TAAL Reports Third Quarter and Nine-Month 2020 Financial Results & Announces Chris Naprawa as Interim CFO
VANCOUVER, BC, Nov. 30, 2020 /PRNewswire/ - TAAL Distributed Information Technologies Inc. (CSE: TAAL) (FWB: 9SQ1) (OTC: TAALF) ("TAAL" or the "Company") a blockchain infrastructure and service provider, today announced its financial results for the three and nine months ended September 30, 2020 ("Q3-2020"). The Q3-2020 unaudited interim financial statements and related management discussion and analysis ("MD&A") are available for review on the Company's SEDAR profile at www.sedar.com. TAAL reports all amounts in Canadian dollars, unless otherwise stated.
Q3-2020 Highlights
-- Company had $12,993,341 million in working capital at the end of
September, 2020.
-- Completed the acquisition of WhatsOnChain Limited ("WhatsOnChain"),
accelerating TAAL's strategy of becoming a leading provider of
enterprise blockchain infrastructure services.
-- The establishment of a European office in Zug, Switzerland, a leading
technology hub in Europe.
-- Filed second patent for L0 token technology to enable smart contracts to
be built on Bitcoin SV which will facilitate an expansion of the fee
market available to TAAL.
-- Increased liquidity to U.S. investors with upgrade to OTCQX.
-- Entered agreement to establish 175 PH of custom computing capacity in a
trusted North American environment to power Bitcoin Satoshi Vision
("BSV") transaction solutions for global enterprise clients, subsequent
to the quarter end.
-- Completed management and senior executive appointments; Stefan Matthews
as Executive Chairman and CEO, Chris Naprawa as President and Interim
CFO following the departure of Satoshi Kitahama, and Jerry Chan as CPO,
subsequent to the quarter end.
-- David Allen, a seasoned finance executive with Fortune 250 Canadian
companies and former VP, Corporate Controller at Canada Goose Inc.
retained as financial consultant to the Company, subsequent to the
quarter end, who will work alongside Interim CFO Chris Naprawa.
Summary of Key Quarterly Financial Results
Three months ended September 30, Nine months ended September 30,
(In CAD Dollars) 2020 2019 2020 2019
---
Revenue $245,629 $7,380,758 $7,854,585 $11,686,385
Adjusted EBITDA ($3,547,408) $1,743,844 ($4,724,058) $1,607,878
Net Loss ($5,928,027) ($756,603) ($9,120,930) ($1,928,212)
Basic and diluted ($0.25) ($0.06) ($0.48) ($0.15)
loss per share
September 30, 2020
December 31, 2019
Assets
Current assets $34,006,781 $44,188,111
Total assets $45,806,798 $46,776,428
Current liabilities $21,013,440 $22,140,102
Shareholder's $24,793,358 $24,636,326
equity
Total liabilities & $45,806,798 $46,776,428
shareholder's
equity
---
Financial Highlights for the Three and Nine Months Ending September 30, 2020
-- Gross revenue from operations generated $245,629 for the three-months
ended September 30, 2020, as compared to $7,380,758 for the same period
in 2019, which decrease reflects the suspension of digital asset hashing
operations in May 2020 in advance of the halving. This resulted in gross
revenue of $7,854,585 for the nine months ended September 30, 2020, as
compared to $11,685,385 for the same period in 2019, which decrease
reflects the suspension of hashing operations in 2020 partially offset
by fleet management revenue.
-- Operating expenses totaled $4,965,786 for the three months ended
September 30, 2020, as compared to $1,446,645 for the same period in
2019. The increase in expenses is largely attributable to one-time
impairment charge related to blockchain computing equipment of
$2,444,857 recognized in the quarter, as well as management fees,
salaries and wages of $1,455,820, office and administration of $331,631,
and share-based payments of $255,955 compared to $322,388, $143,643, and
$230,605, respectively, for the same period 2019. The increased expenses
reflect the continuing investment in the team to deliver the new
business line, including the transition to transaction processing, and
the delivery of other value-added services for enterprise clients. For
further information regarding the impairment charge, see the Company's
interim financial statements for the period ended September 30, 2020.
-- Net loss of $5,928,027 for the three months ended September 30, 2020, as
compared to a net loss of $756,603 for the same period in 2019. Net loss
of $9,120,930 for the nine months ended September 30, 2020, as compared
to a net loss of $1,928,212 for the same period in 2019.
-- Working capital of $12,993,341 as of September 30, 2020, providing
liquidity for at least the next 12 months.
Management Commentary
"In Q3-2020 the Company maintained a strong working capital position, allowing us to service clients and develop our infrastructure in North America and Europe, including closing the acquisition of WhatsOnChain in the UK, opening a TAAL EU office in Zug, Switzerland and subsequent to the quarter, strengthening our leadership team in Canada with the appointment of Chris Naprawa as President. Chris also takes on the role of Interim CFO with the departure of Satoshi Kitahama. These are important achievements which further our capacity as a first-mover in providing trusted blockchain infrastructure services to a growing global enterprise market," comments Stefan Matthews, TAAL CEO and Executive Chairman.
Management Appointments Subsequent to the Quarter
The Company made various appointments and/or changes to its senior management and executive team subsequent to the quarter, which the Company believes have strengthened its financial, capital markets, product development and global commercial capabilities:
- Stefan Matthews to Executive Chairman and Chief Executive Officer
- Chris Naprawa to President, and Interim Chief Financial Officer
- David Allen to Senior Financial Consultant
Mr. Naprawa, with the assistance of Mr. Allen, has also assumed the function of Interim CFO following the departure of former CFO Mr. Kitahama, who left the Company as of November 24, 2020.
About TAAL Distributed Information Technologies Inc.
TAAL Distributed Information Technologies Inc. delivers value-added blockchain services, providing professional-grade, highly scalable blockchain infrastructure and transactional platforms to support businesses building solutions and applications upon the BSV platform, and developing, operating, and managing distributed computing systems for enterprise users. The Company is led by an experienced management team, Board and Advisory Board members that include entrepreneur and BSV advocate Calvin Ayre, and renowned computer scientist and visionary Craig Wright.
Visit TAAL online at www.taal.com
This press release has been reviewed and financial content approved by the Company's Audit Committee of the Board of Directors.
The CSE, nor its Regulation Services Provider, accepts no responsibility for the adequacy or accuracy of this release.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
Certain statements included in this news release constitute "forward-looking information" as defined under applicable Canadian securities legislation. The words "will", "intends", "expects" and similar expressions are intended to identify forward-looking information, although not all forward-looking information will contain these identifying words. Specific forward-looking information contained in this news release includes, but is not limited to statements regarding: TAAL's strategy and vision; the expansion of the free market available to TAAL; TAAL's future business success; and TAAL's ability to provide trusted blockchain infrastructure services globally. These statements are based on factors and assumptions related to historical trends, current conditions and expected future developments. Since forward-looking information relates to future events and conditions, by its very nature it requires making assumptions and involves inherent risks and uncertainties. TAAL cautions that although it is believed that the assumptions are reasonable in the circumstances, these risks and uncertainties give rise to the possibility that actual results may differ materially from expectations. Material risk factors include, but are not limited to: global pandemics, including the affects of COVID-19; the future acceptance of BSV and other digital assets and risks related to information processing using those platforms; TAAL's ability to leverage its intellectual property into viable income streams; and other risks set out in Item 20 - Risk Factors of TAAL's Form 2A - Listing Statement dated July 31, 2018 and elsewhere in TAAL's continuous disclosure filings available on SEDAR at www.sedar.com. Given these risks, undue reliance should not be placed on the forward-looking information contained herein. Other than as required by law, TAAL undertakes no obligation to update any forward-looking information to reflect new information, subsequent or otherwise.
NON-IFRS FINANCIAL MEASURES
The terms "EBITDA" (net income or loss excluding net finance income or expense, income tax or recovery, depreciation, and amortization) and "Adjusted EBITDA" (which is calculated by the Company by adjusting EBITDA to exclude share-based payments, fair value loss or gain on re-measurement of Digital Assets, gain (loss) on foreign exchange, and costs associated with one-time transactions) are not recognized measures nor do they have standardized meanings under International Financial Reporting Standards ("IFRS"). There is no standardized measure of "EBITDA" or "Adjusted EBITDA" under IFRS and consequently, TAAL's method of calculating this measure may differ from methods used by other companies and therefore may not be comparable to similar measures presented by other companies. A reconciliation of "Adjusted EBITDA" to Net Loss can be found in the MD&A.
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SOURCE Taal Distributed Information Technologies Inc.
