Canada NewsWire
NEW YORK, Nov. 26, 2019
NEW YORK, Nov. 26, 2019 /CNW/ - Galaxy Digital Holdings Ltd. (TSXV: GLXY) ("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 three and nine months ended September 30, 2019 ("Q3 2019" or "the third quarter"), as well as the Partnership's corporate updates through the date of this press release.
"While the third quarter proved to be another challenging one for the cryptocurrency markets broadly, the teams here at Galaxy Digital continued to make forward progress across each of our three primary operating business lines as well as to conservatively allocate new capital where we saw pockets of clear value in the industry," said Michael Novogratz, Founder and CEO of Galaxy Digital. "Whether one points to Trading's OTC market share gains and entry into the structured and derivative product markets, Asset Management's launch of the new bitcoin funds, Advisory Services' successful work on two IPOs on the NYSE and Nasdaq, or our Venture and Principal Investment teams' continued and acute focus on portfolio management and positioning, the second half of 2019 has seen the Company leverage our relationships and insights to improve our standing in the digital assets, cryptocurrency and blockchain technology industry."
Corporate Updates
Business Highlights
Select GDH LP's Financial Highlights (Q3 2019)
_____________________________ |
1 Net book value includes non-controlling interests. |
GDH LP's Q3 2019 Financial Results
September 30, | December 31, | ||||
2019 | 2018 | ||||
Assets | |||||
Current assets | |||||
Cash | $ | 78,375,006 | $ | 66,488,012 | |
Digital assets | 124,697,695 | 69,765,339 | |||
Investments | 156,540,340 | 179,365,696 | |||
Receivable for digital asset trades | 2,472,350 | 8,579,058 | |||
Digital asset loans receivable | 7,359,896 | — | |||
Assets posted as collateral | 11,236,848 | — | |||
Receivables | 2,056,531 | 1,238,694 | |||
Prepaid expenses and other assets | 2,749,186 | 2,002,880 | |||
Loans receivable | 14,890,368 | 2,369,024 | |||
400,378,220 | 329,808,703 | ||||
Loans receivable | 13,810,751 | 15,892,320 | |||
Right of use asset | 5,335,434 | — | |||
Property and equipment | 4,116,657 | 4,223,252 | |||
23,262,842 | 20,115,572 | ||||
Total assets | $ | 423,641,062 | $ | 349,924,275 | |
Liabilities | |||||
Current liabilities | |||||
Digital assets sold short | $ | 8,892,355 | $ | 18,666,957 | |
Accounts payable and accrued liabilities | 11,468,306 | 14,558,914 | |||
Payable for digital asset trades | 7,444,945 | 9,832,737 | |||
Digital asset loans payable | 6,945,202 | — | |||
Collateral payable | 579,871 | — | |||
Lease liability | 785,022 | — | |||
Due to related party | — | 1,177,498 | |||
36,115,701 | 44,236,106 | ||||
Lease Liability | 4,796,833 | — | |||
Total liabilities | 40,912,534 | 44,236,106 | |||
Equity | |||||
Partners' capital | 375,171,378 | 301,520,591 | |||
Non-controlling interest | 7,557,150 | 4,167,578 | |||
Total equity | 382,728,528 | 305,688,169 | |||
Total liabilities and equity | $ | 423,641,062 | $ | 349,924,275 |
Three months | Three months | Nine months | Nine months | ||||||
Income (loss) | |||||||||
Advisory and management fees | $ | 1,260,725 | $ | 1,473,297 | $ | 4,110,936 | $ | 2,806,510 | |
Net realized gain (loss) on digital assets | (8,532,363) | (38,067,497) | 107,038,137 | (52,733,347) | |||||
Realized gain (loss) on investments | (18,159) | — | 38,082,476 | — | |||||
Interest income | 1,272,231 | 349,395 | 2,898,153 | 646,469 | |||||
Other income | 5,187,275 | 185,837 | 10,886,584 | 205,659 | |||||
(830,291) | (36,058,968) | 163,016,286 | (49,074,709) | ||||||
Operating expenses | |||||||||
Equity based compensation | 6,297,963 | 14,311,084 | 23,441,735 | 14,311,084 | |||||
Compensation and compensation related | 7,551,497 | 5,031,095 | 22,230,967 | 19,147,279 | |||||
Professional fees | 2,269,488 | 6,161,619 | 5,886,115 | 9,391,601 | |||||
General and administrative | 5,466,079 | 2,671,498 | 9,875,149 | 5,634,518 | |||||
Interest | 637,525 | 1,310,341 | 2,264,779 | 4,294,669 | |||||
Insurance | 282,876 | 480,675 | 1,039,980 | 1,752,465 | |||||
Director fees | 50,000 | 25,000 | 150,000 | 25,000 | |||||
(22,555,428) | (29,991,312) | (64,888,725) | (54,556,616) | ||||||
Net unrealized gain (loss) on digital assets | (39,957,814) | 366,717 | (29,009,140) | (83,357,300) | |||||
Net unrealized gain (loss) on investments | (4,761,276) | (4,172,597) | (10,583,501) | 16,545,019 | |||||
Unrealized foreign currency gain (loss) | (136,911) | (1,474,820) | 143,687 | 92,065 | |||||
Realized foreign currency gain (loss) | 16,704 | 893,387 | (183,034) | 893,387 | |||||
Goodwill impairment | — | (6,216,914) | — | (6,216,914) | |||||
(44,839,297) | (10,604,227) | (39,631,988) | (72,043,743) | ||||||
Income (loss) for the period | $ | (68,225,016) | $ | (76,654,507) | $ | 58,495,573 | $ | (175,675,068) | |
Income (loss) attributed to: | |||||||||
Unit holders of the Partnership | (63,531,407) | (75,148,680) | 57,004,219 | (174,169,241) | |||||
Non-controlling interest | (4,693,609) | (1,505,827) | 1,491,354 | (1,505,827) | |||||
$ | (68,225,016) | $ | (76,654,507) | $ | 58,495,573 | $ | (175,675,068) | ||
Other comprehensive income (loss) | |||||||||
Foreign currency translation adjustment | (13,128) | (7,298) | (101,396) | (7,298) | |||||
Comprehensive income (loss) for the period | $ | (68,238,144) | $ | (76,661,805) | $ | 58,394,177 | $ | (175,682,366) | |
Comprehensive income (loss) attributed to: | |||||||||
Unit holders of the Partnership | $ | (63,544,535) | $ | (75,155,978) | $ | 56,902,823 | $ | (174,176,539) | |
Non-controlling interest | (4,693,609) | (1,505,827) | 1,491,354 | (1,505,827) | |||||
$ | (68,238,144) | $ | (76,661,805) | $ | 58,394,177 | $ | (175,682,366) |
Income and expenses by each reportable segment of GDH LP for the three months ended September 30, 2019 are as follows:
Principal | Asset | Advisory | Corporate | |||||||||
Trading | Investing | Management | Services | and Other | Totals | |||||||
Income (loss) | ||||||||||||
Advisory and management fees | $ | — | $ | — | $ | 1,260,725 | $ | — | $ | — | $ | 1,260,725 |
Net realized loss on digital assets | (8,073,212) | (459,151) | — | — | — | (8,532,363) | ||||||
Net realized loss on investments | — | (18,159) | — | — | — | (18,159) | ||||||
Interest Income | 327,933 | 927,524 | — | 16,556 | 218 | 1,272,231 | ||||||
Other Income | 5,008,525 | 190,000 | (11,250) | — | — | 5,187,275 | ||||||
(2,736,754) | 640,214 | 1,249,475 | 16,556 | 218 | (830,291) | |||||||
Operating expenses | 7,268,827 | 1,576,050 | 4,181,199 | 1,578,080 | 7,951,272 | 22,555,428 | ||||||
Net unrealized loss on digital assets | (33,151,646) | (6,806,168) | — | — | — | (39,957,814) | ||||||
Net unrealized loss on investments | — | (4,761,276) | — | — | — | (4,761,276) | ||||||
Unrealized foreign currency loss | (136,911) | — | — | — | — | (136,911) | ||||||
Realized foreign currency gain | 16,704 | — | — | — | — | 16,704 | ||||||
(33,271,853) | (11,567,444) | — | — | — | (44,839,297) | |||||||
Net loss | $ | (43,277,434) | $ | (12,503,280) | $ | (2,931,724) | $ | (1,561,524) | $ | (7,951,054) | $ | (68,225,016) |
Income and expenses by each reportable segment of GDH LP for the three months ended September 30, 2018 are as follows:
Principal | Asset | Advisory | Corporate | |||||||||
Trading | Investing | Management | Services | and Other | Totals | |||||||
Income (loss) | ||||||||||||
Advisory and management fees | $ | — | $ | — | $ | 1,370,658 | $ | 102,639 | $ | — | $ | 1,473,297 |
Net realized loss on digital assets | (36,945,357) | (1,122,140) | — | — | — | (38,067,497) | ||||||
Interest income | 185,667 | 151,888 | — | 11,840 | — | 349,395 | ||||||
Other income | 187,754 | (14,660) | 12,743 | — | — | 185,837 | ||||||
(36,571,936) | (984,912) | 1,383,401 | 114,479 | — | (36,058,968) | |||||||
Operating expenses | 6,343,281 | 3,510,693 | 4,343,292 | 3,564,262 | 12,229,784 | 29,991,312 | ||||||
Net unrealized gain (loss) on digital assets | 1,922,433 | (1,555,716) | — | — | — | 366,717 | ||||||
Net unrealized loss on investments | (1,372,208) | (2,800,389) | — | — | — | (4,172,597) | ||||||
Unrealized foreign currency gain (loss) | 82,989 | — | — | 11,921 | (1,569,730) | (1,474,820) | ||||||
Realized foreign currency gain (loss) | (52,095) | — | — | — | 945,482 | 893,387 | ||||||
Goodwill impairment | — | — | — | — | (6,216,914) | (6,216,914) | ||||||
581,119 | (4,356,105) | — | 11,921 | (6,841,162) | (10,604,227) | |||||||
Net loss | $ | (42,334,098) | $ | (8,851,710) | $ | (2,959,891) | $ | (3,437,862) | $ | (19,070,946) | $ | (76,654,507) |
Assets and liabilities by reportable segment of GDH LP as of September 30, 2019 are as follows:
Principal | Asset | Advisory | Corporate | |||||||||
Trading | Investing | Management | Services | and Other | Totals | |||||||
Total assets | $ | 207,572,115 | $ | 195,640,729 | $ | 2,150,689 | $ | 943,034 | $ | 17,334,495 | $ | 423,641,062 |
Total liabilities | $ | 24,137,303 | $ | 238,137 | $ | 245,528 | $ | 22,988 | $ | 16,268,578 | $ | 40,912,534 |
Assets and liabilities by reportable segment of GDH LP as of December 31, 2018 are as follows:
Principal | Asset | Advisory | Corporate | |||||||||
Trading | Investing | Management | Services | and Other | Totals | |||||||
Total assets | $ | 121,987,903 | $ | 209,065,821 | $ | 2,427,877 | $ | 1,081,640 | $ | 15,361,034 | $ | 349,924,275 |
Total liabilities | $ | 28,720,908 | $ | 162,086 | $ | 105,946 | $ | 157,811 | $ | 15,089,355 | $ | 44,236,106 |
Select statement of financial position information
The fair value of each asset class by reporting segment of GDH LP as of September 30, 2019 is as follows:
Principal | Asset | Advisory | Corporate | |||||||||
Trading | Investing | Management | Services | and Other | Totals | |||||||
Digital assets: | ||||||||||||
Cryptocurrency | $ | 114,075,206 | $ | 10,622,489 | $ | — | $ | — | $ | 124,697,695 | ||
Digital assets posted as collateral | 8,768,777 | — | — | — | — | 8,768,777 | ||||||
Investments: | ||||||||||||
Pre-ICO | — | 6,602,001 | — | — | — | 6,602,001 | ||||||
Convertible Notes | — | 3,706,828 | — | — | — | 3,706,828 | ||||||
Preferred Stock | — | 75,369,122 | — | — | — | 75,369,122 | ||||||
Common Stock | — | 30,247,973 | — | — | — | 30,247,973 | ||||||
LP/LLC Interests | — | 39,016,786 | — | — | — | 39,016,786 | ||||||
Warrants/Trust Units | — | 1,597,630 | — | — | — | 1,597,630 | ||||||
$ | 122,843,983 | $ | 167,162,829 | $ | — | $ | — | $ | — | $ | 290,006,812 | |
The fair value of each asset class by reporting segment of GDH LP as of December 31, 2018 is as follows:
Principal | Asset | Advisory | Corporate | |||||||||
Trading | Investing | Management | Services | and Other | Totals | |||||||
Digital assets: | ||||||||||||
Cryptocurrency | $ | 62,662,014 | $ | 7,103,325 | $ | — | $ | — | $ | — | $ | 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 | ||||||
$ | 62,662,014 | $ | 186,469,021 | $ | — | $ | — | $ | — | $ | 249,131,035 |
This press release should be read in conjunction with (i) GDH LP's Management Discussion and Analysis and Condensed Consolidated Interim Financial Statements for the three and nine months ended September 30, 2019 and (ii) GDH Ltd.'s Management Discussion and Analysis and Condensed Consolidated Interim Financial Statements for the three and nine months ended September 30, 2019 (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.'s 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 GDH Ltd. and the general partner of GDH LP is Michael Novogratz. GDH LP is headquartered in New York City, with offices in Tokyo, Japan, London, England, Hong Kong, Jersey City, U.S., San Francisco, U. S., and the Cayman Islands (registered office). 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.
FINRA's approval of a continuing membership application does not constitute or imply that FINRA approves of or endorses any security or product offered by the member firm.
This press release is not an offer to sell or the solicitation of an offer to sell or buy any security in any jurisdiction where such an offer or solicitation would be illegal, nor shall there be any sale of any security in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction.
The private placement shares of the Galaxy Bitcoin Funds and the Galaxy Crypto Index Fund (the "Funds") have not been registered under the Securities Act of 1933, as amended (the "Securities Act") or any state securities laws, and the shares are being offered pursuant to an exemption from registration provided by Rule 506(c) of Regulation D under the Securities Act and in reliance on similar exemptions under applicable state laws. An investment in the shares of the Funds is suitable only for sophisticated, well-informed investors, and investors will be required to represent that they are accredited investors as such term is defined in Rule 501(a) of Regulation D under the Securities Act.
BLOOMBERG is a trademark or service mark of Bloomberg Finance L.P. GALAXY is a trademark of Galaxy Digital Capital Management. Bloomberg Finance L.P. and its affiliates (collectively, Bloomberg) are not affiliated with Galaxy Digital Capital Management, the Funds and their respective affiliates (collectively, Galaxy). Bloomberg's association with Galaxy is to act as the administrator and calculation agent of the CFIX and the Bloomberg Galaxy Crypto Index (the "Indices"), which are the property of Bloomberg. Neither Bloomberg nor Galaxy guarantee the timeliness, accurateness, or completeness of any data or information relating to the Indices or results to be obtained. Neither Bloomberg nor Galaxy make any warranty, express or implied, as to the Indices, any data or values relating thereto or any financial product or instrument linked to, using as a component thereof or based on the Indices (Products) or results to be obtained therefrom, and expressly disclaims all warranties of merchantability and fitness for a particular purpose with respect thereto. To the maximum extent allowed by law, Bloomberg, it licensees, Galaxy and its and their respective employees, contractors, agents, suppliers, and vendors shall have no liability or responsibility whatsoever for any injury or damages—whether direct, indirect, consequential, incidental, punitive, or otherwise—arising in connection with the Index, any data or values relating thereto or any Products—whether arising from their negligence or otherwise.
Securities transactions are effected through Galaxy Digital Advisors LLC, a member of FINRA and SIPC.
Forward-Looking Statements
Certain information in this press release, including, but not limited to, statements regarding the future of the industry the Company or Partnership's anticipated 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 subject to the risk that the industry or the Company's businesses do not perform as anticipated, that revenue or expenses estimates may not be met or may be materially less or more than those anticipated, that expected advisory transactions may be modified or not completed at all and those other risks discussed in the risks and uncertainties section in the Partnership's and the Company's Management Discussion and Analysis for the year ended December 31, 2018. Factors that could cause actual results of the Company and its businesses to differ materially from those described in such forward-looking statements include, but are not limited to, a decline in the digital asset market or general economic conditions; the failure or delay in the adoption of digital assets and the blockchain ecosystem by institutions; a delay or failure in developing infrastructure for the trading business or achieving mandates; and for advisory transactions, a decline in the securities markets, an adverse development with respect to an issuer or party to the transaction or failure to obtain a required regulatory approval. In connection with the forward-looking statements contained in this press release, the Company has made assumptions that no significant events occur outside of the Company's and Partnership's normal course of business. Forward-looking statements are not guarantees of future performance, accordingly, you should not put undue reliance on forward-looking statements. Information identifying assumptions, risks and uncertainties relating to the Company and the Partnership are contained in Galaxy Digital's filings with the Canadian securities regulators available at www.sedar.com. 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 and Galaxy Digital undertakes no obligation to update any forward-looking statement to reflect events or circumstances after that date or to reflect the occurrence of unanticipated events.
All figures are in U.S. Dollars unless otherwise noted.
SOURCE Galaxy Digital Holdings Ltd
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