Canada NewsWire
NEW YORK, April 29, 2019
NEW YORK, April 29, 2019 /CNW/ - Galaxy Digital Holdings Ltd. (TSXV: GLXY; Frankfurt: 7LX) ("Galaxy Digital", "GDH Ltd.", or the "Company"), today released both Galaxy Digital Holdings LP's ("GDH LP" or the "Partnership") and GDH Ltd.'s financial results for the fourth quarter ("Q4 2018" or "the fourth quarter") and full year ("FY 2018" or "2018 year-end") ended December 31, 2018, as well as the Partnership's corporate updates through the date of this press release.
GDH Ltd. is a holding company which holds a minority interest in GDH LP as its only material asset. GDH LP is a diversified, multi-service merchant bank dedicated to the digital assets and blockchain technology industry. The financial results of GDH LP have been prepared and are shown separately, as GDH LP is not deemed to control GDH Ltd. as of December 31, 2018.
"While 2018 was a challenging year for the industry, I am pleased with the ways in which our team navigated difficult market dynamics, and believe we are well positioned to scale our business strategically over time. We have used our capitalized position to both identify and invest in a number of unique opportunities, while also continuing to build an institutional-quality platform," said Michael Novogratz, CEO of Galaxy Digital. "The first few months of 2019 have yielded a notable increase in activity across our business lines. We are already benefiting from both the strong foundation we laid in 2018 as well as the year-to-date rally in digital asset markets. We expect to continue to build upon this positive momentum through the remainder of 2019 and beyond."
Corporate Highlights
- Principal Investments
- Asset Management
- Trading
- Advisory
_____________________________ |
1 Data as of April 26, 2019. Source: Bloomberg |
Select GDH LP's Financial Highlights (Q4 2018 and FY 2018)
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2 Net book value per unit is calculated as GDH LP's partners' capital divided by the outstanding number of units as of December 31, 2018. |
GDH LP's 2018 Financial Results
December 31, | December 31, | |||
2018 | 2017 | |||
Assets | ||||
Current assets | ||||
Cash | $ | 66,488,012 | $ | 32,098,217 |
Digital assets | 69,765,339 | 22,650,240 | ||
Investments | 179,365,696 | - | ||
Receivable for digital asset trades | 8,579,058 | - | ||
Receivables | 1,238,694 | - | ||
Prepaid expenses and other assets | 2,002,880 | - | ||
Loans receivable | 2,369,024 | - | ||
329,808,703 | 54,748,457 | |||
Loans receivable | 15,892,320 | - | ||
Property and equipment | 4,223,252 | - | ||
20,115,572 | - | |||
Total assets | $ | 349,924,275 | $ | 54,748,457 |
Liabilities | ||||
Current liabilities | ||||
Accounts payable and accrued liabilities | $ | 14,558,914 | $ | 1,011,795 |
Payable for digital asset trades | 9,832,737 | - | ||
Digital assets sold short | 18,666,957 | - | ||
Due to related party | 1,177,498 | 42,650,240 | ||
Due to exchange | - | 9,344,613 | ||
Total liabilities | 44,236,106 | 53,006,648 | ||
Equity | ||||
Partners' capital | 301,520,591 | 1,741,809 | ||
Non-controlling interest | 4,167,578 | - | ||
Total equity | 305,688,169 | 1,741,809 | ||
Total liabilities and equity | $ | 349,924,275 | $ | 54,748,457 |
For the period from | |||
formation on | |||
Year | November 30, 2017 | ||
ended | to | ||
December 31, 2018 | December 31, 2017 | ||
Income (Loss) | |||
Advisory and management fees | $ 4,192,808 | $ - | |
Net realized gain (loss) on digital assets | (101,394,823) | 1,495,597 | |
Interest income | 1,361,203 | - | |
Other Income | 1,085,092 | - | |
(94,755,720) | 1,495,597 | ||
Operating expenses | |||
Equity based compensation | 31,281,892 | - | |
Compensation and compensation related | 26,875,317 | 815,000 | |
General and administrative | 11,777,456 | 277,947 | |
Professional fees | 11,391,527 | - | |
Interest | 4,798,337 | 135,962 | |
Insurance | 2,188,081 | - | |
Director fees | 50,000 | - | |
(88,362,610) | (1,228,909) | ||
Net unrealized gain (loss) on digital assets | (75,494,453) | 1,475,121 | |
Net unrealized loss on investments | (8,459,854) | - | |
Unrealized foreign currency gain | 35,196 | - | |
Realized foreign currency gain | 612,407 | - | |
Goodwill impairment | (6,216,914) | - | |
(89,523,618) | 1,475,121 | ||
Income (loss) for the period | $ (272,641,948) | $ 1,741,809 | |
Income (loss) attributed to: | |||
Unit holders of the Partnership | (267,930,435) | 1,741,809 | |
Non-controlling interest | (4,711,513) | - | |
$ (272,641,948) | $ (1,741,809) | ||
Other comprehensive loss | |||
Foreign currency translation adjustment | (35,766) | - | |
Comprehensive income (loss) for the period | $ (272,677,714) | $ 1,741,809 | |
Comprehensive income (loss) attributed to: | |||
Unit holders of the Partnership | (267,966,201) | 1,741,809 | |
Non-controlling interest | (4,711,513) | - | |
$ (272,677,714) | 1,741,809 |
Income and expenses by each reportable segment of GDH LP for the three months ended December 31, 2018 are as follows:
Principal | Asset | Advisory | Corporate | |||||||||
Trading | Investing | Management | Services | and Other | Totals | |||||||
Income | ||||||||||||
Advisory and management fees | $ | - | $ | - | $ | 1,344,705 | $ | 41,593 | $ | - | $ | 1,386,298 |
Net realized loss on digital assets | (10,071,594) | (38,589,882) | - | - | - | (48,661,476) | ||||||
Interest Income | 24,140 | 662,202 | - | 27,554 | 838 | 714,734 | ||||||
Other Income | 803,345 | 88,831 | (12,743) | - | - | 879,433 | ||||||
(9,244,109) | (37,838,849) | 1,331,962 | 69,147 | 838 | (45,681,011) | |||||||
Operating expenses | ||||||||||||
Equity based compensation | 5,174,613 | 2,651,917 | 3,235,635 | 2,224,673 | 3,683,970 | 16,970,808 | ||||||
Compensation and compensation related | 1,873,961 | 760,028 | 2,118,634 | 1,026,418 | 1,948,997 | 7,728,038 | ||||||
General and administrative | 1,762,060 | 1,134,464 | 1,189,086 | 409,036 | 1,648,292 | 6,142,938 | ||||||
Professional fees | 421,129 | 404,316 | (16,560) | (49,595) | 1,240,636 | 1,999,926 | ||||||
Interest | 14,345 | 489,323 | - | - | - | 503,668 | ||||||
Insurance | - | - | - | - | 435,616 | 435,616 | ||||||
Director fees | - | - | - | - | 25,000 | 25,000 | ||||||
9,246,108 | 5,440,048 | 6,526,795 | 3,610,532 | 8,982,511 | 33,805,994 | |||||||
Net unrealized gain (loss) on digital assets | 11,708,464 | (3,845,617) | - | - | - | 7,862,847 | ||||||
Net unrealized (loss) on investments | - | (25,004,873) | - | - | - | (25,004,873) | ||||||
Unrealized foreign currency gain (loss) | (75,715) | - | - | 18,846 | - | (56,869) | ||||||
Realized foreign currency (loss) | (280,428) | - | - | - | (552) | (280,980) | ||||||
11,352,321 | (28,850,490) | - | 18,846 | (552) | (17,479,875) | |||||||
Net (loss) | $ | (7,137,896) | $ | (72,129,387) | $ | (5,194,832) | $ | (3,522,539) | $ | (8,982,225) | $ | (96,966,879) |
* Above table represents the three months ended December 31, 2018. These amounts can also be derived by subtracting the nine months ended September 30, 2018 from the year ended December 31, 2018, with the exception of certain figures relating to the macro-trading of the Partnership's digital assets which were reclassified from the Trading segment to the Principal Investing segment. |
Assets by each reportable segment of GDH LP as of December 31, 2018 are as follows:
Principal | Asset | Advisory | Corporate | |||
Trading | Investing | Management | Services | and Other | Totals | |
Assets | ||||||
Cash | $ 35,887,352 | $ 19,064,478 | $ 1,782,993 | $ 349,155 | $ 9,404,034 | $ 66,488,012 |
Digital assets | 20,920,345 | 48,844,994 | - | - | - | 69,765,339 |
Investments | - | 179,365,696 | - | - | - | 179,365,696 |
Receivables for digital asset trades | 8,579,058 | - | - | - | - | 8,579,058 |
Receivables | 19,950 | 222,855 | 641,255 | 129,466 | 225,168 | 1,238,694 |
Prepaids and other assets | 109,756 | 137,871 | 3,629 | 227,988 | 1,523,636 | 2,002,880 |
Loans receivable | - | 2,203,828 | - | 165,196 | - | 2,369,024 |
$ 65,516,461 | $ 249,839,722 | $ 2,427,877 | $ 871,805 | $ 11,152,838 | $ 329,808,703 | |
Loans receivable | - | 15,693,341 | - | 198,979 | - | 15,892,320 |
Property and equipment | 4,200 | - | - | 10,856 | 4,208,196 | 4,223,252 |
4,200 | 15,693,341 | - | 209,835 | 4,208,196 | 20,115,572 | |
$ 65,520,661 | $ 265,533,063 | $ 2,427,877 | $ 1,081,640 | $ 15,361,034 | $ 349,924,275 | |
Select statement of financial position information
The fair value of each asset class by reporting segment of GDH LP as of December 31, 2018 is as follows:
Principal | Asset | Corporate | ||||
Trading | Investing | Management | Advisory | and Other | Totals | |
Digital assets: | ||||||
Cryptocurrency | $ 20,920,345 | $ 48,844,994 | $ - | $ - | $ - | $ 69,765,339 |
Investments: | ||||||
Pre-ICO | - | 3,444,204 | - | - | - | 3,444,204 |
Convertible Notes | - | 1,250,000 | - | - | - | 1,250,000 |
Preferred Stock | - | 59,586,719 | - | - | - | 59,586,719 |
Common Stock | - | 80,483,775 | - | - | - | 80,483,775 |
LP/LLC Interests | - | 33,248,472 | - | - | - | 33,248,472 |
Warrants/Trust Units | - | 1,352,526 | - | - | - | 1,352,526 |
$ 20,920,345 | $ 228,210,690 | $ - | $ - | $ - | $ 249,131,035 |
This press release should be read in conjunction with (i) GDH LP's Management Discussion and Analysis and Consolidated Financial Statements for the year ended December 31, 2018 and (ii) GDH Ltd.'s Management Discussion and Analysis and Consolidated Financial Statements for the year ended December 31, 2018 (together, the "Consolidated Financial Statements" and "MD&As"), which have been filed on SEDAR at www.sedar.com.
About GDH Ltd. and GDH LP (Galaxy Digital)
Galaxy Digital Holdings Ltd. is a holding company whose only significant asset is a minority investment in GDH LP. GDH LP is a diversified, multi-service merchant bank dedicated to the digital assets and blockchain technology industry. GDH LP's multi-disciplinary team has extensive experience spanning investing, portfolio management, capital markets, operations, and blockchain technology. GDH LP currently operates four distinct business lines, which include: Trading, Asset Management, Principal Investing and Advisory Services. The CEO of the general partner of GDH LP is Michael Novogratz. The Partnership is headquartered in New York City, with offices in London, Tokyo, Hong Kong, the Cayman Islands (registered office) and New Jersey. Additional information about GDH LP's businesses and products is available on www.galaxydigital.io.
Disclaimers and Additional Information
The TSXV has neither approved nor disapproved the contents of this press release. 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. The Ontario Securities Commission has not passed upon the merits of the disclosure record of Galaxy Digital.
Forward-Looking Statements
Certain information in this press release, including, but not limited to, statements regarding the future of the industry and our results, business or opportunities, may constitute forward looking information (collectively, forward-looking statements), which can be identified by the use of terms such as "may," "will," "should," "expect," "anticipate," "project," "estimate," "intend," "continue" or "believe" (or the negatives) or other similar variations. Because of various risks and uncertainties, including those referenced below, actual events or results may differ materially from those reflected or contemplated in such forward-looking statements. Forward-looking statements are not guarantees of future performance, accordingly, you should not to put undue reliance on forward-looking statements. Information identifying assumptions, risks and uncertainties relating to Galaxy Digital is contained in Galaxy Digital's filings with the Canadian securities regulators available at www.sedar.com. These risks include those discussed in the risks and uncertainties section in the MD&As filed concurrently with this release. The forward-looking statements in this press release are applicable only as of the date of this release or as of the date specified in the relevant forward-looking statement.
SOURCE Galaxy Digital Holdings Ltd.
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