Bitcoin Well Inc. (the “Company” or “Bitcoin
Well”) (TSXV: BTCW), today announced our financial and operating
results for the fourth quarter and twelve months ended December 31,
2021 and the closing of the second tranche under the Company’s
secured convertible debenture (the “Convertible Debenture”) in the
principal amount of $2 million on March 17, 2022.
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 92% in 2021
as a result of the expansion of white glove service at our
in-person offices in Western Canada. The next step is to expand our
online ecosystem of products to eventually serve a global market,”
said Adam O’Brien, Founder and CEO of Bitcoin Well. “While our
network of more than 220 Bitcoin ATMs and in-person offices
represent a base business for us today, our expanding technological
offerings will create new scalability and better user value across
the business.”
Financial Overview
|
For the three months ended, |
For the twelve months ended, |
|
Dec 31,2021 |
Dec 31,2020 |
%Change |
Dec 31,2021 |
Dec 31,2020 |
%Change |
Revenue ($000s) |
$14,411 |
$22,866 |
(37)% |
$99,613 |
$51,971 |
92% |
Gross profit ($000s) |
$968 |
$3,834 |
(75)% |
$5,173 |
$7,292 |
(29)% |
Adjusted EBITDA1($000s) |
$(2,333) |
$2,037 |
(215)% |
$(4,353) |
$2,994 |
(241)% |
Net loss |
$(5,372) |
$(1,840) |
(192)% |
$(13,603) |
$(2,743) |
(396)% |
New
ATMs Added in Period |
40 |
23 |
|
142 |
52 |
|
1 See Non-IFRS Measures.
Fourth Quarter and Full Year 2021
Results
-
Revenue was $99.6 million in the full year 2021, $47.6 million or
92% higher compared to 2020. Higher revenue was mainly due to an
increase in Over the Counter (OTC) customer transactions.
-
In the fourth quarter of 2021, revenue was $14.4 million compared
to $22.9 million in the same period last year. Lower revenue was
mainly due to a decrease in ATM volume partially offset by an
increase in OTC volume.
-
Gross profit was $1 million and $5.2 million in the fourth quarter
and full year 2021 respectively, compared to $3.8 million and $7.3
million in the same periods in 2020. OTC sales typically represent
larger transactions at a lower fee compared to ATM transactions.
This change in sales mix in the fourth quarter and full year 2021
resulted in lower gross profit.
-
Adjusted EBITDA was a loss of $2.3 million and $4.4 million in the
fourth quarter and full year 2021 respectively, compared to a gain
of $2 million and $3 million in the same periods in 2020. Lower
Adjusted EBITDA was mainly due to lower gross profit and higher
operating expenses resulting from an increased headcount,
professional fees related to legal fees for our business
acquisitions, and technology investments to strengthen the future
of the organization in 2022 and beyond. These organizational
enhancements are expected to set the stage for anticipated online
and mobile app-based scalable growth, additions to our ATM network,
and the pursuit of targeted business acquisition opportunities both
in Canada, and internationally.
-
Net loss was $5.4 million and $13.6 million in the fourth quarter
and full year 2021 respectively, compared to a net loss of $1.8
million and $2.7 million in the same periods in 2020. Net loss
included a non-cash, fair value change on the revaluation of
cryptocurrency loans which are more than offset by a revaluation
gain on digital assets recorded in Other Comprehensive Income of
$2.1 million and $7.2 million in the fourth quarter and full year
2021. It also included a non-cash impairment of $1.3 million
related to the ceasing of operations in the UK, and $1.5 million of
listing expenses related to taking Bitcoin Well public in
2021.
Recent Business
Developments
- Added 142 Bitcoin
ATMs to our operating fleet in 2021, 40 of which were added in the
fourth quarter of 2021. We now have more than 220 ATMs operating
across Canada. We 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.
- Completed a
services agreement in January 2022 with Memory Express to process
bitcoin payments for Memory Express’ online customers. Bitcoin Well
will also be installing Bitcoin ATMs in Memory Express stores
across Canada.
- Signed a letter of
intent in January 2022 with Greater Property Group, a Canada-wide
real estate company, to negotiate a definitive Joint Venture
agreement to work together helping customers use bitcoin and other
cryptocurrencies to buy and sell residential and commercial real
estate.
Convertible Debenture Financing – Second
Tranche Issued
In February, Bitcoin Well issued a secured
convertible debenture for up to $5 million to fund the enhancement
of the existing Bitcoin Well online product, and for user
acquisition and general working capital. The Bitcoin Well ecosystem
of products and services will offer users the ability to buy, sell
and use bitcoin online with self-custodied blockchain technology
and through a proprietary mobile app.
The Convertible Debenture will be issued in up
to three tranches. The first tranche in the principal amount of
CDN$1.5 million was issued on February 23, 2022. A second tranche
in the principal amount of CDN$2.0 million was issued on March 17,
2022. At the option of the holder, the principal amount of the
Convertible Debenture is convertible into common shares of Bitcoin
Well (the “Common Shares”) at a conversion price of $0.30 per
Common Share, subject to adjustments in certain circumstances. Any
such adjustments will be subject to TSXV review and acceptance.
Bitcoin Well has the right to force conversion of the principal
amount if the volume weighted average trading price for the Common
Shares for ten (10) trading days equals or exceeds $0.60 per Common
Share. The Convertible Debenture bears interest at a rate of 10%
per annum and matures on February 23, 2025, subject to two
automatic one year extensions.
For more information regarding the Convertible
Debenture, please see the Bitcoin Well news release issued on
February 24, 2022.
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
loss
|
For the three months ended, |
For the twelve months ended, |
$000s |
Dec 31, 2021 |
Dec 31, 2020 |
Dec 31, 2021 |
Dec 31, 2020 |
Net loss |
$(5,372) |
$(1,840) |
$(13,603) |
$(2,743) |
Listing expense(1) |
- |
- |
1,477 |
- |
Goodwill impairment
loss(2) |
1,306 |
- |
1,306 |
- |
Business acquisition and QT
costs |
(74) |
245 |
793 |
819 |
Depreciation and
accretion |
580 |
154 |
1,384 |
538 |
Fair value change – crypto
loans(3) |
512 |
3,338 |
4,295 |
3,751 |
Income tax
expense/(recovery) |
740 |
325 |
(529) |
326 |
Share based compensation |
(42) |
- |
530 |
303 |
Other |
16 |
(185) |
(7) |
- |
Adjusted EBITDA |
$(2,333) |
$2,037 |
$(4,353) |
$2,994 |
(1) Listing expenses related to taking Bitcoin Well public in
2021. (2) Goodwill impairment loss related to the ceasing of
operations in the UK.(3) Non-cash, fair value change on the
revaluation of cryptocurrency loans which are more than offset by a
revaluation gain on digital assets recorded in Other Comprehensive
Income of [$2.1] million and [$7.2] million in the fourth quarter
and full year 2021.
This news release should be read in concert with
the full disclosure documents. The Bitcoin Well consolidated
financial statements and management's discussion and analysis for
the year ended December 31, 2021 will be available on the Bitcoin
Well website (www.bitcoinwell.com), via SEDAR (www.sedar.com) or
can be requested from the Company.
About Bitcoin Well
Bitcoin Well offers convenient, secure and
reliable ways to buy, sell and use bitcoin. 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. This ecosystem includes non-custodial
financial offerings (both in-person and online); technology
development, including SaaS and internal technology developments
through Ghostlab, the technology arm of the business; and
educational resources designed with the needs of both the
customers, and the industry, in mind.
Sign up for our newsletter and follow us on
LinkedIn, Twitter, YouTube, Facebook, and Instagram to keep up to
date with our business. For OTC location information visit
bitcoinwell.com/appointment/.
Bitcoin Well Contact
Information For investor information, please contact:
Bitcoin Well10142 82 Avenue
NWEdmonton, AB T6E 1Z4bitcoinwell.com
Myles Dougan, Director of
Investor RelationsTel: 587 982 2769m.dougan@bitcoinwell.com
For media queries and further information,
please contact:
Karen Smola, Director of
MarketingTel: 587 735 1570k.smola@bitcoinwell.com
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
Forward-Looking
Information Certain statements contained in this news
release may constitute forward-looking information. Forward-looking
information is often, but not always, identified by the use of
words such as "anticipate", "plan", "estimate", "expect", "may",
"will", "intend", "should", or the negative thereof and similar
expressions. Forward-looking information involves known and unknown
risks, uncertainties and other factors that may cause actual
results or events to differ materially from those anticipated in
such forward-looking information.
Bitcoin Well actual results could differ
materially from those anticipated in this forward-looking
information as a result of regulatory decisions, competitive
factors in the industries in which Bitcoin Well operates,
prevailing economic conditions, and other factors, many of which
are beyond the control of Bitcoin Well.
Bitcoin Well believes that the expectations
reflected in the forward-looking information are reasonable, but no
assurance can be given that these expectations will prove to be
correct and such forward-looking information should not be unduly
relied upon.
Any forward-looking information contained in
this news release represents Bitcoin Well expectations as of the
date hereof, and is subject to change after such date. Bitcoin Well
disclaims any intention or obligation to update or revise any
forward-looking information whether as a result of new information,
future events or otherwise, except as required by applicable
securities legislation.For more information, see the Cautionary
Note Regarding Forward Looking Information found in the Bitcoin
Well quarterly Management Discussion and Analysis.
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