/NOT FOR DISSEMINATION IN THE U.S. OR FOR
DISTRIBUTION TO U.S. NEWSWIRE SERVICES./
TORONTO, Aug. 28, 2018 /CNW/ - Galaxy Digital Holdings
Ltd. (TSXV: GLXY) ("Galaxy Digital" or the "Company"), a
diversified, multi-service merchant bank dedicated to the digital
assets and blockchain technology industry, released Galaxy Digital
LP's financial results for the second quarter ended June 30, 2018 ("Q2 2018" or "the second
quarter"), as well as corporate updates through the date of this
press release. All figures are in U.S. Dollars unless
otherwise noted.
"I am pleased with the progress Galaxy Digital has made in
building a world-class firm and the work we've done to help
institutionalize the digital assets industry," said Galaxy Digital
CEO and Founder, Michael Novogratz.
"We remain laser focused on scaling our core businesses and
identifying strategic opportunities to expand our global
footprint."
Corporate Highlights
- On July 31, 2018, the Company
announced the completion of its previously announced Arrangement
Transaction whereby Galaxy Digital LP and First Coin Capital Corp.
("First Coin") combined to form Galaxy Digital Holdings LP ("GDH
LP"), an operating partnership managed by the principals of Galaxy
Digital LP. In this transaction, Bradmer Pharmaceuticals Inc.
acquired and holds a minority investment in the operating
partnership, and upon completion of the Arrangement, changed its
name to Galaxy Digital Holdings Ltd. and resumed an active public
listing on the TSX Venture Exchange ("TSXV"). On August 1, 2018, shares of the Company began
trading on TSXV under the ticker GLXY.
- The Company continues to focus on expanding its team with
experienced industry executives with deep institutional expertise
spanning technology, investing, advisory, asset management and
trading. As part of these efforts, Galaxy Digital is pleased
to announce the appointment of Julie
Coin as Chief Operating Officer, effective September 4, 2018. Ms. Coin has extensive
operational experience working with numerous financial institutions
such as E*TRADE, Deutsche Bank and Merrill Lynch, as well as firms
dedicated to the digital assets sector. In conjunction with
this appointment and the continued build-out of the Company,
Richard Kim will be shifting his
time to strategic projects and business development efforts across
the firm.
Select Financial Highlights (Q2 2018)
- On February 7, 2018, the Company
entered into a $100 million Revolving
Loan Agreement (the "RLA") with Galaxy Group Investments LLC
("GGI") as a source of additional capital to fund its operations
and prospective investments until such time that the plan of
arrangement among Bradmer, Galaxy Digital and First Coin (the
"Arrangement") is complete. On June 13,
2018, the RLA was upsized by $30
million to $130 million. As of
June 30, 2018, the Company owed an
aggregate principal amount of $109.4
million under the RLA. Upon closing of the Arrangement, the
Company repaid the entire principal balance and accrued interest
outstanding under the RLA.
- Cash and partners' capital stood at $30.4 million and $204.7
million, respectively, as of June 30,
2018. Additionally, the Company had nearly $110 million of liquid digital assets which can
be converted into cash on a short-term basis.
- As of June 30, 2018, digital
assets and investments totaled $313.4
million, largely a result of $46.6
million of unrealized appreciation during the quarter.
- Partners' capital increased $35.0
million to $204.7 million as
of June 30, 2018, representing a more
than 20% increase during the quarter. This compares to increases
(decreases) of (4.1%), (8.2%) and 14.9% for the cryptocurrency
market capitalization, bitcoin, and ether prices, respectively,
over the same time period (Source: coinmarketcap.com).
- As of June 30, 2018, pro forma
equity after giving effect to the Arrangement is approximately
$442 million, as compared to
$406 million as of March 31, 2018.
In connection with a staff review, the Ontario Securities
Commission (the "OSC") staff requested additional disclosure in
connection with the Galaxy Digital LP's management discussion and
analysis ("MD&A") for the three months ended March 31, 2018. The additional disclosure does
not impact current or prior financial figures. OSC staff requested
the additional disclosure in accordance with the general objectives
of MD&A as discussed in Part 1 of Form 51-102F1 in order to
provide further information to investors about the quality and
potential variability of Galaxy Digital LP's profit or loss and
cash flow, specifically with respect to the realized and unrealized
gains or losses on digital assets and investments. Galaxy Digital
will enhance its MD&A disclosure to include the following
information: additional information regarding new material
investments; information regarding the ten largest investments by
fair value, including the cost and fair value of such investments;
a breakdown of the cost and fair value of net digital assets
categorized by market capitalization and accompanied by narrative
discussion; and information regarding select digital assets by fair
value, including the quantity, cost and fair value of such digital
asset.
Q2 2018 Financial Results
|
June
30,
|
December
31,
|
|
2018
|
2017
|
Assets
|
|
|
Current
assets
|
|
|
|
Cash
|
$
|
30,425,333
|
$
|
32,098,217
|
|
Digital
assets
|
112,211,414
|
22,650,240
|
|
Investments
|
201,221,873
|
-
|
|
Receivables
|
929,423
|
-
|
|
Due from
broker
|
3,647,535
|
-
|
|
Deferred financing
costs
|
4,202,745
|
-
|
|
Prepaid expenses and
other assets
|
2,368,533
|
-
|
|
355,006,856
|
54,748,457
|
|
|
|
Note
receivable
|
750,000
|
-
|
Property and
equipment
|
376,291
|
-
|
|
1,126,291
|
|
Total
assets
|
$
|
356,133,147
|
$
|
54,748,457
|
|
|
|
|
|
|
Liabilities
|
|
|
Current
liabilities
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
17,971,961
|
$
|
1,011,795
|
|
Digital assets sold
short
|
14,919,398
|
-
|
|
Due to related
party
|
109,374,924
|
42,650,240
|
|
Due to
exchange
|
9,138,398
|
9,344,613
|
Total
liabilities
|
151,404,681
|
53,006,648
|
|
|
|
Partners'
capital
|
204,728,466
|
1,741,809
|
|
|
|
Total liabilities
and partners' capital
|
$
|
356,133,147
|
$
|
54,748,457
|
|
|
|
|
|
|
|
|
|
|
Three
months
ended
June 30,
2018
|
Six months
ended
June 30, 2018
|
Income
|
|
|
|
Advisory
fees
|
$
|
1,303,302
|
$
|
1,333,213
|
|
Net realized loss on
digital assets
|
(1,139,007)
|
(14,665,850)
|
|
Other
income
|
296,149
|
316,896
|
|
460,444
|
(13,015,741)
|
|
|
|
Operating
expenses
|
|
|
|
Compensation and
compensation related
|
7,808,602
|
14,116,184
|
|
Interest
|
2,325,574
|
2,984,328
|
|
General and
administrative
|
1,490,397
|
2,963,020
|
|
Professional
fees
|
1,455,082
|
3,229,982
|
|
Insurance
|
536,790
|
1,271,790
|
|
(13,616,445)
|
(24,565,304)
|
|
|
|
Net unrealized gain
(loss) on digital assets
|
1,816,396
|
(83,724,017)
|
Net unrealized gain
on investments
|
44,755,752
|
20,717,616
|
Unrealized foreign
currency gain
|
1,566,885
|
1,566,885
|
|
48,139,033
|
(61,439,516)
|
|
|
|
Net comprehensive
income (loss) for the period
|
$
|
34,983,032
|
$
|
(99,020,561)
|
Income and expenses by each reportable segment for the three
months ended June 30, 2018 are as
follows:
|
|
Principal
|
Asset
|
|
Corporate
|
|
|
Trading
|
Investing
|
Management
|
Advisory
|
and
Other
|
Totals
|
Income
|
|
|
|
|
|
|
Advisory
fees
|
$
|
-
|
$
|
-
|
$
|
523,068
|
$
|
780,234
|
$
|
-
|
$
|
1,303,302
|
Net realized loss on
digital assets
|
(1,115,252)
|
-
|
(23,755)
|
-
|
-
|
(1,139,007)
|
Other
Income
|
89,831
|
-
|
-
|
-
|
206,318
|
296,149
|
|
(1,025,421)
|
-
|
499,313
|
780,234
|
206,318
|
460,444
|
|
|
|
|
|
|
|
Compensation
related
|
2,164,522
|
922,752
|
1,472,445
|
458,843
|
2,790,040
|
7,808,602
|
Interest
|
1,412,718
|
612,530
|
-
|
-
|
300,326
|
2,325,574
|
General and
administrative & insurance
|
582,074
|
265,428
|
76,973
|
38,894
|
1,063,818
|
2.027,187
|
Professional
fees
|
(3,167)
|
110,749
|
72,500
|
-
|
1,275,000
|
1,455,082
|
|
4,156,147
|
1,911,459
|
1,621,918
|
497,737
|
5,429,184
|
13,616,445
|
|
|
|
|
|
|
|
Net unrealized gain
(loss) on digital assets
|
5,402,938
|
(30,491)
|
(3,556,051)
|
-
|
-
|
1,816,396
|
Net unrealized gain
(loss) on investments
|
(221,850)
|
44,977,602
|
-
|
-
|
-
|
44,755,752
|
Unrealized foreign
currency gain (loss)
|
(2,845)
|
-
|
-
|
-
|
1,569,730
|
1,566,885
|
|
5,178,243
|
44,947,111
|
(3,556,051)
|
-
|
1,569,730
|
48,139,033
|
Net comprehensive
income (loss)
|
$
|
(3,325)
|
$
|
43,035,652
|
$
|
(4,678,656)
|
$
|
282,497
|
$
|
(3,653,136)
|
$
|
34,983,032
|
|
* Above table
represents the three months ended June 30, 2018. These
amounts can also be derived by subtracting the three months ended
March 31, 2018 from the six months ended June 30, 2018, as
previously disclosed.
|
|
Assets by each
reportable segment as of June 30, 2018 are as follows:
|
|
|
Principal
|
Asset
|
|
Corporate
|
|
|
Trading
|
Investing
|
Management
|
Advisory
|
and
Other
|
Totals
|
Assets
|
|
|
|
|
|
|
Cash
|
$
|
24,725,848
|
$
|
1,342,567
|
$
|
1,458,327
|
$
|
-
|
$
|
2,898,591
|
$
|
30,425,333
|
Digital
assets
|
104,625,731
|
-
|
7,585,683
|
-
|
-
|
112,211,414
|
Investments
|
228,220
|
200,993,653
|
-
|
-
|
-
|
201,221,873
|
Receivables
|
63,721
|
-
|
-
|
865,702
|
-
|
929,423
|
Due from
broker
|
-
|
-
|
-
|
-
|
3,647,535
|
3,647,535
|
Deferred financing
costs
|
-
|
-
|
-
|
-
|
4,202,745
|
4,202,745
|
Prepaid expenses and
other assets
|
627,742
|
-
|
731,250
|
-
|
1,009,541
|
2,368,533
|
Note
receivable
|
-
|
-
|
-
|
-
|
750,000
|
750,000
|
Property and
equipment
|
4,695
|
-
|
-
|
-
|
371,596
|
376,291
|
|
$
|
130,275,957
|
$
|
202,336,220
|
$
|
9,775,260
|
$
|
865,702
|
$
|
12,880,008
|
$
|
356,133,147
|
Select statement of financial position information
The fair value of each asset class by reporting segment as of
June 30, 2018 is as follows:
|
|
Principal
|
Asset
|
|
Corporate
|
|
|
Trading
|
Investing
|
Management
|
Advisory
|
and
Other
|
Totals
|
Digital
assets:
|
|
|
|
|
|
|
Cryptocurrency
|
$
|
104,625,731
|
$
|
-
|
$
|
7,585,683
|
$
|
-
|
$
|
-
|
$
|
112,211,414
|
Investments:
|
|
|
|
|
|
|
Pre-ICO
|
-
|
3,396,962
|
-
|
-
|
-
|
3,396,962
|
Preferred
Stock
|
-
|
52,609,996
|
-
|
-
|
-
|
52,609,996
|
Common
Stock
|
147,340
|
97,081,851
|
-
|
-
|
-
|
97,229,191
|
LP/LLC
Interests
|
-
|
47,804,844
|
-
|
-
|
-
|
47,804,844
|
Convertible
Notes
|
-
|
100,000
|
-
|
-
|
-
|
100,000
|
Warrants/Trust
Units
|
80,880
|
-
|
-
|
-
|
-
|
80,880
|
|
$
|
104,853,951
|
$
|
200,993,653
|
$
|
7,585,683
|
$
|
-
|
$
|
-
|
$
|
313,433,287
|
This press release should be read in conjunction with the
Company's Management Discussion and Analysis and Consolidated
Financial Statements for the three and six months ended
June 30, 2018, which have been posted
on SEDAR at www.sedar.com.
About Galaxy Digital
Galaxy Digital is a diversified,
multi-service merchant bank dedicated to the digital assets and
blockchain technology industry. Galaxy Digital's
multi-disciplinary team has extensive experience spanning
investing, portfolio management, capital markets, operations, and
blockchain technology. Galaxy Digital currently operates four
distinct business lines, which include: Trading (arbitrage, macro,
market making/OTC), Asset Management (management of external
capital across passive and ecosystem funds), Principal Investing
(private equity, venture, public equity, ICO investments, Pre-ICO
investments, and liquid and illiquid cryptocurrencies), and
Advisory (capital markets, M&A/restructuring, and technical
consulting services to both start-ups and established
institutions). Galaxy Digital's CEO and Founder is Michael Novogratz. The Company is
headquartered in New York City,
with offices in Tokyo,
Vancouver, the Cayman Islands (registered office) and
New Jersey.
Disclaimers and Additional Information
See the press releases of Bradmer dated February 14, 2018, March
15, 2018, April 13, 2018,
May 18, 2018, June 11, 2018, June 12,
2018, June 18, 2018, and
July 31, 2018 for further information
concerning the Arrangement and concurrent subscription receipt
financing (the "Offering").
The TSXV has in no way passed upon the merits of the Arrangement
and 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 OSC has not passed upon the merits of the disclosure record
of Galaxy Digital.
Forward-Looking Statements
Certain information in this press release may constitute
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 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. As a result, you should not
rely on such forward-looking statements. Additional information
identifying assumptions, risks and uncertainties relating to Galaxy
Digital and the Arrangement is contained in Galaxy Digital's
filings with the Canadian securities regulators available at
www.sedar.com. These risks include those discussed in the risk
factors section in the Notice of Annual and Special Meeting of
Shareholders and Management Information Circular dated May 14, 2018. 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.
All figures are in U.S. Dollars unless otherwise
noted.
SOURCE Galaxy Digital Holdings Ltd.