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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

 PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): January 31, 2022

 

 

 

QUANTUM FINTECH ACQUISITION CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-40009   85-3286402
(State or other jurisdiction
of incorporation)
 

(Commission File Number)

  (IRS Employer
Identification No.)

 

4221 W. Boy Scout Blvd.,

Suite 300

Tampa, FL 33607

(Address of principal executive offices, including zip code)

 

Registrant’s telephone number, including area code: (813) 257-9366

 

Not Applicable
(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
  
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
  
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
  
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which
registered
Units, each consisting of one share of Common Stock and one redeemable Warrant   QFTA.U   The New York Stock Exchange
Common Stock, par value $0.0001 per share   QFTA   The New York Stock Exchange
Warrants, each warrant exercisable for one-half of one share of Common Stock at an exercise price of $11.50   QFTA WS   The New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    

 

 

 

 

 

 

Item 8.01  Other Events.

 

As previously disclosed, on November 4, 2021, Quantum FinTech Acquisition Corporation, a Delaware corporation (the “Company”), entered into an Agreement and Plan of Merger (as amended, the “Merger Agreement”) by and among the Company, TradeStation Group, Inc., a Florida corporation (“TradeStation”), and TSG Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of TradeStation (“Merger Sub”) pursuant to which, among other things, Merger Sub will merge with and into the Company, with the Company surviving as the surviving corporation and a wholly-owned subsidiary of TradeStation (the “Business Combination”).

 

In connection with the Business Combination, TradeStation has filed a registration statement on Form S-4 (File No. 333-261885) (the “Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC”) on December 23, 2021, which included a proxy statement to be mailed to the Company’s stockholders in connection with the Company’s solicitation of proxies for its special meeting of stockholders to be held to approve, among other things, the proposed Business Combination.

 

On January 31, 2022, TradeStation issued a press release announcing its financial results for the three and nine months ended December 31, 2021. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

Attached as Exhibit 99.2 and Exhibit 99.3 hereto and incorporated by reference herein is an investor presentation and conference call script, respectively, each dated January 31, 2022, which will be used by TradeStation in connection with its financial results for the three and nine months ended December 31, 2021. Attached as Exhibit 99.4 hereto and incorporated by reference herein are investor presentation slides, which will be used by TradeStation’s sole shareholder, Monex Group, Inc., relating to TradeStation and the Business Combination.

 

Additional Information and Where to Find It

 

Company stockholders and other interested persons are advised to read the preliminary proxy statement/prospectus included in the Registration Statement and any amendments thereto and the definitive proxy statement/prospectus in connection with the Company’s solicitation of proxies for its special meeting of stockholders to be held to approve, among other things, the proposed Business Combination (the “Special Meeting”), because these documents will contain important information about the Company, TradeStation and the proposed Business Combination. When available, the definitive proxy statement/ prospectus will be mailed to Company stockholders as of a record date to be established for voting on the Business Combination and the other matters to be voted upon at the Special Meeting.

 

The Company’s stockholders may also obtain a copy of the proxy statement/prospectus, once available, as well as other documents filed with the SEC regarding the proposed Business Combination and other documents filed with the SEC by the Company, without charge, at the SEC’s website located at www.sec.gov or by directing a request to: Quantum FinTech Acquisition Corporation, 4221 W. Boy Scout Blvd., Suite 300, Tampa, FL 33607, Attention: Investor Relations or by email at [email protected].

 

Participants in Solicitation

 

The Company, TradeStation, and their respective directors and officers and certain investors may be deemed participants in the solicitation of proxies of the Company stockholders in connection with the proposed Business Combination. Company stockholders and other interested persons may obtain, without charge, more detailed information regarding the directors and officers of the Company in the Company’s registration statement on Form S-1 (File No. 333-252226), which was declared effective by the SEC on February 4, 2021. Information regarding the persons who may, under SEC rules, be deemed participants in the solicitation of proxies to Company stockholders in connection with the proposed Business Combination and other matters to be voted upon at its Special Meeting are set forth in the preliminary proxy statement/preliminary prospectus included in the Registration Statement. Additional information regarding the interests of participants in the solicitation of proxies in connection with the proposed Business Combination is included in the Registration Statement.

 

Forward-Looking Statements

 

This Current Report on Form 8-K contains, and certain oral statements made by representatives of the Company and TradeStation and their respective affiliates from time to time may contain, a number of “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or our future financial or operating performance. When used in this Current Report on Form 8-K or such oral statements, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “propose” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements include, without limitation, information concerning TradeStation’s and the Company’s expectations with respect to the future performance of the combined company, including whether this proposed Business Combination will generate returns for stockholders, the anticipated addressable market for the combined company, the satisfaction of the closing conditions to the Business Combination, and the timing of the completion of the Business Combination.

 

1

 

 

These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside TradeStation’s or the Company’s management’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. These risks, uncertainties, assumptions and other important factors include, but are not limited to: (a) the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement and the proposed Business Combination contemplated thereby; (b) the inability to complete the proposed Business Combination, including due to the failure to obtain the requisite approval of the stockholders of the Company or other conditions to closing in the Merger Agreement; (c) the ability to meet the New York Stock Exchange’s listing standards following the consummation of the proposed Business Combination; (d) the failure of PIPE Investors to fund their commitments upon the closing of the proposed Business Combination; (e) the risk that the proposed Business Combination disrupts current plans and operations of TradeStation or its subsidiaries as a result of the announcement and consummation of the transactions described herein; (f) the ability to recognize the anticipated benefits of the proposed Business Combination, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth, maintain relationships with customers and suppliers and retain its management and key employees; (g) costs related to the proposed Business Combination; (h) changes in applicable laws or regulations, including legal or regulatory developments which could result in the need for the Company to restate its historical financial statements and cause unforeseen delays in the timing of the Business Combination and negatively impact the trading price of the Company’s securities and the attractiveness of the Business Combination to investors; (i) the possibility that TradeStation or the combined company may be adversely affected by other economic, business and/or competitive factors; and (j) other risks and uncertainties to be identified in the Registration Statement/proxy statement relating to the Business Combination, when available, and in other documents filed or to be filed with the SEC by the Company and TradeStation and available at the SEC’s website at www.sec.gov.

 

The Company and TradeStation caution that the foregoing list of factors is not exclusive, and caution readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Except as required by law, neither the Company nor TradeStation undertakes any obligation to update or revise its forward-looking statements to reflect events or circumstances after the date of this release, other than pursuant to applicable law.

 

No Offer or Solicitation

 

This Current Report on Form 8-K shall not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the Business Combination. This Current Report on Form 8-K also shall not constitute an offer to sell or the solicitation of an offer to buy any securities pursuant to the proposed Business Combination or otherwise, nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, or an exemption therefrom.

 

No Assurances

 

There can be no assurance that the proposed Business Combination will be completed, nor can there be any assurance, if the proposed Business Combination is completed, that the potential benefits of combining the companies will be realized.

  

Item 9.01 Financial Statements and Exhibits.

 

  (d) Exhibits

 

Exhibit No.   Description

99.1 

 

Press Release of TradeStation dated January 31, 2022

99.2 

 

Investor Presentation dated January 31, 2022 

99.3 

 

Conference Call Script dated January 31, 2022 

99.4 

 

Investor Presentation Slides 

104 

  Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

2

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  QUANTUM FINTECH ACQUISITION CORPORATION
     
  By: /s/ John Schaible
    Name: John Schaible
    Title: Chief Executive Officer
     
Dated: January 31, 2022    

 

 

3

 

 

Exhibit 99.1

 

 

TradeStation Reports Results for Three and Nine Months Ended December 31, 2021

 

PLANTATION, FL, January 31, 2022 – TradeStation Group, Inc. (“TradeStation”), the parent company of award-winning self-clearing online brokerages for trading stocks, ETFs, equity and index options, futures, futures options and cryptocurrencies, today announced financial results and certain key metrics for the three and nine months ended December 31, 2021.

 

TradeStation’s operating and financial results for the three months ended December 31, 2021, the company’s third fiscal quarter, include:

 

Total net revenues of $53.9 million, a 1.8% year-over-year increase

 

178,863 Total Customer Accounts at December 31, 2021, a 36.1% year-over-year increase

 

27,412 Gross New Accounts, an 81.0% year-over-year increase

 

214,690 Daily Average Revenue Trades (DARTs), a 10.2% year-over-year decrease

 

$12.3 billion Total Customer Assets, including $3.0 billion of Total Customer Cash, at December 31, 2021, a 32.7% and 13.0% year-over-year increase, respectively

 

Increase in total expenses of 39.1% year over year, and net loss of $11.3 million, as the company continues to invest in marketing and headcount to support its shift to a higher-revenue-growth strategy

 

“We continue to make progress on our investment in marketing to grow our account base, as well as in product initiatives that will enhance our award-winning, multi-asset platform to support our customers’ goal of claiming their financial edge,” said John Bartleman, Chief Executive Officer of TradeStation. “Given the unusually high level of trading volume during the first year of the COVID-19 pandemic, which included our prior-year third fiscal quarter, our year-over-year increase in revenue is a testament to our ability to grow our business, as well as to the considerable skills and efforts of TradeStation’s truly first-rate employees.”

 

Results of Operations and Key Metrics for the Three Months and Nine Months Ended December 31, 2021

 

Revenue

 

TradeStation had total net revenues of $53.9 million for the three months ended December 31, 2021, a 1.8% increase over the three months ended December 31, 2020. Revenue growth resulted from higher trading-related revenue and net interest income, partially offset by lower average trading-related revenue per account and a decrease in subscription and other revenue. Total net revenues grew by 6.9% as compared to the three months ended September 30, 2021, driven primarily by an increase in total customer accounts, higher trading-related revenue per account, and an increase in net interest income. For the nine months ended December 31, 2021, TradeStation had total net revenues of $157.0 million, a 2.2% increase over the prior-year nine-month period, driven by higher trading-related revenue and net interest income, partially offset by lower average trading-related revenue per account and a decrease in subscription and other revenue.

 

Total Customer Accounts and Gross New Accounts

 

At December 31, 2021, TradeStation had 178,863 Total Customer Accounts, an increase of 36.1% from December 31, 2020, and a 9.9% increase from September 30, 2021.

 

 

TradeStation Group Reports Results for Three and Nine Months Ended December 31, 2021

Page 2

 

TradeStation added 27,412 Gross New Accounts during the three months ended December 31, 2021, as compared to 15,147 Gross New Accounts added during the three months ended December 31, 2020, an 81.0% increase, and 16,823 Gross New Accounts added during the three months ended September 30, 2021, a 62.9% increase. Gross New Accounts is the total number of new customer accounts opened and funded during the applicable period, and includes for the December 2021 quarter customer crypto accounts opened and funded through a marketing promotion that began December 20, 2021 in which TradeStation makes the initial account funding for the customer (BTC equal to $10.00). Crypto accounts opened under this promotion represented 4,950, or 86.5%, of the 5,725 total gross new crypto accounts added in the month of December. TradeStation will continue to evaluate the success of this crypto account-opening promotion by monitoring the extent to which these TradeStation-initially-funded crypto accounts receive additional deposits from, and account revenues generated by, these customers.

 

DARTs

 

For the three months ended December 31, 2021, DARTs were 214,690, a decrease of 10.2% from the three months ended December 31, 2020. This decrease resulted primarily from reduced customer trading activity in the December 2021 quarter as compared to the high level of trading volume in the prior-year three-month period, which was during the first year of the COVID-19 pandemic, partially offset by customer account growth. TradeStation’s DARTs increased by 5.6% in the December 2021 quarter compared to the September 2021 quarter due principally to customer account growth.

 

Total Customer Assets and Total Customer Cash

 

Total Customer Assets were $12.3 billion at December 31, 2021, an increase of 32.7% from December 31, 2020 and a 9.0% increase from September 30, 2021, and included Total Customer Cash of $3.0 billion at December 31, 2021, a 13.0% increase from December 31, 2020 and a 3.5% increase from September 30, 2021. If the federal funds target rate increases during the 2022 calendar year as many are anticipating, the company believes the portion of its net interest income generated by the investment of customer cash should increase.

 

Expenses, Net Income (Loss), Income (Loss) Before Income Taxes, and Adjusted EBITDA

 

Due primarily to TradeStation’s increased marketing and headcount to implement its revenue growth strategy, total expenses were $69.5 million for the three-month period, and $180.0 million for the nine-month period, ended December 31, 2021, as compared to $50.0 million and $147.4 million for the three- and nine-month periods, respectively, ended December 31, 2020.

 

Marketing expense for the three months ended December 31, 2021 was $22.7 million, as compared to $4.3 million for the three months ended December 31, 2020, and was $39.6 million for the nine-month period ended December 31, 2021 as compared to $11.9 million for the nine-month period of the prior fiscal year.

 

TradeStation’s total headcount increased, primarily in product development and information technology, from 511 full-time employees at March 31, 2021 to 714 at December 31, 2021, resulting, together with wage inflation, in employee compensation and benefits expense for the three months ended December 31, 2021 of $24.7 million, as compared to $17.7 million for the three months ended December 31, 2020, and $68.6 million for the nine-month period ended December 31, 2021 as compared to $53.1 million for the nine-month period of the prior fiscal year.

 

Due principally to the increased marketing and employee compensation and benefits expenses:

 

For the three months ended December 31, 2021, the company had a net loss of $11.3 million, a loss before income taxes of $15.7 million, and negative Adjusted EBITDA of $13.6 million, as compared to net income of $2.1 million, income before income taxes of $2.9 million, and Adjusted EBITDA of $12.4 million for the three months ended December 31, 2020; and

 

For the nine-month period ended December 31, 2021, the company had a net loss of $16.9 million, loss before income taxes of $23.0 million, and negative Adjusted EBITDA of $14.2 million, as compared to net income of $4.5 million, income before income taxes of $6.2 million, and Adjusted EBITDA of $35.3 million for the nine-month period ended December 31, 2020.

 

 

TradeStation Group Reports Results for Three and Nine Months Ended December 31, 2021

Page 3

 

About TradeStation Group, Inc.

 

TradeStation has, for decades, provided innovative fintech decision-support analysis and order-placement tools that support self-directed traders and investors in their journeys to claim their financial edge. TradeStation provides award-winning trading and analysis platforms and self-clearing online brokerage services for stocks, ETFs, equity and index options, commodity and financial futures, futures options, and cryptocurrencies. These trading platforms are accessible on desktop, Web and mobile, as well as via API technologies which seamlessly provide access to TradeStation’s brokerage environment through third-party platforms. TradeStation’s offerings also include deep and growing learning content designed to build confidence among those new to investing and hone the skills of seasoned traders.

 

TradeStation Securities, Inc. (Member NYSE, FINRA, SIPC, NSCC, DTC, OCC, NFA & CME) offers self-clearing equities, options, futures and futures options brokerage services as a licensed securities broker-dealer and futures commission merchant (FCM) and is a member of major equities and futures exchanges in the United States. TradeStation Crypto, Inc. offers self-clearing cryptocurrency brokerage services under federal and state money services business, money-transmitter and similar registrations and licenses. TradeStation Crypto, Inc. is not subject to NFA’s regulatory oversight and examinations.

 

Cautionary Statement Regarding Forward-Looking Statements

 

This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, that reflect TradeStation’s current views with respect to, among other things, the future operations and financial performance of TradeStation. Forward-looking statements in this communication may be identified by the use of words such as “anticipating,” “believes,” “can,” “continue,” “continuously,” “enhance,” “expects,” “hope,” “in progress,” “intends,” “may,” “over time,” “planned,” “seeks,” “should,” “strategic,” “target,” “think,” “try,” “try to,” “will” and similar terms and phrases. Forward-looking statements contained in this communication include, but are not limited to, statements as to (i) the success of TradeStation’s efforts regarding its revenue growth strategy, including the success of marketing expenditures and campaigns and approaches, increasing headcount to support its revenue growth strategy and its ability to grow its customer account base generally and the pace at which such growth is, or is not, accomplished, (ii) ongoing volume levels of customer trading activity and trading-related revenue generated, (iii) the success of TradeStation’s crypto account-opening/marketing promotion, and whether crypto customer accounts added through such promotion will provide further funding or deposits to, or trade in, such accounts, (iv) whether TradeStation’s planned product and service enhancements, including those recently launched or currently in progress, will be considered valuable or attractive by customers and customer prospects, or completed timely, or at all, and (v) whether federal fund target interest rates will increase, and if so when, whether the effective interest rates will match the target rates, and whether TradeStation will be able to benefit through increased net interest income if those rates increase.

 

The forward-looking statements contained in this communication are based on the current expectations of TradeStation and its management and are subject to risks and uncertainties. No assurance can be given that future developments affecting TradeStation will be those that are anticipated. Actual results may differ materially from current expectations due to changes in global, regional or local economic, business, competitive, market, regulatory and other factors, many of which are beyond the control of TradeStation. Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Factors that could cause actual results to differ may emerge from time to time, and it is not possible to predict all of them.

 

 

TradeStation Group Reports Results for Three and Nine Months Ended December 31, 2021

Page 4

 

Such factors include, but are not limited to: changes in general economic or political conditions; changes in the markets that TradeStation targets; slowdowns in securities or cryptocurrency trading or shifting demand for securities or cryptocurrency trading products; the impact of the ongoing COVID-19 pandemic; the evolving digital asset market, including the regulation thereof; possible regulations that further limit, or eliminate, the ability of TradeStation to accept payment for order flow or similar rebates; any change in laws applicable to TradeStation or any regulatory or judicial interpretation thereof; and other factors, risks and uncertainties, including those under the heading “Risk Factors” in publicly-available SEC filings made by TradeStation. Intentions or expectations disclosed in forward-looking statements may not be achieved and the recipient of this communication should not place undue reliance on such forward-looking statements. Any forward-looking statement made in this communication speaks only as of the date hereof. TradeStation undertakes no obligation to update, revise or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.

 

Proposed Business Combination

 

As previously announced, TradeStation Group, Inc. (the “Company”) and Quantum FinTech Acquisition Corporation (“Quantum”) have entered into agreements to effect a business combination (the “Business Combination”). This presentation does not constitute (i) a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the Business Combination or (ii) an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase, any securities of the Company, Quantum, the combined company or any of their respective affiliates. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended (the “Securities Act”), or an exemption therefrom, nor shall any sale of securities in any states or jurisdictions in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction be effected. No securities commission or securities regulatory authority in the United States or any other jurisdiction has in any way passed upon the merits of the Business Combination or the accuracy or adequacy of this presentation.

 

In connection with the proposed Business Combination between the Company and Quantum, the Company has filed a registration statement on Form S-4 (the “Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC”) that includes a proxy statement / prospectus relating to the offer of the securities to be issued to Quantum. Investors, security holders and other interested persons are advised to read the Registration Statement and proxy statement / prospectus and any amendments thereto, and other relevant documents that are filed with the SEC carefully and in their entirety because they will contain important information about the Company, Quantum and the proposed Business Combination. The definitive proxy statement / prospectus will be mailed to stockholders of Quantum as of a record date to be established for voting on the proposed Business Combination. Investors, security holders and other interested persons will also be able to obtain copies of the Registration Statement and other documents containing important information about the Business Combination and the parties to the Business Combination once such documents are filed with the SEC, without charge, at the SEC’s website at www.sec.gov, or by directing a request to: Quantum FinTech Acquisition Corp., 4221 W. Boy Scout Blvd., Suite 300, Tampa, FL 33607, Attention: Investor Relations or by email at [email protected].

 

Quantum and the Company, their respective directors and executive officers and certain investors may be considered participants in the solicitation of proxies with respect to the proposed Business Combination under the rules of the SEC. Information about the directors and executive officers of Quantum and their ownership is set forth in Quantum’s filings with the SEC, including its final prospectus relating to its initial public offering in February 2021, which is available free of charge at the SEC’s website at www.sec.gov. Additional information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of the Quantum shareholders in connection with the proposed Business Combination, including the Company’s directors and executive officers and certain investors, will be contained in the Registration Statement for the Business Combination when available.

 

Contacts

 

Investors:

[email protected]

 

Media:

Madison Roberts

281-684-9857

[email protected]

 

 

TradeStation Group Reports Results for Three and Nine Months Ended December 31, 2021

Page 5

 

TRADESTATION GROUP, INC.

Consolidated Statements of Income

(In thousands)

 

   Three Months Ended
December 31,
   Nine Months Ended
December 31,
 
   2021   2020   2021   2020 
Revenues:                
Trading-related revenue  $41,466   $39,860   $121,334   $118,299 
Subscription and other revenue   1,096    2,462    4,402    6,449 
Total non-interest income   42,562    42,322    125,736    124,748 
Interest income   14,067    11,476    37,959    31,209 
Interest expense   (2,771)   (912)   (6,688)   (2,311)
Net interest income   11,296    10,564    31,271    28,898 
Total net revenues   53,858    52,886    157,007    153,646 
                     
Expenses:                    
Employee compensation and benefits   24,692    17,736    68,628    53,050 
Cost of services provided   8,225    7,790    25,186    24,439 
Communications   3,843    3,723    11,508    10,497 
Marketing   22,705    4,318    39,595    11,949 
Professional services   1,720    1,601    8,123    4,729 
Occupancy and equipment   4,402    3,592    12,329    9,815 
Depreciation and amortization   2,636    2,589    7,983    7,476 
Amortization of intangibles   2,222    2,236    6,693    6,707 
Interest expense on borrowings   841    681    2,293    2,402 
Other expense (income)   (1,752)   5,725    (2,348)   16,365 
Total expenses   69,534    49,991    179,990    147,429 
                     
Income (loss) before income taxes   (15,676)   2,895    (22,983)   6,217 
Income tax expense (benefit)   (4,334)   791    (6,037)   1,695 
Net income (loss)  $(11,342)  $2,104   $(16,946)  $4,522 

 

 

TradeStation Group Reports Results for Three and Nine Months Ended December 31, 2021

Page 6

 

Key Performance Metrics

 

   As of December 31, 
   2021   2020 
Total Customer Accounts   178,863    131,431 
Total Customer Assets
($ millions)
  $12,286   $9,259 
Total Customer Cash
($ millions)
  $2,984   $2,641 

 

   Three Months Ended
December 31,
   Nine Months Ended
December 31,
 
   2021   2020   2021   2020 
Daily Average Revenue Trades (DARTs)   214,690    239,089    210,802    214,694 
Gross New Accounts   27,412    15,147    66,528    51,828 

 

Total Customer Accounts is the number of customer brokerage accounts with a positive account balance.

 

Total Customer Assets is total cash and assets held in customer accounts.

 

Total Customer Cash is the aggregate cash held in customer accounts.

 

Daily Average Revenue Trades (DARTs) are computed as follows: In computing DARTs, a revenue trade means one completed customer equities, options, futures, or crypto trade, regardless of the number of shares, contracts, or units included in such trade, and includes trades completed under “zero commission” plans (which are supported by payment-for-order-flow, or “PFOF,” revenue). Each “side” of a futures trade is counted as one revenue trade. Partial fills of an equities order on the same day are aggregated and counted as one revenue trade.

 

Gross New Accounts is the total number of new customer accounts opened and funded during the applicable period.

 

Reconciliation of Net Income (Loss) to Adjusted EBITDA

 

The following table presents a reconciliation of net income (loss), the most comparable GAAP measure, to Adjusted EBITDA.

 

TradeStation utilizes Adjusted EBITDA in the management of its business and operation. Adjusted EBITDA represents net income (loss) attributable to TradeStation before income tax provision (benefit), net interest expense, depreciation and amortization, and for the periods presented has excluded certain other expenses or items, including swap fair value gains (losses), certain severance expenses, write-offs of software, certain contractual settlements and cryptocurrency timing gains and losses.

 

 

TradeStation Group Reports Results for Three and Nine Months Ended December 31, 2021

Page 7

 

These items are excluded from TradeStation’s Adjusted EBITDA measures because these items are non-cash in nature or because the amount or timing of these items is not driven by core results of operations and renders comparisons with prior periods and competitors less meaningful. TradeStation believes Adjusted EBITDA provides useful information to investors and others in understanding and evaluating its results of operations, and also provide a useful measure for period-to-period comparisons of its business performance. Moreover, TradeStation has included Adjusted EBITDA in this announcement because it is a key measurement used by its management internally to make operating decisions, including those related to operating expenses, evaluating performance and performing strategic planning and annual budgeting. However, TradeStation does not consider Adjusted EBITDA in isolation or as an alternative to liquidity or financial measures determined in accordance with GAAP.

 

Reconciliation of Net Income (Loss) to Adjusted EBITDA

(In thousands)

 

   Three Months Ended
December 31,
   Nine Months Ended
December 31,
 
   2021   2020   2021   2020 
                 
Net Income (loss)  $(11,342)  $2,104   $(16,946)  $4,522 
Income tax expense (benefit)   (4,334)   791    (6,037)   1,695 
Depreciation and amortization   4,858    4,825    14,676    14,183 
Interest expense   841    681    2,293    2,402 
EBITDA   (9,977)   8,401    (6,014)   22,802 
Adjustments:                    
Severance expense (1)   -    -    -    1,700 
Crypto timing gains and losses (2)   (299)   3,969    (34)   10,759 
Gain on investment (3)   (3,321)   -    (8,146)   - 
Adjusted EBITDA  $(13,597)  $12,370   $(14,194)  $35,261 

 

(1)“Severance expense” related to a planned reduction-in-force that occurred in the June 2020 fiscal quarter
(2)“Crypto timing gains and losses” related to temporary gains or losses for crypto assets recognized due to certain mark-to-market adjustments, but later offset (netted to zero) as the asset positions were closed out
(3)“Gain on investment” related to appreciation of a minority investment made by the company in a digital assets vendor firm.

 

 

 

 

 

Exhibit 99.2

 

EMPOWERING TRADERS TO CLAIM THEIR FINANCIAL EDGE Highlights for Three Months and Nine Months Ended December 31, 2021 January 31, 2022

 

 

Cautionary Statement Regarding Forward - Looking Statements This communication contains forward - looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 , as amended, that reflect TradeStation’s current views with respect to, among other things, the future operations and financial performance of TradeStation . Forward - looking statements in this communication may be identified by the use of words such as “anticipating,” “believes,” “can,” “continue,” “continuously,” “enhance,” “expects,” “hope,” “in progress,” “intends,” “may,” “over time,” “planned,” “seeks,” “should,” “strategic,” “target,” “think,” “try,” “try to,” “will” and similar terms and phrases . Forward - looking statements contained in this communication include, but are not limited to, statements as to ( i ) the success of TradeStation’s efforts regarding its revenue growth strategy, including the success of marketing expenditures and campaigns and approaches, increasing headcount to support its revenue growth strategy and its ability to grow its customer account base generally and the pace at which such growth is, or is not, accomplished, (ii) ongoing volume levels of customer trading activity and trading - related revenue generated, (iii) the success, or lack thereof, of TradeStation’s crypto account - opening/marketing promotion, and whether crypto customer accounts added through such promotion will provide further funding or deposits to, or trade in, such accounts, (iv) whether TradeStation’s planned product and service enhancements, including those recently launched or currently in progress, will be considered valuable or attractive by customers and customer prospects, or completed timely, or at all, and (v) whether federal fund target interest rates will increase, and if so when, whether the effective interest rates will match the target rates, and whether TradeStation will be able to benefit through increased net interest income if those rates increase . The forward - looking statements contained in this communication are based on the current expectations of TradeStation and its management and are subject to risks and uncertainties . No assurance can be given that future developments affecting TradeStation will be those that are anticipated . Actual results may differ materially from current expectations due to changes in global, regional or local economic, business, competitive, market, regulatory and other factors, many of which are beyond the control of TradeStation . Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward - looking statements . Factors that could cause actual results to differ may emerge from time to time, and it is not possible to predict all of them . Any forward - looking statement made in this communication speaks only as of the date hereof . TradeStation undertakes no obligation to update, revise or review any forward - looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws . Trademarks, Trade Names and Service Marks This presentation includes trademarks, trade names and service marks that are the property of their respective owners, and are protected under applicable intellectual property laws . Proposed Business Combination As previously announced, TradeStation Group, Inc . (the “Company”) and Quantum FinTech Acquisition Corporation (“Quantum”) have entered into agreements to effect a business combination (the “Business Combination”) . This presentation does not constitute ( i ) a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the Business Combination or (ii) an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase, any securities of the Company, Quantum, the combined company or any of their respective affiliates . No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933 , as amended (the “Securities Act”), or an exemption therefrom, nor shall any sale of securities in any states or jurisdictions in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction be effected . No securities commission or securities regulatory authority in the United States or any other jurisdiction has in any way passed upon the merits of the Business Combination or the accuracy or adequacy of this presentation . In connection with the proposed Business Combination between the Company and Quantum, the Company has filed a registration statement on Form S - 4 (the “Registration Statement”) with the U . S . Securities and Exchange Commission (the “SEC”) that includes a proxy statement / prospectus relating to the offer of the securities to be issued to Quantum . Investors, security holders and other interested persons are advised to read the Registration Statement and proxy statement / prospectus and any amendments thereto, and other relevant documents that are filed with the SEC carefully and in their entirety because they will contain important information about the Company, Quantum and the proposed Business Combination . The definitive proxy statement / prospectus will be mailed to stockholders of Quantum as of a record date to be established for voting on the proposed Business Combination . Investors, security holders and other interested persons will also be able to obtain copies of the Registration Statement and other documents containing important information about the Business Combination and the parties to the Business Combination once such documents are filed with the SEC, without charge, at the SEC’s website at www . sec . gov , or by directing a request to : Quantum FinTech Acquisition Corp . , 4221 W . Boy Scout Blvd . , Suite 300 , Tampa, FL 33607 , Attention : Investor Relations or by email at IR@qftacorp . com . Quantum and the Company, their respective directors and executive officers and certain investors may be considered participants in the solicitation of proxies with respect to the proposed Business Combination under the rules of the SEC . Information about the directors and executive officers of Quantum and their ownership is set forth in Quantum’s filings with the SEC, including its final prospectus relating to its initial public offering in February 2021 , which is available free of charge at the SEC’s website at www . sec . gov . Additional information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of the Quantum shareholders in connection with the proposed Business Combination, including the Company’s directors and executive officers and certain investors, will be contained in the Registration Statement for the Business Combination when available . Disclaimers

 

 

TradeStation At A Glance 178,863 Total Customer Accounts 36% Year - Over - Year Growth* Helping Self - Directed Traders and Investors Claim Their Financial Edge $12.3 Billion Total Customer Assets 33% Year - Over - Year Growth* Multi - Asset, Self - Clearing Brokerage Offering Equities, Options, Futures and Cryptocurrencies Award - Winning Technology and Research Tools Accessible on Mobile, Web, Desktop and Through API $3.0 Billion Total Customer Cash 13% Year - Over - Year Growth* *As of December 31, 2021 compared to December 31, 2020

 

 

OPERATING HIGHLIGHTS

 

 

TradeStation positions itself to attract an expanding market of self - directed investors Differentiated Positioning in the Market • Multi - asset platform for Equities, Options, Futures and Crypto trading • Self - clearing online brokerage • Education & Social Community • Adaptive technology accessible on desktop, Web and mobile • Advanced API Technology TradeStation’s Pillars for Growth Award - Winning Suite of Trader and Investor Products Expanding Customer Base of Experienced and New Traders • Demographic wave of Millennials and Gen - Z investors, coupled with increased interest in self - directed investing, is leading to an expanding addressable market Marketing • Investments in brand awareness and performance marketing channels designed to drive account acquisition Product Initiatives • Enhance user experience • Advance Crypto offering • Expand API as B2B and B2C Opportunity Well - Defined Marketing and Product Strategy TradeStation Rated #1 or “Best in Class” five times in StockBrokers.com’s 2021 Online Broker Review for: ▪ Platform & Tools ▪ Options Trading ▪ Crypto Technology ▪ Active Trading ▪ Futures Trading 2022 Best Online Broker for Stock Trading Platform and Research in Nerd Wallet’s 2022 Best - of Awards

 

 

Strong year - over - year growth (1) in customer base Total Customer Accounts (2) of 178,863 as of December 31, 2021, representing 36.1% year - over - year growth ▪ Cryptocurrency accounts have grown to >9% of total accounts at December 31, 2021, from less than 2% at December 31, 2020 (2) 27,142 Gross New Accounts (2) added during the fiscal third quarter, a year - over - year increase of 81.0 % Total Customer Assets increased by 32.7% year over year to $12.3 billion Total Customer Cash increased by 13.0% year over year to $3.0 billion 131,431 145,887 156,961 162,751 178,863 $9.3 $10.3 $11.4 $11.3 $12.3 $2.6 $2.8 $2.9 $2.9 $3.0 $0.0 $5.0 $10.0 $15.0 $20.0 - 40,000 80,000 120,000 160,000 200,000 Total Customer Accounts, Total Customer Assets and Total Customer Cash Total Customer Accounts Total Customer Assets Total Customer Cash Dec ‘20 Mar ‘21 Jun ‘21 Sep ‘21 Dec ‘21 ($, billions) ($, billions) (As of period end) (1) As of December 31, 2021 compared to December 31, 2020 (2) Included in “Total Customer Accounts” and "Gross New Accounts" for the three months ended December 31, 2021 are customer cryp to accounts opened through a marketing promotion that began December 20, 2021 in which TradeStation makes the initial account funding (BTC equal to USD $10.00). Crypto accounts opened under this pr omotion were 4,950 of the 5,725 total crypto accounts opened in December 2021.

 

 

Trading Activity Daily Average Revenue Trades (DARTs) of 214,690 declined by 10.2% year over year ▪ Primarily related to reduced customer trading activity as compared to high trading levels in the prior - year period, which occurred within the first year of the COVID - 19 pandemic ▪ Account growth partially offset the decrease in DARTs DARTs increased by 5.6% quarter over quarter 239,089 276,956 214,533 203,271 214,690 25.62 23.20 18.00 18.29 19.28 - 5 10 15 20 25 30 35 40 - 40,000 80,000 120,000 160,000 200,000 240,000 280,000 320,000 DARTs and VIX Closing Average Total DARTs VIX Closing Average 31 - Dec - 20 31 - Mar - 21 30 - Jun - 21 31 - Sep - 21 31 - Dec - 21 Three months ended, Dec ‘20 Mar ‘21 Jun ‘21 Sep ‘21 Dec ‘21

 

 

Key Product Enhancements Crypto IRA ▪ Crypto individual retirement account (IRA) offering was launched in December 2021 ▪ Provides U.S. customers the ability to trade cryptocurrencies in tax - advantaged accounts ▪ Creates an opportunity to tap a large asset base of self - directed IRAs Crypto FIX API ▪ Access to trade Crypto through financial information exchange (FIX) protocol, was launched in January 2022 ▪ FIX connectivity enables more institutional customer account opportunities for TradeStation Crypto

 

 

FINANCIAL HIGHLIGHTS

 

 

Total Revenue Increased by 1.8% year over year ▪ Trading - related revenue increased by 4.0%, driven by account growth, offset by lower DARTs and revenue per trade ▪ Net interest income increased by 6.9% on increased margin and securities lending activity ▪ Subscription and Other revenue declined due to termination of a royalty - based licensing agreement Increased by 6.9% quarter over quarter ▪ Trading - related revenue increased by 4.9% primarily due to account growth ▪ Net - interest income increased by 21.6% principally due to higher asset lending revenues $39.9 $51.7 $40.3 $39.5 $41.5 $10.6 $10.9 $10.7 $9.3 $11.3 $2.4 $2.4 $1.6 $1.6 $1.1 $52.9 $65.0 $52.8 $50.4 $53.9 $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 31-Dec-20 31-Mar-21 30-Jun-21 30-Sep-21 31-Dec-21 Revenue Source Trading-Related Revenue Net-Interest Income Subscription and Other Revenue Three months ended, Dec ‘20 Mar ‘21 Jun ‘21 Sep ‘21 Dec ‘21 ($, millions)

 

 

Trading - Related Revenue Increased by 4.0% year over year ▪ Account growth drove higher overall revenue growth ▪ Options, Futures and Crypto revenues increased ▪ Equities revenue declined on lower trading levels Increased by 4.9% quarter over quarter ▪ Equities, options and futures drove revenue growth ▪ Crypto trading - related revenue declined on lower trading levels $16.4 $23.5 $14.7 $13.6 $14.3 $12.1 $13.3 $12.3 $12.8 $13.7 $10.8 $12.9 $11.4 $11.8 $12.5 $0.6 $2.0 $1.9 $1.3 $1.0 $39.9 $51.7 $40.3 $39.5 $41.5 $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 31-Dec-20 31-Mar-21 30-Jun-21 30-Sep-21 31-Dec-21 Trading - Related Revenue by Asset Type Equities Options Futures Crypto Three months ended, Dec ‘20 Mar ‘21 Jun ‘21 Sep ‘21 Dec ‘21 ($, millions)

 

 

Net Interest Income $3.2 $3.1 $2.3 $2.3 $2.4 $2.5 $3.0 $3.1 $3.1 $3.2 $3.5 $3.3 $4.0 $3.5 $4.6 $1.4 $1.5 $1.3 $0.4 $1.1 $10.6 $10.9 $10.7 $9.3 $11.3 $0 $2 $4 $6 $8 $10 $12 31-Dec-20 31-Mar-21 30-Jun-21 30-Sep-21 31-Dec-21 Net Interest Income Total Customer Cash Margin Lending Securites Lending Crypto Lending ($, millions) Net interest income increased by 6.9% year over year ▪ Margin lending and securities lending both increased ▪ Net interest earned on customer cash and crypto lending was lower Net interest income increased by 21.6% quarter over quarter ▪ Increased securities and crypto lending were the primary driver of growth, with slight increases of net interest earned on customer cash and margin lending Interest earned on the investment of customer cash is highly correlated to short - term interest rates Three months ended, Dec ‘20 Mar ‘21 Jun ‘21 Sep ‘21 Dec ‘21

 

 

Expenses $4.3 $5.4 $5.7 $11.2 $22.7 $17.7 $21.2 $21.2 $22.7 $24.7 $7.8 $9.1 $8.6 $8.4 $8.2 $14.6 - $2.7 $13.6 $7.8 $8.2 $5.5 $5.6 $5.6 $5.7 $5.7 $50.0 $38.6 $54.7 $55.7 $69.5 -$10 $0 $10 $20 $30 $40 $50 $60 $70 Expenses Marketing Employee Compensation and Benefits Cost of Services Provided Other Interest, Depr & Amort (1) Other includes Communications, Professional Services, Occupancy and Equipment, and Other Expense (Income). Other Expense (Income) includes gains or losses on cryptocurrency assets. (1) Expense growth comparisons reflect the implementation of TradeStation's strategic growth plan ▪ Increased marketing costs aimed at growing total customer accounts and total customer assets ▪ Employee headcount growth to drive product enhancements Increased by 39.1% year over year ▪ Marketing increased 425.8% ▪ Employee Compensation and Benefits increased 39.2%, primarily related to adding headcount and principally in product development Increased by 24.7% quarter over quarter ▪ Marketing increased 103.4% ▪ Employee Compensation and Benefits increased 8.6%, primarily related to adding headcount Three months ended, Dec ‘20 Mar ‘21 Jun ‘21 Sep ‘21 Dec ‘21 ($, millions)

 

 

Appendix

 

 

Operating Metrics Total Customer Accounts is the number of customer brokerage accounts with a positive account balance. Total Customer Assets is total cash and assets held in customer accounts. Total Customer Cash is the aggregate cash held in customer accounts. Daily Average Revenue Trades (DARTs) are computed as follows: In computing DARTs, a revenue trade means one completed customer equities, options, futures, or crypto trade, regardless of the number of shares, contracts, or units included in such trade, and includes trades completed under “zero commission” plans (which are supported by payment - for - order - flow, or “PFOF,” revenue). Each “side” of a futures trade is counted as one revenue trade. Partial fills of an equities order on the same day are aggregated and counted as one revenue trade. Gross New Accounts is the total number of new customer accounts opened and funded during the applicable period. As of December 31, 2021 2020 Total Customer Accounts 178,863 131,431 Total Customer Assets ($, billions) $12.3 $9.3 Total Customer Cash ($, billions) $3.0 $2.6 Three Months Ended December 31, Nine Months Ended December 31, 2021 2020 2021 2020 Daily Average Revenue Trades (DARTs) 214,690 239,089 210,802 214,694 Gross New Accounts 27,412 15,147 66,528 51,828 Operating Metrics Definitions:

 

 

($11,340) $2,000 ($16,946) $3,965 Condensed Income Statement (GAAP) Three months ended December 31, Nine Months Ended December 31, ($, thousands) 2021 2020 2021 2020 Trading - related revenue $41,466 $39,860 $121,334 $118,299 Net interest income 11,296 10,564 31,271 28,898 Subscription and other revenue 1,096 2,462 4,402 6,449 Total Net Revenues $53,858 $52,886 $157,007 $153,646 Employee compensation and benefits 24,692 17,736 68,628 53,050 Cost of services provided 8,225 7,790 25,186 24,439 Marketing 22,705 4,318 39,595 11,949 Other (1) 8,213 14,641 29,612 41,406 Interest, depreciation & amortization 5,699 5,506 16,969 16,585 Total Expenses 69,534 49,991 179,990 147,429 Income (Loss) Before Income Taxes (15,676) 2,895 (22,983) 6,217 Income Taxes (Benefit) (4,334) 791 (6,037) 1,695 Net Income (Loss) ($11,342) $2,104 ($16,946) $4,522 (1) Other includes Communications, Professional Services, Occupancy and Equipment, and Other Expense (Income). Other Expense (Inc ome ) includes gains or losses on cryptocurrency assets.

 

Exhibit 99.3

 

Monex Group Conference Call Script, TradeStation Group CEO Portion

 

Three months and nine months ended December 31, 2021

 

Date: January 31, 2022

 

This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, that reflect TradeStation’s current views with respect to, among other things, the future operations and financial performance of TradeStation. Forward-looking statements in this communication may be identified by the use of words such as “anticipating,” “believes,” “can,” “continue,” “continuously,” “enhance,” “expects,” “hope,” “in progress,” “intends,” “may,” “over time,” “planned,” “seeks,” “should,” “strategic,” “target,” “think,” “try,” “try to,” “will” and similar terms and phrases. Forward-looking statements contained in this communication include, but are not limited to, statements as to (i) the success of TradeStation’s efforts regarding its revenue growth strategy, including the success of marketing expenditures and campaigns and approaches, increasing headcount to support its revenue growth strategy and its ability to grow its customer account base generally and the pace at which such growth is, or is not, accomplished, (ii) ongoing volume levels of customer trading activity and trading-related revenue generated, (iii) the success of TradeStation’s crypto account-opening/marketing promotion, and whether crypto customer accounts added through such promotion will provide further funding or deposits to, or trade in, such accounts, (iv) whether TradeStation’s planned product and service enhancements, including those recently launched or currently in progress, will be considered valuable or attractive by customers and customer prospects, or completed timely, or at all, and (v) whether federal fund target interest rates will increase, and if so when, whether the effective interest rates will match the target rates, and whether TradeStation will be able to benefit through increased net interest income if those rates increase.

 

The forward-looking statements contained in this communication are based on the current expectations of TradeStation and its management and are subject to risks and uncertainties. No assurance can be given that future developments affecting TradeStation will be those that are anticipated. Actual results may differ materially from current expectations due to changes in global, regional or local economic, business, competitive, market, regulatory and other factors, many of which are beyond the control of TradeStation. Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Factors that could cause actual results to differ may emerge from time to time, and it is not possible to predict all of them.

 

Such factors include, but are not limited to: changes in general economic or political conditions; changes in the markets that TradeStation targets; slowdowns in securities or cryptocurrency trading or shifting demand for securities or cryptocurrency trading products; the impact of the ongoing COVID-19 pandemic; the evolving digital asset market, including the regulation thereof; possible regulations that further limit, or eliminate, the ability of TradeStation to accept payment for order flow or similar rebates; any change in laws applicable to TradeStation or any regulatory or judicial interpretation thereof; and other factors, risks and uncertainties, including those under the heading “Risk Factors” in publicly-available SEC filings made by TradeStation. Intentions or expectations disclosed in forward-looking statements may not be achieved and the recipient of this communication should not place undue reliance on such forward-looking statements. Any forward-looking statement made in this communication speaks only as of the date hereof. TradeStation undertakes no obligation to update, revise or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.

 

As previously announced, TradeStation Group, Inc. (the “Company”) and Quantum FinTech Acquisition Corporation (“Quantum”) have entered into agreements to effect a business combination (the “Business Combination”). This presentation does not constitute (i) a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the Business Combination or (ii) an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase, any securities of the Company, Quantum, the combined company or any of their respective affiliates. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended (the “Securities Act”), or an exemption therefrom, nor shall any sale of securities in any states or jurisdictions in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction be effected. No securities commission or securities regulatory authority in the United States or any other jurisdiction has in any way passed upon the merits of the Business Combination or the accuracy or adequacy of this presentation.

 

In connection with the proposed Business Combination between the Company and Quantum, the Company has filed a registration statement on Form S-4 (the “Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC”) that includes a proxy statement / prospectus relating to the offer of the securities to be issued to Quantum. Investors, security holders and other interested persons are advised to read the Registration Statement and proxy statement / prospectus and any amendments thereto, and other relevant documents that are filed with the SEC carefully and in their entirety because they will contain important information about the Company, Quantum and the proposed Business Combination. The definitive proxy statement / prospectus will be mailed to stockholders of Quantum as of a record date to be established for voting on the proposed Business Combination. Investors, security holders and other interested persons will also be able to obtain copies of the Registration Statement and other documents containing important information about the Business Combination and the parties to the Business Combination once such documents are filed with the SEC, without charge, at the SEC’s website at www.sec.gov, or by directing a request to: Quantum FinTech Acquisition Corp., 4221 W. Boy Scout Blvd., Suite 300, Tampa, FL 33607, Attention: Investor Relations or by email at [email protected].

 

 

 

 

Quantum and the Company, their respective directors and executive officers and certain investors may be considered participants in the solicitation of proxies with respect to the proposed Business Combination under the rules of the SEC. Information about the directors and executive officers of Quantum and their ownership is set forth in Quantum’s filings with the SEC, including its final prospectus relating to its initial public offering in February 2021, which is available free of charge at the SEC’s website at www.sec.gov. Additional information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of the Quantum shareholders in connection with the proposed Business Combination, including the Company’s directors and executive officers and certain investors, will be contained in the Registration Statement for the Business Combination when available.

 

Thank you, Oki, and hello everyone.

 

For our fiscal third quarter, we posted results that reflect the early stage of implementing our strategic growth plan. TradeStation aims to leverage its feature-rich technology and trading platform by investing in marketing and product enhancements that will accelerate the growth of customer accounts and customer assets under custody.

 

During the third fiscal quarter we continued to see strong account growth and growth in client assets. As of December 31, 2021, total accounts were 36% higher than at December 31, 2020, and TradeStation’s total customer assets under custody were $12.3 billion, 33% higher than December 31, 2020.

 

Cryptocurrency accounts grew to 9% of total accounts at December 31, 2021, from less than 2% at December 31, 2020. A significant contributor to this recent growth has been a promotional campaign that was launched late in the quarter and continues at this time. For this promotion, when the customer completes an approved crypto account application TradeStation makes the initial account funding for the customer -- a nominal amount of $10 BTC. We then engage with these new account holders with the goal of their making additional account deposits and investing and trading in crypto. This is an example of us deploying different marketing approaches to build our brand and increase customers on our platform.

 

Comparison of our trading activity in the third quarter to prior periods requires context for what occurred in the markets during our prior fiscal year, which was the first year of the COVID-19 pandemic. The markets experienced extreme volatility and unusually high levels of customer trading, and then returned toward pre-pandemic levels in our current fiscal year. Accordingly, our DARTs during the quarter declined by 10.2 percent compared to the prior-year third fiscal quarter. However, on a sequential quarter-over-quarter basis, which compares two periods in the lower volatility market, our DARTs increased by 5.6%.

 

Total brokerage and other commissions was $41.3 million in our third fiscal quarter. Even with the significant drop in volatility, as compared to the prior-year third fiscal quarter, we were able to drive an increase in trading-related revenue. This is primarily due to the growth of customer accounts.

 

Net interest income during the quarter grew 8.7% compared to the prior-year third fiscal quarter, driven mainly by an increase in securities lending revenue and margin lending revenue, partially offset by lower interest earned on customer cash and crypto asset lending.

 

Net interest income expanded by 26.3% quarter-over-quarter, driven primarily by a 31% increase in securities lending and strong growth in crypto asset lending. With respect to the portion of interest income we generate from investing customer cash, we anticipate benefitting in the next fiscal year from a rising interest-rate environment.

 

We continue to make progress on our plans to become a publicly-traded company listed on the New York Stock Exchange through a de-SPAC transaction, which we announced on November 4, 2021. Late in December 2021 we filed a registration statement on Form S-4 with the SEC and look forward to the completion of this transaction.

 

As I said at the beginning, we are in the investment phase of our growth strategy.

 

During the quarter, we increased our advertising spend in performance-based and brand marketing channels. This was a substantial, and planned, step-up that we expect to increase the size and pace of growth of our customer base.

 

We are also investing in our platform, and that is reflected in higher compensation and benefits expense. We are increasing software development headcount to deliver on several initiatives:

 

One is to support the evolution of our customer experience primarily across our website and mobile applications. This quarter we launched a new simplified portfolio and balances view in our Web App and Mobile Apps. Over the next several quarters, we look to further simplify our Web and Mobile experience and integrate crypto investing natively in our proprietary TradeStation apps. Another initiative is the expansion of our cryptocurrency brokerage offering. This quarter we launched support for trading crypto in an IRA account, our Crypto FIX API, , as well as support for the CME Micro ETH futures product. We also plan to increase the number of cryptocurrencies we support. Another area on which we are focused is to grow our strategic alliance business relationships by offering third-party fintech companies the ability, through our API technology, to enable their customers’ access to TradeStation’s brokerage services from their platforms. TradingView is the largest of our 70-plus strategic alliance relationships today, and we are further enhancing our API capabilities as we seek to scale this part of our business.

 

Thank you for your time, and we look forward to continuing to update you on the progress of these

initiatives. Oki . . .

 

 

 

 

 

Exhibit 99.4