Bitcoin Well Announces Strategy for Highly Scalable Ecosystem of Products and Services With Q3 Financial Results
November 29 2021 - 7:00AM
Bitcoin Well (the “Company” or
“
BTCW”), is pleased to announce our financial and
operating results for the third quarter and nine months ended
September 30, 2021, and to introduce our new three-pillar strategic
growth plan. The interim Financial Statements and Notes, as well as
Management’s Discussion and Analysis (“MD&A”) are available on
our website and have been filed on SEDAR.
“Bitcoin Well increased revenue by 193% and
gross profit by 22% in the first nine months of 2021. This growth
is exciting however, I am even more inspired by the path we have
set to expand our ecosystem of products and services. These new
offerings within our core business pillars will increase customer
value and complement our growing network of over 200 ATMs,” said
Adam O’Brien, Founder and CEO of Bitcoin Well. “While our ATM
network represents a base business for us today, our expanding
technology, SaaS software development and online services offer new
scalability across the business, as we seek to deliver innovative
payment rails that set the stage for long-term growth and diversity
across the organization. We continue to forge new paths, create new
partnerships, expand on our capital markets presence and establish
an ecosystem to expand our offerings to existing customers.”
Financial Highlights
Overview
|
For the three months ended, |
For the nine months ended, |
|
Sept 30, 2021 |
|
Sept 30, 2020 |
|
% Change |
|
Sept 30, 2021 |
|
Sept 30, 2020 |
|
% Change |
|
Revenue ($000s) |
$ |
15,943 |
|
$ |
14,615 |
|
9 |
% |
$ |
85,201 |
|
$ |
29,105 |
|
193 |
% |
Gross Profit ($000s) |
$ |
745 |
|
$ |
1,826 |
|
(59 |
)% |
$ |
4,204 |
|
$ |
3,457 |
|
22 |
% |
Gross Profit Margin (%) |
|
5 |
% |
|
12 |
% |
(58 |
)% |
|
5 |
% |
|
12 |
% |
(58 |
)% |
Net Loss |
$ |
(3,897 |
) |
$ |
(758 |
) |
(414 |
)% |
$ |
(8,231 |
) |
$ |
(903 |
) |
(812 |
)% |
Adjusted EBITDA1 ($000s) |
$ |
(2,003 |
) |
$ |
397 |
|
(605 |
)% |
$ |
(2,020 |
) |
$ |
927 |
|
(318 |
)% |
New
ATMs Added in Period |
|
55 |
|
|
19 |
|
189 |
% |
|
129 |
|
|
39 |
|
231 |
% |
1 Non-IFRS measure. See Advisories – "Non-IFRS
measures".
Q3 and Nine Months Financial
Overview
-
Revenue increased to $15.9 million in Q3 2021, and to $85.2 million
for the nine-month period, which included a single over-the-counter
(“OTC”) transaction that represented $22.0 million in revenue in
Q2. While not expected to recur at that level, the recent success
of our OTC business demonstrates the economies of scale and the
Company’s ability to offer large-scale transactions to individuals
as a significant component of our offerings.
-
Cash at the end of the quarter increased to $6.1 million from $4.1
million at year end 2020 - a 49% increase - and we had a working
capital surplus of $5 thousand at September 30, 2021 compared to a
working capital deficit of $2.9 million at December 31, 2020.
-
Operating expenses in Q3 2021 reflect the impact of hiring a larger
corporate team and implementing organizational enhancements
required to support our aggressive expansion plans (some of which
are detailed below), which contributed to negative Adjusted EBITDA1
of $2.0 million in the third quarter of 2021, and negative Adjusted
EBITDA1 of $2.0 million in the first nine months of the
year.
-
These losses are expected as we set the stage for anticipated
scalable growth, while benefitting from the economies of scale that
our bolstered team brings. The investments made into our
organization and processes have already started to come to
fruition, as exemplified by the expanded RapidCash partnership
announced on November 18, 2021, as well as doubling our in-person
OTC presence across Canada as announced November 10, 2021.
-
Net loss totaled $3.9 million for the quarter ended September 30,
2021, primarily a result of the increased expenses for the expanded
team and a $1.9 million non-cash, unrealized loss on the
revaluation of cryptocurrency-based loans, which is an accounting
requirement but does not have any impact on the Company’s ability
to operate or grow the business.
Q3 and Nine Months Strategic /
Operational Overview
- 129 machines were
added to our fleet during the nine months ended September 30, 2021,
55 of which were added in Q3 2021, leading to over 200 machines
installed at the period end.
- 43 of the ATMs
installed during the nine months ended September 30, 2021 are
operating under our strategic Partner Program, which enables us to
scale our ATM count more quickly and without significant capital
expenditures or operating costs, supporting greater economies of
scale while also protecting the balance sheet.
- During the first
nine months of the year, execution of our strategic and diversified
M&A strategy continued with acquisitions of, and investments
into numerous opportunities:
- Acquired the assets
of Crypto Kiosk Inc. a cryptocurrency ATM operator in northern
Ontario, including 11 cryptocurrency ATMs. This resulted in a
direct injection of cash flow as we were able to use our existing
team and existing fixed costs to support this growth;
- Acquired Ghostlab,
a software company that designs and develops software to improve
the functionality and accessibility of modern financial technology
and services, including Bitcoin ATM machines. With Ghostlab in
house, we expect to have the opportunity to capture incremental
revenue without high capital costs, while leveraging research and
development to generate high margin SaaS revenue to provide
long-term, innovative solutions for the bitcoin industry.
- Acquired
Entreprises Equibytes Inc. (“Equibytes”), a money service business
and bitcoin ATM operator based in Montreal, Quebec, further
expanding our reach across Canada. This led to the expansion of our
In-Person services in Montreal, as announced on November 10,
2021.
- Acquired Paradime
LDT, operating as AlphaVend, a Bitcoin ATM operator in the United
Kingdom, which included 26 operated machines in England, Scotland
and Wales;
Recent Developments
-
Announced the grand opening of two new, white-glove OTC offices in
Montreal (open) and Winnipeg (opening November 29, 2021),
structured to test the market without a significant outlay of
capital. Our existing Calgary OTC office (opened June 15, 2021)
reached a point of profitability within 4 months, and we expect the
new OTC locations, which are operating under a newly refined
process and strong corporate team, to return capital even
faster.
-
Confirmed the Company reached a critical milestone with our 200th
operated ATM in Canada, realized ahead of our internal
forecasts.
-
Enhanced our partnership with RapidCash ATM to expand exclusive
operations of our Bitcoin ATM software on an anticipated 100+ newly
deployed machines, providing incremental revenue potential to
Bitcoin Well with no additional capital investment or further
increases to our now bolstered team.
-
Unveiled Bitcoin Academy, a free online educational curriculum of
relevant and reliable information about Bitcoin, created in
partnership with PowerED™ and local award-winning creative agency,
Sticks & Stones, which we expect will overcome a significant
barrier to entry for new customers.
-
Deployed our Bitcoin Well online ecosystem, with the addition to
purchase Bitcoin online, in a non-custodial fashion, with Visa
Debit. This is the first step towards a full ecosystem of products
including in person services and online services.
-
As outlined in the Share Purchase
Agreement (SPA) related to Paradime LDT, operating as
AlphaVend, if we determine that compliance with any condition or
term to obtain the Full FCA Registration is onerous, then we may
elect to serve a notice of this determination to the sellers (the
“Buyer Option”). We have elected to serve this notice which
triggers the exclusive option for the sellers to purchase all of
the issued and outstanding shares of AlphaVend, or walk away from
the future considerations of the deal (the “Seller Option”). As a
result we are not able to make a determination to the potential
outcome of this process, or the potential impact it may have on the
consolidated financial statements.
Introducing the Three Strategic Pillars of Bitcoin
Well
At Bitcoin Well, our mission has been refined to
reflect our commitment to thought leadership and customer security
within the bitcoin industry. We have set out to shift the
relationship that society has with money by offering an ecosystem
of products and services that make bitcoin accessible and
understood. Our ecosystem is comprised of three pillars, which we
summarize below. A full outline of our three pillars and their
anticipated contribution to the Company is included within our
third quarter MD&A, available on our website, or on SEDAR.
-
Pillar #1 | Non-Custodial Financial Services (buy,
sell and use bitcoin)
-
Through our non-custodial business model, we offer convenient,
secure and reliable ways to buy and sell bitcoin through a trusted
Bitcoin ATM network and suite of web-based and in-person
transaction services. Our non-custodial service offerings now
include ATMs (wholly owned or operated through the Partner
Program), white-glove in-person OTC transactions, and select online
services that we hope to integrate into our full online ecosystem,
allowing customers to interact with their bitcoin in a
self-custodied and secure fashion, with the same convenience of
modern banking.
-
Pillar #2 | Technology Development
-
Our Technology Development pillar is split into two functions:
external and internal technology. Externally, ghostATM and future
technologies are SaaS business offerings that we anticipate will
start generating external revenue in 2022. These offerings are
designed and intended to be highly scalable and have the potential
to generate traditional SaaS margins. Internally, we now have the
technological expertise to create self-serving technology and will
be able to dedicate resources to technology that we expect will
continue to enhance the customer experience, such as the newly
developed and released Visa Debit bitcoin purchase
functionality.
-
Pillar #3 | Education
-
We build products and services that remove barriers to entry for
new bitcoin consumers, which we believe will build trust with
newcomers entering the space. Our most recent development is the
Bitcoin Academy, a 6-module curriculum developed and distributed in
partnership with PowerED™, by Athabasca University. In addition, we
offer informative in-person consultations at our four OTC locations
across Canada as well as free online training sessions for the
community.
“Our multi-faceted growth plan is designed to
change the landscape of self-custodied bitcoin ownership (direct
ownership by the customer). Supported by transaction-based revenue
from our growing suite of bitcoin ATMs, we continue to develop
online offerings to facilitate the effortless use of bitcoin for
all day-to-day money exchanges. It is my hope that the Bitcoin Well
ecosystem will soon be a fluent and convenient network of physical
and digital service offerings to ensure Bitcoin Well customers are
able to buy, sell and use bitcoin in the fastest and safest way
possible,” said Adam O’Brien, Founder and CEO of Bitcoin Well. “We
will continue to execute on our three pillars to facilitate
widespread financial independence and drive further expansion and
diversity to our revenue streams and customer base.”
About Bitcoin Well
Bitcoin Well (TSX.V: BTCW) 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. Bitcoin Well is on a
mission to shift the relationship that society has with money by
offering an ecosystem of products and services that make bitcoin
accessible and understood. Follow us on LinkedIn, Twitter, YouTube,
Facebook 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, President & CEO or
Dave Bradley, Chief Revenue OfficerTel: 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, third-party and partner
expansion plans and activities, the obtaining of licenses and
approvals from regulatory authorities, as well as various business
objectives including but not limited to the result of our notice
under the Paradime SPA. 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) the need for additional
financing; and (iii) changes in laws and regulations. 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 nine months ended, |
$000s |
Sept 30, 2021 |
|
Sept 30, 2020 |
|
Sept 30, 2021 |
|
Sept 30, 2020 |
|
Net loss |
$ |
(3,897 |
) |
$ |
(758 |
) |
$ |
(8,231 |
) |
$ |
(903 |
) |
Listing expense |
|
- |
|
|
- |
|
|
1,477 |
|
|
- |
|
Business acquisition and QT
costs |
|
303 |
|
|
336 |
|
|
867 |
|
|
574 |
|
Depreciation and
accretion |
|
262 |
|
|
172 |
|
|
804 |
|
|
384 |
|
Fair value change – crypto
inventory |
|
(54 |
) |
|
(37 |
) |
|
(63 |
) |
|
(5 |
) |
Fair value change – crypto
loans |
|
1,900 |
|
|
253 |
|
|
3,846 |
|
|
389 |
|
Foreign exchange |
|
(7 |
) |
|
- |
|
|
(9 |
) |
|
- |
|
Income tax expense |
|
(791 |
) |
|
- |
|
|
(1,269 |
) |
|
- |
|
Share based compensation |
|
290 |
|
|
303 |
|
|
573 |
|
|
303 |
|
(Gain) loss on debt
settlement |
|
(9 |
) |
|
128 |
|
|
(15 |
) |
|
185 |
|
Adjusted EBITDA |
$ |
(2,003 |
) |
$ |
397 |
|
$ |
(2,020 |
) |
$ |
927 |
|
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 Non-IFRS measure. See Advisories – "Non-IFRS measures".
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