EDMONTON, Alberta, Feb. 16, 2023 (GLOBE NEWSWIRE) — Bitcoin Well Inc. (“Bitcoin Well” or “Company“) (TSXV:BTCW; OTCQB:BCNWF), the non-custodial fintech business that future-proofs money by making bitcoin useful for ordinary people, today announced financial and operating results for the fourth quarter and twelve months ended December 31, 2022. The company also announced the closing of a secured convertible bond (“ Convertible Notes”) with the principal amount of $0.7 million on February 16, 2023. Bitcoin Well has a network of over 260 Bitcoin ATMsone online product which allows Canadians to buy and sell bitcoin in Canada instantly and a Personal service team that offers an education-focused experience to individuals who want to make their bitcoin journey easy and convenient. All dollar amounts shown are in Canadian dollars unless otherwise noted.
Important highlights
- Over 2,500 unique users in the online portal
- Associated Online monthly revenue exceeds $190,000 and is growing rapidly.
- Revenue of $67 million in 2022, compared to normalized revenue of $77 million in 2021.
- Normalized revenue in 2021 excludes a one-off transaction of $22 million
- Revenue in Q4 2022 was $18.3 million, compared to revenue of $14.4 million in Q4 2021.
- Gross margin of 7% in 2022, compared to 5% in 2021
- Adjusted EBITDA of negative $0.2 million in Q4 2022, compared to negative $2.3 million in Q4 2021.
Recent business developments
- Extended personal service offer set for launch in spring 2023
- 3,000 unique users on the platform as of February 2023
- Online revenues grew by an average of 145% MoM in Q4 2022
Economic overview
| For the three months ended, | For the twelve months ended, | |||||||||
| 31 December 2022 ($000s) |
31 December 2021 ($000s) |
% Change |
31 December 2022 ($000s) |
31 December 2021 ($000s) |
% Change |
|||||
| Income | $ 18,262 | 14,411 dollars | 27% | $ 66,731 | $99,613 | (33) % | ||||
| Gross profit | $ 1216 | $968 | 26% | $ 4,424 | 5173 dollars | (14) % | ||||
| Adjusted EBITDA1 | $ (227) | $(2333) | 90% | $ (3,471) | $(4353) | 21% | ||||
| Net loss | $ (1 852) | $(5,372) | 66% | $ (5,992) | $(13,603) | 56% | ||||
1 See non-IFRS measures.
The company’s revenue for the fourth quarter of 2022 increased to $18.2 million compared to $14.4 million in the prior year, representing a 27% year-over-year improvement. Gross profit also increased to $1.2 million in Q4 2022, compared to $0.9 million in the same period last year, an improvement of 26%. Adjusted EBITDA improved to negative $0.2 million in Q4 2022 compared to negative $2.3 million in the prior year and an improvement of 90%.
In 2021, the Company recorded a one-time transaction of $22.0 million that was not expected to recur. When normalized to remove this transaction, 2021 revenue was $77.6 million. The company has revenue of $66.7 million in 2022, which represents a 14% decrease from the previous year’s normalized revenue. Gross profit was $5.1 million in 2021 and $4.4 million in 2022, representing a 14% year-over-year decrease. This decline in revenue and gross profit is attributed to a significant decline in sentiment in the overall bitcoin market. Notably, the company achieved a gross margin of 7% in 2022 compared to a gross margin of 5% in 2021.
“The much improved financial performance seen in the latter half of 2022 is a demonstration of our effective strategy to significantly reduce costs while maintaining strong revenues for the year,” said Luke Thibodeau, Chief Financial Officer “We are committed to maintaining this positive financial momentum, and are excited to see how the growth of our new online product offering creates value for our users and our investors.”
The graph represents our quarterly adjusted EBITDA over the last 6 quarters. The quarter ending December 2022 on the right shows a significant year-over-year improvement, and management is looking for this metric to continue to improve.
Convertible bond financing
In February 2023, Bitcoin Well issued a secured convertible bond for up to $0.7 million to refinance a portion of its existing bitcoin-denominated debt.
At the option of the holder, the principal amount of the Convertible Notes may be converted into common shares of Bitcoin Well (the “Common Shares”) at a conversion price of $0.15 per common share, subject to TSXV review and acceptance. Bitcoin Well has the right to require the Holder to convert any portion of the Principal Amount into Common Shares at any time where the current market price of the Common Shares equals or exceeds $0.30 for a period of ten (10) consecutive trading days. The convertible bond bears an interest rate of 8% + the Bank of Canada policy rate per annum and matures on February 16, 2026.
“2022 was a transformational year for Bitcoin Well. The market has forced us to find the balance between growth and sustainability and I am very pleased with the results so far. While we still have work to do, our Bitcoin ATM business unit cash flows are stable while we continue to develop and expand our hyper-scalable growth business unit. Our financial improvement in the latter half of the year is a testament to the capabilities of our team, and we march into 2023 with more momentum than ever before.” said Adam O’Brien, founder and CEO of the company.
The audited consolidated financial statements, as well as the management’s discussion and analysis (“MD&A”) for the period are available on our website and at www.sedar.com.
Non-IFRS measures
The Company uses certain terms in this press 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 to the calculation of similar measures used by other companies. See the table below for a reconciliation of each non-IFRS measure to its closest IFRS measure, or see the “Non-GAAP Measures” and “Selected Financial Information” sections of the MD&A for the applicable definitions, calculations, rationale for use and reconciliations to the most directly comparable measure under IFRS. Non-IFRS measures are provided as supplementary information where readers may wish to assess the company’s performance, but should not be relied upon for comparison or investment purposes.
Reconciliation of adjusted EBITDA to net loss
| For the three months ended, | For the twelve months ended, | |||
| $000s | 31 December 2022 | 31 December 2021 | 31 December 2022 | 31 December 2021 |
| Net loss | $ (1 852) | $(5,372) | $ (5,992) | $(13,603) |
| Fair value change – crypto loans (1) | (1204) | 512 | (5,896) | 4,295 |
| Impairment (2) | – | – | 3.164 | 1,306 |
| Depreciation and accretion | 362 | 580 | 2,160 | 1,384 |
| Interest | 371 | – | 1,122 | – |
| Income tax expense/(collection) | 1,373 | 740 | 778 | (529) |
| Fair value change – investments | 585 | – | 585 | – |
| Share-based compensation | 110 | (42) | 314 | 530 |
| Profit on debt arrangement | – | – | (119) | (7) |
| Financing Fees | – | – | 262 | – |
| Bad debt deduction | – | – | 94 | – |
| Business acquisitions and QT costs | – | (74) | 57 | 793 |
| Listing cost (3) | – | – | – | 1,477 |
| Other | 28 | 17 | – | – |
| Adjusted EBITDA | $ (227) | $(2333) | $ (3,471) | $(4353) |
(1) Non-cash, change in fair value on revaluation of cryptocurrency loans that is more than offset by a revaluation loss on digital assets recorded in other comprehensive income.
(2) Goodwill loss due to impairment and restructuring related to Ghostlab and cessation of operations in the UK (2021).
(3) Listing expenses related to going public with Bitcoin Well in 2021.
This press release should be read in conjunction with the full disclosure documents. Bitcoin Well’s consolidated financial statements and management’s discussion and analysis for the year ended December 31, 2022 will be available on the Bitcoin Well website (www.bitcoinwell.com), via SEDAR (www.sedar.com) or can be ordered from the company.
About Bitcoin well
Bitcoin Well deals in future-proof money. We do this by making bitcoin useful to ordinary people to give them the convenience of modern banking and the benefits of bitcoin. Our existing Bitcoin ATM and Personal Services business unit drives cash flow to help fund this mission.
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Bitcoin Well Contact Information
To book a virtual meeting with our Founder and CEO Adam O’Brien, please use the following link:
For additional investor and media information, please contact:
Tel: 1 888 711 3866
[email protected]
Neither the TSX Venture Exchange nor the Regulatory Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-looking information
Certain statements in this press 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 negatives thereof and similar expressions. Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to deviate significantly from those expected in such forward-looking information.
The actual results of Bitcoin Well may 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.
All forward-looking information in this press release represents Bitcoin Well’s expectations as of the date hereof and may 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 laws.
For more information, see the cautionary note regarding forward-looking information contained in Bitcoin Wells’ Quarterly Management’s Discussion and Analysis.
