Lion Announces Response to SEC Direction Issued on April 12, 2021 Relevant to Warrants Issued by Particular Purpose Acquisition Providers (“SPACs”)

HONG KONG, June 11, 2021 /PRNewswire/ — Lion Group Keeping Ltd. (“Lion” or “the Firm”) (NASDAQ: LGHL), operator of an all-in-a single trading platform that provides a vast spectrum of products and products and services with a concentration on Chinese traders, introduced right now in a Present Report on Form 6-K, that as a outcome of not too long ago issued guidance delivered by the Division of Company Finance of the Securities and Trade Fee (the “SEC”) on April 12, 2021 for all SPAC-relevant companies regarding the classification of their warrants for accounting and reporting reasons (the “SEC Assertion”), it will restate its previously issued consolidated money statements incorporated on the Type 20-F for the year ended December 31, 2020.

The restatement pertains to the accounting treatment for general public and non-public warrants (the “Public Warrants” and “Non-public Warrants”) issued in link with the initial community presenting of Proficient Alpha Acquisition Corp. (“PAAC”) and recorded to the Firm’s consolidated economic statements as a consequence of the Company’s merger with PAAC, a SPAC and legal predecessor of the Company, and Lion Economical Team Confined on June 16, 2020 (the “Enterprise Mixture”).

Dependable with marketplace apply among SPACs, the Corporation had been accounting for the Community and Non-public Warrants as fairness. Even so, steady with the new SEC Statement, the Enterprise intends to restate selected of its historical economical statements these that the Community and Private Warrants are accounted for as liabilities and marked-to-sector each reporting period of time (the “restatement”). In standard, less than the mark-to-marketplace accounting design, as the inventory value boosts, the reasonable benefit of the warrant liabilities raises, and the Company acknowledges added non-functioning expenditure in its money statement – with the reverse effect when the inventory selling price declines.

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The Corporation does not foresee the restatement to impact its previously communicated non-GAAP working metrics for 2020.

As a end result of the restatement and the reduce in the Firm’s stock selling price over the relevant interval, the Company expects to understand incremental non-functioning cash flow of approximately $.8 million for the time period from June 16, 2020 by means of December 31, 2020. There will be no impact to the Firm’s earlier reported internet dollars flow.

The adhering to gives further element with regards to how the Corporation currently anticipates the restatement will effects its consolidated monetary statements:

• Opening Equilibrium Sheet Impacts — As of the day of the Business enterprise Mixture (June 16, 2020), the honest worth of the Public and Non-public Warrants will be mirrored as warrant liabilities in the equilibrium sheet with a corresponding offset in Supplemental compensated-in-cash in fairness.

• Revenue Assertion Impacts — Subsequent to the shut of the Business enterprise Mix, any change in the honest price of the Community and Non-public Warrants is regarded in the income assertion under functioning financial gain as “Adjust in fair benefit of warrant liabilities” with a corresponding total identified in the harmony sheet. (In the Firm’s situation, this is recognized as warrant liabilities below present liabilities in the stability sheet).

• Balance Sheet Impacts — As is pointed out above, the stability of the warrant liabilities on the stability sheet demonstrates the fair worth of the Warrants.

• Money Circulation Impacts — The effect of the alterations in truthful benefit of the Community and Personal Warrants has no impression on internet income offered by (made use of for) operating activities.

• Statement of Fairness Impacts — The effect to Additional paid-in-funds as of the opening balance sheet is highlighted previously mentioned.

These estimates are matter to transform as management completes the restatement, and the Firm’s unbiased registered community accounting company has not audited or reviewed these estimates. As a consequence, the envisioned economic influence described above is preliminary and issue to transform.

Ultimately, as of nowadays, the Organization has roughly 11.5 million Public Warrants and 5.4 million Personal Warrants exceptional. No General public or Non-public Warrants have been exercised or redeemed given that initially issued.

About Lion

Lion Team Holding Ltd. (NASDAQ: LGHL) operates an all-in-one particular investing system that offers a wide spectrum of goods and companies with a focus on Chinese investors. By way of its state-of-the-artwork technologies, Lion features deal-for-change (CFD) trading, insurance brokerage, futures brokerage, and securities brokerage on its platform, which can be accessed by apps accessible on the iOS, Android, Home windows, and macOS methods. Lion’s buyers are well-educated and affluent Chinese person buyers residing the two inside and outside the house the PRC as very well as institutional customers in Hong Kong. More data could be located at http://ir.liongrouphl.com.

Ahead-Looking Statements

This push release is made up of, “forward-on the lookout statements” inside of the that means of the “harmless harbor” provisions of the Private Securities Litigation Reform Act of 1995. Lion’s real final results may differ from their anticipations, estimates and projections and for that reason, you really should not count on these ahead-hunting statements as predictions of upcoming occasions. Phrases such as “be expecting,” “estimate,” “venture,” “price range,” “forecast,” “anticipate,” “intend,” “approach,” “might,” “will,” “could,” “must,” “believes,” “predicts,” “probable,” “might” and “continues,” and similar expressions are meant to identify this sort of ahead-looking statements. These ahead-looking statements include, with out limitation, Lion’s expectations with regard to future overall performance and anticipated economical impacts of the Enterprise combination, the gratification of the closing problems to the enterprise mixture and the timing of the completion of the enterprise mix. These forward-searching statements require considerable challenges and uncertainties that could bring about actual outcomes to differ materially from predicted effects. Most of these variables are outdoors the manage of Lion and are tough to predict. Elements that might trigger these differences include, but are not confined to: (1) the lack of ability to retain the listing of the article-acquisition firm’s ADSs on NASDAQ following the business mixture (2) the danger that the enterprise combination disrupts existing ideas and operations as a end result of the announcement and consummation of the transactions described herein (3) the incapacity to figure out the expected benefits of the company mix, which may well be afflicted by, between other issues, competitors, the ability of the merged organization to mature and regulate advancement profitably and keep its vital workers (4) charges connected to the business combination (5) variations in applicable laws or restrictions (6) the possibility that Lion may be adversely influenced by other economic, business enterprise, and/or aggressive things and (7) other challenges and uncertainties to be identified in the proxy assertion/prospectus relating to the business combination, including all those less than “Chance Elements” therein, and in other filings with the Securities and Exchange Fee (“SEC”) manufactured by Lion. Lion cautions that the foregoing record of variables is not exceptional. Lion cautions readers not to area undue reliance upon any ahead-wanting statements, which speak only as of the date produced. Lion does not undertake or settle for any obligation or endeavor to release publicly any updates or revisions to any forward-hunting statements to mirror any adjust in its expectations or any modify in activities, problems or circumstances on which any these types of assertion is based, topic to applicable law.

Contacts

Lion Team Holding
Tel: +852 2820 9011
Electronic mail: [email protected]

ICR, LLC
William Zima
Tel: +1 203 682 8233
E mail: [email protected]

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Source Lion Group Keeping Ltd.