The iSignthis Ltd (ASX: ISX) share price is rocketing this morning, it’s up 13% in early trading.
iSignthis is listed on the ASX and Frankfurt Stock Exchange. It provides remote identity verification and payment authentication combined with e-money, transactional banking, IBAN issue and payment processing capability. Its products and businesses are iSignthis Paydentity, ISXPay, UAB Baltic Banking Service and Probanx Information Systems.
Why The iSignthis Share Price Is Jumping
The iSignthis share price has risen 18% in early trading after the company responded to an ASX price query relating to a significant increase in the volume of trading and the large price movement.
The company responded that it became aware of a report by James Samson and Dean Paatsch from Ownership Matters, which was reported in the Australian Financial Review by Yolanda Redrup and the Sydney Morning Herald by Colin Kruger.
iSignthis noted it wasn’t invited to comment on the report, which it said draws unverified conclusions which are inconsistent with public disclosures made by the the company.
The report also suggested that the ownership of iSignthis is opaque, which the company refuted because it has made all the necessary disclosures.
One of the main issues being highlighted in the media is that the report asserts the performance rights had revenue targets which were only met by a margin of $1,347 with revenue falling 78% after the hurdle was tested.
iSignthis explained that it was the collapse of one of its clients, KAB (a Danish bank), which caused the fall in revenue.
The fintech company said that the performance rights allegation was factually incorrect, as revenue includes interest and R&D grants.
iSignthis said that the relevant revenue figures were total annual audited revenue at June 2018 was $6,338,969 and the audited revenue for the six-month half to June was $5,512,057.
Therefore, as iSignthis said (and bolded in its release), the prospectus milestone targets for performance rights were met by $512,057 not $1,347 as Ownership Matters said.
The company went on to explain why the reporting dates were changed, which was in order to help the auditing and reporting requirements in Europe and match the audit periods.
iSignthis also said it will refer the matter and the conduct of Ownership Matters to ASIC.
What Now?
This is unlikely to be the end of the matter. iSignthis is likely to continue to be volatile due to the high level of interest and the growth rate the company is reporting.
iSignthis is not the type of business I’d buy for my own portfolio, particularly under these circumstances. But I’ll be very interested to watch and see how this plays out.
I’d rather buy the growth shares revealed for free in the report below.
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