Bitcoin Well — Management Reports 2021

Jul 28, 2021

Red River Capital Corp.

Management’s Discussion and Analysis For The Year Ended March 31, 2021

Red River Capital Corp.

RED RIVER CAPITAL CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS For the year ended March 31, 2021

This Management’s Discussion and Analysis (“MD&A”) is dated July 26, 2021 and should be read in conjunction with the audited financial statements for the years ended March 31, 2021 and 2020 of Red River Capital Corp. (“Red River” or the “Company”). The audited financial statements were prepared in accordance with International Financial Reporting Standards (“IFRS”). All dollar amounts are expressed in Canadian dollars unless otherwise noted.

Additional information about the Company is available on SEDAR at www.sedar.com.

Certain statements included in this MD&A may constitute forward-looking statements involving known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this MD&A, such statements use words such as “may”, “will”, “expect”, “believe” and “plan”. These statements reflect management’s current expectations regarding future events and operating performance and are valid only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties, including the impact of general economic conditions, industry conditions, and changes in laws and regulations, increased competition, fluctuations in commodity prices and foreign exchange, and interest rates and stock market volatility. The Company does not reconcile past forward-looking information but presents its most current view based on the known facts on hand at the time of dissemination.

Description of the Business

Red River was incorporated under the laws of the Province of Alberta on December 20, 2017. The Company was classified as a Capital Pool Corporation as defined in Policy 2.4 of the TSX Venture Exchange (“TSXV"). The principal business of the Company was to identify and evaluate assets or businesses with a view to potentially acquire them or an interest therein by completing a purchase transaction, by exercising of an option or by any concomitant transaction. The purpose of such an acquisition was to satisfy the related conditions of a “Qualifying Transaction” (as such term is defined in Policy 2.4 of the TSXV Corporate Finance Manual), under the TSXV rules.

Pursuant to a final prospectus dated April 26, 2018, the Company completed a public offering of 3,000,000 common shares for gross proceeds of $300,000 on July 26, 2018. In addition, the agent was granted the option to purchase up to 300,000 common shares at a price of $0.10 per common share. These options expired on July 26, 2020. The Company also granted share options to purchase an aggregate of 550,000 common shares at an exercise price of $0.10 per Common Share to the directors and officers of the Company, which expire five years from July 26, 2018.

The novel coronavirus (“COVID-19”) outbreak was declared a pandemic by the World Health Organization on March 11, 2020. This resulted in significant economic uncertainty and governments worldwide enacting emergency measures to contain the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused material disruption to businesses globally resulting in an economic slowdown. Global financial markets have experienced significant volatility and weakness as a consequence of this economic uncertainty. The duration and impact of the COVID-19 outbreak is unknown as this time, as is the effectiveness of interventions by governments and central banks. The full extent of the impact on the Company’s future financial results is uncertain given the length and severity of these developments cannot be reliably estimated.

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Red River Capital Corp.

Qualifying Transaction

On September 11, 2020, Red River entered into a definitive agreement with 1739001 Alberta Ltd. (DBA “Bitcoin Well”), pursuant to which Red River agreed to acquire each of the issued and outstanding securities of Bitcoin Well (the “Transaction”). The Transaction closed on June 11, 2021 and constituted the Company’s “Qualifying Transaction”.

The Transaction was completed by way of a three-cornered amalgamation, pursuant to which 2283971 Alberta Ltd., a wholly owned subsidiary of Red River, amalgamated with Bitcoin Well to form a new wholly owned subsidiary of the Company, Bitcoin Well Holdings Inc., which now holds the assets of Bitcoin Well. Contemporaneous with the Transaction, Red River changed its name to “Bitcoin Well Inc”.

Established in 2013, Bitcoin Well is a leading cryptocurrency ATM machine operator in Canada with a national network of Bitcoin ATMs.

Upon completion of the Transaction, Bitcoin Well Inc. had 162,879,500 shares issued and outstanding on a non-diluted basis, with approximately 96% held by former Bitcoin Well shareholders and approximately 4% held by Red River shareholders.

Additional information regarding the Transaction is available in the Filing Statement of Red River filed on May 17, 2021 and available on SEDAR under the Company’s profile.

Selected Annual Financial Data

Year ended and as at	March 31	March 31	March 31
$	2021	2020	2019
Revenue	2,519	4,051	616
Expenses	185,487	47,543	119,642
Net loss and comprehensive loss	(182,968)	(43,492)	(119,026)
Loss per share–basic and diluted	(0.06)	(0.01)	(0.06)
Total assets	63,671	243,469	278,236
Total liabilities	18,751	15,581	6,856
Long-term liabilities	-	-	-
Shareholders’equity	44,920	227,888	271,380

Revenue for the years ended March 31, 2021, 2020, and 2019 consisted of interest income earned on the Company’s cash and cash equivalents. Expenses primarily consisted of legal and accounting fees associated with completing the Transaction.

Liquidity and Capital Resources

As at March 31, 2021, the Company had working capital of $44,920, including sufficient cash to meet its ongoing obligations to complete the Transaction.

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Red River Capital Corp.

Summary of Quarterly Data

Quarter ended	Mar	Dec	Sep	Jun	Mar	Dec	Sept	Jun
$	2021	2020	2020	2020	2020	2019	2019	2019
Revenue	251	659	717	892	1,184	926	931	1,010
Net loss	(19,500)	(21,785)	(136,932)	(4,751)	(22,372)	(3,121)	(6,202)	(11,797)
Loss pershare(1)	(0.01)	(0.01)	(0.05)	(0.00)	(0.01)	(0.00)	(0.00)	(0.00)

Note: (1) Loss per share represents both basic and diluted loss per share for all periods presented.

Revenue for the trailing eight quarters ended March 31, 2021 were comparable and consisted of interest income earned on the Company’s cash and cash equivalents. The Company’s expenses over the past eight quarters primarily consisted of legal and accounting fees associated with completing the Transaction. The higher net loss incurred for the quarter ended September 30, 2020 related to legal fees incurred in connection with the letter of intent and definitive agreements for the Transaction.

Fourth Quarter Results

Revenue for the fourth quarter ended March 31, 2021 consisted of interest income earned on the Company’s cash and cash equivalents. Expenses for the fourth quarter of $19,751 consisted primarily of professional fees associated with completing the Transaction.

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements as at March 31, 2021.

Critical Accounting Estimates and Policies

The Company’s significant accounting policies are disclosed in the audited financial statements for the year ended March 31, 2021.

Financial Instruments and Other Instruments

The Company’s financial instruments consist of cash and cash equivalents, accrued interest, and accounts payable and accrued liabilities. It is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments and that the fair value of these financial instruments approximates their carrying values due to their short-term nature.

Disclosure of Outstanding Share Data

As of the date of this MD&A, subsequent to completion of the Transaction, Bitcoin Well Inc. (the Company’s successor) had issued and outstanding 162,879,500 common shares, 5,346,018 options to purchase common shares, 14,569,000 warrants to purchase common shares, and a shareholder loan of $750,000, which is convertible into 6,250,000 common shares.

Related Party Transactions

Key management personnel consist of officers and directors of the Company. No compensation was paid to key management personnel during the current or prior years.

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Red River Capital Corp.

Risks and Uncertainties

The Company has a limited history of existence. The securities of the Company should be considered a highly speculative investment. Since the Company has now completed its Qualifying Transaction with Bitcoin Well, the Company’s primary risks and uncertainties are the same as those of Bitcoin Well and are summarized in the Company’s Filing Statement dated May 17, 2021, available on SEDAR.

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