Trade Cessation Status and Business Update
Banxa Holdings (OTCQX:BNXAF) announced delays in filing audited financial results for 2022, causing a trade cessation. Growth in transaction volumes strained financial systems, necessitating additional audit verifications. The company aims to enhance future audits by transitioning to SOC-compliant liquidity providers. Despite these issues, Banxa reported solid business progress, including partnerships with LG Electronics, integration with major Web3 players, and securing 10 Money Transmitter Licenses in the USA. The company claims clear visibility to profitability in FY2023.
- Partnership with LG Electronics to enable NFT purchases through smart TVs.
- Integration with two major global partners in the Web3 sector.
- Identified new revenue streams contributing to gross margin.
- Secured 10 Money Transmitter Licenses in the USA, with more expected.
- Clear line of sight to profitability in FY2023.
- Delays in filing audited financial results leading to trade cessation.
- Strain on financial systems due to rapid growth necessitating additional audits.
- Group CFO departure creates potential instability in financial operations.
TORONTO, ON / ACCESSWIRE / November 9, 2022 / Banxa Holdings Inc. (TSXV:BNXA) (OTCQX:BNXAF) (FSE:AC00) ("Banxa" or the "Company") provides further information on reasons for delayed lodgement of audited financial results for the financial year 2022 which has resulted in a trade cessation.
Banxa has experienced a year of significant growth in terms of transaction volumes and order processing which ultimately led to the business growing at a rate that put a strain on its financial systems and processes. This has required additional audit verification and the requirement for proper application of IFRS accounting standards as specifically related to on-ramping transactions.
Additionally, delays related to the Company's controls and use of its liquidity providers (digital currency exchanges) that are not SOC-compliant have resulted in the need for additional verifications. Banxa is currently reviewing moving liquidity and wallet services to SOC-compliant platforms which would improve future audit processes.
The Company's board and management are disappointed with the delays. It is the Company's intention to resolve the matter promptly.
CFO Update
Group CFO, Shyamal Deo is no longer with the Company. The Company is currently interviewing for his replacement.
Business Update
The general operations of the Company have not been affected and continue to see solid progress across the business. Some highlights include:
- Successfully partnered with global electronics brand LG Electronics to allow eligible customers to purchase NFT's directly through their smart televisions;
- Signed and currently integrating two major global partners in the Web3 space. Further detail will be provided in the next business update;
- Successfully identified and generated additional revenue streams that directly contribute to the gross margin including paid integrations of Banxa's on/off ramps and paid listings of partners' tokens;
- Granted a total of 10 Money Transmitter Licences in the USA (with more expected over the coming months); and
- Clear line of sight to profitability in the financial year 2023 (ending June 2023).
Update on FTX situation
The Company has received queries from its partners and investors regarding the FTX situation currently unfolding. Banxa has no direct exposure to FTX and/or Alameda (Alameda being a related entity to FTX). Banxa does not hold assets with FTX or Alamedia, hold any FTX native tokens (e.g. FTT) or generate any revenue from customers of FTX. Banxa's business model is such that it doesn't hold any cryptocurrency on behalf of customers.
Webinar:
The Company will be running a webinar to discuss the Trade Cessation and other general business.
Details are as follows:
Thursday, November 10th, 2022
3pm EST / 12pm PST
Webinar Registration:
https://us02web.zoom.us/webinar/register/WN_HGT30oU0Rq--43di7P_Q8w
CONTACTS
Investors:
MZ North America
Brian M. Prenoveau, CFA
BNXA@mzgroup.us
561-489-5315
Media:
Wachsman
Ethan Lyle
banxa@wachsman.com
ENDS
ON BEHALF OF THE BOARD OF DIRECTORS
Per: "DOMENIC CAROSA" https://twitter.com/dcarosa
Domenic Carosa = Chairman (1-888-218-6863)
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release
Forward-looking Information and Statements
This news release includes certain statements and information that may constitute forward-looking information within the meaning of applicable Canadian securities laws. Forward-looking statements relate to future events or future performance and reflect the expectations or beliefs of management of the Company regarding future events. Generally, forward-looking statements and information can be identified by the use of forward-looking terminology such as "intends", "expects" or "anticipates", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would" or will "potentially" or "likely" occur. This information and these statements, referred to herein as "forward‐looking statements", are not historical facts, are made as of the date of this news release and include without limitation, statements regarding the completion of the Audit by RSM, and the filing of the Annual Filings by the Company.
These forward‐looking statements involve numerous risks and uncertainties and actual results might differ materially from results suggested in any forward-looking statements. These risks and uncertainties include, among other things, risks related to the completion of the Audit by RSM within the timeframe expected by management, and risks relating to the filing of the Annual Filings within the timeframe expected by management, and risks related to changes in general economic, business and political conditions, including changes in the financial markets, changes in applicable laws, and compliance with extensive government regulation, as well as those risk factors discussed or referred to in the Company's disclosure documents filed with the securities regulatory authorities in certain provinces of Canada and available at www.sedar.com.
In making the forward-looking statements in this news release, the Company has applied several material assumptions, including without limitation, assumptions regarding the completion of the Audit by RSM in a timely manner and the filing of the Annual Filings by the Company in a timely manner.
Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. Readers are cautioned that reliance on such information may not be appropriate for other purposes. The Company does not undertake to update any forward-looking statement, forward-looking information or financial out-look that are incorporated by reference herein, except in accordance with applicable securities laws. We seek safe harbor.
SOURCE: Banxa Holdings
View source version on accesswire.com:
https://www.accesswire.com/724750/Trade-Cessation-Status-and-Business-Update
FAQ
What caused the trade cessation for Banxa (BNXAF)?
What are Banxa's plans regarding liquidity providers?
How many Money Transmitter Licenses has Banxa obtained in the USA?
What updates does Banxa provide about its business operations?
Is Banxa exposed to the FTX situation?
