for a permanent CEO. Leadership changes in financial institutions often signal shifts in strategic focus or operational adjustments, and Schaafsma’s background in finance could mean an emphasis on fiscal discipline and profitability.
As a credit union with a significant member base, Alliant’s choice of leadership may influence its approach to digital services and customer engagement. With Schaafsma’s familiarity with the organization’s financial health, his interim tenure may bring stability during this transitional period.
In an industry undergoing rapid digital transformation, Alliant Credit Union’s ability to maintain a clear strategic vision and leadership stability will be crucial in keeping pace with fintech competitors.
Source: Fintech Futures
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