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CryptoStar Corp. Management Reports 2025
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Management Reports
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CRYPTOSTAR CORP.
Management Discussion and Analysis
For the Year Ended December 31, 2024
(Expressed in U.S. dollars)
This management discussion and analysis ("MD&A") of the results of the operations and financial position of CryptoStar Corp. and its subsidiaries (the "Company" or "CryptoStar") is dated as of April 29, 2025 and should be read in conjunction with the Company's consolidated financial statements and the related notes for the year ended December 31, 2024. All amounts are expressed in United States dollars ($) unless otherwise stated.
Management's Responsibility
The Company's management is responsible for the preparation and presentation of the consolidated financial statements and the MD&A. This MD&A has been prepared in accordance with the requirements of securities regulators, including National Instrument 51-102 of the Canadian Securities Administrators. Information provided in this report, including the consolidated financial statements, is the responsibility of management. In the preparation of these statements, estimates and judgements are sometimes necessary to make a determination of future value for certain assets or liabilities. Management believes such estimates and judgements have been based on careful assessments and have been properly reflected in the accompanying consolidated financial statements. Management maintains a system of internal controls to provide reasonable assurances that the Company's assets are safeguarded and to facilitate the preparation of relevant and timely information.
Non-IFRS Measures
This MD&A presents certain non-IFRS ("IFRS" refers to International Financial Reporting Standards) financial measures to assist readers in understanding the Company's performance. These non-IFRS measures do not have any standardized meaning and therefore are unlikely to be comparable to similar measures presented by other issuers and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
The following terms are used, which are not found in the Chartered Professional Accountants of Canada Handbook and do not have a standardized meaning under IFRS:
- "Net gain from operations" represents gross profit or loss excluding depreciation and amortization.
- "EBITDA" represents net income or loss excluding net finance income or expense, income tax or recovery, depreciation, and amortization.
- "Adjusted EBITDA" represents EBITDA adjusted to exclude non-cash share-based compensation, fair value loss or gain on remeasurement of foreign currency and digital assets, and costs associated with one-time or non-recurring transactions.
The Company uses these non-IFRS measures to supplement the analysis and evaluation of operating performance as it provides an indication of the operational results generated by its business activities prior to taking into consideration how those activities are financed and taxed and also prior to taking into consideration asset depreciation and amortization and it excludes items that could affect the comparability of our operational results and could potentially alter the trends analysis in business performance. Excluding these items does not necessarily imply they are non-recurring, infrequent or unusual. Net gain from operations, EBITDA and Adjusted EBITDA are also used by some investors and analysts for the purpose of valuing a company. Investors are cautioned that Net gain from operations, EBITDA and Adjusted EBITDA should not be construed as an alternative to operating earnings or net earnings determined in accordance with IFRS as an indicator of the Company's financial performance or as a measure of the Company's liquidity and cash flows. Net gain from operations, EBITDA and Adjusted EBITDA do not take into account the impact of working capital changes, capital expenditures, debt principal reductions and other sources and uses of cash, which are disclosed in the consolidated statements of cash flows.
CRYPTOSTAR CORP. Management Discussion and Analysis For the Year Ended December 31, 2024 (Expressed in U.S. dollars)
Non-IFRS Measures (continued)
See “Reconciliation of Non-IFRS Measures” section of this MD&A for reconciliations of non-IFRS measures to IFRS measures.
Description of Business
CryptoStar operates in the distributed ledger technology space, utilizing specialized equipment (“miners”) to perform computationally intensive cryptographic operations to validate transactions on the Blockchain (a process known as “mining”), receiving digital currencies (primarily Bitcoin and Ethereum). The Company also provides equipment hosting services to customers worldwide, for which services the Company receives monthly hosting fees, as well as sells miners to customers.
CryptoStar Corp. was incorporated under the Ontario Business Corporations Act on January 6, 2017. The registered and head office of the Company is located at 181 Bay Street, Suite 4400, Toronto, Ontario, Canada M5J 2T3. CryptoStar Corp.’s common shares are listed on the TSX Venture Exchange (“TSXV”) under the trading symbol “CSTR” and the OTCQB Venture Market under the trading symbol “CSTXF”.
Update on Business and Operations
- During the subsequent period from January 1, 2025, to April 29, 2025, there were no changes to the stock options outstanding.
- The natural gas power generation site of 611890 Alberta Inc. DBA Avila Energy (the "Alberta Partner") remains shut down. Litigation against the Alberta Partner et al. is ongoing with respect to the non-compliance with terms of the power supply agreement for up to 30 MW and damages arising therefrom.
- As at April 29, 2025, the Company has an aggregate self-mining Hashrate of 21.33 PH/s from ASIC miners running at its data centres. The Company’s self-mining revenue run rate is USD$31,744/month. Further orders for mining hardware may be placed using astute capital management strategies based upon prevailing market conditions. (Source: https://whattomine.com/ Mining metrics are calculated based on a BTC - USD exchange rate of 1 BTC = $93,936 updated at 2025-04-27 22:22:06 UTC).
- The Company plans to continue to further expand its self-mining inventory of mining hardware. Further orders for mining hardware may be placed using astute capital management strategies based upon prevailing market conditions.
- The Company continues to consider and perform diligence on several potential transactions and opportunities.
- As at April 29, 2025, the Company holds 1.1 BTC and USD$1.4 million (CAD$1.9 million) in cash. Additionally, the Company has made prepayments and deposits for buildings and infrastructure equipment of USD$2.0 million (CAD$2.8 million).
CRYPTOSTAR CORP.
Management Discussion and Analysis
For the Year Ended December 31, 2024
(Expressed in U.S. dollars)
Subsequent Events
The Company's management has evaluated subsequent events up to April 29, 2025, the date the consolidated financial statements were issued and determined the following significant events to report:
Post year end, the United States and Canadian governments levied new tariffs on imported goods. This has resulted in considerable economic uncertainty and market volatility. The company continues to monitor ongoing trade negotiations and assess the direct and indirect impacts on the Company's future financial results, if any, which are currently uncertain. The company is also assessing additional cost-saving measures to offset potential tariff-related expenses.
On January 23, 2025, the Company received a copy of a Statement of Claim filed digitally in the Court of King's Bench of Alberta in connection with a contractual dispute by Hydra Fabricators Ltd. ("Hydra"), naming the Company as the defendant. In the Statement of Claim, Hydra is seeking judgment against the defendant in the amount of $443,096 plus interest thereon in the amount of 8% per month or in the alternative in accordance with the Judgment Interest Act, R.S.A. 2000, Chapter J-1 and amendments thereto, plus storage costs in the amount of $800 per unit per month, such further and other relief as the Court determines and costs of the action as ordered by the Court. The outcome of the proceeding is not determinable at this time.
CRYPTOSTAR CORP.
Management Discussion and Analysis
For the Year Ended December 31, 2024
(Expressed in U.S. dollars)
Overall Operational Performance and Results
| For the Years Ended December 31, | ||
|---|---|---|
| 2024 | 2023 | |
| $ | $ | |
| Income from operations | ||
| Digital assets mined | 1,205,776 | 2,030,910 |
| Hosting income | 876,348 | 1,595,899 |
| Cost of revenue | (1,234,350) | (2,137,563) |
| Net gain from operations | 847,774 | 1,489,246 |
| Realized gain on digital currencies | 209,505 | 1,070 |
| Operating expenses | (1,775,729) | (1,704,155) |
| Net loss before other items | (718,450) | (213,839) |
| Depreciation of property and equipment | (892,879) | (4,228,293) |
| Depreciation of right-of-use assets | (354,611) | (435,281) |
| Foreign exchange (loss) gain | (686,701) | 113,704 |
| Interest expense on lease obligations | (217,693) | (271,080) |
| Share based compensation | (9,204) | (116,633) |
| Write down of inventory | (209,875) | (226,500) |
| Impairment of property and equipment | (1,296,333) | — |
| Impairment of goodwill | (214,389) | (80,043) |
| Impairment of intangible assets | (19,754) | (237,936) |
| Loss on disposal of property and equipment | (380,029) | (163) |
| Gain on cancellation of lease | 54,116 | 12,320 |
| Other income | 417,811 | — |
| Other expense | — | (8,777) |
| Net loss before tax | (4,527,991) | (5,692,521) |
| Income tax (expense) recovery | (60,127) | 79,521 |
| Net loss | (4,588,118) | (5,613,000) |
| Revaluation gain on digital currencies | 75,486 | 25,303 |
| Currency translation gain (loss) | 193,810 | (94,909) |
| Net comprehensive loss | (4,318,822) | (5,682,606) |
| Adjusted EBITDA | (779,036) | (24,148) |
| Loss per share, basic and diluted | (0.010) | (0.013) |
| Weighted average shares, basic and diluted | 441,107,006 | 429,016,069 |
| Bitcoin mined | 20.51 | 71.61 |
| Average Bitcoin price when mined during the period | 58,790 | 28,361 |
CRYPTOSTAR CORP.
Management Discussion and Analysis
For the Year Ended December 31, 2024
(Expressed in U.S. dollars)
Financial and Operational Results
The Company recorded a net loss of $4,588,118 in the year ended December 31, 2024 (December 31, 2023 – $5,613,000).
The Company's revenue from operations was $2,082,124 in the year ended December 31, 2024 (December 31, 2023 – $3,626,809).
The Company's direct cost of revenue was $1,234,350 in the year ended December 31, 2024 (December 31, 2023 – $2,137,563). Direct cost of revenue consisted of site operating costs.
The Company incurred non-cash expenses consisting of depreciation and amortization of $1,247,490 and share based compensation of $9,204 in the year ended December 31, 2024 (December 31, 2023 – $4,663,574 and $116,633, respectively).
The Company's operating expenses, including non-cash share-based compensation, in the year ended December 31, 2024, totaled $1,784,933 (December 31, 2023 – $1,820,788) and were comprised of:
| For the Years Ended December 31, | ||
|---|---|---|
| 2024 | 2023 | |
| $ | $ | |
| Interest and bank charges | 17,667 | 9,146 |
| Interest on related party loan | 148,919 | 190,761 |
| Management fees, salaries and wages | 678,632 | 683,643 |
| Share based compensation | 9,204 | 116,633 |
| Office and administration | 554,886 | 528,424 |
| Professional fees | 375,625 | 292,181 |
| Total operating expenses | 1,784,933 | 1,820,788 |
The Company's revenue from mining digital currencies is highly dependent upon the market price of digital currencies and the Company's ability to transact with and convert digital currencies. Management monitors the legal and regulatory environment surrounding digital currencies on an ongoing basis.
Summary of Financial Results for the Trailing Four Quarters
| March 31, 2024 | June 30, 2024 | September 30, 2024 | December 31, 2024 | |
|---|---|---|---|---|
| Revenue | 956,623 | 750,675 | 349,357 | 25,469 |
| Net loss for the period | (539,911) | (885,462) | (512,462) | (2,650,283) |
| Loss per share for the period, basic and diluted | (0.001) | (0.002) | (0.001) | (0.006) |
The net loss for the three months ended December 31, 2024, amounted to $2,650,283. The price of Bitcoin increased by 46% over the three months ended December 31, 2024, and the Bitcoin difficulty increased by 24%.
CRYPTOSTAR CORP.
Management Discussion and Analysis
For the Year Ended December 31, 2024
(Expressed in U.S. dollars)
Reconciliation of Non-IFRS Measures
This MD&A presents certain non-IFRS ("IFRS" refers to International Financial Reporting Standards) financial measures to assist readers in understanding the Company's performance. These non-IFRS measures do not have any standardized meaning and therefore are unlikely to be comparable to similar measures presented by other issuers and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
The Company uses these non-IFRS measures including "Net gain from operations" and "Adjusted EBITDA" to supplement the analysis and evaluation of operating performance and should not be viewed as alternatives to, or replacements of, measures of operating results and liquidity presented in accordance with IFRS.
The following tables and definitions reconcile non-IFRS measures used by the Company to analyze the operational performance of the Company to their nearest IFRS measure and should be read in conjunction with the consolidated financial statements for the years ended December 31, 2024, and 2023.
Net Gain from Operations
"Net gain from operations" represents gross profit or loss excluding depreciation and amortization. Net gain from operations shows the profitability of the Company's operations without the impact of non-cash depreciation and amortization expense. Net gain from operations provides the investors the ability to assess the profitability of the Company's operations exclusive of operating expenses.
The following table reconciles gross loss to the non-IFRS measure, net gain from operations:
| For the Years Ended December 31, | ||
|---|---|---|
| 2024 | 2023 | |
| $ | $ | |
| Gross loss | (399,716) | (3,174,328) |
| Add: | ||
| Depreciation of right-of-use assets | 354,611 | 435,281 |
| Depreciation of property and equipment | 892,879 | 4,228,293 |
| Net gain from operations | 847,774 | 1,489,246 |
Adjusted EBITDA
"Adjusted EBITDA" represents EBITDA (net income or loss excluding net finance income or expense, income tax or recovery, depreciation, and amortization) adjusted to exclude non-cash share-based compensation, fair value loss or gain on remeasurement of foreign currency and digital assets, and costs associated with one-time or non-recurring transactions. Adjusted EBITDA is used to assess the profitability without the impact of non-cash accounting policies, capital structure and one-time or non-recurring transactions.
CRYPTOSTAR CORP.
Management Discussion and Analysis
For the Year Ended December 31, 2024
(Expressed in U.S. dollars)
Reconciliation of Non-IFRS Measures (continued)
Adjusted EBITDA (continued)
The following table reconciles net loss before taxes to the non-IFRS measure, adjusted EBITDA:
| For the Years Ended December 31, | ||
|---|---|---|
| 2024 $ | 2023 $ | |
| Net loss before tax | (4,527,991) | (5,692,521) |
| Add: | ||
| Interest expense on lease obligations | 217,693 | 271,080 |
| Interest on related party loan | 148,919 | 190,761 |
| Depreciation of right-of-use assets | 354,611 | 435,281 |
| Depreciation of property and equipment | 892,879 | 4,228,293 |
| EBITDA | (2,913,889) | (567,106) |
| Add (deduct): | ||
| Realized gain on digital currencies | (209,505) | (1,070) |
| Foreign exchange loss (gain) | 686,701 | (113,704) |
| Share based compensation | 9,204 | 116,633 |
| Write down of inventory | 209,875 | 226,500 |
| Impairment of property and equipment | 1,296,333 | — |
| Impairment of goodwill | 214,389 | 80,043 |
| Impairment of intangible assets | 19,754 | 237,936 |
| Loss on disposal of property and equipment | 380,029 | 163 |
| Gain on cancellation of lease | (54,116) | (12,320) |
| Other income | (417,811) | — |
| Other expense | — | 8,777 |
| Adjusted EBITDA | (779,036) | (24,148) |
Outstanding Share Data
As of the date of this MD&A, the Company has the following securities issued and outstanding:
- 443,909,869 common shares;
- 14,893,800 common share purchase warrants; and
- 9,440,000 options to purchase common shares.
CRYPTOSTAR CORP.
Management Discussion and Analysis
For the Year Ended December 31, 2024
(Expressed in U.S. dollars)
Segmented Information
The Company has two reportable segments based on geographical locations: Canada and the USA, and three reportable segments based on operations: self-mining, hosting and miner sales, along with a Head Office segment. The disclosures with regards to the Company's aforementioned segments for the years ended December 31, 2024 and 2023 are listed below.
| For The Year Ended December 31, 2024 | |||||||
|---|---|---|---|---|---|---|---|
| Canada | USA | Head Office | Total | ||||
| Mining $ | Hosting $ | Mining $ | Hosting $ | Miner Sales $ | |||
| Income from mining of digital currency | |||||||
| Digital assets mined | 699,134 | — | 506,642 | — | — | — | 1,205,776 |
| Hosting income | — | 2,129 | — | 874,219 | — | — | 876,348 |
| Site operating costs | (738,536) | — | (495,814) | — | — | — | (1,234,350) |
| Depreciation of right-of-use assets | (24,223) | — | (330,388) | — | — | — | (354,611) |
| Depreciation of property and equipment | (749,048) | — | (143,831) | — | — | — | (892,879) |
| Realized gain on digital currencies | 209,505 | — | — | — | — | — | 209,505 |
| Net (loss) income before operating expenses | (603,168) | 2,129 | (463,391) | 874,219 | — | — | (190,211) |
| Operating and other expenses (income) | |||||||
| Interest and bank charges | 1,889 | — | 6,203 | — | — | 9,575 | 17,667 |
| Interest on related party loan | 42,269 | — | 41,122 | 65,528 | — | — | 148,919 |
| Interest expense on lease obligations | 7,712 | — | 209,981 | — | — | — | 217,693 |
| Management fees, salaries and wages | 127,421 | — | 119,891 | — | — | 431,320 | 678,632 |
| Office and administration | 120,988 | — | 290,342 | — | — | 143,556 | 554,886 |
| Professional fees | 7,600 | — | 78,973 | — | — | 289,052 | 375,625 |
| Share based compensation | — | — | — | — | — | 9,204 | 9,204 |
| Write down of inventory | — | — | — | — | 209,875 | — | 209,875 |
| Impairment of property and equipment | 259,273 | 1,037,060 | — | — | — | — | 1,296,333 |
| Impairment of goodwill | 42,879 | 171,510 | — | — | — | — | 214,389 |
| Impairment of intangible assets | — | 19,754 | — | — | — | — | 19,754 |
| Loss on disposal of property and equipment | 380,029 | — | — | — | — | — | 380,029 |
| Gain on cancellation of lease | (10,821) | (43,295) | — | — | — | — | (54,116) |
| Other income | — | — | — | — | — | (417,811) | (417,811) |
| Foreign exchange loss | 89,525 | 79,581 | 211,960 | 22,868 | — | 282,767 | 686,701 |
| Total operating and other expenses | 1,068,764 | 1,264,610 | 958,472 | 88,396 | 209,875 | 747,663 | 4,337,780 |
| Net (loss) income before tax | (1,671,932) | (1,262,481) | (1,421,863) | 785,823 | (209,875) | (747,663) | (4,527,991) |
| Income tax expense | — | — | — | — | — | 60,127 | 60,127 |
| Net (loss) income | (1,671,932) | (1,262,481) | (1,421,863) | 785,823 | (209,875) | (807,790) | (4,588,118) |
| Revaluation gain on digital currencies | — | — | 75,486 | — | — | — | 75,486 |
| Currency translation gain | — | — | — | — | — | 193,810 | 193,810 |
| Net comprehensive (loss) income | (1,671,932) | (1,262,481) | (1,346,377) | 785,823 | (209,875) | (613,980) | (4,318,822) |
CRYPTOSTAR CORP.
Management Discussion and Analysis
For the Year Ended December 31, 2024
(Expressed in U.S. dollars)
Segmented Information (continued)
| For The Year Ended December 31, 2023 | |||||||
|---|---|---|---|---|---|---|---|
| Canada | USA | Head Office | Total | ||||
| Mining $ | Hosting $ | Mining $ | Hosting $ | Miner Sales $ | |||
| Income from mining of digital currency | |||||||
| Digital assets mined | 1,177,563 | — | 853,347 | — | — | — | 2,030,910 |
| Hosting income | — | 3,877 | — | 1,592,022 | — | — | 1,595,899 |
| Site operating costs | (1,278,946) | — | (858,617) | — | — | — | (2,137,563) |
| Depreciation of right-of-use assets | (29,733) | — | (405,548) | — | — | — | (435,281) |
| Depreciation of property and equipment | (3,547,172) | — | (681,121) | — | — | — | (4,228,293) |
| Realized gain on digital currencies | 1,070 | — | — | — | — | — | 1,070 |
| Net (loss) income before operating expenses | (3,677,218) | 3,877 | (1,091,939) | 1,592,022 | — | — | (3,173,258) |
| Operating and other expenses (income) | |||||||
| Interest and bank charges | 978 | — | 3,211 | — | — | 4,957 | 9,146 |
| Interest on related party loan | 54,145 | — | 52,676 | 83,940 | — | — | 190,761 |
| Interest expense on lease obligations | 9,603 | — | 261,477 | — | — | — | 271,080 |
| Management fees, salaries and wages | 128,362 | — | 120,776 | — | — | 434,505 | 683,643 |
| Office and administration | 115,218 | — | 276,496 | — | — | 136,710 | 528,424 |
| Professional fees | 5,912 | — | 61,429 | — | — | 224,840 | 292,181 |
| Share based compensation | — | — | — | — | — | 116,633 | 116,633 |
| Write down of inventory | — | — | — | — | — | 226,500 | 226,500 |
| Impairment of goodwill | 16,009 | 64,034 | — | — | — | — | 80,043 |
| Impairment of intangible assets | — | 237,936 | — | — | — | — | 237,936 |
| Loss on disposal of property and equipment | 163 | — | — | — | — | — | 163 |
| Gain on cancellation of lease | (2,464) | (9,856) | — | — | — | — | (12,320) |
| Other expense | — | — | — | — | — | 8,777 | 8,777 |
| Foreign exchange gain | — | — | — | — | — | (113,704) | (113,704) |
| Total operating and other expenses | 327,926 | 292,114 | 776,065 | 83,940 | — | 1,039,218 | 2,519,263 |
| Net (loss) income before tax | (4,005,144) | (288,237) | (1,868,004) | 1,508,082 | — | (1,039,218) | (5,692,521) |
| Income tax recovery | — | — | — | — | — | (79,521) | (79,521) |
| Net (loss) income | (4,005,144) | (288,237) | (1,868,004) | 1,508,082 | — | (959,697) | (5,613,000) |
| Revaluation gain on digital currencies | — | — | 25,303 | — | — | — | 25,303 |
| Currency translation loss | — | — | — | — | — | (94,909) | (94,909) |
| Net comprehensive (loss) income | (4,005,144) | (288,237) | (1,842,701) | 1,508,082 | — | (1,054,606) | (5,682,606) |
The disclosures with regards to the Company's aforementioned segments as at December 31, 2024 and 2023 are listed below.
| Canada | USA | Head Office | Total | |||
|---|---|---|---|---|---|---|
| Mining | Hosting | Mining | Hosting | |||
| $ | $ | $ | $ | $ | $ | |
| As at December 31, 2024 | ||||||
| Total assets | 386,675 | 1,707,323 | 1,619,752 | 1,589,281 | — | 2,244,993 |
| Total non-current assets | 341,465 | 1,707,323 | 1,594,924 | 1,564,453 | — | — |
| Total liabilities | 160,685 | 232,503 | 1,166,555 | 1,326,554 | — | 983,301 |
| As at December 31, 2023 | ||||||
| Total assets | 5,847,127 | 420,723 | 2,519,624 | 2,201,279 | 209,875 | 1,515,022 |
| Total non-current assets | 4,578,612 | 329,449 | 2,137,343 | 1,723,719 | — | 1,186,343 |
| Total liabilities | 2,387,286 | 171,775 | 1,114,410 | 898,747 | — | 618,559 |
CRYPTOSTAR CORP.
Management Discussion and Analysis
For the Year Ended December 31, 2024
(Expressed in U.S. dollars)
Liquidity and Capital Resources
| For the Years Ended December 31, | ||
|---|---|---|
| 2024 | 2023 | |
| $ | $ | |
| Cash from (used in) provided by: | ||
| Operating activities | (2,364,794) | (2,406,201) |
| Investing activities | 2,366,492 | 2,153,655 |
| Financing activities | (687,900) | (1,422,075) |
| Effect of foreign exchange on cash | 479,088 | (134,772) |
| Net change in cash during the period | (207,114) | (1,809,393) |
As at December 31, 2024, the Company had current assets of $2,339,859 and current liabilities of $1,853,567, resulting in a working capital surplus of $486,292 (December 31, 2023 – working capital surplus of $649,492). The Company anticipates it has sufficient cash on hand to service its liabilities and fund operating costs for the immediate future.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements as at the date of this MD&A.
Payable to Related Party
The balance of $983,302 payable to related party as at December 31, 2024 (December 31, 2023 - $1,371,266) represents the amount advanced under a line of credit provided by A.C.N 117 402 838 PTY LTD ("ACN"). ACN is related to the Company through common control of the CEO in both Companies. During the year ended December 31, 2023, the Company renewed its line of credit with ACN for further 54-month term ending in June 30, 2027. The renewed line of credit is a revolving credit facility available to fund general corporate purposes with a maximum principal amount of $1,769,943. The unsecured line of credit bears interest at a rate of 12% per annum, payable monthly in arrears, together with a minimum monthly repayment of principal amount outstanding of $32,777. As consideration for renewing the line of credit, the Company repaid $196,660 of the principal amount outstanding of $1,966,604 under the previous line of credit on January 3, 2023.
| December 31, 2024 | December 31, 2023 | |
|---|---|---|
| $ | $ | |
| Balance, beginning of the year | 1,371,266 | 1,966,604 |
| Interest | 148,919 | 190,761 |
| Interest paid | (148,919) | (190,761) |
| Principal repayment | (387,964) | (595,338) |
| Balance, end of the year | 983,302 | 1,371,266 |
| Current portion of loan | 393,321 | 393,321 |
| Non-current portion of loan | 589,981 | 977,945 |
| Balance, end of the year | 983,302 | 1,371,266 |
CRYPTOSTAR CORP.
Management Discussion and Analysis
For the Year Ended December 31, 2024
(Expressed in U.S. dollars)
Key Management Remuneration
Management fees, salaries and wages comprise amounts paid to key management personnel, including officers and directors of ACN, for services provided. Key management remuneration paid to key management personnel and directors during the year ended December 31, 2024, was $366,249 (December 31, 2023 – $381,915).
On May 3, 2021, the Company granted 2,000,000 stock options under the Company's stock option plan to an officer of the Company. These options have an exercise price of CAD$0.28 per stock option, and an expiry date of May 3, 2031. The options vest in equal 25% tranches in each of August 2021, March 2022, October 2022 and May 2023. Share based compensation related to these options during the year ended December 31, 2024, was $Nil (December 31, 2023 – $22,803).
On June 17, 2022, the Company granted 5,000,000 stock options under the Company's stock option plan to an officer of the Company. 2,500,000 of these options have an exercise price of CAD$0.05 per stock option and 2,500,000 of these options have an exercise price of CAD$0.10. These options have an expiry date of June 17, 2032. The options vest in equal 25% tranches in each of September 2022, April 2023, November 2023 and June 2024. Share based compensation related to these options during the year ended December 31, 2024, was $9,204 (December 31, 2023 - $62,762).
On February 21, 2023, the Company granted 1,200,000 stock options under the Company's stock option plan to directors of the Company. These options have an exercise price of CAD$0.05 per stock option, and an expiry date of February 21, 2033. The options vested immediately on February 21, 2023. Share based compensation related to these options during the year ended December 31, 2024, was $Nil (December 31, 2023 - $31,068).
The Company incurred directors' fees during the year ended December 31, 2024, of $55,874 (December 31, 2023 - $48,854).
Included in trade payable and accrued liabilities was $3,397 payable to the directors of the Company for the director fees for the year ended December 31, 2024 (December 31, 2023 - $27,170).
The remuneration of key management personnel paid by ACN on the Company's behalf during the year ended December 31, 2024, was $279,343 (December 31, 2023 – $277,983).
Business Risks and Uncertainties
There are a number of risk factors that could impact the Company's ability to successfully execute its key strategies and may materially affect future events, performance or results. The risks and uncertainties described herein are not the only ones the Company faces. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, could have a material adverse effect on the Company. If any of the following or other risks occurs, the Company's business, prospects, financial condition, results of operations and cash flows could be materially adversely impacted. There is no assurance that risk management steps taken will avoid future loss due to the occurrence of the risks described below or other unforeseen risks. Risk factors relating to the Company include, but are not limited to, the factors set out below.
Credit Risk
Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and accounts receivable and others. The Company limits its exposure to credit loss by placing its cash with high credit quality financial institutions. The carrying amount of financial assets represents the maximum credit exposure.
CRYPTOSTAR CORP.
Management Discussion and Analysis
For the Year Ended December 31, 2024
(Expressed in U.S. dollars)
Business Risks and Uncertainties (continued)
Credit Risk (continued)
The Company's maximum exposure to credit risk at the end of any period is equal to the carrying amount of these financial assets as recorded in the consolidated statements of financial position. As at December 31, 2024, no amounts were held as collateral.
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company currently settles its financial obligations out of cash. The ability to do this relies on the Company scaling to become profitable or raising additional equity in excess of anticipated cash needs. The Company's cash is held in corporate bank accounts available on demand.
Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and price risk. These are discussed further below.
Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to significant interest rate risk relating to its payable to related party and trade payable and accrued liabilities. The interest rate on the payable to related party is fixed, and the trade payable and accrued liabilities are not subject to any interest. A 10% change in the interest rate would not result in a material impact on the Company's operations.
Foreign Currency Risk
As at December 31, 2024, portions of the Company's financial assets and liabilities are held in USD and CAD. The Company's objective in managing its foreign currency risk is to minimize its net exposure to foreign currency cash flows by transacting, to the greatest extent possible, with third parties in Canadian dollars. The Company does not currently use foreign exchange contracts to hedge its exposure of its foreign currency cash flows as management has determined that this risk is not significant at this point in time. The following amounts are presented in USD to demonstrate the effect of changes in foreign exchange rates:
| December 31, 2024 | |
|---|---|
| $ | |
| Canadian dollar-based net assets | 1,327,852 |
| Effect of a +/- 10% change in exchange rate | 181,889 |
Digital Currency and Risk Management
Digital currencies are measured based on their fair values, determined using the daily weighted close price for the digital currency on www.bitcoincharts.com and www.coinmarketcap.com. Digital currency prices are affected by various forces including global supply and demand, interest rates, exchange rates, inflation or deflation and the global political and economic conditions. The profitability of the Company is directly related to the current and future market price of digital currencies; in addition, the Company may not be able liquidate its inventory of digital currency at its desired price if required. A decline in the market prices for digital currencies could negatively impact the Company's future operations. The Company has not hedged the conversion of any of its digital currency sales.
CRYPTOSTAR CORP. Management Discussion and Analysis For the Year Ended December 31, 2024 (Expressed in U.S. dollars)
Business Risks and Uncertainties (continued)
Price Risk
Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices, other than those arising from interest rate risk or foreign currency risk. The Company is not exposed to any significant price risks with respect to its financial instruments.
Market Risk for Securities
The Company is a reporting issuer whose common shares are listed for trading on a stock exchange. There can be no assurance that an active trading market for the Company's common shares will be sustained in the future. The market price for the Company's common shares could be subject to wide fluctuations. Factors such as commodity prices, government regulation, interest rates, share price movements of peer companies and competitors, as well as overall market movements, may have a significant impact on the market price of the Company's securities. The stock market has from time to time experienced extreme price and volume fluctuations, which have often been unrelated to the operating performance of particular companies.
Global Economic Risk
Economic slowdown and downturn of global capital markets would make raising of capital through equity or debt financing more difficult. The Company will be dependent upon capital markets to raise additional financing in the future. The Company is subject to liquidity risks in meeting developmental and future operating cost requirements in instances where cash positions are unable to be maintained or appropriate financing is unavailable. These factors may impact the Company's ability to raise equity or obtain loans and other credit facilities in the future and on terms favorable to the Company and its management. If uncertain market conditions persist, the Company's ability to raise capital could be jeopardized resulting in an adverse impact on the Company's operations and the price of the Company's common shares.
Share Price Volatility Risk
In recent years, the securities markets in Canada have experienced a high level of price and volume volatility, and the market prices of securities of many companies, particularly cryptocurrency companies, like the Company, have experienced wide fluctuations that have not necessarily been related to the operating performance, underlying asset values or prospects of such companies. There can be no assurance that these price fluctuations and volatility will not continue to occur.
Capital Management
The Company's objectives when managing its capital are:
- To maintain a flexible capital structure that optimizes the cost of capital at acceptable risk while providing an appropriate return to its shareholders;
- To maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business;
- To safeguard the Company's ability to obtain financing should the need arise; and
- To maintain financial flexibility in order to have access to capital in the event of future capital acquisitions.
CRYPTOSTAR CORP.
Management Discussion and Analysis
For the Year Ended December 31, 2024
(Expressed in U.S. dollars)
Capital Management (continued)
The Company manages its capital structure and makes adjustments to it in accordance with the objectives stated above, as well as responds to changes in economic conditions and the risk characteristics of the underlying assets. The Company monitors the return on capital, which is defined as total shareholders' equity. The Company is not subject to externally imposed capital requirements.
Current Market Conditions
The average price of Bitcoin increased in Q4 2024, with the average price increasing from $64,062 as at September 30, 2024 to $93,765 as at December 31, 2024.
(Source: https://bitinfocharts.com/comparison/bitcoin-price.html#1y).
*The Company holds no liability for any inaccurate data.
Bitcoin difficulty increased in Q4 2024.
(Source: https://bitinfocharts.com/comparison/bitcoin-difficulty.html#1y).
*The Company holds no liability for any inaccurate data.
CRYPTOSTAR CORP.
Management Discussion and Analysis
For the Year Ended December 31, 2024
(Expressed in U.S. dollars)
Critical Accounting Policies and Estimates
The Company has prepared the accompanying consolidated financial statements in accordance with International Financial Reporting Standards ("IFRS"). Significant accounting policies and estimates are described in Note 3 of the Company's consolidated financial statements for the years ended December 31, 2024, and 2023.
The preparation of consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates.
Significant Accounting Judgments and Estimates
The Company is in the business of digital currencies, many aspects of which are not specifically addressed by current IFRS guidance. The Company is required to make judgments as to its accounting policies under IAS 8. The Company has disclosed its presentation, recognition and derecognition, and measurement of digital currencies, and the recognition of revenue as well as significant assumptions and judgments, however, if specific guidance is enacted by the IASB in the future, the impact may result in changes to the Company's income and financial position as presented. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period, are described below. The Company based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
Information about estimates made in applying accounting policies that could potentially have an effect on the amounts recognized in the consolidated financial statements, are discussed below:
(a) Useful Lives and Residual Values of Property and Equipment
Management determines the estimated useful lives and residual values of property and equipment for calculating depreciation. This estimate is determined after considering expected usage of the assets or physical wear and tear. Management reviews the useful lives and residual value annually and future depreciation charges are adjusted where management believes the useful lives differ from previous estimates.
(b) Going concern
The assessment of the Company's ability to continue as a going concern and to raise sufficient funds to pay its ongoing operating expenditures and to meet its liabilities for the ensuing year involves significant judgment based on historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances.
15
CRYPTOSTAR CORP. Management Discussion and Analysis For the Year Ended December 31, 2024 (Expressed in U.S. dollars)
Significant Accounting Judgments and Estimates (continued)
(c) Share Based Compensation
The Company estimates the cost of equity-settled share-based compensation using the Black-Scholes option pricing model. The model takes into account an estimate of the expected life of the option, the current price of the underlying common share, the expected volatility, an estimate of future dividends on the underlying common share, the risk-free rate of return expected for an equity instrument with a term equal to the expected life of the option, and the expected forfeiture rate.
(d) Income Taxes
The Company is subject to income tax assessment in multiple jurisdictions. Significant judgment is required in determining the provision for income taxes. There are many transactions and calculations undertaken in the ordinary course of business for which the ultimate tax determination is uncertain.
The Company recognizes liabilities based on the Company's current understanding of tax laws as applied to the Company's circumstances.
Where the final outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred tax provisions in the period in which such determination is made.
The Company computes an income tax provision in each of the jurisdictions in which it operates. Actual amounts of income tax expense only become final upon filing and acceptance of the tax return by the relevant authorities, which occur subsequent to the issuance of these consolidated financial statements. Additionally, estimating income taxes includes evaluating the recoverability of deferred tax assets based on an assessment of the ability to use the underlying future tax deductions against future taxable income before such deductions expire. The assessment is based upon existing tax laws and estimates of future taxable income. To the extent estimates differ from the final tax return, earnings would be affected in a subsequent period.
(e) Revenue Recognition
The Company recognizes revenue from the provision of transaction verification services withing digital currency networks, commonly described as "mining". As consideration for these services, the Company receives digital currencies from the mining pools in which it participates. Revenue is recognized when the Company receives payouts from the mining pools in which it participates.
For hosting and other services contracts, the Company has determined that the substance of the service contracts is provision of services under IFRS 15 Revenue from Contracts with Customers. Revenue is recognized only when the amount of the contract and separate performance obligations are identified, the transaction can be measured reliably, the transaction price can be allocated to the performance obligations, and the performance obligations is satisfied. Accordingly, the Company has determined that revenue should be recognized as the provision of services under the contract is completed.
The Company recognizes revenue from the sale of mining equipment once the risks and rewards of ownership of equipment are transferred to the customer and it is probable that the economic benefits associated with the sale contract will flow to the Company.
Determination of separate elements under the terms of the contract and completion of performance obligation may be subject to significant judgment exercised by management.
CRYPTOSTAR CORP. Management Discussion and Analysis For the Year Ended December 31, 2024 (Expressed in U.S. dollars)
Significant Accounting Judgments and Estimates (continued)
(f) Business Combination and Goodwill
Judgment is used in determining whether an acquisition is a business combination or an asset acquisition. For any intangible asset identified, depending on the type of intangible asset and the complexity of determining its fair value, an independent valuation expert or management may develop the fair value, using appropriate valuation techniques, which are generally based on a forecast of the total expected future net cash flows. The evaluations are linked closely to the assumptions made by management regarding the future performance of the assets concerned and any changes in the discount rate applied. Goodwill is assessed for indicators of impairment at each reporting date and is tested annually or whenever events or changes in circumstances indicate that the carrying amount of goodwill exceeds its recoverable amount.
(g) Functional Currency
The functional currency of the Company and its subsidiaries has been assessed by management based on consideration of the currency and economic factors that mainly influence the Company's digital currencies, production and operating costs, financing and related transactions. Specifically, the Company considers the currencies in which digital currencies are most commonly denominated and expenses are settled by each entity as well as the currency in which each entity receives or raises financing. Changes to these factors may have an impact on the judgment applied in the determination of the Company's functional currency. The application of the Company's accounting policies requires management to use estimates and judgments that can have significant effect on the revenues, expenses, comprehensive loss, assets and liabilities recognized and disclosures made in the consolidated financial statements.
(h) Impairment of Non - Financial Assets
The Company uses judgment in determining the grouping of assets to identify its CGUs for the purposes of testing for impairment of property and equipment and intangible assets. In testing for impairment of intangibles with indefinite lives, these assets are allocated to the CGUs to which they relate. Furthermore, on a quarterly basis, judgment has been used in determining whether there has been an indication of impairment, which would require the completion of a quarterly impairment test, in addition to the annual requirement.
The evaluation of asset carrying values for indications of impairment includes consideration of both external and internal sources of information, including such factors as the relationship between mining rewards and the required computing power, digital currency prices, the periodic contribution margin of digital currency mining activities, changes in underlying costs, such as electricity, and technological changes.
When required, the determination of FVLCD and VIU requires management to make estimates and assumptions about digital currency prices, required computing power, technological changes and operating costs, such as electricity. The estimates and assumptions are subject to risk and uncertainty; hence, there is the possibility that changes in circumstances will alter these projections, which may impact the recoverable amount of the assets. In such circumstances some or all of the carrying value of the assets may be further impaired or the impairment charge reduced with the impact recorded in the consolidated statement of loss and comprehensive loss.
CRYPTOSTAR CORP. Management Discussion and Analysis For the Year Ended December 31, 2024 (Expressed in U.S. dollars)
Significant Accounting Judgments and Estimates (continued)
(i) Digital Currencies Classification
Digital currencies generally meet the relatively wide definition of an intangible asset, as they are identifiable, lack physical substance, are controlled by the holder and give rise to future economic benefits for the holder.
Intangible assets should be accounted for under IAS 38, except when they are within the scope of another standard (e.g., crypto-assets that meet the definition of a financial asset under IAS 32 or crypto-assets held for sale in the ordinary course of business under IAS 2).
(j) Digital Currencies Valuation
Management has determined that revenues should be recognized as the fair value of digital currencies received in exchange for mining services on the date that digital currencies are received and subsequently measured as an intangible asset. Digital currencies consist of cryptocurrency denominated assets and are included in current assets. Digital currencies are carried at their fair value determined by the spot rate less costs to sell. The digital currency market is still a new market and is highly volatile; historical prices are not necessarily indicative of future value; a significant change in the market prices for digital currencies would have a significant impact on the Company's earnings and financial position. Fair value is determined by taking the price of the digital currencies from www.bitcoincharts.com and www.coinmarketcap.com.
(k) Decommission Cost
The Company makes a number of estimates when calculating the fair value of its asset decommissioning obligation, which represent the present value of future decommissioning costs for its lease assets. Estimates of these costs are dependent on labor and material costs, inflation rates, salvage values, discount rates, the risk specific to the obligation, and the timing of the outlays.
(l) Contingencies
Contingencies can be either possible assets or liabilities arising from past events which, by their nature, will be resolved only when one or more uncertain future events occur or fail to occur. Such contingencies include, but are not limited to, litigation, regulatory proceedings, tax matters and losses resulting from other events and developments. The assessment of the existence and potential impact of contingencies inherently involves the exercise of significant judgement regarding the outcome of future events.
Changes in Accounting Standards
New and Amended Accounting Pronouncements
The Company applied for the first-time certain standards and amendments, which are effective for annual periods beginning on or after January 1, 2024. The Company has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.
CRYPTOSTAR CORP. Management Discussion and Analysis For the Year Ended December 31, 2024 (Expressed in U.S. dollars)
Changes in Accounting Standards (continued)
New and Amended Accounting Pronouncements (continued)
IFRS 16 Amendments – Lease Liability in a Sale and Leaseback
In September 2022, the IASB issued amendments to IFRS 16 – Leases (“IFRS 16”) relating to sale leaseback transactions for seller-lessees. The amendment adds a requirement that measuring lease payments or revised lease payments shall not result in the recognition of a gain or loss that relates to the right-of-use asset retained by the seller-lessee. The amendments are effective for annual reporting periods beginning on or after January 1, 2024, with early adoption permitted. The Company assessed the impact of the amendment and determined there to be no material impact on the consolidated financial statements.
IAS 1 Amendments – Non-current Liabilities with Covenants
In October 2022, the IASB issued amendments to IAS 1 – Presentation of Financial Statements, which specifies that covenants whose compliance is assessed after the reporting date do not affect the classification of debt as current or non-current at the reporting date. Instead, the amendments require disclosure of information about these covenants in the notes to the financial statements. The amendments are effective for annual reporting periods beginning on or after January 1, 2024, with early adoption permitted. The Company assessed the impact of the amendment and determined there to be no material impact on the consolidated financial statements.
IAS 1 Amendments – Classification of Liabilities as Current or Non-Current
In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments clarify:
- What is meant by a right to defer settlement
- That a right to defer must exist at the end of the reporting period
- That classification is unaffected by the likelihood that an entity will exercise its deferral right
- That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification
The amendments are effective for annual reporting periods beginning on or after January 1, 2024, and must be applied retrospectively. The Company assessed the impact of the amendment and determined there to be no material impact on the consolidated financial statements.
IAS 7 Amendments – Supplier Finance Arrangements
In May 2023, the IASB issued amendments to IAS 7 – Statement of Cash Flows and IFRS 7 – Financial Instruments: Disclosures. The amendments add requirements to disclose information that allows users to assess how supplier finance arrangements affect an entity's liabilities, cash flows, and exposure to liquidity risk. The amendments are effective for annual reporting periods beginning on or after January 1, 2024, with early adoption permitted. The Company assessed the impact of the amendment and determined there to be no material impact on the consolidated financial statements.
19
CRYPTOSTAR CORP.
Management Discussion and Analysis
For the Year Ended December 31, 2024
(Expressed in U.S. dollars)
Changes in Accounting Standards (continued)
Standards, Amendments and Interpretations Issued but not yet Adopted
The following new standards, amendments and interpretations have been issued but are not effective for the fiscal year ended December 31, 2024, and, accordingly, have not been applied in preparing these consolidated financial statements.
IAS 21 Amendments – Lack of Exchangeability
In August 2023, the IASB issued amendments to IAS 21 – The Effects of Changes in Foreign Exchange Rates in relation to Lack of Exchangeability. The amendments require entities to apply a consistent approach in assessing whether a currency can be exchanged into another currency, and in determining the exchange rate to use and the disclosures to provide when it cannot. These amendments are effective for annual reporting periods beginning on or after January 1, 2025, with early adoption permitted. The Company is assessing the potential impact of these amendments.
Classification and Measurement of Financial Instruments
In May 2024, the IASB issued amendments to IFRS 9 – Financial Instruments and IFRS 7 – Financial Instruments: Disclosures. The amendments relate to settling financial liabilities using an electronic payment system and assessing contractual cash flow characteristics of financial assets, including those with Environmental, Social, and Governance (ESG)-linked features. The IASB also amended disclosure requirements relating to investments in equity instruments designated at FVOCI and added disclosure requirements for financial instruments with contingent features. The amendments are effective for annual periods beginning on or after January 1, 2026, with early adoption permitted. The Company is assessing the impacts to the consolidated financial statements.
Presentation and Disclosure in Financial Statements
In April 2024, the IASB issued the new standard IFRS 18 – Presentation and Disclosure in Financial Statements that will replace IAS 1 – Presentation of Financial Statements. The new standard introduces newly defined subtotals on the income statement, requirements for aggregation and disaggregation of information, and disclosure of Management Performance Measures (MPMs) in the financial statements. The new standard is effective for annual reporting periods beginning on or after January 1, 2027, with early adoption permitted. The Company is assessing the impacts to the consolidated financial statements.
Subsidiaries without Public Accountability: Disclosures
In May 2024, the IASB issued IFRS 19 – Subsidiaries without Public Accountability: Disclosures. The new standard allows eligible subsidiaries to apply IFRS Accounting Standards with reduced disclosure requirements. The new standard is effective for annual reporting periods beginning on or after January 1, 2027, with early adoption permitted. The Company assessed the impact of the amendments and determined there to be no material impact on the consolidated financial statements. The Company is assessing the impact to its subsidiaries.
20
CRYPTOSTAR CORP.
Management Discussion and Analysis
For the Year Ended December 31, 2024
(Expressed in U.S. dollars)
Changes in Accounting Standards (continued)
New and Amended Accounting Pronouncements (continued)
Annual Improvements
In July 2024, the IASB issued IFRS Accounting Standards Annual Improvements – Volume 11, which clarifies wording, correcting minor consequences, oversights, or conflicts among requirements in the Standards. The amendments affect IFRS 1 - First-time Adoption of International Financial Reporting Standards, IFRS 7 - Financial Instruments: Disclosures, IFRS 9 - Financial Instruments, IFRS 10 - Consolidated Financial Statements, and IAS 7 - Statement of Cash Flows. These amendments will be effective for annual periods beginning on or after January 1, 2026, with early adoption permitted. The Company is assessing the impacts to the consolidated financial statements.
Contracts Referencing Nature - Dependent Electricity
In December 2024, the IASB issued amendments to IFRS 9 and IFRS 7 - Contracts Referencing Nature dependent Electricity. The amendments apply only to nature-dependent electricity contracts, which are those that generate variable levels based on uncontrollable factors such as weather conditions. These amendments will be effective for annual periods beginning on or after January 1, 2026, with early adoption permitted. The Company is assessing the impacts to the consolidated financial statements.
Canadian Sustainability Reporting Standards (CSDS 1 and CSDS 2)
In December 2024, the Canadian Sustainability Standards Board ("CSSB"), released the final versions of the Canadian Sustainability Reporting Standards, CSDS 1 and CSDS 2 (collectively, the "Canadian Standards"). Currently the adoption of the Canadian Standards remains voluntary. These standards closely align with the ISSB's international sustainability standards IFRS S1 and IFRS S2, but include certain differences and are applicable from January 1, 2025. Currently the adoption of the Canadian Standards remains voluntary, while the Canadian Securities Administrators are currently evaluating how and to what extent they will be incorporated into future reporting requirements. The impact and costs to comply with these standards has not yet been quantified.
Forward-Looking Statements
Certain statements contained in this MD&A may constitute forward-looking statements. These statements relate to future events or the Company's future performance. All statements, other than statements of historical fact, may be forward-looking statements.
Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "propose", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. These statements involve 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 statements. The Company believes that the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this MD&A should not be unduly relied upon by investors as actual results may vary. These statements speak only as of the date of this MD&A and are expressly qualified, in their entirety, by this cautionary statement. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of various risk factors.
CRYPTOSTAR CORP.
Management Discussion and Analysis
For the Year Ended December 31, 2024
(Expressed in U.S. dollars)
Forward-Looking Statements (continued)
Some of the important factors, but certainly not all, that could cause actual results to differ materially from those indicated by such forward-looking statements are:
i. That the information is of a preliminary nature and may be subject to further adjustment;
ii. The possible unavailability of financing;
iii. Start-up risks;
iv. General operating risks;
v. Dependence on third parties;
vi. Changes in government regulation;
vii. The effects of competition;
viii. Dependence on senior management;
ix. Impact of global economic conditions;
x. Fluctuations in currency exchange rates and interest rates; and
xi. Fluctuations in cryptocurrency prices.
Additional information relating to the Company is available on SEDAR+ at www.sedarplus.ca.