NEW YORK, Jan. 8, 2015 (GLOBE NEWSWIRE) -- Liquid Holdings Group, Inc. (Nasdaq:LIQD), a provider of cloud-based investment management solutions for the financial community, today filed a current report on Form 8-K (the "Form 8-K") to provide an update on the status of its largest customer, QuantX Management. As announced on December 23, 2014, QuantX had become delinquent on payments owed to Liquid pursuant to services agreements and certain notes receivable contracted between the two firms. As of January 7, 2015, Liquid has not received any payment from QuantX in response to the demand letters it issued. While the company has not received any formal communication from QuantX as to its status, the company's discussions with QuantX representatives indicate that QuantX is in the process of winding down and has limited operating cash left. Based on these discussions, Liquid believes that QuantX may not have the financial means to satisfy its obligations to the company, and at this time expects that it may need to write off all or a significant portion of these obligations, which in the aggregate total approximately $2 million.
"We are disappointed by the failure of QuantX, which drove much of our early growth and gave us a great launch point for the business," said Brian Storms, CEO of Liquid Holdings Group. "Despite this loss, our core strategic focus does not change. We are deeply committed to providing our clients with the mission-critical tools and great user experience they need to grow, as well as winning new independent hedge funds as customers seeking a better, less costly and more comprehensive integrated solution. We will continue to expand on the solid foundation we began building in 2014—our recent wins have demonstrated the acceptance of our dynamic approach and will contribute significantly to our ability to attract new clients throughout 2015."
"Our balance sheet remains strong and our continued focus on expense reductions in non-critical areas provides us with a substantial runway to rebuild our revenue base and grow with our customers," added Peter Kent, CFO. "Based on our initial estimates, Liquid had a cash balance of $24 million as of December 31, 2014 and we continue to strive to reduce cash operating expenses to an annual run rate below $18 million. In addition, we intend to make every effort to collect the monies due from QuantX, including taking all appropriate legal action."
Additional disclosure is available in the Form 8-K, which is available on the web site of the U.S. Securities and Exchange Commission.
About Liquid Holdings Group
Liquid Holdings Group, Inc. (Nasdaq:LIQD) is a cloud-based technology and managed services provider to the global hedge fund and active trading markets. Liquid's solutions are delivered efficiently and securely through the cloud in a SaaS model. The Liquid platform was purpose built to manage the entire trade lifecycle by seamlessly integrating multi-currency, multi-asset trade order management and execution with real-time risk, portfolio management and shadow account reporting through a single solution. The Company offers the Liquid platform or any of its components on a subscription basis to hedge fund managers, asset managers, family offices and financial institutions worldwide. Liquid was recently named 2014 Best Risk Management Provider by HFM, 2014 Best Global Risk Management Software Company and Best USA Global Risk Management Software Company by the readers of Hedgeweek, as well as 2014 Best Cloud Provider and Best Fin Tech Operations Startup by FTF News.
Headquartered in New York City, Liquid Holdings Group was formed in 2012. For more information, please visit www.liquidholdings.com.
Contact for Investor Relations:
Monica Gould
The Blueshirt Group
+1 212 871-3927
monica@blueshirtgroup.com
Contact for Media Relations:
Jon Schubin
Cognito
+1 646 395 6300 or +1 518 322 0380 (mobile)
liquid@cognitomedia.com
LIQD-F
Cautionary Statement Concerning Forward Looking Statements
This release contains forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. These statements include, among others, statements relating to the Company's ability to collect the amounts owed by QuantX Management LLP; the current and future status of QuantX; the Company's ability to retain and attract customers and grow its business; the Company's liquidity and financial position, including its cash position at December 31, 2014; and the Company's ability to reduce expenses. These statements are based on our beliefs and assumptions, which in turn are based on currently available information. Forward-looking statements involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. Many of these factors are beyond our ability to control or predict and you should be aware that the occurrence of certain events, including those referenced in the sections titled "Risk Factors" in our 2013 Form 10-K or our Quarterly Reports on Form 10-Q, could harm our business, prospects, results of operations, liquidity and financial condition. We cannot guarantee future results or performance. Except as required by applicable law, including the securities laws and the rules and regulations of the Securities and Exchange Commission, we are under no obligation to publicly update or revise any forward-looking statements.