- Cash and cash equivalents at the end of the quarter of $14.8m was down $1.8m from the prior quarter ($16.6m) due to timing of several material payments, continued investment in technology and the impact from exchange rate movements ($0.2m).
- Net cash used in operating activities was $0.5m in the quarter, due to the timing of a $636k previously disclosed Mastercard charge and a $536k half yearly tax payment in Cyprus. Excluding these items operating cash flows were positive $0.7m.
- Cash receipts of $7.6m were down 5% versus the prior quarter due to seasonality and strengthening of the AUD versus EURO exchange rate.
- Payments for suppliers and employees of $7.0m were down 3% versus the prior quarter, due to a lower card scheme fees partially offset by $542k in legal and advisory costs related to the ASX and ASIC cases in the quarter.
Cash receipts of $7.6m were down 5% on the prior quarter due to seasonality in online gaming, which traditionally slows in the first two months of the year, plus a strengthening in the Australian Dollar as our reporting currency versus the EURO ($0.3m). In March the company saw a 27% increase in receipts from customers, as revenue rebounded post the seasonal decline, with almost all revenues now receipted in EUROS. Investment in technology and R&D was over $1m in the quarter.
Payments for suppliers and employees were down 3% in the quarter to $7.0m due to lower card scheme fees, as a result of seasonality in online gaming, partially offset by $542k in legal and advisory costs related to the ASX and ASIC cases in the quarter (included in 1.2 (f)*).
Payments for related parties including executive and non-executive directors' fees and salaries for the quarter were $172k.
Quarterly cash flows were also impacted by the half yearly tax payment of $536k made against last years profits and payment of a $636k previously disclosed Mastercard charge.
The March month delivered positive operating cash flows, which is expected to continue into the coming period.
The business continues to focus on diversifying its revenue, away from card acquiring, towards lower cost instant and batched interbank payments, and creating a multi-rail ecosystem centred on its flykk(R) service.
This quarter, we have seen instant and batched interbank payments revenue grow by 14%, which has been offset by a decline in card acquiring revenue.
Pleasingly we have also seen revenue from Alternative Payments Methods (APMs) become significant in the quarter, now representing 14% of revenue and growing on average over 80% a month.
Overall revenues were down during the last quarter versus the previous quarter largely due to lower card acquiring revenues, as a result of seasonality in online video gaming.
The business is also pleased with the steady take up of flykk(R) in the quarter. We now have a number of merchants live with flykk and while the volumes remain small, we continue to see strong growth week on week. Merchant interest in flykk remains strong, with a significant pipeline of new customers, including the recent onboarding of the Playtech (LON:PTEC) platform and two William Hill (LON:WMH) brands.
The Company also completed integration to the WIX (NASDAQ:WIX) platform which complements the recent Worldline (EPA:WLN) Devcode platform integration, increasing the number of platforms with which we are integrated to include gaming, trading and ecommerce.
The materiality (if any) of the foregoing cannot yet be assessed.
The revenue breakdown for the quarter is as follows:
- Online video gaming represents twenty five percent, with no single customer being individually material, with exposure to this industry segment reducing from forty percent last quarter.
- Regulated online gaming revenues represent thirty six percent, with no single customer being individually material, increasing from seventeen percent last quarter.
- CFD/FX represents ten percent of our revenues, with exposure to this industry segment increasing from nine percent last quarter. The Company has not at any stage processed payments for binary options providers in any jurisdiction.
- Crypto currency represents two percent of our revenues, reducing from three percent last quarter.
- Credit providers represent six percent of our revenues, up from two percent last quarter, due to the timing of product implementations in Probanx(R).
- Travel services remains at zero percent of revenue, consistent with the prior quarter.
- Revenues from other sources, comprise the balance of the breakdown.
ASIC and ASX Federal Court Cases
Shareholders may receive updates regarding the Federal Court timetable by accessing the court orders and subscribing to notifications from the Court at:
using reference numbers VID773/2020 and VID1315/2019.
To view the quarterly cashflow, please visit:
About iSignthis Ltd
iSignthis Ltd (ASX:ISX) (FRA:TA8) is a hybrid monetary financial institution and also a RegTech leader in remote identity verification, payment authentication with deposit taking, transactional banking and payment processing capability. iSignthis provides an end-to-end on-boarding service for merchants, with a unified payment, electronic money and identity service via our Paydentity(TM) and ISXPay(R) solutions.
By converging payments and identity, iSignthis delivers regulatory compliance to an enhanced customer due diligence standard, offering global reach to any of the world's 4.2Bn 'bank verified' card or account holders, that can be remotely on-boarded to meet the Customer Due Diligence requirements of AML regulated merchants in as little as 3 to 5 minutes. Paydentity(TM) has now onboarded and verified more than 1.5m persons to an AML KYC standard.
iSignthis Paydentity(TM) service is the trusted back office solution for regulated entities, allowing merchants to stay ahead of the regulatory curve, and focus on growing their core business. iSignthis' subsidiary, iSignthis eMoney Ltd, trades as ISXPay(R), and is an EEA authorised eMoney Monetary Financial Institution, offering card acquiring in the EEA, and Australia.
ISXPay(R) is a principal member of Mastercard Inc, Diners, Discover, (China) Union Pay International and JCB International, an American Express aggregator, and provides merchants with access to payments via alternative methods including SEPA, Poli Payments, Sofort, PRZ24 and others.
Probanx Solutions Ltd, a wholly owned subsidiary of iSignthis Ltd, provides API based access to CORE Banking solutions, SEPA Core, SEPA Instant and SEPA business scheme, for neobanks, banks, credit unions and emoney institutions, and provides a bridge to the Eurosystem's Central Bank of Lithuania's CENTROLink service.