LGHL Lion Group Holding Ltd

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of December 2023

 

Commission File Number: 001-39301

 

LION GROUP HOLDING LTD.

 

Not Applicable

(Translation of registrant’s name into English)

 

Cayman Islands

(Jurisdiction of incorporation or organization)

 

3 Phillip Street, #15-04 Royal Group Building

Singapore 048693

(Address of principal executive office)

 

Registrant’s phone number, including area code

+65 8877 3871

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F ☒      Form 40-F ☐

 

 

 

Other Information

 

Attached hereto as Exhibit 99.1 is a press release dated December 6, 2023, announcing the Company’s interim financial results for the six months ended June 30, 2023.

 

Exhibits

 

99.1

Press Release, dated December 6, 2023

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	Lion Group Holding Ltd.
	By:	/s/ Chunning Wang
		Name:	Chunning Wang
		Title:	Chief Executive Officer

 

Date: December 6, 2023

 

 

2

 

Exhibit 99.1

 

Lion Announces Unaudited First Half 2023 Financial Results

 

Hong Kong, December 6, 2023 /PRNewswire/ -- Lion Group Holding Ltd. (“Lion” or “the Company”) (NASDAQ: LGHL), operator of an all-in-one trading platform that offers a wide spectrum of products and services, today announced its unaudited financial results for the six months ended June 30, 2023.

 

Mr. Chunning (Wilson) Wang, CEO of Lion, commented, “We are pleased to report a great improvement in our overall business during the first half of 2023, with a strong rebound in the first half growing over pre-Covid revenue levels. Total revenue for the first half of 2023 was US$13.3 million, a record high for the Company. This growth was mainly driven by trading gains from contract for difference (“CFD”) and total return swap (“TRS”) trading activities.”

 

“The strong results in the first half demonstrate our resilience and the tangible outcomes of our continued focus on CFD and TRS trading. Although our business has been sensitive to the macro environment, we are proud of our team’s adaptability and have gleaned data to improve our risk management. Throughout the Covid period, we have been continuously updating our risk management system with a better understanding of the market and our customer behaviors by calibrating and fine-tuning trading variables so as to predict future risk exposures more accurately,” he continued.

 

“China’s economic recovery in the first quarter of 2023 has contributed to our strong first half performance. Meanwhile, as we see that economic growth begin to dampen as markets express caution for the coming year, we remain diligent in executing our operations and marketing our business to new and existing customers. We were pleased to see the overall performance of our CFD business improve with increased trading volumes, as well as an increasing number of TRS customers. Looking forward into the second half, we continue our efforts to increase trading volume and new customer wins, and anticipate that over the counter call options will be another segment for accretive earnings growth for Lion in the second half of 2023.”

 

FINANCIAL RESULTS

 

For the Six Months Ended June 30, 2023

 

Revenues

 

Total revenue for the six months ended June 30, 2023 was US$13.3 million, compared to total revenues (losses) of US$(4.3) million for the six months ended June 30, 2022. Total number of revenue-generating customer accounts decreased to 2,982 as of June 30, 2023, from 4,526 as of December 31, 2022 due to the decline in Lion’s policy renewal clients in insurance business and CFD trading customers.

 

●

CFD Trading Services Income (Losses). Income generated from CFD trading services increased by US$16.1 million from a loss of US$(6.9) million for the six months ended June 30, 2022 to an income of US$9.1 million for the six months ended June 30, 2023, primarily attributable to an increase of US$15.7 million in trading gains and an increase of US$0.3 million in commission income. CFD trading gains increased to US$8.1 million for the six months ended June 30, 2023 from trading losses of US$(7.6) million for the prior year period. This is mainly attributable to a reduction in market volatility in the first half of 2023 compared to the first half of 2022 when global financial markets experienced high fluctuation and volatility in reaction to a series of unpredictable events, including the Russia and Ukraine conflict, surging inflation, etc. In addition, the enhancement of our risk management practice through the continued optimization of risk modelling and methods also contributed to the increase in CFD trading gains. Total revenue-generating CFD trading client accounts decreased to 1,935 as of June 30, 2023, from 2,818 as of December 31, 2022, primarily as a result of the closeout of inactive customer accounts in the past year. CFD trading volume increased to 335,173 lots for the six months ended June 30, 2023, from 110,526 lots for the six months ended June 30, 2022.

 

●

TRS Trading Services Income (Losses). Revenues generated from TRS trading services increased by US$2.7 million from a loss of US$(0.8) million for the six months ended June 30, 2022 to an income of US$1.9 million for the six months ended June 30, 2023, due to the trading gains from proprietary TRS trading activities, which increased by US$3.3 million from a loss of US$(3.0) million to an income of US$0.3 million, partially offset by a decrease of US$0.6 million in interest income earned on loans provided to TRS trading customers. The increase in the gains derived from our proprietary TRS trading activities was primarily attributable to the decrease in the volatility of Chinese stock markets in the first half of 2023 compared to the first half of 2022, as well as the improvement of our risk management practice. Interest income decreased from US$1.8 million to US$1.2 million year-over-year, primarily attributable to the decrease in the loans provided to TRS customers as the customers are concerned about sustainability of economic recovery after China’s reopening as well as heightened geopolitical tensions. Total revenue-generating TRS trading client accounts increased to 276 accounts as of June 30, 2023, from 226 accounts as of December 31, 2022. TRS trading volume was US$363 million and US$293 million for the six months ended June 30, 2023 and 2022, respectively.

 

 

●

Futures and Securities Brokerage Services. Revenues from futures and securities brokerage services decreased from US$2.0 million for the six months ended June 30, 2022 to US$1.6 million for the six months ended June 30, 2023 as a result of the 32% year-over-year decline in trading volume amid macro uncertainty. Futures brokerage trading volume decreased to 541,537 lots from 795,559 lots.

 

●

Others. Other income decreased by US$0.7 million from US$1.4 million for the six months ended June 30, 2022, to US$0.7 million for the six months ended June 30, 2023. The decrease in other income was primarily attributable to a decrease of US$1.6 million in trading gains from OTC call options, a decrease of US$0.4 million in sale of MetaWords NFTs, partially offset by an increase of US$0.6 million in insurance brokerage commission income and an increase of US$0.7 million in trading gains from exchange-traded stock.

 

		Six months ended June 30,
		2023								2022
		US$				%				US$				%
		(Unaudited)								(Unaudited)
Revenues
CFD trading services income (losses)			9,148,435				68.7				(6,911,887	)			158.9
TRS trading services income (losses)			1,873,275				14.0				(798,522	)			18.3
Futures and securities brokerage services			1,593,687				11.9				1,979,384				(45.5	)
Others			695,600				5.4				1,381,294				(31.7	)
Total			13,310,997				100.0				(4,349,731	)			100.0

 

Expenses

 

Total expenses were US$12.7 million for the six months ended June 30, 2023, representing a decrease of 29.8% from US$18.0 million in the first half of 2022, primarily due to the decrease in research and development expenses and impairment of mining equipment.

 

●

Commission and fees expenses increased by 11.9% to US$2.4 million from US$2.1 million in the prior year period, primarily due to an increase of US$0.7 million in commission expenses from insurance brokerage services, partially offset by a decrease of US$0.5 million in commission expenses from futures brokerage services.

●

Compensation expenses decreased by 10.9% to US$1.7 million from US$1.9 million in the prior year period, primarily due to key management taking pay reductions starting from the middle of the first quarter.

●

Occupancy expenses was US$0.4 million, remaining comparable to the prior year period.

●

Communication and technology expenses was US$1.7 million, remaining comparable to the prior year period.

●

General and administrative expenses decreased by 11.7% to US$0.6 million from US$0.7 million in the prior year period, primarily resulting from the internal cost control measures.

●

Professional fees slightly decreased to US$1.2 million from US$1.3 million in the prior year period.

●

Research and development expenses were nil for the six months ended June 30, 2023, compare with US$4.1 million incurred in connection with developing and enhancing the Company’s Metaverse project in the prior year period.

●

Service fees were US$1.1 million, remaining comparable to the prior year period.

●

Interest expenses increased by 56.4% to US$1.6 million from US$1.0 million in the prior year period, mainly attributable to an increase of US$0.4 million in the interest we paid for loans borrowed from our TRS trading business partners, as well as an increase of US$0.2 million in the interest and the amortization of debt discounts from convertible debentures.

●

Depreciation expenses decreased to US$0.9 million from US$1.2 million in the prior year period, mainly attributable to the full impairment of mining equipment in the second quarter of 2022.

●

Marketing expenses slightly increased to US$1.5 million from US$1.4 million in the prior year period.

 

Net income (loss)

 

As a result of the above, net income was US$0.6 million in the first half of 2023, compared to net loss of US$(22.4) million in the prior year period. Diluted net loss attributable to LGHL ordinary shareholders per ADS was US$(1.92) in the first half of 2023, compared to US$(25.78) in the first half of 2022. Each ADS represents fifty Class A ordinary shares¹.

 

¹

The Company implemented an ADS ratio change on July 13, 2023, from one (1) ADS representing one (1) ordinary share to one (1) ADS representing fifty (50) ordinary shares. The ADS ratio change has no impact on LGHL’s underlying ordinary shares. Loss per ADS for the six-month ended June 30, 2023 and 2022 had been retrospectively adjusted accordingly.

 

 

Non-GAAP financial results

 

Non-GAAP net income, which excludes change in fair value of warrant liabilities, stock-based compensation expenses and amortization of debt discounts, depreciation expenses and impairment of fixed assets was US$2.1 million in the first half of 2023, compared to non-GAAP net loss of US$(19.5) million in the first half of 2022. Non-GAAP diluted net income per ADS was US$1.42, compared to non-GAAP diluted net loss per ADS of US$(24.16) in the first half of 2022.

 

Non-GAAP Financial Measures

 

This press release includes reconciliations of the most comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the U.S. (“GAAP”) to non-GAAP financial measures. The Company’s calculation of Non-GAAP income (loss) (net income or loss before change in fair value of warrant liabilities, stock-based compensation, amortization of debt discounts, depreciation expenses and impairment of fixed assets) and Non-GAAP EPS differs from EPS based on net income (loss) because it does not include change in fair value of warrant liabilities, stock-based compensation, amortization of debt discounts, depreciation expenses and impairment of fixed assets, which are non-cash charges. The Company believes that these measures help the management identify underlying trends in the Company’s business that could otherwise be distorted by the effect of certain expenses that the Company includes in net income (loss). The Company believes that these measures provide useful information about its operating results, enhance the overall understanding of its past performance and future prospects, and allow for greater comparability with respect to key metrics used by its management in its financial and operational decision-making.

 

For more information on the non-GAAP financial measures, please see the table, titled “Unaudited Reconciliations of Non-GAAP and GAAP Financial Results,” set forth at the end of this press release.

 

About Lion

 

Lion Group Holding Ltd. (Nasdaq: LGHL) operates an all-in-one, state-of-the-art trading platform that offers a wide spectrum of products and services, including (i) total return service (TRS) trading, (ii) contract-for-difference (CFD) trading, (iii) insurance brokerage, and (iv) futures and securities brokerage. In addition, Lion owns a professional and experienced SPAC sponsorship team to become a leader in the SPAC arena, helping guide private companies through their listing journey while creating value for Lion itself. Additional information may be found at http://ir.liongrouphl.com.

 

Forward-Looking Statements

 

This press release contains, “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Lion’s actual results may differ from their expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “might” and “continues,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, but are not limited to, statements about: Lion’s goals and strategies; our ability to retain and increase the number of users, members and advertising customers, and expand its service offerings; Lion’s future business development, financial condition and results of operations; expected changes in Lion’s revenues, costs or expenditures; the impact of the COVID-19 pandemic; competition in the industry; relevant government policies and regulations relating to our industry; general economic and business conditions globally and in China; and assumptions underlying or related to any of the foregoing. Lion cautions that the foregoing list of factors is not exclusive. Lion cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Lion does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based, subject to applicable law. Additional information concerning these and other factors that may impact our expectations and projections can be found in Lion’s periodic filings with the SEC, including Lion’s Annual Report on Form 20-F for the fiscal year ended December 31, 2022. Lion’s SEC filings are available publicly on the SEC’s website at www.sec.gov.

 

Contacts

 

Lion Group Holding
Tel: +852 2820 9011
Email: ir@liongrouphl.com

 

ICR, LLC
William Zima
Tel: +1 203 682 8233
Email: ir@liongrouphl.com

 

 

LION GROUP HOLDING LTD

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)

(in dollar amount)

 

		Six Months Ended June 30,
		2023				2022
Revenues
Insurance brokerage commissions		$	979,236			$	340,218
Securities brokerage commissions and fees			1,688,618				2,130,975
Market making commissions and fees			1,020,189				677,338
Interest income			1,423,928				1,894,170
Trading gains (loss)			7,818,819				(10,175,033	)
Other income			380,207				782,601
			13,310,997				(4,349,731	)
Expenses and others (iii)
Commissions and fees			2,366,802				2,116,021
Compensation and benefits			1,714,336				1,923,259
Occupancy			391,251				372,628
Communication and technology			1,719,924				1,661,310
General and administrative			601,780				681,860
Professional fees			1,233,666				1,272,096
Research and development			-				4,160,033
Services fees			1,119,581				1,070,887
Interest			1,598,478				1,021,773
Depreciation and amortization			874,858				1,198,122
Marketing			1,502,421				1,370,893
Impairment of fixed assets			-				1,691,079
Impairment of cryptocurrencies			-				293,619
Change in fair value of warrant liabilities			(453,761	)			(759,375	)
Other operating (income) expenses			985				(25,689	)
			12,670,321				18,048,516
Income (loss) before income taxes			640,676				(22,398,247	)
Income tax expense			(1,058	)			(3,071	)
Net Income (loss)		$	639,618			$	(22,401,318	)
Net loss attributable to non-controlling interests			(53,715	)			(2,124,600	)
Net Income (loss) gain attributable to LGHL		$	693,333			$	(20,276,718	)
Deemed dividend on the effect of the warrant modification			(3,086,000	)			-
Dividends and deemed dividends on preferred shares			-				(546,141	)
Net loss attributable to LGHL ordinary shareholders		$	(2,392,667	)		$	(20,822,859	)
Loss per share for both Class A and Class B
- basic and diluted		$	(0.04	)		$	(0.52	)
Loss per ADS
- basic and diluted (ii)		$	(1.92	)		$	(25.78	)
Weighted average Class A ordinary shares outstanding
- basic and diluted			56,479,793				35,295,167
Weighted average Class B ordinary shares outstanding
- basic and diluted			5,975,615				5,088,873

 

(ii) On July 3, 2023, LGHL announced that it plans to change its American depositary share (“ADS”) to ordinary share (“Share”) ratio from one (1) ADS representing one (1) Share to one (1) ADS representing fifty (50) Shares. The change in the ADS ratio was effective on July 13, 2023. For LGHL’s ADS holders, the change in the ADS ratio had the same effect as a one-for-fifty reverse ADS split. The ADS ratio change has no impact on LGHL’s underlying Shares. Loss per ADS for the six month ended June 30, 2023 and 2022 had been retrospectively adjusted accordingly.

(iii) Certain prior periods amounts have been reclassified to be comparable to the current period presentation. The reclassification has no effect on previously reported net assets or net income (loss).

 

 

LION GROUP HOLDING LTD

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in dollar amount)

 

		June 30, 2023				December 31, 2022
Assets
Current Assets
Cash and cash equivalents		$	15,763,073			$	11,159,610
Restricted cash-bank balances held on behalf of customers			1,626,680				3,242,989
Securities owned, at fair value			16,835,069				11,104,047
Receivables from broker-dealers and clearing organizations			33,301,424				33,342,254
Short-term loans receivable			-				7,126,021
Other receivables			50,670				534,437
Prepaids, deposits and other			2,197,921				2,534,684
Total current assets			69,774,837				69,044,042
Long term investment			1,378,968				1,436,142
Fixed assets, net			12,952,716				13,786,344
Right-of-use assets			872,344				1,160,563
Other assets			8,646,071				1,207,293
Total Assets		$	93,624,936			$	86,634,384
Liabilities and Stockholders’ Equity
Liabilities
Current Liabilities
Payables to customers		$	24,955,725			$	23,829,192
Payables to broker-dealers and clearing organizations			32,151,798				24,963,524
Accrued expenses and other payables			1,867,779				1,923,305
Derivative liabilities, at fair value			134,337				-
Embedded derivative liabilities			1,257,795				2,292,056
Short-term borrowings			109,376				110,000
Lease liability - current			606,430				601,531
Due to director			115,305				146,671
Total current liabilities			61,198,545				53,866,279
Lease liability - noncurrent			309,155				618,705
Convertible debentures			2,433,892				4,061,735
Warrant liabilities			202,500				675,000
Total Liabilities			64,144,092				59,221,719
Commitments and Contingencies
Stockholders’ Equity
Preferred shares, $0.0001 par value, 2,500,000,000 shares authorized Series A Convertible Preferred Shares - 345,000 shares authorized, stated value of $1,000 per share, nil shares issued and outstanding each at June 30, 2023 and December 31, 2022 (i)			-				-
Class A ordinary shares, $0.0001 par value, 40,000,000,000 shares authorized, 77,850,203 and 48,761,596  shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively (i)			7,785				4,876
Class B ordinary shares, $0.0001 par value, 7,500,000,000 shares authorized, 9,843,096 shares issued and outstanding each at June 30, 2023 and December 31, 2022 (i)			984				984
Additional paid in capital			66,721,830				63,660,939
Accumulated deficit			(33,799,528	)			(34,492,863	)
Accumulated other comprehensive losses			(224,677	)			(303,213	)
Total LGHL shareholders’ equity			32,706,394				28,870,723
Non-controlling interest			(3,225,550	)			(1,458,058	)
Total shareholders’ equity			29,480,844				27,412,665
Total Liabilities, Mezzanine Equity and Shareholders’ Equity		$	93,624,936			$	86,634,384

 

(i) The numbers of authorized shares have been retrospectively restated to reflect the increase approved by the Company’s 2023 Annual Meeting of Shareholders on October 6, 2023.

 

 

LION GROUP HOLDING LTD

UNAUDITED RECONCILIATIONS OF NON-GAAP AND GAAP FINANCIAL RESULTS

(in dollar amount)

 

		Six months ended June 30,
		2023				2022
		US$				US$
Net income (loss) attributable to LGHL			693,333				(22,401,318	)
Stock-based compensation			650,275				650,275
Amortization of debt discounts			382,957				105,000
Depreciation expenses			874,858				1,198,122
Impairment of fixed assets			-				1,691,079
Change in fair value of warrant liabilities			(453,761	)			(759,375	)
Non-GAAP income (loss) attributable to LGHL  before change in fair value of warrant liabilities, stock-based compensation, amortization of debt discounts, depreciation expenses and impairment of fixed assets			2,147,662				(19,516,217	)
Non-GAAP income (loss) per share for both Class A and Class B
- basic			0.03				(0.48	)
- diluted			0.03				(0.48	)
Non-GAAP income (loss) per ADS
- basic			1.72				(24.16	)
- diluted			1.42				(24.16	)
Weighted average Class A ordinary shares outstanding
- basic			56,479,793				35,295,167
- diluted			69,820,068				35,295,167
Weighted average Class B ordinary shares outstanding
- basic			5,975,615				5,088,873
- diluted			5,975,615				5,088,873

 

		Six months ended June 30,
		2023								2022
		Basic				Fully Diluted				Basic				Fully Diluted
Earnings (Loss) attributable to LGHL per share for both Class A and Class B			0.01				0.01				(0.55	)			(0.55	)
Stock-based compensation			0.01				0.01				0.02				0.02
Amortization of debt discounts			0.01				0.01				0.00				0.00
Depreciation expenses			0.01				0.01				0.03				0.03
Impairment of fixed assets			-				-				0.04				0.04
Change in fair value of warrant liabilities			(0.01	)			(0.01	)			(0.02	)			(0.02	)
Non-GAAP earnings (losses) per share for both Class A and Class B (before change in fair value of warrant liabilities, stock-based compensation, amortization of debt discounts, depreciation expenses and impairment of fixed assets)			0.03				0.03				(0.48	)			(0.48	)

 

 

6

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