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Bitcoin Well Interim / Quarterly Report 2025
47558_rns_2025-05-06_ba277895-bdf4-4470-bc4d-eb6861daad4c.pdf
Interim / Quarterly Report
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BITCOIN WELL
TSX.V:BTCW OTCQB:BCNWF
Unaudited Condensed Consolidated Interim Financial Statements
For the Three Months ended March 31, 2025 and 2024
6
BITCOIN WELL
TSX.VISTCW OTCQBSCNWF
Condensed Consolidated Interim Statements of Financial Position
(Expressed in Canadian dollars)
| As at | Note | March 31, 2025 | December 31, 2024 |
|---|---|---|---|
| Assets | |||
| Current assets | |||
| Cash | $ | 1,655,099 | $ 2,875,766 |
| Accounts receivable | 716,802 | 576,463 | |
| Digital assets | 3 | 17,265,393 | 22,374,404 |
| Inventory | 6 | 1,226,053 | 1,378,640 |
| Deposits and prepaid expenses | 396,703 | 225,903 | |
| 21,260,050 | 27,431,176 | ||
| Non-current assets | |||
| Property and equipment | 296,038 | 379,671 | |
| Right of use assets | 80,969 | 38,672 | |
| Intangible assets | 63,292 | 69,553 | |
| Goodwill | 105,427 | 105,427 | |
| Total assets | $ | 21,805,776 | $ 28,024,499 |
| Liabilities | |||
| Current liabilities | |||
| Accounts payable and accrued liabilities | $ | 659,649 | $ 562,134 |
| Deferred revenue | 139,041 | 734,893 | |
| Lease liability - current | 49,219 | 32,403 | |
| Acquisition consideration payable | 163,077 | 167,260 | |
| Convertible debt - current | 7 | 1,410,862 | 243,698 |
| Line of credit | 8 | 9,942,978 | 9,643,793 |
| Loans payable - cryptocurrency | 5 | 7,722,683 | - |
| 20,087,509 | 11,384,181 | ||
| Non-current liabilities | |||
| Lease liability - long term | 32,758 | 8,884 | |
| Convertible debt | 7 | 6,280,712 | 7,397,069 |
| Loans payable - cryptocurrency | 5 | 9,505,278 | 22,187,896 |
| Loans payable - long term | 40,000 | 40,000 | |
| Total liabilities | 35,946,257 | 41,018,030 | |
| Shareholders' deficit | |||
| Share capital | 12 | 15,607,259 | 15,365,507 |
| Contributed surplus | 12 | 3,959,723 | 3,912,707 |
| Convertible debt - equity | 316,881 | 316,881 | |
| Warrants | 12 | 873,240 | 872,520 |
| Accumulated deficit | (49,201,712) | (52,495,210) | |
| Accumulated other comprehensive income | 14,304,128 | 19,034,064 | |
| Total shareholders' deficit | (14,140,481) | (12,993,531) | |
| Total liabilities and shareholders' deficit | $ | 21,805,776 | $ 28,024,499 |
The accompanying notes are an integral part of these consolidated financial statements
Condensed Consolidated Interim Statements of Income and Comprehensive Loss
(Expressed in Canadian dollars, except for number of and earnings per share)
| Three months ended March 31 | Note | 2025 | 2024 |
|---|---|---|---|
| Revenue | |||
| Sales revenue | 13 | $ 31,802,012 | $ 16,181,120 |
| Cost of coins | (30,717,562) | (15,378,309) | |
| Gross profit | 1,084,450 | 802,811 | |
| Expenses | |||
| General and administration | 14 | 630,652 | 736,410 |
| Salaries and wages | 247,602 | 194,360 | |
| Depreciation | 106,636 | 262,453 | |
| Financing fees | 5, 7 | 705,152 | 644,147 |
| Marketing and advertising | 349,566 | 149,815 | |
| Professional fees | 104,365 | 104,194 | |
| Software | 106,958 | 48,112 | |
| 2,250,931 | 2,139,491 | ||
| Loss before other items | (1,166,481) | (1,336,680) | |
| Other items | |||
| Fair value change - cryptocurrency loans | 5 | 2,253,103 | (7,876,112) |
| Share based compensation | (104,318) | (67,583) | |
| Foreign exchange gain (loss) | 16,894 | (121,512) | |
| Gain on debt settlement | - | 20,000 | |
| Fair value change - cryptocurrency inventory | (156,586) | 404,615 | |
| Fair value change - convertible debt | (27,557) | - | |
| Realized gain on digital assets | 2,478,443 | 852,579 | |
| Net income (loss) | 3,293,498 | (8,124,693) | |
| Other comprehensive income | |||
| Revaluation (loss) gain on digital assets | 3 | (4,729,936) | 6,582,955 |
| Total comprehensive loss | $ (1,436,438) | $ (1,541,738) | |
| Net income (loss) per common share | |||
| Basic | $ 0.01 | $ (0.04) | |
| Diluted | $ 0.01 | $ (0.04) | |
| Weighted average common shares outstanding: | |||
| Basic | 219,812,080 | 201,538,615 | |
| Diluted | 263,186,871 | 201,538,615 |
The accompanying notes are an integral part of these consolidated financial statement
Condensed Consolidated Interim Statements of Cash Flows
(Expressed in Canadian dollars)
| Three months ended March 31 | 2025 | 2024 |
|---|---|---|
| Cash provided by (used in): | ||
| Operating activities | ||
| Net income (loss) | $ 3,293,498 | $ (8,124,693) |
| Adjustments for: | ||
| Depreciation | 106,636 | 262,453 |
| Fair value change - cryptocurrency loans | (2,253,103) | 7,876,112 |
| Fair value change - cryptocurrency inventory | 156,586 | (404,615) |
| Fair value change - convertible debenture | 27,557 | - |
| Accretion expense - convertible debenture | 23,831 | - |
| Realized gain on digital assets | (2,478,443) | (852,579) |
| Foreign exchange (gain) loss | (16,894) | 121,512 |
| Share based compensation | 104,318 | 67,583 |
| Gain on debt settlement | - | (20,000) |
| (1,036,014) | (1,074,227) | |
| Changes in non-cash working capital items: | ||
| Accounts receivable | (140,339) | 1,848 |
| Deposits and prepaid expenses | (170,800) | (58,637) |
| Inventory | (3,999) | (92,640) |
| Accounts payable and accrued liabilities | 230,223 | 5,029 |
| Deferred revenue | (595,852) | 735,000 |
| Cash used in operating activities | (1,716,781) | (483,627) |
| Investing activities | ||
| Purchase of property and equipment | (7,578) | - |
| Proceeds on disposal of digital assets | 2,943,459 | 1,154,250 |
| Purchase of digital assets | (85,940) | (151,890) |
| Cash provided by investing activities | 2,849,941 | 1,002,360 |
| Financing activities | ||
| Net repayment of cryptocurrency loans | (2,706,833) | (950,750) |
| Payments of acquisition consideration payable | (4,182) | (5,870) |
| Repayment of loans | - | (40,000) |
| Proceeds from (repayments of) line of credit | 316,079 | (78,049) |
| Repayment of lease liability | (10,772) | (11,299) |
| Shares issued pursuant to exercise of options and warrants | 51,881 | - |
| Shares issued pursuant to private placement | - | 1,983,369 |
| Cash (used in) provided by financing activities | (2,353,827) | 897,401 |
| Change in cash | (1,220,667) | 1,416,134 |
| Cash, beginning of period | 2,875,766 | 1,668,922 |
| Cash, end of period | $ 1,655,099 | $ 3,085,056 |
The accompanying notes are an integral part of these consolidated financial statements.
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Condensed Consolidated Interim Statements of Changes in Shareholders' Equity (Expressed in Canadian dollars, except for number of shares)
| Share Capital | Contributed Surplus | Convertible Debt - Equity | Warrants | Accumulated Deficit | Accumulated Other Comprehensive Income | Total | |||
|---|---|---|---|---|---|---|---|---|---|
| Note | Number of Common Shares | Amount | |||||||
| Balance at December 31, 2023 | 200,160,478 | $ 13,246,686 | $ 3,332,772 | $ - | $ 620,948 | $(34,718,093) | $ 8,367,101 | $(9,150,586) | |
| Shares issued - services received | 12 | 2,540,887 | 246,339 | - | - | - | - | - | 246,339 |
| Shares and warrants issued - private placement | 12 | 13,781,368 | 1,618,035 | 156,556 | - | 208,779 | - | - | 1,983,370 |
| Shares issued - warrants exercised | 12 | 860,000 | 76,364 | - | - | (33,364) | - | - | 43,000 |
| Shares issued - options exercised | 12 | 1,071,629 | 129,300 | (81,399) | - | - | - | - | 47,901 |
| Share based compensation | 12 | - | - | 467,952 | - | - | - | - | 467,952 |
| Net loss for the period | - | - | - | - | - | (17,777,117) | - | (17,777,117) | |
| Revaluation gain on digital assets | - | - | - | - | - | - | 10,666,963 | 10,666,963 | |
| Issuance of convertible debt | 7 | 286,956 | 48,783 | 36,826 | 316,881 | 76,157 | - | - | 478,647 |
| Balance at December 31, 2024 | 218,701,318 | $ 15,365,507 | $ 3,912,707 | 316,881 | $ 872,520 | $(52,495,210) | $ 19,034,064 | $(12,993,531) | |
| Shares issued - options exercised | 12 | 701,619 | 103,583 | (54,502) | - | - | - | - | 49,081 |
| Shares issued - broker warrants exercised | 12 | 16,000 | 4,880 | (2,800) | - | 720 | - | - | 2,800 |
| Shares issued - debt settlement | 12 | 742,789 | 133,289 | - | - | - | - | - | 133,289 |
| Share based compensation | 12 | - | - | 104,318 | - | - | - | - | 104,318 |
| Net income for the period | - | - | - | - | - | 3,293,498 | - | 3,293,498 | |
| Revaluation loss on digital assets | - | - | - | - | - | - | (4,729,936) | (4,729,936) | |
| Balance at March 31, 2025 | 220,161,726 | $ 15,607,259 | $ 3,959,723 | 316,881 | $ 873,240 | $(49,201,712) | $ 14,304,128 | $(14,140,481) |
The accompanying notes are an integral part of these consolidated financial statements.
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
1. NATURE OF OPERATIONS
Operating businesses
Bitcoin Well Inc. ("Bitcoin Well" or the "Company") is on a mission to enable independence. The Company does this by making bitcoin useful to everyday people to give them the convenience of modern banking and the benefits of bitcoin.
The Company operates three business units, consisting of (i) Bitcoin ATMs, (ii) the Online Bitcoin Portal, and (iii) Bitcoin Well Infinite. The Bitcoin ATM business unit operates 165 Bitcoin ATM machines placed and operating throughout Canada. The Online Bitcoin Portal platform offers customers a fast and safe way to buy, sell and use bitcoin online in Canada and the USA. This business unit is designed to offer bank-like functionality coupled with the benefits of bitcoin. The Bitcoin Well Infinite business unit facilitates large bitcoin transactions ($50,000 and above) for high net worth individuals and businesses.
Corporate administration
The address of the Company's registered office is 1700 Enbridge Centre, 10175 – 101 Street NW, Edmonton, Alberta. The Company's common shares are traded on the TSX Venture Exchange (the "TSXV") under the ticker symbol "BTCW" and on the OTCQB under the ticker symbol "BCNWF".
These condensed consolidated interim financial statements were authorized for issue by the Board of Directors on May 5, 2025.
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
2. BASIS OF PRESENTATION
a) Statement of compliance and basis of presentation
These condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard ‘Interim Financial Reporting’ (“IAS 34”) using accounting policies consistent with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”).
These condensed interim consolidated financial statements follow the same accounting policies and methods of application as the Company’s audited consolidated financial statements for the year ended December 31, 2024 and should be read in conjunction with the Company’s annual financial statements for the year ended December 31, 2024. These consolidated financial statements have been prepared using the accrual basis of accounting, and fair value accounting where appropriate, except for cash flow information. The policies applied in these condensed interim consolidated financial statements are based on IFRS issued as of March 31, 2025.
The preparation of these condensed consolidated interim financial statements in compliance with IAS 34 requires management to make certain accounting estimates. It also requires management to exercise judgement in applying the Company’s accounting policies. The areas where significant judgement and estimates have been made in preparing the financial statements are disclosed in note 2 of the Company’s 2024 consolidated annual financial statements.
The functional currency for the Company and its subsidiaries is the Canadian dollar. The presentation currency for the Company is the Canadian dollar.
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
These condensed consolidated interim financial statements have been prepared on a going concern basis, which assumes the realization of assets and satisfaction of liabilities in the normal course of business for the foreseeable future. For the three months ended March 31, 2025, the Company incurred a comprehensive loss of $1,436,438 (Q1 2024 - loss $1,541,738) and reported a shareholders' deficit of $14,140,481 at March 31, 2025 (December 31, 2024 - deficit of $12,993,531).
Operations have been financed using a combination of cryptocurrency loans (Note 5) and convertible debt (Note 7) which had balances of $17,227,961 and $7,691,574, respectively, at March 31, 2025 with no financial covenants attached. In addition, the Company has raised capital through equity issuances. Management applied judgements in preparing forecasts to support the going concern assumption, including the expected demand for the Company's current and future products, as well as expected operating expenses.
These estimations may raise doubt about whether the Company will continue to operate as a going concern, and therefore, whether it will realize its assets and settle its liabilities in the normal course of business and at the amounts stated in the financial statements. Should the Company be unable to meet its obligations as they become due, the preparation of these consolidated financial statements on a going concern basis may not be appropriate.
b) Basis of consolidation
These consolidated financial statements incorporate the financial statements of the Company and its wholly owned subsidiaries, the Company's current active subsidiaries include Bitcoin Well Canada Ltd., Ghostlab Inc. and Independent Well USA Corp. All intercompany transactions and balances have been eliminated on consolidation.
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Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
c) Reclassifications
Certain comparative amounts in the statement of income for the period ended March 31, 2024 have been reclassified to better reflect the nature of the expenditures reported. This included the reclassification of $404,615 related to the change in fair value of cryptocurrency inventory into a separate line that was previously included in cost of coins in the comparative quarter ended March 31, 2024. The reclassification better reflects and separately reports the nature of this income (expense).
In addition, certain comparative amounts in the statement of cash flows for the period ended March 31, 2024 have been reclassified to better reflect the nature of the transactions. Cash proceeds or disbursements from the sale or purchase of digital assets, which are accounted for as intangible assets under IAS 38, have been reclassified from cash flows from operating activities to cash flow from investing activities.
The reclassification caused a $1,002,360 decrease in cash flows from operating activities and a $1,002,360 increase in cash flows from investing activities for the comparative quarter ended March 31, 2024.
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
3. DIGITAL ASSETS
The Company classifies bitcoin holdings in excess of the inventory required for operations as digital assets. As at March 31, 2025, the price of bitcoin was $118,811 which reflected an decrease from its price of $134,469 on December 31, 2024. The Company recognized an unrealized revaluation loss of $4,729,936 during the three months ended March 31, 2025 (Q1 2024 - unrealized gain of $6,582,955).
| Bitcoin | CAD $ Value | |
|---|---|---|
| Balance at December 31, 2023 | 183 $ | 10,224,666 |
| Additions | 22 | 2,354,888 |
| Disposals | (39) | (3,402,805) |
| Realized gain on sale of digital assets | 2,530,692 | |
| Revaluation | - | 10,666,963 |
| Balance at December 31, 2024 | 166 $ | 22,374,404 |
| Additions | 1 | 85,940 |
| Disposals | (22) | (2,943,459) |
| Realized gain on sale of digital assets | - | 2,478,444 |
| Revaluation | - | (4,729,936) |
| Balance at March 31, 2025 | 145 $ | 17,265,393 |
The Company recognizes realized gains and losses arising from the disposal of digital assets. Accordingly, for the three ended March 31, 2025, a realized gain of $2,478,443 (Q1 2024 - gain of $852,579) was recognized.
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
4. RELATED PARTY TRANSACTIONS
Key Management Compensation
Key management includes members of the Board of Directors and its executive officers. The aggregate value of compensation relating to key management personnel and entities over which they have control or significant influence were as follows.
| Three months ended March 31 | 2025 | 2024 |
|---|---|---|
| Salary, fees, and other short-term benefits | $ 166,559 | $ 158,263 |
| Share based payments (Note 12) | 15,000 | 17,847 |
| Total | 181,559 | $ 176,110 |
Other related party transactions
During the three months ended March 31, 2025, the Company incurred $215,065 (Q1 2024 - $265,754) of interest on crypto currency loans and convertible debentures owing to directors and officers of the company (see Notes 5 and 7 for additional information related to these loans).
During the three months ended March 31, 2025, a director and officer of the company purchased $42,000 of cryptocurrency through the Company's online platform.
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
5. LOANS PAYABLE - CRYPTOCURRENCY
The Company has secured loans of bitcoin from various lenders through Use of Coin Agreements. These agreements were established to fulfill customer demand for cryptocurrency and to serve as security for the Company's Line of Credit (Note 8).
| Bitcoin | CAD $ Value | |
|---|---|---|
| Balance at December 31, 2023 | 195 | $ 10,920,226 |
| Repayments | (30) | (2,706,782) |
| Revaluation | - | 13,974,453 |
| Balance at December 31, 2024 | 165 | $ 22,187,897 |
| Repayments | (20) | (2,706,833) |
| Revaluation | - | (2,253,103) |
| Balance at March 31, 2025 | 145 | $ 17,227,961 |
| Less: Current portion | $ 7,722,683 | |
| Non-current portion | $ 9,505,278 |
As at March 31, 2025, the Company's cryptocurrency loans consisted of 145 bitcoins with a fair value of $17,227,961 (December 31, 2024 – 165 bitcoins valued at $22,187,897).
Of this amount, 40 bitcoins, valued at $4,752,857 (December 2024 - 40 bitcoins valued at $5,379,259) was owing to the Chief Executive Officer of the Company and 10 bitcoins, valued at $1,188,105 (December 2024 - $1,344,691) was owing to a director of the Company. The changes in fair value were a result of the fluctuating prices of cryptocurrency.
In the three months ended March 31, 2025, the company repaid 20 bitcoin cryptocurrency loans totaling $2,706,833 (Q1 2024 - $950,750).
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
The loans are unsecured and bear interest at fixed monthly fees ranging from 6.0% to 10.0% per annum, based on the value of the loans at the time of issuance or at a variable rate equal to bank prime plus 5% per annum based on the current value of the loan.
Of the 145 bitcoins owing, 65 bitcoins, valued at $7,722,683 are currently redeemable by the holders in March 2025. The remaining 80 bitcoins, valued at $9,505,278, are redeemable by the holder with 12 months advance notice and, therefore, have been classified as long-term liabilities.
The total interest incurred under these agreements for the three months ended March 31, 2025 was $184,501 (Q1 2024 - $224,386), of which $43,200 (Q1 2024 - $54,000) was incurred with an officer and director of the Company and $37,015 (Q1 2024 - $24,951) was incurred with a director of the Company. This expense has been recorded within Finance fees.
At each reporting period, the Company revalues the outstanding loans based on current market price of the cryptocurrencies, using CoinMarketCap. For the three months ended March 31, 2025, the Company recognized an unrealized fair value gain of $2,253,103 (Q1 2024 - loss of $7,876,112), as a result of changes in the price of the cryptocurrencies.
Whenever any borrowed cryptocurrencies are used in operations or to secure borrowings under the line of credit (Note 8), an equal amount of cryptocurrency is purchased, which effectively allows the Company to eliminate any price exposure to those borrowed coins once they have been used. Therefore, the $2,253,103 in unrealized gain for the three months ended March 31, 2025 (Q1 2024 - loss $7,876,112) was mostly offset by the net of (i) a $4,729,936 unrealized loss (Q1 2024 - gain $6,582,955) recorded in Other Comprehensive Income, and (ii) a $2,478,443 realized gain (Q1 2024 - $852,579), that were recognized related to cryptocurrencies held by the Company in digital assets.
12
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
6. INVENTORY
| As at | March 31, 2025 | December 31, 2024 | ||
|---|---|---|---|---|
| Value | Units | Value | Units | |
| Bitcoin | $ 1,188,105 | 10 | $ 1,344,691 | 10 |
| Ethereum | 9,746 | 4 | 22,174 | 5 |
| Other | 28,202 | 11,775 | ||
| Total | $ 1,226,053 | $ 1,378,640 |
For the three months ended March 31, 2025, a fair value loss of $156,586 (Q1 2024 - gain of $404,615) was recognized due to changes in the market value of The Company's inventory balances.
7. CONVERTIBLE DEBT
| As at | March 31, 2025 | December 31, 2024 |
|---|---|---|
| Debenture A | $ 4,100,000 | $ 4,100,000 |
| Debenture A - Royalty liability | 1,222,193 | 1,194,636 |
| Debentures B | 1,120,735 | 1,121,316 |
| Debentures C | 1,248,646 | 1,224,815 |
| Total | 7,691,574 | 7,640,767 |
| Less: current portion | (1,410,862) | (243,698) |
| $ 6,280,712 | $ 7,397,069 |
Debenture A
As at March 31, 2025, the Company had an outstanding secured convertible debenture ("Debenture A") in the principal amount of $4,100,000 owing to Beyond the Rhode Corp ("BTR"), a company controlled by a director of Bitcoin Well. The convertible Debenture incurs interest at Prime + 6.2% per annum, matures on May 1, 2028, and is convertible into common shares of the Company at a price of $0.25 per share at the election of the holder at any time.
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
The Company has the right to force conversion of the principal amount if the volume weighted average trading price of the common shares for ten trading days equals or exceeds $0.50 per common share. The Company also has the option to repay any amounts of the Debenture A with no penalty, at any time.
The Debenture A also provides for the payment of a monthly royalty to the holder equal to between 12% and 20% of the gross profit, defined as revenue less the cost of coins, generated from the Online Bitcoin Portal, until the latter of three months after the most recent conversion date or the maturity date. No royalty payments shall be made if the aggregate amount of all interest payments, future interest payments and royalty payments would exceed 24% per annum. During the three months ended March 31, 2025, the lender agreed to waive all royalty payments otherwise due in exchange for an extension of the royalty for an additional period of 3 months. The royalty payment period now expires on October 31, 2028.
During the three months ended March 31, 2025, the Company incurred interest of $116,850 (Q1 2024 - $167,500) and paid no royalties (Q1 2024 - $9,899) related to Debenture A.
Debenture A - Royalty liability
The Company has determined that the royalty payments, which are required by Debenture A, constitute an embedded derivative liability that needs to be measured at fair value every reporting period. The calculated fair value was $1,222,193 as of March 31, 2025, and the resulting change in fair value of $27,557 during the three months ended March 31, 2025 was recognized in profit and loss. This fair value was determined by discounting the revised expected future gross profit from the Bitcoin Online Portal at an annual rate of 15%.
14
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
Debentures B
The Company has outstanding secured convertible debentures in the principal amount of $1,120,735 owing to various arm's length parties (the "Debentures B"). The convertible debentures incur interest at the Bank of Canada policy interest rate + 8% per annum and mature between February 16, 2026 and March 28, 2026, subject to two automatic one year extensions. The Debentures B are convertible into common shares of the Company at a price of $0.15 per share at the election of the holder at any time.
The Company has the right to force conversion of the principal amount of the Debentures B if the volume weighted average trading price of the common shares for ten trading days equals or exceeds $0.30 per common share. The Company also has the option to repay any amounts of these debentures with no penalty, with 30 days notice.
During the three months ended March 31, 2025, the Company recognized $29,167 (Q1 2024 - $29,861) in interest related to the Debentures B.
Debentures C
The Company has outstanding unsecured convertible debentures in the principal amount of $2,000,000 owing to various arm's length parties (the "Debentures C"). The Debentures C bear interest of 8% per annum, payable semi-annually in arrears, on the first business day in July and January of each year (the "Interest Payment Date") and mature on December 30, 2029 (the "Maturity Date"). The Company shall pay, on each Interest Payment Date, all interest in the form of common shares of the Company (the "PIK Interest Payment") or in cash, at the sole discretion of the Company. In the event the Company elects to make a PIK Interest Payment, it shall deliver such number of common shares, within 10 business days of the Interest Payment Date, as is determined by dividing the accrued and unpaid interest due and payable on the Interest Payment Date by the 10 day volume weighted average trading price ("VWAP") of the Common Shares on the TSXV, immediately preceding the Interest Payment Date.
15
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
Each $1,000 principal amount of the Debentures C is convertible into 4,347 common shares of the Company at the option of the holder thereof, at a conversion price of $0.23 per share.
If the VWAP of the common shares on the TSXV is greater than $0.32 for a period of 10 consecutive trading days, the Company may, within 10 business days of the occurrence of such event, force the conversion of the Debentures C by giving notice (the "Debenture Conversion Notice") to the holders of the Debentures C, and issuing a concurrent press release, and, in such case, the conversion date of the Debentures C shall be the date specified by the Company in the Debenture Conversion Notice, provided such date shall not be less than 30 trading days following delivery of the Debenture Conversion Notice.
The Debentures C are classified as a liability in the consolidated statement of financial position with an equity component representing the conversion feature as well as the warrants issued in conjunction with the issuance. The liability component was initially recognized at fair value, calculated as the present value of future cash flows discounted at a market rate of interest of 15.0% for similar non-convertible instruments. The residual amount was allocated to the equity components and recorded within equity. The effective interest rate method is being used to amortize the liability component over the term of the Debentures.
During the three months ended March 31, 2025, the Company recognized $63,831 (Q1 2024 - $nil) in interest related to the Debentures C, including $23,831 in accretion.
At March 31, 2025, BTR held $900,000 principal amount of the Debentures C, representing 45% of the total outstanding.
16
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
8. LINE OF CREDIT
The Company has a line of credit with Ledn, a lending firm that provides bitcoin-backed loans. The line of credit accrues interest at 13.4% per annum and matures in various tranches from October 2025 to December 2025. These tranches can be extended for additional 12-month terms, subject to mutual agreement.
The line of credit requires the Company to hold a mix of cryptocurrency assets and cash (collectively the "Collateral") with the lender such that the debt outstanding will not exceed 70% of the Collateral (the "Loan to Value"). If the Loan to Value exceeds 70%, the lender may require the Company to deposit additional collateral with the lender to reduce the Loan to Value to 50%. If the Loan to Value exceeds 80%, the Company will be in default and the lender will be able to immediately demand repayment of the line of credit and exercise all of its rights and remedies available to collect on the outstanding balance, including liquidating the collateral held.
On March 31, 2025, the lender held 142 Bitcoin as security over the line of credit, with a fair value of $16.9 million, representing a Loan to Value of 59%.
In the three months ended March 31, 2025, the Company recognized $312,915 in interest related to the line of credit (Q1 2024 - $200,398).
9. SEGMENTED INFORMATION
The Company reports three operating business segments: (i) Bitcoin ATMs, (ii) Online Bitcoin Portal and (iii) Bitcoin Well Infinite, as well as a head office segment that includes overhead and administrative expenditures applicable to the whole business. These segments have been identified by management based on components of the business containing similar economic characteristics. Management reviews the financial information for each of these segments separately when making business decisions.
17
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
The Bitcoin ATM segment comprises sales and expenses related to the Company's Bitcoin ATMs placed and operating throughout Canada. The Online Bitcoin Portal segment includes sales and expenses related to the Company's online bitcoin platform. The Bitcoin Well Infinite segment includes sales and expenses related to large bitcoin transactions ($50,000 and above) for high net worth individuals and businesses. Management reviews the financial information for each of these segments separately when making business decisions.
Management has identified Bitcoin Well Infinite as a separate business segment starting in the first quarter of 2025, due to its significant growth and development in recent months. Previously, it was part of the Online Bitcoin Portal segment. The comparative period for the three months ended March 31, 2024, has been adjusted to reflect this change in segmentation.
| Three months ended March 31, 2025 | ATMs | Online | Infinite | Head office | Total |
|---|---|---|---|---|---|
| Sales | $ 4,898,386 | $ 15,215,463 | $ 11,688,163 | $ - | $ 31,802,012 |
| Cost of coins | (4,261,073) | (14,980,018) | (11,476,471) | - | (30,717,562) |
| Gross profit | 637,313 | 235,445 | 211,692 | - | 1,084,450 |
| Gross profit margin % | 13.0% | 1.5% | 1.8% | 3.4% | |
| Expenses | |||||
| General and administration | 343,263 | 45,797 | 15,909 | 225,683 | 630,652 |
| Salaries and wages | 61,901 | 123,801 | 24,760 | 37,140 | 247,602 |
| Depreciation and accretion | 93,840 | - | - | 12,796 | 106,636 |
| Financing fees | - | - | - | 705,152 | 705,152 |
| Marketing and advertising | - | 123,510 | 36,195 | 189,861 | 349,566 |
| Professional fees | - | - | - | 104,365 | 104,365 |
| Software | 25,799 | 38,699 | 29,560 | 12,900 | 106,958 |
| Other items | - | - | 239 | (4,460,218) | (4,459,979) |
| Segment income (loss) | 112,510 | (96,362) | 105,029 | 3,172,321 | 3,293,498 |
| Total assets | $ 2,674,379 | $ 420,593 | $ 316,428 | $ 18,394,376 | $ 21,805,776 |
| Total liabilities | - | 13,714 | 20,056 | 35,912,487 | 35,946,257 |
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
| Three months ended March 31, 2024 | ATMs | Online | Infinite | Head office | Total |
|---|---|---|---|---|---|
| Sales | $ 6,512,285 | $ 7,201,057 | $ 2,467,778 | $ - | $ 16,181,120 |
| Cost of coins | (5,798,369) | (7,152,886) | (2,427,054) | - | (15,378,309) |
| Gross profit | 713,916 | 48,171 | 40,724 | - | 802,811 |
| Gross profit margin % | 11.0% | 0.7% | 1.7% | 5.0% | |
| Expenses | |||||
| General and administration | 439,904 | 61,116 | 20,517 | 214,873 | 736,410 |
| Salaries and wages | 48,590 | 97,180 | 19,436 | 29,154 | 194,360 |
| Depreciation and accretion | 183,469 | - | - | 78,984 | 262,453 |
| Financing fees | - | - | - | 644,147 | 644,147 |
| Marketing and advertising | - | 34,449 | 8,847 | 106,519 | 149,815 |
| Professional fees | - | 3,388 | 3,388 | 97,418 | 104,194 |
| Software | 14,434 | 21,651 | 4,811 | 7,216 | 48,112 |
| Other items | - | - | - | 6,788,013 | 6,788,013 |
| Segment income (loss) | 27,519 | (169,613) | (16,275) | (7,966,324) | (8,124,693) |
| Total assets | $ 2,357,131 | $ 917,268 | $ 96,463 | $ 19,691,779 | $ 23,062,641 |
| Total liabilities | - | - | - | 31,704,013 | 31,704,013 |
Included in the Online and Infinite segments for the three months ended March 31, 2025 was fee revenue of $15,688 and $94,344 (Q1 2024 - $nil and $nil), respectively, generated from customers located in the United States. All of the Company's property and equipment, intangible assets and goodwill are located in Canada.
10. MANAGEMENT OF CAPITAL
The Company defines the capital that it manages as its shareholders' equity, convertible debt, loans payable, loans payable - cryptocurrency, and line of credit. The Company's objectives when managing capital are:
- Maintaining adequate liquidity reserves and access to capital.
- Ensuring sufficient liquidity to support its corporate and administrative functions as well as being able to execute on strategic initiatives.
- Minimizing the impact of the current market and economic conditions through active capital management.
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
The Company manages its capital structure in a manner that provides sufficient funding for operational and capital expenditure activities. Funds are secured, when necessary, through debt funding or equity capital raised by means of private placements. There can be no assurances that the Company will be able to obtain debt or equity capital in the case of working capital deficits.
The Company is subject to externally imposed capital requirements related to its line of credit, see Note 8.
11. RISK MANAGEMENT
11.1 Financial Risk Management
The Company may be exposed to various financial risks, which could affect its ability to achieve its strategic objectives. The main objectives of the Company's risk management strategy is to ensure that risks are properly identified and that the capital base is adequate in relation to those risks. The principal risks to which the Company is exposed are described below.
a) Credit Risk
Credit risk is the risk that a counterparty will be unable to pay any amounts owed to the Company. Assets that subject the Company to credit risk consist primarily of cash, digital assets, and accounts receivable.
The Company limits its exposure to credit loss related to its cash by placing its cash with high quality financial institutions. The Company is also exposed to the risk of loss from theft of its cash held in ATM machines or in transit from ATM machines to financial institutions. This risk is mitigated by having no concentration of cash in any one location, the regular collection of cash from ATM machines and by using reputable service organizations to transport cash from its ATM machines to financial institutions.
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
Credit risks related to the Company's digital assets include that a portion of these assets are held by third parties, including lenders and liquidity partners. The Company is also exposed to the risk of loss associated with digital assets held in its controlled wallets. To mitigate these risks, the Company has implemented rigorous levels of internal controls to ensure the safety and security of its digital assets, including but not limited to multi-signature wallets, the use of cold storage wallets, and signing authority limitations.
The Company may, from time to time, hold a net asset position with its liquidity partners. The Company limits its exposure to potential credit loss by ensuring it is working with liquidity partners who have a high standard of care, and that a reasonable degree of oversight and review over their internal controls has been maintained, including the requirement of a current Systems and Organization Controls 2 ("SOC 2") report in order for the Company to work with the liquidity partner.
A significant portion of the Company's digital assets are also held by its lender as collateral for the line of credit (note 8). The Company does not hold, or have rights to the potential economic benefits of the cryptocurrency assets that comprise the collateral for the duration of the line of credit. The lender is also not required to deposit the collateral with a custodial service for safekeeping, and the lender can pledge, sell, lend, or transfer the collateral to third parties.
As disclosed in the annual consolidated financial statements for the year ended December 31, 2024, in October 2023, Rapid Cash ATM Ltd. ("Rapid Cash") suddenly uninstalled and removed the Company's software from Rapid Cash's ATMs that were operating in the Company's partner program. As a result, the Company terminated its hosting agreement with Rapid Cash who previously operated approximately 100 ATM machines under the Company's partner program. The Company is vigorously pursuing its rights under the contract and has commenced an action against Rapid Cash before the Alberta Court of King's Bench.
21
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
Accounts receivable at March 31, 2025 includes $509,582 of the Company's cash in ATM machines that was withheld by Rapid Cash. In February 2025, the Company was awarded a partial summary judgement in the amount of $509,582 plus costs. The Company believes it will be successful in recovering this amount from Rapid Cash, but the amount remains uncollected, and therefore, the Company's accounts receivable is subject to credit risk.
b) Liquidity Risk
Liquidity risk is the risk that the Company is not able to meet its financial obligations as they come due. As at March 31, 2025 the Company had a positive working capital balance of $1,172,541 (December 31, 2024 - $16,046,995).
As at March 31, 2025, the Company had cash of $1,655,099 (December 31, 2024 - $2,875,766) and short term liabilities in the table below:
| March 31, 2025 | December 31, 2024 | |
|---|---|---|
| Accounts payable | $ 395,088 | $ 268,544 |
| Accrued liabilities | 264,561 | 293,590 |
| Deferred revenue | 139,041 | 734,893 |
| Lease liability - current | 49,219 | 32,403 |
| Acquisition consideration payable | 163,077 | 167,260 |
| Convertible debt - current | 1,410,862 | 243,698 |
| Line of credit | 9,942,978 | 9,643,793 |
| Loans payable - cryptocurrency | 7,722,683 | - |
| Total | $ 20,087,509 | $ 11,384,181 |
Accounts payable, accrued liabilities, deferred revenue, and lease liabilities will be paid or extinguished within the next 12 months, as they become due.
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
The line of credit and current portion of convertible debt (excluding $290,127 related to the current portion of the royalty liability, which is anticipated to be paid) is expected to continue to be extended as required by the Company and agreed to by the lenders. The convertible debentures that are scheduled to mature in Q1 2026 also carry automatic one year extensions. However, there is no guarantee the tranches advanced under the line of credit or the convertible debentures will be extended by the lenders.
The Company's line of credit is also subject to minimum collateral covenants, which if insufficient, could result in default, and the requirement to immediately repay any balances outstanding. Should such an event occur, the lender may also dispose of the digital assets that it currently holds as collateral for the line of credit. See note 8 for additional information.
During the quarter ended March 31, 2025, the Company established an at-the-market equity program (the "ATM Program") that allows the Company to issue and sell, at its discretion, up to $5,000,000 of common shares to the public from time to time. Distributions of the shares under the ATM Program will be made pursuant to the terms of an equity distribution agreement between Bitcoin Well and Haywood Securities Inc. (the "Agent"). All shares sold under the ATM Program will be sold through the TSX or other recognized Canadian marketplace at prevailing market prices at the time of sale. The ATM Program will be effective until the earlier of March 28, 2027 and the completion of the issuance and sale of all of the Shares issuable pursuant to the ATM Program, subject to earlier termination by Company or the Agent in accordance with the terms of the distribution agreement.
The ATM Program is intended to provide the Company with additional financing flexibility should it be required in the future. The volume and timing of distributions under the ATM Program, if any, will be determined in the Company's sole discretion. As Shares distributed under the ATM program will be sold at the prevailing market price at the time of sale, prices may vary among purchasers during the term of the ATM Program.
23
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
The Company intends to use the net proceeds from the ATM Program, if any, together with the Company's current cash resources, to fund general corporate purposes, including ongoing operations and/or working capital requirements; to repay indebtedness outstanding from time to time; to complete future acquisitions; to fund research and development, intellectual property development; or for other corporate purposes.
There were no share issuance pursuant to the ATM Program during the three months ended March 31, 2025.
The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. The Company may also seek additional financing through debt or equity offerings, but there can be no assurance that such financing will be available on terms acceptable to the Company or at all. Any equity offering will result in dilution to the ownership interests of the Company's shareholders and may result in dilution to the value of such interests.
c) Foreign Currency Risk
The Company is exposed to foreign currency risk in relation to its line of credit, which is denominated in USD. Based on the balance of the line of credit denominated in USD at March 31, 2025, a 5% increase or decrease in the exchange rate would result in a gain or loss of $497,149. The Company is not currently exposed to any other significant foreign exchange risk.
d) Digital Asset and Market Risk
Digital asset and market risk incorporates a range of risks. Movements in risk factors, such as market price risk and currency risk, affect the fair values of financial assets and liabilities. The Company is exposed to market risk on cryptocurrency held as digital assets, inventory, and cryptocurrency loans. Cryptocurrency prices are affected by various forces including global supply and demand, interest rates, exchange rates, inflation or deflation, and global political and economic conditions.
24
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
A decline in the market prices for cryptocurrencies could negatively impact the Company's future operations. The Company has not hedged the conversion of its inventory into sales. Cryptocurrencies have a limited history, and the fair value historically has been volatile. Historical performance of cryptocurrencies is not indicative of their future price performance. The Company's inventory consists primarily of Bitcoin and Ethereum.
With a 10% change to the price of bitcoin, the Company's digital assets and inventory at March 31, 2025 would increase or decrease by $1,726,539 and $118,811, respectively and the Company's loans payable - crypto currency would increase or decrease by $1,722,796.
e) Interest rate risk
The Company is exposed to interest rate cash flow risk associated with its Debenture A and Debentures B as these instruments bear interest at a variable market rate. With a 100 basis point change in market interest rates, the Company's interest expense for the quarter related to these debts would increase or decrease by $13,052.
The Company is not exposed to significant interest rate risk on its line of credit, Debentures C, and loans payable - crypto currency as the majority of these liabilities incur interest at a fixed rate.
11.2 Fair Values
The carrying values of cash, accounts receivable, accounts payable and accrued liabilities, acquisition consideration payable, and line of credit approximate their fair values due to their short-term nature. The carrying value of the Company's convertible debt (excluding the royalty derivative liability) does not differ significantly from its carrying value using observable inputs as the debt bears interest at a variable rate or at fixed rates that approximate market rates for debt of similar characteristics.
25
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2 – Quoted prices in markets that are not active, or inputs that are not observable, either directly or indirectly, for substantially the full term of the asset or liability.
Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).
The Company's financial instruments and digital assets have been classified as follows:
| As at March 31, 2025 | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| Fair value through profit and loss | ||||
| Cryptocurrency loans | $ - | $ - | $ 17,227,961 | $ 17,227,961 |
| Royalty liability | - | - | 1,222,193 | 1,222,193 |
| Fair value through other comprehensive income | ||||
| Digital assets | - | 17,265,393 | - | 17,265,393 |
| As at December 31, 2024 | Level 1 | Level 2 | Level 3 | Total |
| --- | --- | --- | --- | --- |
| Fair value through profit and loss | ||||
| Cryptocurrency loans | $ - | $ - | $ 22,187,896 | $ 22,187,896 |
| Royalty liability | - | - | 1,194,636 | 1,194,636 |
| Fair value through other comprehensive income | ||||
| Digital assets | - | 22,374,404 | - | 22,374,404 |
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
12. EQUITY
12.1 Authorized Share Capital
The Company is authorized to issue the following:
- Unlimited number of voting common shares, without nominal or par value.
- Unlimited number of non-voting preferred shares, without nominal or par value.
12.2 Shares issued
During the three months ended March 31, 2025, the Company issued 536,408 common shares in the capital of the Company at a deemed price of $0.19 per share and 206,381 common shares at a deemed price of $0.152 per share to settle total outstanding debt obligations of $133,289. The debt obligations related to accrued interest owing pursuant to certain cryptocurrency loans and a convertible debt agreement.
During the quarter ended March 31, 2025, the Company also issued the following common shares:
- 701,619 common shares were issued upon the exercise of stock options; and
- 16,000 common shares were issued upon the exercise of broker options.
12.3 Incentive Plan
Long-term Incentive Plan ("LTIP")
The Company periodically grants stock options to purchase common shares of the Company to certain officers, directors, and employees. Options vest within two to three years of the grant date and expire after a term of 5 years.
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
Stock options issued are summarized below:
| Number of options | Weighted average exercise price | |
|---|---|---|
| Options outstanding, December 31, 2023 | 8,086,245 | 0.09 |
| Granted | 10,150,000 | 0.14 |
| Forfeited | (1,712,221) | 0.14 |
| Exercised | (1,071,629) | 0.05 |
| Options outstanding, December 31, 2024 | 15,452,395 | $ 0.12 |
| Exercised | (701,619) | 0.07 |
| Options outstanding, March 31, 2025 | 14,750,776 | $ 0.12 |
| Options exercisable, December 31, 2024 | 7,386,816 | $ 0.10 |
| Options exercisable, March 31, 2025 | 7,100,776 | $ 0.10 |
The Company had the following stock options outstanding and exercisable, at March 31, 2025:
| Outstanding | Exercisable | ||||
|---|---|---|---|---|---|
| Exercise Price | Number of options outstanding | Weighted average exercise price | Weighted average remaining life (months) | Weighted average exercise price | Number of options exercisable |
| $ 0.20 | 150,000 | $ 0.20 | 10 | $ 0.20 | 150,000 |
| 0.30 | 200,000 | 0.30 | 10 | 0.30 | 200,000 |
| 0.34 | 294,117 | 0.34 | 4 | 0.34 | 294,117 |
| 0.31 | 91,553 | 0.31 | 18 | 0.31 | 91,553 |
| 0.18 | 896,278 | 0.18 | 21 | 0.18 | 896,278 |
| 0.07 | 2,929,881 | 0.07 | 28 | 0.07 | 2,929,881 |
| 0.05 | 2,238,947 | 0.05 | 25 | 0.05 | 2,238,947 |
| 0.14 | 7,650,000 | 0.14 | 9 | 0.14 | - |
| 0.12 | 300,000 | 0.12 | 12 | 0.12 | 300,000 |
| 14,750,776 | $ 0.12 | 16 | $ 0.10 | 7,100,776 |
During the three months ended March 31, 2025, the Company recorded a total of $104,318 (2024 - $67,583) as share based payments related to stock options.
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
12.4 Warrants
Warrants issued are summarized below:
| Number of options | Weighted average exercise price | |
|---|---|---|
| Warrants outstanding, December 31, 2023 | 30,291,985 | $ 0.15 |
| Granted - equity private placement | 6,890,684 | 0.275 |
| Granted - convertible debenture private placement | 8,980,956 | 0.30 |
| Exercise of warrants | (860,000) | 0.05 |
| Warrants outstanding, December 31, 2024 | 45,303,625 | $ 0.20 |
| Granted pursuant to exercise of broker options | 16,000 | 0.175 |
| Warrants outstanding, March 31, 2025 | 45,319,625 | $ 0.20 |
The following table summarizes the warrants that were outstanding as at March 31, 2025:
| Exercise price | Number of warrants | Expiry Date |
|---|---|---|
| $ 0.05 | 6,140,000 | September 7, 2028 |
| $ 0.18 | 23,291,985 | September 1, 2026 |
| $ 0.275 | 6,906,684 | March 22, 2027 |
| $ 0.30 | 8,980,956 | December 30, 2029 |
| Warrants outstanding, March 31, 2025 | 45,319,625 |
12.5 Agent Options
In connection with the March 2024 private placement, the Company granted Agent Options to acquire 894,603 Units. The Agent Options are exercisable at a price of $0.175 per option and expire on March 22, 2027. Each Unit consisted of one common share and one Warrant of the Company, exercisable at a price of $0.275 per share, and expiring on March 22, 2027. During the three months ended March 31, 2025, 16,000 of the Agent Options were exercised.
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
In connection with the December 2024 convertible debenture private placement, the Company granted Compensation Options to acquire 334,782 Compensation Option Units. The Compensation Options are exercisable at a price of $0.23 per option and expire on December 30, 2029. Each Compensation Option Unit consists of one common share and one Warrant, exercisable at a price of $0.30 per Warrant and expiring on December 30, 2029. During the three months ended March 31, 2025, no Compensation Options were exercised.
13. REVENUE
The Company generates revenue through the sale of its inventory (cryptocurrency). These sales are transacted to customers, as well as to arms-length cryptocurrency exchanges. The below table summarizes both sources of revenue reported.
| Three months ended March 31 | 2025 | 2024 |
|---|---|---|
| Customers | $ 23,906,249 | $ 11,944,201 |
| Cryptocurrency exchanges | 7,785,731 | 4,236,919 |
| Transaction fee revenue | 110,032 | - |
| Total sales revenue | $ 31,802,012 | $ 16,181,120 |
The Company recognizes revenue when customers purchase cryptocurrency and it is transferred to the customer's account. The Company's performance obligation is the confirmed transfer of the purchased cryptocurrency to the customer's wallet. The Company purchases bitcoin and other cryptocurrencies from cryptocurrency exchanges and applies a margin before selling it to customers.
The amounts sold to and purchased from the Company's customers are recorded as revenue on a gross basis, and the inventory sold is the cost of coin, as the Company is the principal in the cryptocurrency sale transaction.
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2025 and 2024
(Unaudited - Expressed in Canadian dollars, except where otherwise stated)
The Company has been determined to be the principal because it controls the cryptocurrency before delivery to the customer, the Company is primarily responsible for the delivery of the cryptocurrency to the customer, the Company is exposed to risks arising from fluctuations in the market prices of cryptocurrencies before delivery to the customer, and the Company has discretion in setting prices charged to the customer. Sales to cryptocurrency exchanges represents coins sold to exchanges as a function of managing the Company's coin inventory balance.
The Company recently expanded its Online Portal and Bitcoin Well Infinite service lines to serve customers located in the United States. Transactions conducted with US based customers are currently facilitated through third party service providers that purchase and sell the cryptocurrency directly with the customers. The Company is compensated by the third party service providers through a monthly per transaction fee based on a sliding scale dependent on quarterly volumes. During the three months ended March 31, 2025, the transaction fees earned from the third party service providers were $110,032 (Q1 2024 - nil). Gross transaction volumes related to these transactions for the three months ended March 31, 2025 was USD $7,341,830 (Q1 2024 - nil).
14. GENERAL AND ADMINISTRATION
| Three months ended March 31 | 2025 | 2024 |
|---|---|---|
| Service costs | $ 424,756 | $ 546,981 |
| Office expenses | 39,673 | 55,957 |
| Travel and meals | 23,240 | 12,241 |
| Automobile | 2,701 | 607 |
| Rent and lease payments | 9,958 | 6,814 |
| Consulting fees | 130,324 | 113,810 |
| Total | $ 630,652 | $ 736,410 |
Service costs include cash logistics, ATM operating costs, and costs related to hosting ATMs.