TechFinancials posts 2019 loss of $6.2M as Binary Options halted
Applied blockchain technologies and trading platform firm TechFinancials has come out with its 2019 financials, indicating a 56% drop in Revenues and a net loss of USD $6.2 million for the year.
And, it looks like 2020 is getting off to a rocky start.
The drop in Revenues, from $7.8 million in 2018 to $3.4 million last year, is attributable mainly to the deterioration of TechFinancials’ binary options platform licensing and brokerage business.
Toward the end of 2019 TechFinancials sold its MarketFinancials market making subsidiary for just €100,000. In December 2019 the company’s 51% China-focused binary options brokerage brand DragonFinancials ceased to operate, such that the company no longer operates any B2C business in its traditional systems unit. TechFinancials said that DragonFinancials faced a “challenging regulatory and business environment,” which resulted in it incurring losses which started in 2018 and continued throughout H1 2019, leading to the aforementioned decision to shutter.
The company’s B2B binary options platform licensing business is headed the same way, as in May 2020 TechFinancials took the decision to give its licensees a six months termination notice. The company will terminate all its B2B brokerage services activities by November 1, 2020 or earlier in the case that all licensees will choose to terminate their agreement any time before then.
But TechFinancials’ other new project, Footies, has been hit by Covid-19 headwinds. In February 2019, TechFinancials established Footies Limited in the UK – TechFinancials has a 75% interest in Footies. Footies was established to develop a Blockchain based digital ticketing and fan engagement solution for sports organizations and venues.
The company provided funding during the year to Footies of about $1 million. At the beginning of Q3-2019, the first version of the platform became available for testing with potential clients following which Footies started approaching potential customers with a ‘demo’ product.
However the Covid-19 crisis has led to development of the Footies product being delayed, as the events world has been brought to a virtual standstill. TechFinancials has therefore taken development expenses which were capitalised in the interim reports of 2019, and reversed the capitalised expenses to recognise them as development costs. This led to an impairment of intangible assets of $2.6 million and $2.4 million in 2019 and 2018, respectively.