F-1: Webull Files F-1 for Resale of Shares, Reveals Q1 2025 Operational Growth Amidst 2024 Net Loss and Strategic Capital Initiatives

Webull Corporation has filed an F-1 registration statement for the resale of up to 75.16 million Class A Ordinary Shares, including commitment shares, under a new $1 billion standby equity purchase agreement, while reporting a net loss of $22.7 million for 2024 despite strong operational growth in early 2025.

Summary

• Webull Corporation filed an F-1 registration statement for the resale of up to 75,159,236 Class A Ordinary Shares by YA II PN, LTD., including 159,236 commitment shares issued at a deemed $12.56 per share.
• The company entered into a Standby Equity Purchase Agreement on July 1, 2025, allowing it to sell up to $1,000,000,000 of Class A Ordinary Shares to the Selling Securityholder over 36 months at a 2.5% discount to the market price.
• Webull reported a net loss attributable to the Company of $22.7 million for the year ended December 31, 2024, a significant decline from a net income of $6.1 million in 2023.
• Net loss attributable to ordinary shareholders increased to $517.8 million in 2024 from $334.0 million in 2023, primarily due to preferred shares redemption value accretion.
• Total revenues slightly increased to $390.2 million in 2024 from $389.6 million in 2023.
• Adjusted operating income decreased significantly to $18.2 million in 2024 from $52.4 million in 2023.
• Total operating expenses increased by $38.0 million to $404.6 million in 2024, driven by higher general and administrative, and technology and development costs.
• Operational metrics for Q1 2025 showed strong year-over-year growth: registered users increased 17% to 24.1 million, funded accounts grew 10% to 4.7 million, customer assets rose 45% to $12.6 billion, and DARTs increased 44% to 924 thousand.
• The company completed the redemption of all Webull Incentive Warrants on June 30, 2025, generating approximately $204.5 million in gross proceeds from exercised warrants.
• Webull Financial LLC entered a new syndicated credit agreement for up to $150 million on February 21, 2025.
• Webull announced a partnership with Kalshi in February 2025 to offer binary event contracts and launched Webull Premium in March 2025, which had approximately 40,000 users and $2.0 billion in customer assets by May 15, 2025.
• The company entered into an agreement on July 11, 2025, to re-acquire Webull Pay Inc. (its former digital assets business) as part of a plan to reintroduce crypto trading to global customers.
• Webull's founder, Mr. Anquan Wang, beneficially owns all Class B Ordinary Shares, representing approximately 80.5% of the total voting power.
• The company is subject to ongoing regulatory scrutiny and investigations, including past fines from FINRA ($3 million), Massachusetts Securities Division ($500,000), and SEC ($125,000), and inquiries regarding its connections to China.

Sentiment

Score: 4

Explanation: While Webull demonstrates strong operational growth in user base, customer assets, and trading volumes, and is actively expanding its product offerings and global footprint, the significant shift to a net loss and decline in adjusted profitability in 2024, coupled with substantial potential dilution from the standby equity purchase agreement and ongoing regulatory and geopolitical risks, present considerable financial and operational headwinds. The capital raise provides liquidity but at a cost of dilution and potential share price volatility.

Positives

• Strong growth in key operational metrics for Q1 2025 year-over-year, including registered users (24.1 million, +17%), funded accounts (4.7 million, +10%), customer assets ($12.6 billion, +45%), equities notional volume ($128 billion, +15%), options contracts volume (121 million, +8%), and DARTs (924 thousand, +44%).
• High quarterly customer retention rate of approximately 98% in Q4 2024, indicating strong customer loyalty.
• Successful launch of Webull Premium, a subscription-based service, attracting approximately 40,000 users and $2.0 billion in customer assets by May 15, 2025.
• Expansion of product offerings through new partnerships, such as with Kalshi for binary event contracts and BlackRock for model portfolios on Webull Advisors.
• Significant gross proceeds of approximately $204.5 million generated from the exercise of Webull Incentive Warrants.
• Secured a new syndicated credit agreement for up to $150 million, enhancing liquidity.
• Entered into a Standby Equity Purchase Agreement with YA II PN, LTD. for up to $1 billion in potential capital, providing a flexible funding source.
• Continued global expansion with broker-dealer licenses in 12 markets and plans to launch in additional markets in Europe and Latin America.
• Proprietary technology and scalable infrastructure enable efficient global deployment and high system availability (over 99.9% in 2021).

Negatives

• Shift from a net income of $6.1 million in 2023 to a net loss of $22.7 million in 2024.
• Net loss attributable to ordinary shareholders significantly increased to $517.8 million in 2024 from $334.0 million in 2023, largely due to preferred shares redemption value accretion.
• Adjusted operating income decreased substantially from $52.4 million in 2023 to $18.2 million in 2024.
• Total operating expenses increased by $38.0 million to $404.6 million in 2024, outpacing revenue growth.
• Interest-related income decreased by $25.3 million in 2024, primarily due to a $29.9 million decrease in stock lending income.
• Option order flow rebates decreased by $5.4 million in 2024 despite an increase in options contracts traded, attributed to a shift towards narrower spread securities.
• Cash and cash equivalents decreased from $372.3 million in 2023 to $270.7 million in 2024.
• The company has a limited operating history as a public company, making future financial performance difficult to predict.
• Significant reliance on Payment for Order Flow (PFOF) for a majority of trading-related income, which is subject to heightened regulatory scrutiny and potential restrictions or bans.
• Exposure to fluctuations in interest rates could reduce interest-related income.
• Reliance on a limited number of market makers and a single clearing partner (Apex Clearing) creates concentration risks.
• Identified a material weakness in internal control over financial reporting in 2022 related to evaluating a digital assets service provider's control activities.
• Qualifies as a 'controlled company' and 'foreign private issuer,' allowing exemptions from certain Nasdaq corporate governance rules, which may afford less protection to shareholders.
• The dual-class voting structure limits the ability of Class A shareholders to influence corporate matters.
• Potential for substantial dilution from future share sales, including those under the Standby Equity Purchase Agreement and warrant exercises.
• The Selling Securityholder may experience a positive rate of return even if the public trading price declines, due to their discounted purchase price.
• The company does not carry business interruption insurance, cybersecurity insurance, general product liability insurance, or key-man insurance.
• Ongoing inquiries and investigations from U.S. government bodies regarding connections to China pose reputational and operational risks.

Risks

• Limited operating history and historical operating and financial results are not necessarily indicative of future performance.
• Incurred net losses in the past and may not maintain net income in the future.
• Risks associated with global operations and continued global expansion, including complex or constantly evolving political or regulatory environments and exchange rate fluctuations.
• Intense competition in the digital trading and investing services market.
• Heavy reliance on trading-related income; a sustained slowdown in securities trading could adversely affect results.
• A majority of trading-related income is derived from Payment for Order Flow (PFOF), which faces heightened scrutiny and potential new regulations or bans.
• Direct and indirect exposure to fluctuations in interest rates, which could reduce interest-related income.
• Reliance on a limited number of market makers and liquidity providers; loss of any could negatively affect the business.
• Platform and internal systems rely on highly technical software and applications that may contain undetected errors, leading to unexpected network interruptions, failures, or security breaches.
• Failure to protect customer data and privacy or prevent security breaches could result in economic loss, reputational damage, and legal penalties.
• Laws and regulations regarding cybersecurity and data privacy are complex and evolving, increasing compliance costs and risks.
• May be involved in regulatory investigations, actions, and settlements, which could result in fines, penalties, or restrictions on business practices.
• Inability to retain existing customers or attract new customers, or failure to offer a positive trading experience.
• Cannot guarantee the profitability of customer investments or ensure customers will exercise rational judgment.
• The Webull Affiliate Program exposes the company to regulatory scrutiny with limited control over participants' content.
• New lines of business or services may subject the company to additional risks.
• Business and reputation may be harmed by employee or business partner misconduct or errors.
• Future strategic alliances or acquisitions may have a material adverse effect on business, results of operations, and financial condition.
• Risks related to health epidemics, natural disasters, and other outbreaks.
• Subject to regulatory capital requirements; failure to comply could lead to suspension or revocation of licenses.
• Providing market insights and analytical tools could be construed as investment advice, subjecting the company to additional risks and regulations.
• The development and use of artificial intelligence (AI) presents business, compliance, and reputational risks.
• Fraudulent or illegal activities on the platform could negatively impact brand and reputation and cause financial loss.
• Reliance on external service providers for key market information and data, technology, processing, and supporting functions.
• Reliance on mobile application distribution channels.
• Exposure to credit risks associated with margin financing services.
• Compliance and risk management policies and procedures may not be fully effective.
• Operating expenses are expected to increase significantly, and profitability or positive cash flow may not be consistently achieved.
• Fluctuations in exchange rates could have a material adverse effect on business and results of operations.
• Increased share-based compensation expenses.
• Inability to control labor costs effectively.
• Failure to comply with local labor laws and make adequate contributions to employee benefit plans.
• Changes to U.S. and foreign tax laws, as well as their application, could adversely impact financial position and operating results.
• Key business metrics and other estimates are subject to inherent challenges in measurement, and inaccuracies could adversely affect the business.
• Limited insurance coverage may expose the company to significant costs and business disruption.
• Identified a material weakness in internal control over financial reporting in past years.
• Controlled company and foreign private issuer status allows exemptions from Nasdaq corporate governance rules, potentially affording less protection to shareholders.
• Dual-class voting structure will limit Class A shareholders' ability to influence corporate matters and could discourage change of control transactions.
• Webull Class A Ordinary Shares and Warrants may be ineligible for inclusion in certain stock market indices, adversely affecting trading price and liquidity.
• If securities are not eligible for deposit and clearing within the facilities of the Depository Trust Company (DTC), transactions may be disrupted.
• Uncertainty regarding classification as a passive foreign investment company (PFIC) for U.S. federal income tax purposes, which could result in adverse tax consequences to U.S. Holders.
• No intention to pay cash dividends for the foreseeable future; return on investment depends on share price appreciation.
• Future sales of securities in the public market, or the perception of such sales, could cause the market price to decline significantly and impair ability to raise capital.
• Webull Warrants are currently exercisable, increasing shares eligible for future resale and potentially resulting in dilution.
• Terms of Webull Warrants may be amended in a manner adverse to a holder if holders of at least 50% of outstanding warrants approve.
• Company may redeem unexpired Webull Public Warrants prior to their exercise at a time disadvantageous to a holder, making them worthless.
• If securities or industry analysts do not publish research, publish inaccurate or unfavorable research, or cease publishing research, the price and trading volume could decline significantly.
• Management team has limited experience managing a public company, which may result in difficulty operating and growing the business.
• Requirements of being a public company may strain resources and distract management.
• Increased visibility as a public company may result in threatened or actual litigation.

Future Outlook

Webull plans to evolve into a comprehensive financial services platform, expanding beyond self-directed trading to offer wealth management and other financial services. This strategy includes growing its retail customer base, broadening product offerings (e.g., becoming a carrying broker in the U.S., reintroducing crypto trading, expanding robo-advisor services), continuing global geographic expansion, and investing in technology, particularly AI for risk management, fraud detection, and personalized content.

Management Comments

• "We strive to be the platform of choice for a new generation of investors by building an efficient, low-cost, and easy-to-use global investment platform."
• "We arm each customer with the tools they need to develop into what we refer to as an informed investor — one who understands the market and has the confidence to succeed as an investor."
• "We believe all investors, not just professional investors that can afford to pay for expensive subscriptions, should have access to advanced, real-time market data and news."
• "We think of our customers as long-term partners, because our success depends on theirs."
• "We believe Webull represents the future of retail investing and that we have differentiated ourselves from other offerings in the market."
• "Our goal is to become a full-service investment platform offering our customers in all of the markets where we operate the financial products necessary to take control of their financial future and achieve their long-term wealth accumulation goals."
• "We are deeply cognizant that the market and the needs of our customers are rapidly evolving, and we focus on delivering innovations to meet these changes and drive customer engagement."
• "We believe that successful global expansion first requires robust local execution."
• "We maintain that a truly global investment platform is one that operates a unified technology platform globally, yet at the same time, localizes the products and services to serve the needs of local customers, complies with the local laws and regulations and engages positively with the local community."
• "We take pride in our pursuit of perfection and release frequent upgrades to our platform both proactively and based on user feedback."
• "We are proactively engaged in exploring practical applications and integrations of the latest AI technologies, including Generative AI, into our core business operations, from risk management and fraud detection to more personalized content curation, to stay a step ahead of the technology adoption curve."
• "We believe that the new generation of investors wants to become informed investors. They are our target customers because we believe they are an underserved market segment that is poised for tremendous growth in the future."
• "We are committed to investor education and believe our platform provides retail investors with a specialized and effective resources to learn about investing and build confidence — establishing a foundation for a lifetime of active and informed investing."
• "Our ambition is to become the first globally connected, retail-oriented investing platform where investors everywhere can trade financial products listed on all major global exchanges seamlessly through a single account."
• "We believe that the ease-of-use of our platform, the breadth and depth of the learning tools we offer, and our reliable infrastructure naturally encourage our customers to recommend us to their friends and family."

Industry Context

The digital trading and investing services market is rapidly evolving and intensely competitive, driven by mobile-first investing preferences of millennials and Gen-Z, increased accessibility of financial information, and the globalization of retail investing. Retail participation in equity trading grew from approximately 15% in 2019 to 18% by the end of 2024, and options trading rose from 35% to over 40% in the same period. This shift favors digital platforms like Webull over traditional brokerages. However, the industry faces heightened regulatory scrutiny, particularly concerning Payment for Order Flow (PFOF) and digital engagement practices, which could impact business models and revenue streams.

Comparison to Industry Standards

• Webull offers zero-commission trading on U.S. equities and options, which is stated as an 'industry standard' in the U.S. market.
• The company claims its platform solves pain points of 'legacy providers' (limited mobile functionality) and 'digitally-native online investment platforms' (lack product depth/analytical tools).
• Webull's commission rates outside the United States are 'typically among the lowest of local brokerage firms'.
• The company highlights its 'industry-leading technical indicators' and believes its interface offers 'some of the most robust and in-depth trading related tools and technical indicators on the market today'.
• Webull's system maintained an 'availability rate of over 99.9%' during extreme market volatility in 2021, demonstrating high reliability compared to industry expectations.
• The platform's ability to open 'more than 240,000 accounts and process over 2.6 million trades in a single day' in January 2021 showcases high scalability.
• Webull's KYC process integrates 'comprehensive AML measures in accordance with United States regulations' and uses 'industry-standard security measures, such as two-factor authentication'.
• The company's 'approximately 98% quarterly retention rate in the fourth quarter of 2024' suggests strong customer loyalty relative to industry benchmarks.

Management Changes

Corporate Governance

Legal Proceedings

• Paid a $3 million fine to FINRA in February 2023 for alleged non-compliance related to its option trading approval process and handling of customer complaints from December 2019 through July 2021.
• Settled with the Massachusetts Securities Division (MSD) for $500,000 in 2022 for allegations of not dedicating sufficient resources to compliance.
• Paid a $125,000 fine to the SEC for filing deficient suspicious activity reports (SARs) from October 2018 through December 2022.
• Subject to inquiries and investigations from various U.S. government bodies, including 14 state attorneys general (April 2024) and the Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party (December 2024), relating to concerns about connections to China and customer data security.
• Faced class action lawsuits from customers alleging significant economic loss due to trading halts on GameStop, AMC, and Koss Corporation stocks on January 28, 2021.

Related Party Transactions

• Webull has a clearing relationship with Apex Clearing Corporation, which is controlled by PEAK6 Investments LLC, a minority common and preferred shareholder of Webull Corporation. Webull receives revenue (interest and stock lending income) and incurs expenses (clearing costs) from Apex Clearing. Apex Clearing was considered a related party until May 9, 2024.
• Apex Crypto LLC, formerly controlled by PEAK6, was a related party until April 1, 2023. Webull Pay LLC (discontinued operations) earned fee revenue from Apex Crypto.
• On July 11, 2025, Webull entered into an agreement to re-acquire Webull Pay Inc., the parent company of Webull Pay LLC, which was spun off in July 2023. This transaction involves issuing Webull Class A Ordinary Shares and cash to Webull Pay shareholders, including Water Castle Az Inc. (wholly-owned by founder Anquan Wang) and Webull Partners Limited (share-award platform for certain Webull employees/officers).
• Webull repurchased 3,017,119 Series D preferred shares from certain preferred shareholders for $100,000,000 in unsecured promissory notes on April 10, 2025.
• Auxo Capital Managers LLC (Sponsor) provided loans to SKGR (First Overfunding Loan of $5.0 million, Second Overfunding Loan of $240,000) and unsecured promissory notes ($1,720,000 outstanding as of December 31, 2024).
• The Sponsor agreed to surrender and forfeit Class B ordinary shares in connection with non-redemption agreements.
• Webull agreed to indemnify Auxo and other Initial SKGR Shareholders for up to $5,000,000 for certain U.S. federal income taxes related to the business combination.
• Initial SKGR Shareholders and certain non-redemption agreement investors are subject to transfer restrictions on their Webull Class A Ordinary Shares for one year after the Business Combination closing date, with exceptions for tax purposes (25% released) or if the share price exceeds $12.00 for 20 trading days within a 30-trading day period after 150 days.
• Existing Webull Shareholders are subject to transfer restrictions on their Webull Class A Ordinary Shares for 180 days after the Business Combination closing date, with exceptions if the share price exceeds $12.00 for 20 trading days within a 30-trading day period, allowing up to 25% release.
• Historically, Webull extended interest-free loans to its founder (Mr. Anquan Wang) and his family, Mr. Jun Yuan, Mr. Xinyu Yi (former director), and Mr. Anthony Denier (CEO of Webull Financial); all outstanding balances have been fully repaid.

Stakeholder Impact

• Shareholders face potential significant dilution from the Standby Equity Purchase Agreement and future warrant exercises, as well as risks associated with the dual-class voting structure and the company's foreign private issuer/controlled company status, which may reduce shareholder protections.
• Employees are impacted by share-based compensation plans designed for attraction and retention, and the company's ability to manage labor costs.
• Customers benefit from the low-cost, mobile-first platform, broad product range, and advanced analytical tools, but face risks related to market fluctuations, potential PFOF conflicts of interest, and data security.
• Regulators are actively scrutinizing Webull's operations, particularly regarding PFOF, compliance, data privacy, and its connections to China, which could lead to further enforcement actions or changes in business practices.
• Business partners, especially market makers and the clearing partner (Apex Clearing), are critical to Webull's operations, and reliance on a limited number of these partners creates concentration risk.

Next Steps

• Closing of the Webull Pay Transaction, expected in August 2025, to reintroduce crypto trading to global customers.
• Construction of a new research and development center in Changsha, China, with construction required to be completed by December 31, 2026.
• Continued global geographic expansion into additional markets in Europe and Latin America.
• Ongoing investment in and upgrade of technological infrastructure, including exploring practical applications of AI.
• Potential future sales of Webull Class A Ordinary Shares to the Selling Securityholder under the Standby Equity Purchase Agreement.
• Potential filing of additional registration statements for resale of shares under the Purchase Agreement if sales exceed the currently registered amount or the Exchange Cap.
• Potential shareholder approval to issue Webull Class A Ordinary Shares in excess of the Exchange Cap.
• Potential exercise of remaining Webull Warrants.
• Repayment of promissory notes from preferred share repurchase by their maturity date of April 9, 2027.
• Completion of Webull Securities Limited's acquisition of 18,300 shares from the noncontrolling shareholder of Webull Indonesia, pending regulatory approval.
• Closing of the acquisition of Vifaru (Mexico) expected before December 31, 2025.

Key Dates

Recommendation

Keywords

Webull, Digital Investment Platform, Online Brokerage, Fintech, SEC Filing, F-1 Registration Statement, Standby Equity Purchase Agreement, YA II PN LTD, Class A Ordinary Shares, Dilution, Payment for Order Flow, PFOF, Regulatory Risk, Corporate Governance, Dual-Class Structure, Global Expansion, Customer Assets, Funded Accounts, Trading Volume, Net Loss, AI Integration, Wealth Management, Crypto Trading, Nasdaq Listing, Risk Management, Financial Performance