$Debitum Network obtains an investment firm license from FCMC

On 21.09.2021, SIA DN Operator legal entity of Debitum operations obtained an investment brokerage license from the FCMC (Latvia’s Financial and Capital Market Commission), which allows us to be a regulated platform in Latvia.


We have added the 2021 Q2 financial report of $Debitum Network.

Key figures:

Profit/loss: € -21k
Assets: € 313k
Equity: € 286k
Debt: € 27k

DN Operator SIA has released its 2020 annual report.

Key figures:
Loss = € -3k
Assets = € 315k
Equity = € 307k
Debt = € 8k

''Considering that SIA DN Operator, as the Platform Operator, does not assume the credit risks related to these assets or liabilities, but earns only commission income for their servicing, referring to the requirements of regulatory enactments, these assets and liabilities are off-balance sheet and are not reflected in the balance sheet of these financial statements, but are provided only as additional information to provide a true and fair view and a clear picture of the Company's operations.''

Off-balance sheet (serviceable) assets 31.12.2020:

Claims on creditors for investments in assignment agreements: 3 754 581
Claims on creditors for accrued interest and fines: 25,046
Current settlements with credit issuers: 211 803
Settlements with the previous platform operator: 6 313
Total off - balance sheet assets: 3 997 743

Off-balance sheet (serviceable) liabilities 31.12.2020:

Free balance of investors' contributions: 218 116
Investors' investments in assignment agreements: 3 754 581
Accrued interest and fines: 25 046
Total liabilities: 3,997,743


$Debitum Network has shared a 2021 Q1 financial report of DN Operator SIA.

Key figures:
Profit = € -46k
Total assets = € 320k
Equity = € 259k
Debt = € 61k

PLATFORM PERFORMANCE OVERVIEW

Key information about Debitum platform for Q1 2021
Currencies for investments: EUR, USD*
Registered users at the end of the reporting period: 6 576
Investments outstanding at the end of the reporting period: 4.94 million EUR
Client funds on Debitum platform at the end of the reporting period: 5.11 million EUR
Number of assets available for investments at the end of the reporting period: 238
Average weighted interest rate for active assets (invested or available for investments) during the reporting period: 8.86 %
Defaulted assets during Debitum platform operations: 0

* Debitum provides only EUR investments through main platform which is available for all users. USD
investments are available only for few institutional investors and are not available publicly.

Largest (77%) loan originators at the end of Q1 2021 are Triple Dragon Funding Delta (UK) with assets on EUR and USD platforms and Flexidea (LV).

Future plans
Debitum management is still working hard on receiving investment broker company license. We feel really close to it and we hope to share this news in Q2-Q3 2021. In this process we also need some cooperation from the users by filling in the questionnaire on the platform which is mandatory requirement by the regulator of financial market for investment platform users.
In Q2 2021 we are planning to introduce a new product to our investors. The product will provide a possibility to invest in a pool of loans issued by a loan originator. That will make it easier to invest as investors will not need to choose each asset separately - they will only need to choose the loan originator and duration of investment.

Interview with $Debitum Network, they got asked some tricky questions about ICO as well:

31:37​ How Debitum was funded in 2018 / ICO Crowdsale event
37:03​ Scam accusations related to selling DEB Token
40:40​ Did Debitum break its promises after Crowdsale?


Update from $Debitum Network:

Hello,
Yes, everything is going well, the company has new projects and the one Debitum Network refinances is finished a while ago. Therefore, it could be only mildly affected by the current situation. Regarding future assets on the platform, there will be no more Vihorev Investments assets as we decided not to risk due to lack of expertise in the real estate field.
Respectfully,
Eimantas Valančius

$Debitum Network have shared additional financial reports of their loan originators, and have promised to share all LO financials in the future.
They explained their loan originator due diligence process and shared their own ratings of the LOs:

''Debitum due diligence process is focused on the operational sustainability of a loan originator. The analysis begins by analysing the market and identifying whether the company is focusing on an appropriate customer segment and offering suitable products. Furthermore, detailed debt collection procedures and results analysis is carried out. Later, if the company provides sufficient information, Debitum analyses the loan book of the company. Debitum compares planned revenue with the factual cash flow, evaluates the collection performance of different loan types, and forecasts the amount of late and defaulted loans. The analysis continues with estimating the true value of revenues and identifying loans that do not follow the overall performance of the loan book. When performing financial analysis, Debitum focuses on identifying the true value of capital employed and its structure. Moreover, the debt structure is analysed and Debitum establishes a maximum sustainable level of financing. Additionally, the analysts check whether the company can cover interest expenses. Lastly, strict covenants are set in place within the partnership agreement.''

$Debitum Network refused to share financials of its loan originators, but we found most of them. Reporting quality is really bad - only 1 loan originator has a reputable auditor, but even in that case report is not in English. Financials are questionable as well - more than 50% of lenders have negative equity or very high leverage.


It is interesting that $Debitum Network raised huge amount of funding (or "donation"): $18 million in an ICO, but price of it's token has lost 98% of value by going from $0.07 to $0.001598 right now.
At the same time the token is completely useless and they don't even try to use it as we can see it with the disabled "loyalty program".

SIA DN Operator registered capital: 310k EUR
SIA Prosperitu registered capital: 2840 EUR, equity: 82k EUR (at end of 2019)

Could it mean that less than $1m was invested in business? And $17 million or so cashed out?

Telegram group for ICO investors: t.me/debitum

$Debitum Network - loan originator "Vihorev Investments" has some delays:

Gytis from Debitum, 8th Feb 2021: I do hereby confirm that the assets will be repaid. Moreover, I confirm that the loan originator is aware of the issue that the assets are running late and we have agreed on the most effective way to cover the balance on the platform. Based on an agreement with the loan originator, we will start to repay all principle, interest, and penalty already next week. The plan is to cover all outstanding balances by the end of this month. As there were no restructuring or rescheduling of the assets, there are no changes for the investors on our platform besides that they will receive penalties accumulated throughout the period. The company is also aware that on 2021 April 24 we will execute the buyback guarantee. As an additional guarantee, our partnership agreement defines that in case of non-payment Debitum will execute the right to cover the outstanding balance with all future revenues of the company, if necessary, take ownership of the assets in question. Moreover, the owner of the company is personally liable in case of non-payment.


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