First Global Data (FGD.V) is a fin-tech enterprise focused on mobile payments and cross border remittances. Through its mobile app (VPayQwik), FGD.V enables electronic payments via numerous channels: Business to Customer (B2C), Business to Business (B2B), and Peer to Peer lending (P2P).
Coverage was initiated on May 2017 with notes on May 2017, June 2017, September 2017, December 2017, April 2018, and June 2018. Here's an update since.
June 18 - Strategic Partnership to Expand Philippines Remittances from Canada Gemini Worldwide Inc. Focus on remittance to the Philippines.
July 3 - State of Louisiana - Money License granted.
Aug. 3 - Earnings for the Years Ended December 31, 2017 and 2016. (Sedar). Restated 2017 revenue from $11M for 9 months to $1.4M for 12 months.
Aug. 16 - Releases 2017 Year End Audited Financial Statements
ISPL License Program and Revenue Recognition Issues
In reviewing the Company's standard form ISPL agreement (the "Agreements") and reviewing such against International Accounting Standard 18 (IAS 18) and, in particular, IAS 18.14, the Company's auditor cited the following concerns:
a) the Agreements lacked clarity on whether the Company had relinquished control over the license issued thereunder post-sale;
b) significant payment had not yet been received as of the reporting period in question;
c) the auditor felt that the costs related to the sale of an ISPL could not be determined reliably.
Consequently, the Company found that $2.7M in ISPL licensing sales for the year ended December 31, 2016 was incorrectly classified as revenue. Accordingly, certain comparative information for the year ended December 31, 2016 has been restated to reflect same. As a result of the Company's inability to recognize certain ISPL revenues, revenues in 2017 were significantly lower than expected.
Aug. 21 - State of Vermont - Money License granted.
Aug. 24 - Provides Update on Financial Statements Q1-2018 and Q2-2018.
Aug. 30 - First Global Issues Q1 and Q2 2018 Financial Statements. $0.8M revenue YTD and in par with re-stated revenue of $1.4M for 2017.
Earnings for the Q1 of $0.5M vs. Q2 of $0.39M. Loss reported were $3.3M YTD.
Sept. 4 - Announces Hiring of Chief Revenue Officer - Mr. Amar Das.
Sept. 7 - Change of Auditors: Fareed Sheik LLP, Chartered Professional Accountant resigned, company is actively sourcing new auditor.
Sept. 27 - Provides Corporate Update Cease Trade Order and the Resumption of Trading of its Securities. - Company is actively seeking new CFO
Oct. 4 - Announce Resignation of Director. Ray Wieler has decided it necessary to resign from the board for personal health reasons.
Oct. 18 - Provides Update on Status of Full Revocation Application of Cease Trade Order. Working with the Ontario Securities Commission ("OSC") pursuant to Part 4 of National Policy 12-202 and under section 144 of the Securities Act (Ontario).
The Company has filed the Application and is in receipt of substantial comments (the "Comments") from the OSC related thereto. In particular, the Comments focus primarily on the Company's continuous disclosure record (and any clarifications necessary therein) including, among other things, the Company's 2017 audited year-end financial statements as well as its interim financial statements pertaining to the 6 months ended June 30, 2018.
The Company is currently working closely with counsel in a concerted effort to respond to the Comments in a timely manner and anticipates being in a position to respond formally (the "Response") in short order.
Nov. 29 - Earnings for Q3 2017 (No news release). $1.0M revenue YTD vs. $1.22M for 2017. Earnings for the Q3 of $0.23M. Loss of $6.0M YTD.
It is evident that the FGD.V was over-reporting revenues. This led the company to having to restate its numbers for both 2016 and 2017. The results was that from a forecast of $140M to the previously reported $11M for 9 months; FGD.V's actual revenue were $1.4M for 2017. That's quite the gap!
Moreover, looking at this year earnings to date, FGD.V is actually under-performing the restated 2017 earnings for 9 months ($1.0M vs $1,2M). In fact, there is a downward trends in earnings for the last three consecutive quarters: Q1 2018 ($0.5M), Q2 2018 ($o.3M), and Q3 ($0.2M). FGD.V is also still without a CFO and auditing firm which it will soon need to conduct the annual earning reports.
FGD.V has issued press releases during the halt period (now over 8 months). However, none on actual business activities have been issued since August 21, 2018. The last news release to the market was on October 18th, 2018. In the meantime, FGD.V is no doubt focused on responding to the OSC's request regarding the continuous disclosure record which will assist investors (and the market) to determine how this situation occurred in the first place.
The FGD.V story is slowly unraveling itself and the facts are astonishing.
DISCLAIMER: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.
The content of rally is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions - rally cannot take responsibility for your investment decisions.
