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    CWRK   US23131W1036


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03/30/2020 | 04:57pm EDT

Our management's discussion and analysis provides a narrative about our financial performance and condition that should be read in conjunction with the audited consolidated financial statements and related notes thereto included in this annual report. This discussion contains forward looking statements reflecting our current expectations and estimates and assumptions about events and trends that may affect our future operating results or financial position. Our actual results and the timing of certain events could differ materially from those discussed in these forward-looking statements due to a number of factors, including, but not limited to, those set forth in the sections of this annual report titled "Risk Factors" and "Forward-Looking Statements".


We were incorporated under the laws of the State of Nevada on July 20, 2010. Following incorporation, we commenced the business of representing authors to publishers.

Our business is a services and development business that provides a turnkey set of services for companies to develop and integrate blockchain and payment technologies into their business operations. We anticipate that we will enable companies to focus on their core competencies while providing the necessary resources and expertise to execute a strategy that will enable companies to integrate new blockchain plus payment technologies into their business operations. Our plan is to be compensated on a fee-for-services model, technology licensing model and reoccurring transactions revenue model. We may accept tokens, coins or equity in payment for our services, to the extent permitted under applicable law.

Results of Operations


We recognized revenues of $250,000 from consulting services for the year ended December 31, 2019 compared to $0 in 2018.

Operating Expenses

We incurred operating expenses of $2,187,114 and $3,980,160 for the years ended December 31, 2019 and 2018, respectively, representing a decrease of $1,793,046 between the two periods. These expenses consisted primarily of consulting fees, service costs, professional fees, stock-based compensation, interest and bank charges, and other general and administrative expenses. The decrease in operating expenses between the two periods related to an decrease in consulting expenses from $1,449,681 in 2018 to $656,737 in 2019 due to our company amending consulting agreement with Business Instincts Group Inc. and other individuals to provide strategic and project management services, a decrease in service costs from $675,633 in 2018 to a credit of $58,454 in 2019 due to the impairment related to Ryde, and a decrease in other general and administrative expenses from $1,390,489 in 2018 to $1,378,834 in 2019 as travel costs and advertising expenses have decreased due to lowered activity in 2019.

Net Loss from Operations

We incurred net losses from operations of $1,937,114 and $3,980,160 for the years ended December 31, 2019 and 2018, respectively, representing a decrease of $2,043,046 primarily attributable to the factors discussed above under the heading "Operating Expenses".

  - 22 -

Other Income (Expense)

Other income includes $56,096 of interest earned for the year ended December 31, 2019 on a loan receivable to a related party compared to $30,864 for the period ended December 31, 2018. Other expenses include interest expense on convertible notes payable of $113,413 compared to $70,558 interest expense for the same period last year. There was also bad debt expense of $110,000 and an impairment of $2,783,834 for the year ended December 31, 2019.

The loan receivable of $1,250,000, plus accrued interest of $86,762, was impaired as the loan matured at the end of Q3 and there were concerns about collectability. Efforts to pursue the receivable amounts will continue.

Liquidity and Capital Resources

Working Capital

                                   As at                   As at
                             December 31, 2019       December 31, 2018
Current Assets              $            42,886     $         3,170,861
Current Liabilities                   1,844,693                 286,457
Working Capital (Deficit)   $        (1,801,807 )   $         2,884,404

Current Assets

Current assets of $42,886 as at December 31, 2019 and $3,170,861 as at December 31, 2018 were comprised of only cash and cash equivalents, accounts receivable, prepaid expenses, an outstanding loan receivable, deferred service costs and our capitalized service costs. The decrease in current assets as at December 31, 2019 is due to our company impairing the matured loan and accrued interest of $1,280,666 and the write down of deferred service costs of $874,838 were impaired as the path to bringing these clients to a revenue generating position is no longer likely. Cash and cash equivalents also decreased by $896,873 as it was used for operating costs in the year.

Current Liabilities

Current liabilities as at December 31, 2019 were attributable to $264,808 in accounts payable, $41,307 in accounts payable, related party, $534,840 in loans payable, related party and $1,003,738 in convertible notes and accrued interest due within the year compared to $239,026 in accounts payable and accrued expenses and $47,431 in accounts payable, related party as at December 31, 2018.

Cash Flow

Our cash flows for the year ended December 31, 2019 and December 31, 2018 are as

                                                   Year ended              Year ended
                                                December 31, 2019       December 31, 2018

Net cash (used in) operating activities $ (2,292,337 ) $ (4,074,305 ) Net cash (used in) investing activities

                          -              (1,150,000 )
Net cash provided by financing activities                1,395,890               5,907,454
Net changes in cash and cash equivalents       $          (896,873 )   $           683,149

Operating Activities

Net cash used in operating activities was $2,292,337 for the year ended December 31, 2019, as compared to $4,074,305 for the year ended December 31, 2018, a decrease of $1,781,968. The decrease in net cash used in operating activities was primarily due to impairment of the deferred service costs and the loan receivable.

Investing Activities

Net cash used in investing activities was $nil for the year ended December 31, 2019, as compared to $1,150,000 from the loan to Wenn Digital Inc. for the year ended December 31, 2018.

  - 23 -

Financing Activities

Financing activities provided cash of $1,395,890 for the year ended December 31, 2019 and $5,907,454 for the year ended December 31, 2018. In 2019, sBetOne issued $575,000 of convertible debentures, net proceeds of $294,550 were raised in a private placement, and $526,340 was raised from issuance of loans payable.

On June 1, 2018, we issued an aggregate of 9,274,524 shares of common stock for total consideration of $5,468,195 and paid offering costs of $235,206. On November 27, 2018, we issued an aggregate of 674,950 share of common stock for total consideration of $674,950 and paid offering costs of $18,485.

Cash Requirements

We expect that we will require $780,000, including our current working capital, to fund our operating expenditures for the next twelve months. Projected working capital requirements for the next twelve months are as follows:

      Estimated Working Capital Expenditures During the Next Twelve Months

General and administrative expenses   $ 780,000
Total                                 $ 780,000

Our estimated general and administrative expenses for the next 12 months are $780,000 and are comprised of: consulting fees, accounting services, board of directors and our advisory board, investor relations consultants, and to our public relations and marketing consultants; legal and professional fees (including auditing fees); for insurance; marketing and advertising expenses; trade shows; travel expenses; office rent and miscellaneous and office expenses.

We will require additional cash resources to meet our planned capital expenditures and working capital requirements for the next 12 months. We expect to derive such cash through the sale of equity or debt securities or by obtaining a credit facility. The sale of additional equity securities will result in dilution to our stockholders. The incurrence of indebtedness will result in debt service obligations, could cause additional dilution to our stockholders, and could require us to agree to financial covenants that could restrict our operations or modify our plans to source a new business opportunity. Financing may not be available in amounts or on terms acceptable to us, if at all. Failure to raise additional funds could cause our company to fail.

Going Concern

Our consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. We have not yet established a source of revenues sufficient to cover our operating costs and to allow us to continue as a going concern. We have incurred losses since inception resulting in an accumulated deficit of $9,310,776 as at December 31, 2019 (December 31, 2018: $4,712,862). Our ability to operate as a going concern is dependent on obtaining adequate capital to fund operating losses until we become profitable.

In its report on our financial statements for the years ended December 31, 2019 and 2018, our independent registered public accounting firm included an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

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Financials (USD)
Sales 2020 0,19 M - -
Net income 2020 -4,01 M - -
Net Debt 2020 1,43 M - -
P/E ratio 2020 -4,03x
Yield 2020 -
Capitalization 67,0 M 67,0 M -
EV / Sales 2019 11,6x
EV / Sales 2020 85,3x
Nbr of Employees 2
Free-Float 90,7%
Duration : Period :
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Managers and Directors
Bruce Elliott President & Chief Executive Officer
Swapan Kakumanu Chief Financial Officer, Secretary & Treasurer
Cameron Chell Non-Executive Chairman
James P. Geiskopf Lead Independent Director
Edmund C. Moy Independent Director
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