Lion Group Holding Ltd. ("Lion" or "the Company") (NASDAQ: LGHL), operator of an all-in-one trading platform that offers a wide spectrum of products and services, today announced its unaudited financial results for the full year ended December 31, 2022.

Mr. Chunning (Wilson) Wang, CEO of Lion, commented, "In 2022, the unprecedented combination of global financial market fluctuation and volatility, pandemic-driven excessive restrictions, and customers' compounded reluctance to invest and trade created enormous headwinds for our various business lines, affecting earnings and margins. Although we are still suffering losses in CFD (contract for difference) and TRS (total return swap) trading business due to unpredictable market events, we have seen reversal begin in the second half of 2022. Thanks to our conservative trading strategies, we have also seen positive signs of revenue improvement in the second half of 2022 as well as in the last few months of 2023."

"At the same time, we are prudently managing operating leverage amidst weak market-wide demand to reduce margin pressure. Our general and administrative expenses decreased by 39.1% year-over-year in 2022 as a result of our internal cost control efforts. We will continue to focus on operating leverage management and enhancing operational efficiency."

"With the lifting of the COVID-zero policy in China, we are seeing macroeconomic recovery and business improvements, while we are watching the macroeconomic risks carefully. As we look at 2023, we are confident that the operating environment will improve and the global financial market will be stabilized, and we continue to diligently manage the business in order to best position the Company for future growth and value creation," Mr. Wang concluded.

FINANCIAL RESULTS

For the Full Year ended December 31, 2022

Revenues

Total revenue for the year ended December 31, 2022 was largely affected by trading losses in CFD and TRS trading services, resulting in revenues (losses) of US$(2.5) million, compared to total revenues of US$25.0 million for the full year ended December 31, 2021. Total number of revenue-generating customer accounts decreased to 4,526 as of December 31, 2022, from 5,261 as of December 31, 2021 mainly due to the decline in Lion's insurance business.

CFD Trading Services Income (Losses)

Revenue generated from CFD trading services decreased by US$15.4 million from an income of US$8.7 million for the year ended December 31, 2021 to a loss of US$(6.7) million for the year ended December 31, 2022, primarily attributable to an increase of US$11.9 million in trading losses and a decrease of US$3.5 million in commission income. CFD trading losses increased from trading gains of US$4.4 million for the year ended December 31, 2021 to losses of US$(7.5) million for the year ended December 31, 2022. The Company has suffered significant losses from acting as a counterparty to our clients' CFD trades in 2022, particularly in the first half, as a result of fluctuation and volatility of the global financial markets in reaction to a series of unpredictable events, such as the Russia and Ukraine conflict, Europe's energy crisis, surging inflation, climbing interest rates in the U.S. and Europe, China's housing market slump, etc.. These events impacted major stock indexes, commodity markets including crude oil and metal, and the foreign exchange market. Market making commission income decreased from $4.3 million for the year ended December 31, 2021 to $0.8 million for the year ended December 31, 2022, which was mainly attributable to China's tightened restrictions on promotion and advertisements related to internet financial products and services, leading to a significant decrease in the number of new accounts opened through online advertising. Total revenue-generating CFD trading client accounts slightly decreased to 2,818 accounts as of December 31, 2022, from 2,866 accounts as of December 31, 2021. CFD trading volume decreased to 116,607 lots for the year ended December 31, 2022, from 453,687 lots for the year ended December 31, 2021.

TRS Trading Services Income (Losses)

Revenue generated from TRS trading services decreased by US$13.8 million from an income of US$13.2 million for the year ended December 31, 2021 to a loss of US$(0.6) million for the year ended December 31, 2022, due to the trading losses from proprietary TRS trading activities, which decreased by US$15.0 million from an income of US$11.1 million to a loss of US$(3.9) million, and a decrease of US$0.2 million in commissions and other income partially offset by an increase of US$1.4 million in interest income earned on loans provided to TRS trading customers. Our proprietary TRS trading activities suffered significant losses from Chinese stock markets' high fluctuations in 2022, which was caused by China's dismal economic outlook, renewed lock-downs in cities across China resulting from the stringent zero-Covid policy, heightened geopolitical tensions such as U.S.-China relations, escalated friction over the Taiwan Strait, and unpredictable regional military conflict worldwide, etc. Total revenue-generating TRS trading client accounts increased to 226 accounts as of December 31, 2022, from 180 accounts as of December 31, 2021. TRS trading volume was $484 million and $1,074 million for the years ended December 31, 2022 and 2021, respectively.

Futures and Securities Brokerage Services

Revenues from futures and securities brokerage services increased from US$2.8 million for the year ended December 31, 2021 to US$3.3 million for the year ended December 31, 2022 as a result of an increase in the number of executed futures contracts, primarily due to Hong Kong's economic rebound as the local pandemic subsided starting in 2021 and sophisticated investors wanted to take advantage of the volatile markets and allocated more to speculative trading. Total revenue-generating futures trading client accounts increased to 177 accounts from 149 accounts. Futures brokerage trading volume increased by 15.4% to 1,298,452 lots from 1,124,805 lots.

Others

Other income increased by US$1.2 million from US$0.3 million for the year ended December 31, 2021, to US$1.5 million for the year ended December 31, 2022. The increase in other income was primarily attributed to trading gains from OTC call options of US$0.9 million, sale of MetaWords NFTs of US$0.4 million and interest, other income of US$0.7 million generated in 2022, and the decrease of US$0.9 million in trading losses from exchange-traded stock, offset by the decrease of US$1.7 million in Bitcoin mining income as the Company ceased Bitcoin mining operations in October 2021.

For more information on the non-GAAP financial measures, please see the table, titled "Unaudited Reconciliations of Non-GAAP and GAAP Financial Results," set forth at the end of this press release.

About Lion

Lion Group Holding LTD. (Nasdaq: LGHL) operates an all-in one, state-of-the-art trading platform that offer a wide spectrum of products and services, including (i) Total Return Service (TRS) Trading, (ii) Contract-for-difference (CFD) trading, (iii) Insurance Brokerage and (iv) Futures and Securities Brokerage.

Additional information may be found at http://ir.liongrouphl.com.

Forward-Looking Statements

This press release contains, "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Lion's actual results may differ from their expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believes," "predicts," "potential," "might" and "continues," and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, but are not limited to, statements about: Lion's goals and strategies; our ability to retain and increase the number of users, members and advertising customers, and expand its service offerings; Lion's future business development, financial condition and results of operations; expected changes in Lion's revenues, costs or expenditures; the impact of the COVID-19 pandemic; competition in the industry; relevant government policies and regulations relating to our industry; general economic and business conditions globally and in China, Hong Kong, and Southeast Asia; and assumptions underlying or related to any of the foregoing. Lion cautions that the foregoing list of factors is not exclusive. Lion cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Lion does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based, subject to applicable law. Additional information concerning these and other factors that may impact our expectations and projections can be found in Lion's periodic filings with the SEC, including Lion's Annual Report on Form 20-F for the fiscal year ended December 31, 2022. Lion's SEC filings are available publicly on the SEC's website at www.sec.gov.

Contacts

Lion Group Holding

Tel: +852 2820 9011

Email: ir@liongrouphl.com

ICR, LLC

William Zima

Tel: +1 203 682 8233

Email: ir@liongrouphl.com

Lion Group Holding Limited Consolidated Statements of Operations and Comprehensive Income (Loss) (in dollar amount)

Years Ended December 31,

2022

2021

Revenues (losses)

Insurance brokerage commissions

$ 455,394

$ 542,795

Securities brokerage commissions and fees

3,412,644

3,188,684

Market making commissions and fees

781,878

4,324,650

Interest income

3,229,716

1,351,318

Trading (loss) gains

(11,467,969)

13,379,146

Other income

1,105,837

2,206,119

(2,482,500)

24,992,712

Expenses and others

Commissions and fees

3,198,934

3,317,692

Compensation and benefits

3,620,506

4,069,203

Occupancy

826,254

778,881

Communication and technology

3,392,794

1,929,981

Cost of crypto mining

-

1,163,846

General and administrative

1,228,572

2,016,582

Professional fees

3,716,839

3,836,817

Research and development

4,693,995

1,205,040

Services fees

1,956,785

3,574,579

Interest

2,334,598

1,608,100

Depreciation

2,032,386

916,916

Marketing

3,743,567

913,675

Payment service charge

(12,407)

(181,249)

Impairment of fixed assets

1,690,028

-

Impairment of cryptocurrencies

293,619

-

Change in fair value of warrant liabilities

(1,260,354)

470,804

Other operating

32,406

144,175

31,488,522

25,765,042

Loss before income taxes

(33,971,022)

(772,330)

Income tax expense

(3,419)

(54,367)

Net loss

$ (33,974,441)

$ (826,697)

Net loss attributable to non-controlling interests

(2,411,158)

(849,479)

Net (loss) gain attributable to LGHL

$ (31,563,283)

$ 22,782

Deemed dividend on the effect of the down round features

-

(6,354,500)

Dividends and deemed dividends on preferred shares

(595,208)

(1,810,204)

Net loss attributable to LGHL ordinary shareholders

$ (32,158,491)

$ (8,141,922)

Loss per share for both Class A and Class B

- basic and diluted

$ (0.70)

$ (0.27)

Weighted average Class A ordinary shares outstanding

- basic and diluted

40,438,604

26,046,212

Weighted average Class B ordinary shares outstanding

- basic and diluted

5,535,888

4,041,875

Lion Group Holding Limited Consolidated Balance Sheets (in dollar amount)

December 31,

2022

2021

Assets

Current Assets

Cash and cash equivalents

$ 11,159,610

$ 15,098,151

Restricted cash-bank balances held on behalf of customers

3,242,989

653,324

Securities owned, at fair value

11,104,047

15,900,369

Receivables from broker-dealers and clearing organizations

33,342,254

87,938,377

Short-term loans receivable

7,126,021

-

Other receivables

534,437

67,352

Prepaids, deposits and other

2,534,684

8,741,735

Total current assets

69,044,042

128,399,308

Long term investment

1,436,142

1,550,314

Fixed assets, net

13,786,344

17,507,742

Right-of-use assets

1,160,563

-

Other assets

1,207,293

1,459,467

Total Assets

$ 86,634,384

$ 148,916,831

Liabilities, Mezzanine Equity and Stockholders' Equity

Liabilities

Current Liabilities

Payables to customers

$ 23,829,192

$ 35,959,925

Payables to broker-dealers and clearing organizations

24,963,524

53,101,820

Accrued expenses and other payables

1,923,305

1,623,354

Derivative liabilities, at fair value

2,292,056

554,710

Short-term borrowings

110,000

110,000

Lease liability - current

601,531

-

Due to director

146,671

161,044

Total current liabilities

53,866,279

91,510,853

Lease liability - noncurrent

618,705

-

Convertible debentures

4,061,735

-

Warrant liabilities

675,000

1,940,625

Total Liabilities

59,221,719

93,451,478

Commitments and Contingencies

Mezzanine Equity

Series B Convertible Preferred Shares - 4,000 shares authorized,

stated value of $1,000 per share, nil and 4,000 shares issued and outstanding

at December 31, 2022 and 2021, respectively

-

1,222,771

Stockholders' Equity

Preferred shares, $0.0001 par value, 50,000,000 shares authorized

Series A Convertible Preferred Shares - 345,000 shares authorized,

stated value of $1,000 per share, nil and 6,500 shares issued and outstanding

at December 31, 2022 and 2021, respectively

-

3,929,206

Class A ordinary shares, $0.0001 par value, 300,000,000 shares

authorized, 48,761,596 and 29,677,969 shares issued and outstanding

at December 31, 2022 and 2021, respectively

4,876

2,968

Class B ordinary shares, $0.0001 par value, 150,000,000 shares

authorized, 9,843,096 shares issued and outstanding

at December 31, 2022 and 2021, respectively

984

984

Additional paid in capital

63,660,939

54,057,211

Accumulated deficit

(34,492,863)

(2,929,580)

Accumulated other comprehensive losses

(303,213)

(57,532)

Total LGHL shareholders' equity

28,870,723

55,003,257

Non-controlling interest

(1,458,058)

(760,675)

Total shareholders' equity

27,412,665

54,242,582

Total Liabilities, Mezzanine Equity and Shareholders' Equity

$ 86,634,384

$ 148,916,831

Lion Group Holding Limited Summary of Condensed Consolidated Statement of Cash Flows Data (in dollar amount)

Year ended December 31,

2022

2021

Net cash used in operating activities

$ (3,940,552)

$ (20,482,499) Net cash used in investing activities

(7,093,339)

(12,104,687) Net cash provided by financing activities

9,808,775

43,578,397 Effect of exchange rate changes on cash

(123,760)

(33,833) Net (decrease) increase in cash and restricted cash

(1,348,876)

10,957,378 Cash and restricted cash at beginning of year

15,751,475

4,794,097 Cash and restricted cash at end of year

$ 14,402,599

$ 15,751,475

Lion Group Holding Limited Reconciliations of Non-GAAP and GAAP Financial Results (in dollar amount)

Year ended December 31,

2022

2021

US$

US$

Net (loss) income attributable to LGHL

$ (31,563,283)

$ 22,782

Stock-based compensation

1,300,550

381,800

Amortization of debt discounts

658,680

783,994

Depreciation expenses

2,032,386

1,295,470

Impairment of fixed assets

1,690,028

-

Change in fair value of warrant liabilities

(1,260,354)

470,804

Non-GAAP (loss) income attributable to LGHL before change in

fair value of warrant liabilities, stock-based compensation,

amortization of debt discounts, depreciation expenses and impairment

of fixed assets

$ (27,141,993)

$ 2,954,850

Non-GAAP (losses) earnings per share for both Class A and Class B

- basic

$ (0.59)

$ 0.10

- diluted

$ (0.59)

$ 0.09

Weighted average Class A ordinary shares outstanding

- basic

40,438,604

26,046,212

- diluted

40,438,604

29,145,497

Weighted average Class B ordinary shares outstanding

- basic and diluted

5,535,888

4,041,875

Year ended December 31,

2022

2021

Basic

Fully Diluted

Basic

Fully Diluted

Earnings (Loss) attributable to LGHL per share for

both Class A and Class B

$ (0.69)

$ (0.69)

$ 0.00

$ 0.00

Stock-based compensation

0.03

0.03

0.01

0.01

Amortization of debt discounts

0.01

0.01

0.03

0.02

Depreciation expenses

0.04

0.04

0.04

0.04

Impairment of fixed assets

0.04

0.04

-

-

Change in fair value of warrant liabilities

(0.03)

(0.03)

0.02

0.01

Non-GAAP earnings (losses) per share for both

Class A and Class B (before change in fair value of

warrant liabilities, stock-based compensation,

amortization of debt discounts, depreciation expenses

and impairment of fixed assets)

$ (0.59)

$ (0.59)

$ 0.10

$ 0.09