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Solution Financial Reports Record Q3 2020 Financial Results, Conversion of Debentures into Equity and Increase to Bank Leasing Facility

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Vancouver, British Columbia–(Newsfile Corp. – September 23, 2020) – Solution Financial Inc. (TSXV: SFI) (the Company) a leading provider of luxury automotive and yacht leasing in western Canada, today announced its financial results for the third quarter ending July 31, 2020 along with conversion of $1,380,000 of convertible debentures into common shares and a $2,500,000 increase to its Bank Leasing Facility.

Earnings Highlights for the Third Quarter:

  • Net income increased to a record $235,222 and Adjusted net income(1) increased to a record $301,084.
  • Net revenue increased 58% over the prior year quarter to a record $3,936,630.
  • Total lease and finance portfolio grew 2.9% to $25,361,020 over the prior quarter.
  • Quarterly dividend on common shares of $0.001 per share or roughly 1% returns at the Company’s current share trading price of $0.44 per share.

“Business remains very good despite the COVID-19 as we originated $4,565,205 of new in-house vehicle leases in the quarter compared to only $3,952,223 during the same quarter in the previous year which is a healthy 15% increase,” began Bryan Pang, the Company’s CEO.

“We attribute this increase to a strengthening of the real estate markets in western Canada, the weakening Canadian dollar and our expansion into Alberta. Most of our clientele are very wealthy and their spending is likely tied to the value of their underlying assets which include real estate and financial assets impacted by the US dollar. We saw an uptick in the real estate markets over the summer compared to significant drops in 2019 and with the drop in Canadian dollar from 2019 to 2020, luxury vehicles seem comparatively inexpensive. We also saw a lot of repeat customers who do not seem to be overly impacted by COVID-19,” continued Bryan.

“This continued growth also resulted in record earnings for us in both top line revenue, bottom line earnings and adjusted net income or cash profits. Our in-house portfolio has grown over 167% since we went public in 2018 and our portfolio is generating average returns at over 14% with little to no increases in our operating costs. Vehicle sales on end-of-lease and wholesale brokered revenues also remained strong at $1.8 million during the quarter. We also concluded some tax planning initiatives that further improved our net earnings,” added Bryan.

“Our next highest priority will be securing additional equity financing and looking at how best to leverage our strong portfolio position to continue expanding into other markets in Canada that are ideally suited to our unique leasing model. We are thrilled to have recently converted all of our 3.99% convertible debenture holders into equity which is a great start to this initiative. In addition, our banking partner added $2,500,000 of leasing capacity to our facility which bears interest at prime plus 1.2% to bring our total leasing bank facility to $12,500,000,” concluded Bryan.

Financial Results

Solution is reporting a net income of $235,222, or $0.003, per share for the quarter ending July 31, 2020. This compares to a net income of $98,565 or $0.001 per share for the quarter ending July 31, 2019.

Adjusted net income for the quarter ending July 31, 2020 was $301,084 (1) or $0.004 per share compared to $228,261 or $0.003 per share for the quarter ending July 31, 2019. Adjusted Net Income excludes the non-cash accretion interest expense related to the convertible debentures of $50,649, share-based compensation expense of $4,720 for stock compensation and amortization expense of $10,493.

Our operating cash flow for the nine months ended July 31, 2020 increased to $4,667,047 compared to $4,266,065 for the nine months ended July 31, 2019.

Lease Portfolio

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At July 31, 2020, Solution had 337 vehicles in our In House lease portfolio, with 41 new vehicles added to the portfolio during the quarter less 36 end-of-lease or upgrade sales resulting in a net increase of $714,672 during the quarter to bring the total lease portfolio to $25.4 million.

At July 31, 2020, the average remaining lease term for the portfolio was 21.12 months, weighted by net book value for each vehicle. At July 31, 2020, Solutions’ 337 leases were generating annualized rental revenue of approximately $15.7 million, a 43% increase during the quarter.

About Solution

Solution Financial commenced operations in 2004 and specializes in sourcing and leasing luxury and exotic vehicles, yachts and other high value assets. Solution works with a select group of automotive and marine dealerships providing lending solutions to clients who cannot obtain leasing terms with traditional Canadian financial institutions or other lenders. Typical customers include new immigrants, business owners and international students. Solution Financial provides a unique leasing experience whereby it partners with its clients to help them navigate the challenges of acquiring, insuring, maintaining and upgrading vehicles and luxury assets in Canada.

Note 1- Non-IFRS Financial Metrics

Solution provides all financial information in accordance with International Financial Reporting Standards (“IFRS”). To supplement our consolidated financial statements presented in accordance with IFRS, we are also providing with this press release, certain non-IFRS financial measures, including Adjusted Net Income to help investors better quantify our cash earnings. In calculating these non-IFRS financial measures, we have excluded certain transactions that are not necessarily indicative of our ongoing operations or do not impact cash flows.

Cautionary Statement Regarding Forward- Looking Statements

This press release contains “forward-looking information” as defined under applicable Canadian securities laws. This information includes, but is not limited to, statements concerning our objectives, our strategies to achieve those objectives, as well as statements made with respect to management’s beliefs, plans, estimates, projections and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking information generally can be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plans” or “continue”, or similar expressions suggesting future outcomes or events. Such forward-looking information reflects management’s current beliefs and is based on information currently available to management. Although forward-looking information contained in this press release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with this forward-looking information. Certain statements included in this press release may be considered a “financial outlook” for purposes of applicable Canadian securities laws, and as such the financial outlook may not be appropriate for purposes other than this press release.

The forward-looking information contained in this press release is made as of the date of this press release and should not be relied upon as representing Solution’s views as of any date subsequent to the date of this press release. Except as required by applicable law, management and Solution’s Board of Directors undertake no obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

For further information please contact Sean Hodgins at (778) 318-1514.

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ON BEHALF OF THE BOARD

(signed) “Bryan Pang
Brian Pang
President, CEO and Director

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act“) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Fintech

Fintech Pulse: Your Daily Industry Brief (Chime, ZBD, MiCA)

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As we close out 2024, the fintech industry continues to deliver headlines that underscore its dynamism and innovation. From IPO aspirations to groundbreaking regulatory milestones, today’s updates highlight the transformative power of fintech partnerships, regulatory evolution, and disruptive technologies. Here’s what you need to know.

Chime’s Quiet Step Toward Public Markets

Chime, the U.S.-based financial technology startup best known for its digital banking services, has taken a significant step by filing confidential paperwork for an initial public offering (IPO). As one of the most valuable private fintechs in the U.S., Chime’s move could potentially signal a renewed appetite for fintech IPOs in a market that has been cautious following fluctuating valuations across the tech sector.

With a valuation that reportedly exceeded $25 billion in its last funding round, Chime’s IPO could set a new benchmark for the industry. Observers note that its strong customer base and revenue growth may make it an appealing choice for investors seeking to capitalize on the digital banking boom. However, the timing and success of the IPO will depend on broader market conditions and the regulatory landscape.

Source: Bloomberg

ZBD’s Pioneering Achievement: EU MiCA License Approval

ZBD, a fintech company specializing in Bitcoin Lightning network solutions, has made history by becoming the first to secure an EU MiCA (Markets in Crypto-Assets Regulation) license. This landmark approval by the Dutch regulator positions ZBD at the forefront of compliant crypto-fintech operations in Europe.

MiCA, which aims to harmonize the regulatory framework for crypto-assets across the EU, has been a focal point for industry players aiming to establish legitimacy and expand their offerings. ZBD’s achievement not only validates its operational rigor but also sets a precedent for other fintech firms navigating the evolving regulatory landscape.

Industry insiders view this as a strategic advantage for ZBD as it broadens its footprint in Europe. By leveraging its regulatory approval, the company can accelerate its product deployment and establish trust with institutional and retail users alike.

Source: Coindesk, PR Newswire

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The Fintech-Credit Union Synergy: A Blueprint for Innovation

The convergence of fintechs and credit unions continues to reshape the financial services ecosystem. Collaborative initiatives, such as the one highlighted in the recent partnership between fintech innovators and credit unions, are proving to be a potent force in delivering tailored financial solutions.

This “dream team” approach allows credit unions to leverage fintech’s technological expertise while maintaining their community-focused ethos. Key areas of collaboration include digital payments, personalized financial management tools, and enhanced loan processing capabilities. These partnerships not only enhance member engagement but also enable credit unions to remain competitive in an increasingly digital-first financial environment.

Industry analysts emphasize that such collaborations underscore a broader trend of traditional financial institutions embracing fintech-driven solutions to bridge service gaps and foster innovation.

Source: PYMNTS

Tackling Student Loan Debt: A Fintech’s Mission

Student loan debt remains a pressing issue for millions of Americans, and a Rochester-based fintech aims to offer relief through its cloud-based platform. This innovative solution is designed to simplify loan management and provide borrowers with actionable insights to reduce their debt burden.

The platform’s features include repayment optimization tools, personalized financial education, and seamless integration with loan servicers. By addressing the complexities of student loan management, this fintech is empowering borrowers to make informed decisions and achieve financial stability.

As the student loan crisis continues to evolve, solutions like this highlight the critical role fintech can play in addressing systemic financial challenges while fostering financial literacy and inclusion.

Source: RBJ

Industry Implications and Takeaways

Today’s updates underscore several key themes shaping the fintech landscape:

  1. Regulatory Milestones: ZBD’s MiCA license approval exemplifies the importance of regulatory compliance in unlocking growth opportunities.
  2. Strategic Partnerships: The collaboration between fintechs and credit unions demonstrates the value of combining technological innovation with traditional financial models to drive customer-centric solutions.
  3. Market Opportunities: Chime’s IPO move reflects a potential revival in fintech public offerings, signaling confidence in the sector’s long-term prospects.
  4. Social Impact: Fintech’s ability to tackle systemic issues, such as student loan debt, showcases its role as a force for positive change.

 

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SPAYZ.io prepares for iFX EXPO Dubai 2025

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Leading global payments platform SPAYZ.io has confirmed it will be attending iFX EXPO Dubai 2025 on 14 to 16 January. Exhibiting at Stand 64 at Trade Centre Dubai, SPAYZ.io’s team of professionals will be on hand providing live demonstrations of its renowned payment services for payment providers. Attendees will also receive exclusive insight into SPAYZ.io’s plans for 2025 alongside early early access to its upcoming plans for the new year.

SPAYZ.io delivers a host of payment solutions that leverage the latest technological innovations and open access to the fastest growing emerging markets across Africa, Europe and Asia. Over the past year, there has been huge demand for its Open Banking and local payment method services, alongside bank transfers, mass payouts, online banking and e-wallets.

Yana Thakurta, Head of Business Development at SPAYZ.io commented: “We look forward to once again participating at iFX Dubai to expand our network of partners and clients. It’s a fantastic way to kick off the year, connecting with thousands of industry leaders from FOREX platforms to trading companies, and everything in between.

“Our key goal for iFX Dubai EXPO 2025 is to expand our portfolio of solutions and geographies. We’re using this as an opportunity to partner with like-minded entities who share our ambition to provide payment solutions that are truly global.”

Come meet SPAYZ.io’s team at the Trade Centre Dubai at Stand 64. You can also book a meeting slot with a member of a team.

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Airtm Enhances Its Board of Directors with Two Strategic Appointments

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Airtm, the most connected digital dollar account in the world, is proud to announce the addition of two distinguished industry leaders to its Board of Directors: Rafael de la Vega, Global SVP of Partnerships at Auctane, and Shivani Siroya, CEO & Founder of Tala. These appointments reflect Airtm’s commitment to innovation and financial inclusion as the company enters its next phase of growth.

“We are thrilled to welcome Rafael and Shivani to Airtm’s Board of Directors,” said Ruben Galindo Steckel, Co-founder and CEO of Airtm. “Their unique perspectives and proven track records will be invaluable as we continue scaling our platform to empower individuals and businesses in emerging markets. Together, we’ll push the boundaries of financial inclusion and innovation to create a more connected and equitable global economy. Rafael and Shivani bring a wealth of experience and strategic insight that will strengthen Airtm’s mission to connect emerging economies with the global market.”

Rafael de la Vega, a seasoned leader in fintech global partnerships and technology innovation, is currently the Global SVP of Partnerships at Auctane. With a proven track record of delivering scalable, impactful solutions at the intersection of fintech, innovation, and commerce, Rafael’s expertise will be pivotal as Airtm continues to grow. “Airtm has built a platform that breaks down barriers and opens up opportunities for people in emerging economies to connect to global markets. I am excited to contribute to its growth and help further its mission of fostering financial inclusion on a global scale,” said Rafael.

Shivani Siroya, CEO and Founder of Tala, is a pioneer in financial technology, renowned for empowering underserved communities through access to credit and essential financial tools. Her leadership in leveraging data-driven innovation aligns seamlessly with Airtm’s vision of creating more equitable financial opportunities. “Empowering underserved communities has always been at the core of my work, and Airtm’s mission resonates deeply with me. I’m thrilled to join the Board and work alongside such a dynamic team to expand access to financial tools that truly make a difference in people’s lives,” said Shivani.

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