| Revision of Financial Statement |
When preparing the condensed consolidated financial statements as
of and for the three months ended June 30, 2018, management determined that certain amounts included in the Company’s condensed
consolidated financial statements as of March 31, 2018 and for the three months ended June 30, 2017 required revision, due to closing
of the acquisition of Freedom RU on June 29, 2017, and Freedom CY on November 1, 2017 and the closing of the mergers of Nettrader
LLC (“Nettrader”) in May 2018 and Asyl Invest JSC (“Asyl”) in April 2018, which were deemed to be entities
under common control with the Company.
Certain reclassifications also have been made to the prior
year’s consolidated financial statements to enhance comparability with the current year’s consolidated financial
statements following the increase in intangible assets of the Company related to acquisition of the Tradernet trading
platform. As a result, certain line items have been amended in the Condensed Consolidated Balance Sheets. Comparative figures
have been adjusted to conform to the current period’s presentation.
The previously issued Condensed Consolidated Balance Sheet as of
March 31, 2018, and Condensed Consolidated Statement of Operations and Statements of Other Comprehensive Income for the three months
ended June 30, 2017 have been revised as follows:
| |
|
As of March 31, 2018 |
|
| BALANCE SHEETS (RECAST) |
|
As previously reported |
|
|
Recast |
|
|
As recasted |
|
| |
|
|
|
|
|
|
|
|
|
| ASSETS |
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
64,531 |
|
|
$ |
1,200 |
|
|
$ |
65,731 |
|
| Restricted cash |
|
|
13,671 |
|
|
|
8,291 |
|
|
|
21,962 |
|
| Trading securities |
|
|
212,319 |
|
|
|
276 |
|
|
|
212,595 |
|
| Available-for-sale securities, at fair value |
|
|
2 |
|
|
|
238 |
|
|
|
240 |
|
| Brokerage and other receivables, net |
|
|
21,109 |
|
|
|
3,745 |
|
|
|
24,854 |
|
| Loans issued |
|
|
8,754 |
|
|
|
- |
|
|
|
8,754 |
|
| Deferred tax assets |
|
|
1,046 |
|
|
|
(274 |
) |
|
|
772 |
|
| Fixed assets, net |
|
|
2,362 |
|
|
|
209 |
|
|
|
2,571 |
|
| Intangible assets, net |
|
|
- |
|
|
|
5,531 |
|
|
|
5,531 |
|
| Goodwill |
|
|
1,798 |
|
|
|
1,490 |
|
|
|
3,288 |
|
| Other assets, net |
|
|
4,494 |
|
|
|
79 |
|
|
|
4,573 |
|
| TOTAL ASSETS |
|
$ |
330,086 |
|
|
$ |
20,785 |
|
|
$ |
350,871 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Securities sold, not yet purchased - at fair value |
|
$ |
1,135 |
|
|
$ |
- |
|
|
$ |
1,135 |
|
| Loans received |
|
|
7,143 |
|
|
|
- |
|
|
|
7,143 |
|
| Debt securities issued |
|
|
10,840 |
|
|
|
382 |
|
|
|
11,222 |
|
| Customer liabilities |
|
|
21,855 |
|
|
|
8,817 |
|
|
|
30,672 |
|
| Trade payables |
|
|
8,998 |
|
|
|
15 |
|
|
|
9,013 |
|
| Deferred distribution payments |
|
|
8,534 |
|
|
|
- |
|
|
|
8,534 |
|
| Securities repurchase agreement obligation |
|
|
154,775 |
|
|
|
- |
|
|
|
154,775 |
|
| Deferred income tax liabilities |
|
|
387 |
|
|
|
(387 |
) |
|
|
- |
|
| Other liabilities |
|
|
1,319 |
|
|
|
57 |
|
|
|
1,376 |
|
| TOTAL LIABILITIES |
|
|
214,986 |
|
|
|
8,884 |
|
|
|
223,870 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Preferred stock |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Common stock |
|
|
58 |
|
|
|
- |
|
|
|
58 |
|
| Additional paid in capital |
|
|
87,049 |
|
|
|
13,131 |
|
|
|
100,180 |
|
| Retained earnings |
|
|
35,387 |
|
|
|
(1,067 |
) |
|
|
34,320 |
|
| Accumulated other comprehensive loss |
|
|
(7,394 |
) |
|
|
(163 |
) |
|
|
(7,557 |
) |
| TOTAL STOCKHOLDERS’ EQUITY |
|
|
115,100 |
|
|
|
11,901 |
|
|
|
127,001 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
$ |
330,086 |
|
|
$ |
20,785 |
|
|
$ |
350,871 |
|
| |
|
For the three months ended June 30, 2017 |
|
| STATEMENTS OF OPERATIONS AND STATEMENTS OF OTHER COMPREHENSIVE INCOME (RECAST) |
|
As previously reported |
|
|
Recast |
|
|
As recasted |
|
| |
|
|
|
|
|
|
|
|
|
| Revenue: |
|
|
|
|
|
|
|
|
|
| Fee and commission income |
|
$ |
2,855 |
|
|
$ |
202 |
|
|
$ |
3,057 |
|
| Net gain on trading securities |
|
|
7,009 |
|
|
|
122 |
|
|
|
7,131 |
|
| Interest income |
|
|
2,584 |
|
|
|
63 |
|
|
|
2,647 |
|
| Net gain on derivatives |
|
|
490 |
|
|
|
- |
|
|
|
490 |
|
| Net gain on foreign exchange operations |
|
|
617 |
|
|
|
42 |
|
|
|
659 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| TOTAL REVENUE, NET |
|
|
13,555 |
|
|
|
429 |
|
|
|
13,984 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Expense: |
|
|
|
|
|
|
|
|
|
|
|
|
| Interest expense |
|
|
1,987 |
|
|
|
43 |
|
|
|
2,030 |
|
| Fee and commission expense |
|
|
238 |
|
|
|
51 |
|
|
|
289 |
|
| Operating expense |
|
|
2,911 |
|
|
|
752 |
|
|
|
3,663 |
|
| Other expense, net |
|
|
78 |
|
|
|
(33 |
) |
|
|
45 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| TOTAL EXPENSE |
|
|
5,214 |
|
|
|
813 |
|
|
|
6,027 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| NET INCOME BEFORE INCOME TAX |
|
|
8,341 |
|
|
|
(384 |
) |
|
|
7,957 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Income tax benefit |
|
|
31 |
|
|
|
2 |
|
|
|
33 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| NET INCOME |
|
$ |
8,372 |
|
|
$ |
(382 |
) |
|
$ |
7,990 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| OTHER COMPREHENSIVE INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
| Change in unrealized gain on investments available-for-sale, net of tax effect |
|
$ |
- |
|
|
$ |
(59 |
) |
|
$ |
(59 |
) |
| Foreign currency translation adjustments, net of tax |
|
|
(1,758 |
) |
|
|
(411 |
) |
|
|
(2,169 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| COMPREHENSIVE INCOME |
|
$ |
6,614 |
|
|
$ |
(852 |
) |
|
$ |
5,762 |
|
|