'More trouble' what trouble ?
The Company has been working proactively with ASIC, and has previously disclosed the matter of client funds (i.e. not company funds) of two Australian Financial Services Licensed (AFSL) merchants being moved from ‘on balance sheet’ to ‘off balance sheet’, per Page 11 of ISX’s Half Yearly Report announced 28th August 2019.
The treatment of the client funds related to these two merchants is consistent with the position agreed between the Company and ASIC. The situation has arisen due to the unusual circumstances of ASIC having been successful in Federal Court to freeze the funds of these two merchants, which funds are held by the Company. This in turn has resulted in a $4.7m balance sheet adjustment of client funds held as at 31st December 2018.
The Company continues to hold these client funds, awaiting further instructions from ASIC via the Court, or until the Court orders are lifted.
These merchants are no longer active customers of iSignthis, with the processing of transactions and revenue generation ceased over a year ago in March 2018. The current actual GPTV figures and EBIT projections do not include these merchants.
The Court action by ASIC and the freezing of funds has not impacted the Company’s P&L in any way, and the Company’s net assets on the balance sheet remain unchanged. The Company now holds more than $34m in other client funds on balance sheet at 30 June 2019 (a rise from $4.3m in restated client funds held by the Company as at 31 December 2018).
