EDMONTON, Alberta, Aug. 11, 2022 (GLOBE NEWSWIRE) — Bitcoin Well Inc. (the “Company” or the “Bitcoin Well”) (TSXV: BTCW), today announced its financial and operating results for the second quarter ended June 30, 2022. The interim financial statements and the management’s discussion and analysis (“MD&A”) are available on the website ours and has been filed on SEDAR.
Revenue and gross profit from our ATMs across Canada and over the counter (“OTC”) personal offices have remained strong over the past four quarters amid volatile cryptocurrency market sentiment. Second quarter 2022 revenue increased 52% and gross profit increased 10% compared to first quarter 2022, primarily due to the diversity of revenue streams we have been focused on growing over the past two years. Going forward in 2022, we expect conservative monthly growth in our personal services and have significantly reduced costs to a manageable level within these conservative forecasts to improve our adjusted EBITDA.
“Our business has effectively navigated the downturn in the crypto market. Although modest, we were focused on growing our gross profit and succeeded in doing so in the second quarter despite the overall crypto market falling from all-time highs,” said Adam O ‘Brien, founder and CEO of Bitcoin Well. “We continue to focus on growing gross profit in the third quarter and are excited to show the markets what we can do. I have successfully led this organization through several ‘crypto winters’ and will use similar cash preservation and building strategies through this one as I have previously.”
Economic overview
| For the three months ended, |
For the six months ended, |
|||||||||||
| 30 June 2022 |
30 June 2021 | 30 June 2022 |
30 June 2021 | |||||||||
| Revenue ($000s) | $ 20,586 | $41,734 | $ 34,115 | $69,259 | ||||||||
| Gross Profit ($000s) | $ 1,066 | $1157 | $ 2,031 | $3460 | ||||||||
| Adjusted EBITDA1 ($000s) | $ (1587 | ) | $(845 | ) | $ (3636 | ) | $(17 | ) | ||||
| Net Income (Loss) ($000s) | $ (1,095 | ) | $30 | $ (3.156 | ) | $(4333 | ) | |||||
| Total ATMs | 248 | 169 | 248 | 169 | ||||||||
1 See non-IFRS measures.
Results for the second quarter of 2022
- Revenues in the second quarter and first six months of 2022 were $21.1 million and $35.1 million lower compared to the same periods last year. Revenues in the second quarter of 2021 included $22 million in personal transactions with one customer, which were not expected to recur. Excluding this one-time transaction, revenues in the second quarter of 2022 increased by 4% compared to the same period last year.
- The gross profit in the second quarter of 2022 was in line with the same period last year, even though revenues were significantly lower. Gross profit margins in the second quarter of 2022 remained strong at 7% compared to 8% in the same period last year.
- Adjusted EBITDA in the second quarter and first six months of 2022 was $1 million and $3.3 million lower compared to the same periods last year. In the first six months of 2022, the company has streamlined operations, and implemented cost-cutting decisions, including a reduction in the number of employees. These actions are expected to significantly reduce wages and salaries and general and administrative expenses going forward, resulting in improved adjusted EBITDA.
- Second quarter 2022 net loss of $1.1 million included $3.3 million in restructuring charges that were not in the normal course of business. These costs mainly relate to staff reductions and related severance costs, office facilities, as well as costs related to a pause in ghostATM B2B product development. The company has streamlined operations and implemented cost-cutting decisions, including a reduction in the number of employees. These actions are expected to significantly reduce wages and salaries and general and administrative expenses going forward.
Recent business developments
- Continued to expand our online ecosystem in the second quarter of 2022. We added e-transfer as a second payment rail to our online offerings, allowing our users to buy bitcoin in the fastest and safest way. Currently, Bitcoin Well users can buy bitcoin online using VISA debit or Interac e-Transfer. This online ecosystem:
- Allows users to sell bitcoin and receive CAD directly in their bank,
- Allows payment of any Canadian bill or credit card in bitcoin and other cryptocurrencies,
- Emphasizes a user-preserved journey that eliminates the risk associated with other competing online depository offerings, and
- Available in WellWallet™, our user-protected Bitcoin Wallet app, and online at www.bitcoinwell.com.
- Added 9 Bitcoin ATMs to our operating fleet in Q2 2022. We now have 248 ATMs operating across Canada. This includes 75 ATMs under our partner program, which allows us to scale ATM numbers faster and add increased revenue potential with minimal capital expenditure. We expect continued gross profit contribution from the partner program with ongoing growth, including our previously announced expansion with Rapid Cash ATM Ltd. to over 100 additional locations by 2022, of which less than 30 have been completed to date.
Issued the third tranche in the amount of $1.5 million of a secured convertible bond agreement for up to $5 million. The $1.5 million was received on July 4, 2022. In the first quarter of 2022, the first and second tranches totaling $3.5 million were issued. The convertible bond has an interest rate of 10% per annum and matures on 23 February 2025, subject to two automatic one-year extensions. 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 $0.30 per common share, subject to adjustments in certain circumstances. Bitcoin Well has the right to force conversion of the principal if the volume weighted average trading price of the common shares for ten (10) trading days equals or exceeds $0.60 per common share.
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 it 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 income (loss)
| For the three months ended, |
For the last six months |
|||||||||||
| $000s | 30 June 2022 |
30 June 2021 | 30 June 2022 |
30 June 2021 | ||||||||
| Net Income (Loss) | $ | (1,095 | ) | $ | 30 | $ | (3.156 | ) | $ | (4,333 | ) | |
| Listing cost | – | 1,477 | – | 1,477 | ||||||||
| Business acquisitions and QT transaction costs | – | 467 | – | 564 | ||||||||
| Depreciation and accretion | 714 | 274 | 1,395 | 542 | ||||||||
| Fair value change – cryptocurrency | (4,777 | ) | (3313 | ) | (4,915 | ) | 1,946 | |||||
| Restructuring | 3.308 | – | 3.308 | – | ||||||||
| Income tax expense (recovery) | 284 | 17 | (294 | ) | (478 | ) | ||||||
| Share-based compensation | 38 | 207 | 111 | 282 | ||||||||
| Profit on debt arrangement | (58 | ) | (1 | ) | (87 | ) | (6 | ) | ||||
| Other | – | (4 | ) | 1 | (11 | ) | ||||||
| Adjusted EBITDA | $ | (1587 | ) | $ | (845 | ) | $ | (3636 | ) | $ | (17 | ) |
This press release should be read in conjunction with the full disclosure documents. The Bitcoin Well Unrevised Condensed Consolidated Interim Financial Statement and Management’s Discussion and Analysis for the three months ended June 30, 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 offers convenient, secure and reliable ways to buy, sell and spend bitcoin. Bitcoin Well is on a mission to enable independence by providing an ecosystem of products and services that give users practical control over their bitcoin. This ecosystem will future-proof money by including financial offerings (both in-person and online) and educational resources designed with the needs of both customers and the industry in mind.
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Bitcoin Well Contact Information
To book a virtual meeting with 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.
