Bitcoin Well Inc. (TSXV: BTCW) (“Bitcoin Well” or
the “Company”) today announced our financial and operating results
for the second quarter and first half of 2021. The interim
Financial Statements and Notes, as well as Management’s Discussion
and Analysis (“MD&A”) for the three and six month periods ended
June 30, 2021 and 2020 are available on our website and have been
filed on SEDAR.
“I am excited to share the numerous
transformational milestones achieved by Bitcoin Well during the
second quarter. We enhanced our Board of Directors, closed a $7
million private placement financing, and opened an over-the-counter
(“OTC”) office in Calgary. We have also continued to expand,
including the international acquisition of a UK bitcoin ATM
operator,” said Adam O’Brien, Founder and CEO of Bitcoin Well.
“Since then, Bitcoin Well has officially become the first
publicly-traded bitcoin ATM company in the world1 with our listing
on the TSX Venture Exchange (“TSXV”) at the end of July; we have
also assumed the assets of Crypto Kiosk in northern Ontario, and
brought new technology solutions in-house with the proposed
acquisition of Ghostlab. We look forward to building on this
momentum for the second half of the year.”
Overview
|
For the three months ended, |
For the six months ended, |
|
June 30, 2021 |
June 30, 2020 |
June 30, 2021 |
June 30, 2020 |
Revenue ($000s) |
$ |
41,734 |
|
$ |
8,268 |
|
$ |
69,259 |
|
$ |
14,489 |
|
Gross Profit ($000s) |
$ |
1,157 |
|
$ |
1,140 |
|
$ |
3,460 |
|
$ |
1,632 |
|
Gross Profit Margin (%) |
|
3 |
% |
|
14 |
% |
|
5 |
% |
|
11 |
% |
Net Income (Loss) |
$ |
30 |
|
$ |
37 |
|
$ |
(4,333 |
) |
$ |
(145 |
) |
Adjusted EBITDA1 ($000s) |
$ |
(845 |
) |
$ |
542 |
|
$ |
(17 |
) |
$ |
530 |
|
Adjusted EBITDA1 Margin
(%) |
|
(2.0 |
)% |
|
6.6 |
% |
|
(0.0 |
)% |
|
3.7 |
% |
ATM
Count |
|
169 |
|
|
60 |
|
|
169 |
|
|
60 |
|
1 Non-IFRS measure. See Advisories – "Non-IFRS
measures".
Q2 2021 Financial
Highlights
-
Revenue grew 405% to $41.7 million relative to Q2 2020, primarily
from an increase in active ATMs plus over-the-counter (“OTC”) and
exchange sales. Exchange sales reflect the revenue booked when
customers sell us bitcoin at one price, and we are able to sell
that bitcoin to cryptocurrency exchanges at a higher price, which
demonstrates the success of our OTC growth strategy. Included in Q2
2021 revenue is an outlier exchange sale transaction of $22.0
million, which is not expected to recur in future periods.
Normalized revenue with this $22.0 million sale removed would be
$19.7 million, showcasing growth of 139% over Q2 2020.
-
Average per machine revenue was $15,156 in Q2 2021, approximately
half of the Q2 2020 level, with an average per machine transaction
size of $921 compared to $814 in the prior year. Average per
machine revenue was lower primarily due to access restrictions
related to the COVID-19 restrictions and the implementation of new
‘know-your-customer’ regulations that came into effect in June. As
COVID-19 restrictions continue to ease, we plan to continually
monitor and find creative ways to increase our machine revenues
back to pre-pandemic levels.
-
Although our gross profit remained consistent year-over-year, as a
result of initiatives designed to support future growth plans for
the remainder of 2021 and future years, we incurred significantly
higher operating expenses in Q2 2021. This contributed to negative
Adjusted EBITDA2 of $0.8 million for the quarter.
-
Net income was positive in Q2 2021 totaling $30 thousand compared
to a loss of $4.3 million in the previous quarter and net income of
$37 thousand in Q2 2020. The quarter-over-quarter improvement
reflects the non-cash impact of the revaluation of cryptocurrency
loans, a practice required under accounting standards that is
undertaken each quarter.
- Our cash at the end of the quarter
increased to $9.5 million from $4.1 million at year end 2020 and we
had a working capital surplus of $3.2 million at June 30 compared
to a working capital deficit of $2.9 million at December 31, 2020,
positioning Bitcoin Well with financial flexibility to continue
executing our growth strategy.
Strategic & Operational
Highlights
-
Bitcoin Well expanded internationally in May of 2021 (see our July
28th press release for acquisition details) through the acquisition
of Paradime LTD, operating as AlphaVend, the second largest Bitcoin
ATM operator in the United Kingdom, which included 26 operated
machines across England, Scotland and Wales. AlphaVend is currently
conducting its operations under a temporary registration with the
FCA and if any licensing changes occur that would result in a
deemed non-compliance with regulations, AlphaVend’s operations will
cease.
-
A total of 46 new ATMs were added to our portfolio during Q2 2021,
resulting in Bitcoin Well having a total of 141 machines installed
across Canada and 28 machines installed in the United Kingdom at
the end of June, 2021. Currently, Bitcoin Well has nearly 190 ATMs
in operation globally, representing an increase of more than 120%
since the beginning of this year, which currently places our
Company as the second largest bitcoin ATM operator in Canada and
the UK based on number of machines.
-
On July 30, the common shares of Bitcoin Well made their trading
debut on the TSXV under the symbol "BTCW", where we are listed as a
Tier 2 Technology Issuer, and the Bitcoin Well team commemorated
the event by ringing the opening bell on the TSX that same
morning.
-
Consistent with our diversified growth strategy, Bitcoin Well
rebooted our M&A strategy with the acquisition of, and
investment into, companies operating or complementary to the
cryptocurrency industry, both during and subsequent to the quarter
end, as a way to access innovative solutions and gain exposure to
growing companies, including:
-
Invested in an environmentally-friendly bitcoin mining company in
June 2021 that uses stranded energy to power its fleet of bitcoin
miners. This gives us an inside look to the mining industry in
order to better position ourselves to strike strategic partnerships
with other bitcoin miners as well as gain exposure to the bitcoin
mining industry in passive form;
-
Invested in a company that uses proprietary and cutting edge
biometrics, artificial intelligence, and blockchain technology to
provide world-class identity verification. With access to this
technology, we believe Bitcoin Well can create streamlined,
improved and innovative solutions for our customers’ KYC
(Know-Your-Customer) onboarding process;
-
Acquired the assets of Crypto Kiosk Inc. in July 2021, a
cryptocurrency ATM operator in northern Ontario, which consisted of
11 cryptocurrency ATMs plus associated proprietary accounts;
and
-
Entered into a share purchase agreement to acquire Ghostlab Inc., a
software company that designs and develops software to improve the
functionality and accessibility of modern financial technology and
services, including bitcoin ATM machines. More details about the
Ghostlab acquisition are available within our August 11, 2021 press
release.
Return of Our Chief Financial
Officer
Our Chief Financial Officer, Mandy Johnston,
MBA, CPA (US), CMA (US), CSCA, has returned from a temporary leave
and resumed her duties, effective immediately. With her return,
Jason Vandenberg, Senior Vice President and Co-Founder of Camilla
Advisory Group Inc., a management consulting firm in Edmonton,
Alberta, has stepped down as Interim CFO.
We greatly appreciate Mr. Vandenberg’s
leadership and contributions in Ms. Johnston’s absence.
Outlook
With our recently secured public markets listing
and enterprising consolidation strategy, the team at Bitcoin Well
is excited about the opportunities ahead through the second half of
2021 and beyond. Our announced pending acquisition of software
development company, Ghostlab, will enable us to offer technology
that makes bitcoin more accessible and user friendly for the
general public while also expanding the future potential SaaS
revenue stream for Bitcoin Well. We believe that our company is
well positioned to continue delivering meaningful value to
stakeholders and to further advance our mission of allowing bitcoin
accessibility from ocean to ocean across Canada and around the
world.
Thank you for joining us on this journey.
About Bitcoin Well
Bitcoin Well offers convenient, secure and
reliable ways to buy and sell bitcoin through a trusted Bitcoin ATM
network and suite of web-based transaction services. The Company
generates revenue and based on management’s assessment of
publicly-available data, is the first publicly traded Bitcoin ATM
company in the world, with an enterprising consolidation strategy
to deliver accretive and cost-effective expansion in North America
and globally. As leaders of the longest-running, founder-led
Bitcoin ATM company in Canada, management of Bitcoin Well brings
deep operational capabilities that span the entire value chain
along with access to proprietary, cutting-edge software development
that supports further expansion. Sign up for our newsletter and
follow us on LinkedIn, Twitter, YouTube, Facebook, TikTok and
Instagram to keep up to date with our business.
Contact Information For
investor information, please contact:
Bitcoin Well10142 82 Avenue
NWEdmonton, AB T6E 1Z4bitcoinwell.com
Adam O’Brien, Founder & CEO
Mandy Johnston, CFOTel: 1 888 711 3866
ir@bitcoinwell.com
For media queries and further information,
please contact:
Karen Smola, Director of
MarketingTel: 587-735-1570k.smola@bitcoinwell.com
Reader Advisories / Forward-Looking
Statements
Statements in this press release regarding
Bitcoin Well which are not historical facts are “forward-looking
statements” that involve risks and uncertainties, such as the
timing of expansion plans and activities, the pending acquisition
of GhostLab, as well as various business objectives. Such
information can generally be identified by the use of
forwarding-looking wording such as “may”, “expect”, “estimate”,
“anticipate”, “intend”, “believe” and “continue” or the negative
thereof or similar variations. Since forward-looking statements
address future events and conditions, by their very nature, they
involve inherent risks and uncertainties. Actual results in each
case could differ materially from those currently anticipated in
such statements due to factors such as: (i) adverse market
conditions, (ii) achieving all of the conditions required to close
the acquisition of Ghostlab, including the approval of the TSXV,
and (iii) the need for additional financing. Except as required by
law, Bitcoin Well does not intend to update any changes to such
statements.
Non-IFRS Measures The Company
uses certain terms in this news release and within the MD&A,
such as ‘adjusted EBITDA’, which do not have a standardized or
prescribed meaning under International Financial Reporting
Standards (IFRS), and accordingly, these measurements may not be
comparable with the calculation of similar measurements used by
other companies. See the table below for a reconciliation of each
non-IFRS measure to its nearest IFRS measure or refer to the
"Non-GAAP Measures” and “Selected Financial Information” sections
in the MD&A for applicable definitions, calculations, rationale
for use and reconciliations to the most directly comparable measure
under IFRS. Non-IFRS measures are provided as supplementary
information by which readers may wish to consider the Company's
performance but should not be relied upon for comparative or
investment purposes.
Reconciliation of Adjusted EBITDA to net income
(loss)
|
For the three months ended, |
For the six months ended, |
$000s |
June 30, 2021 |
June 30, 2020 |
June 30, 2021 |
June 30, 2020 |
Net income (loss) |
$ |
30 |
|
$ |
37 |
$ |
(4,333 |
) |
$ |
(145 |
) |
Listing expense |
$ |
1,477 |
|
|
- |
$ |
1,477 |
|
|
- |
|
Business acquisition and QT
costs |
|
467 |
|
|
177 |
|
564 |
|
|
239 |
|
Depreciation and
accretion |
|
274 |
|
|
141 |
|
542 |
|
|
212 |
|
Fair value change –
cryptocurrency inventory |
|
(4 |
) |
|
38 |
|
(9 |
) |
|
32 |
|
Fair value change –
cryptocurrency loans |
|
(3,313 |
) |
|
135 |
|
1,946 |
|
|
135 |
|
Foreign exchange |
|
- |
|
|
- |
|
(2 |
) |
|
- |
|
Income tax expense |
|
17 |
|
|
- |
|
(478 |
) |
|
- |
|
Share based compensation |
|
207 |
|
|
- |
|
282 |
|
|
- |
|
(Gain) loss on debt
settlement |
|
(1 |
) |
|
14 |
|
(6 |
) |
|
57 |
|
Adjusted EBITDA |
$ |
(845 |
) |
$ |
542 |
$ |
(17 |
) |
$ |
530 |
|
Neither TSXV nor its Regulation Services Provider
(as that term is defined in policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this release.
1 Based on management’s assessment of
publicly-available data.2 Non-IFRS measure. See Advisories –
"Non-IFRS measures".
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