iSignthis Ltd is an Australian headquartered business with patented technology used to significantly enhance online payment security and to electronically verify identities by way of a dynamic, digital and automated system. The system assists obligated entities under Anti Money Laundering ("AML") and Counter Terrorism Funding ("CTF") legislation to meet their compliance requirements and to ensure rapid and convenient on boarding of their customers. iSignthis also assists online merchants with mitigating Card Not Present ("CNP") fraud and providing CNP liability shift, within the framework of the card scheme rules and applicable regulatory regimes. The consolidated entity has been granted USA, European, South African, Portuguese, Singaporean and Australian patents and has patents pending in several other key jurisdictions including China, Hong Kong, South Korea, Canada, Brazil and India. The Company is licensed by the Central Bank of Cyprus as an EEA authorised eMoney Institution, offering card acquiring in the EEA, Australia and New Zealand.
Review of operations
The loss for the consolidated entity after providing for income tax amounted to $5,700,062 (30 June 2016: $9,235,217).
Revenue including other income during the period amounted to $1,371,192 (2016: $443,881), which included interest of $126,003, sales from operating activities of $666,305 and R&D tax concession of $578,884.
Operating expenses for the financial year were $7,071,254 (2016: $9,679,098). Employment benefit costs amounted to $2,618,551 (2016: $2,035,354), due to an increase in the number of employees throughout the financial year. Corporate expenses amounted to $1,031,525 (2016: $831,674) resulting from continuing operations. These fees are made up of consultancy, accounting and other professional services. Share based payments during the period amounted to $979,347 (2016: $4,834,907) which represented a total of 15,000,000 unlisted options issued to advisors of the company in consideration for services provided and a total of 1,796,750 performance rights issued to employees in accordance with the company's employee incentive scheme.
The net assets of the consolidated entity decreased by $4,333,469 to $5,410,364 as at 30 June 2017 (2016: $9,743,833). The consolidated entity's working capital, being current assets less current liabilities was $4,152,721 at 30 June 2017 (2016: $8,509,398). During the period the consolidated entity had a negative cash flow from operating activities of $5,337,210 (2016: $3,893,501).
As a result of the above the Directors believe the consolidated entity is in a strong and stable position to expand and grow its current operations.
Significant changes in the state of affairs
On 10 February 2017, the consolidated entity issued 10,000,000 fully paid ordinary shares upon the exercise of unlisted options at an exercise price of $0.04 (4 cents) per option raising a total of $400,000.
There were no other significant changes in the state of affairs of the consolidated entity during the financial year.
Matters subsequent to the end of the financial year
No matter or circumstance has arisen since 30 June 2017 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.
Likely developments and expected results of operations
The past financial year has seen continual growth in operations and advancement of the core services offered to merchant customers. Key operational staff and systems are located in Melbourne and Cyprus and continue to build brand awareness, a pipeline of new business opportunities and integration of existing customers to enable processing of transactions and generating revenues.
Additional revenue streams are now available via a payment facilitation agreement with the National Australia Bank and an eMoney Institution license issued by the Central Bank of Cyprus. iSignthis is therefore now an EEA authorised institution allowing it to offer settlement services (card acquiring) to its existing and new merchant customers. These services now provide a full range of revenue generating services which include customer verification (identify and verify the customer as required by AML law), the Processing of payments (payment gateway) and the settlement of payments to the merchant (Acquiring).
Every effort is now focused on growth. We continue to hold a significant first mover advantage in regards to the delivery of a truly online customer identity service. We now strive to deliver an outstanding product to existing customers, expand our customer list and deliver increased revenues in the 2018 financial year.
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About iSignthis Ltd
iSignthis Ltd (ASX:ISX) (FRA:TA8) is the global leader in remote identity verification, payment authentication and payment processing to meet AML/CFT requirements. iSignthis provides an end-to-end on-boarding service for merchants, with a unified payment 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 3.5Bn 'bank verified' card or account holders, that can be remotely on-boarded to regulated merchants in as little as 3 to 5 minutes.
iSignthis Paydentity 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' and its subsidiary, iSignthis eMoney Ltd, trade as ISXPay(R), and are an EEA authorised eMoney Monetary Financial Institution, offering card acquiring in the EEA, Australia and New Zealand. ISXPay is a principal member of Mastercard Worldwide and JCB International.