Wednesday, November 08, 2023 7:57:52 AM
TORONTO, November 08, 2023--(BUSINESS WIRE)--Tokens.com Corp. (NEO Exchange Canada: COIN)(Frankfurt Stock Exchange: 76M) (OTCQB US: SMURF) ("Tokens.com" or the "Company"), a technology company that builds immersive experiences and games in 3D internet environments and owns an inventory of cryptocurrencies, is pleased to provide a corporate update.
To better withstand current market conditions, the Company has streamlined its operations, including a reduction in staff of approximately 40% and the cancellation of certain outsourced services. Management estimates it has eliminated approximately CAD$1.6 million thus far from its operating overhead.
In addition, the Company and the board of directors (the "Board") have agreed to commence a strategic review of the business with a view to enhance shareholder and stakeholder value in the long term. Consideration is being given to a full or a partial sale of business segments or IP within those segments, a sale of the domain name portfolio, including Tokens.com, and/or a sale of the crypto inventory or other digital assets. An independent committee of the Board has been formed to review potential transactions.
Neither the Board nor the Committee have set a timetable to complete the strategic review process nor have any decisions been made relating to strategic alternatives at this time. There can be no assurance that the review process will result in a transaction. The Company does not intend to provide any updates or make any announcements unless or until it determines that further disclosure is appropriate or necessary.
Corporate Update and Strategic Direction Going Forward
Tokens.com has focused on building web3 projects and holding an inventory of crypto assets for staking. In 2021, our assets and share price appreciated significantly. However, since then, our asset values and share price have declined significantly as a result of several factors largely related to macroeconomic conditions and crypto prices. Management has attempted to offset these conditions through building new web3 businesses intended to bring in new revenue streams and new sources of growth.
While these initiatives have shown success, they will require additional capital commitment for further R&D and marketing. Given weak market conditions, there are no assurances that the Company will be able to access new capital in the future to scale these businesses.
At this time, the Company will scale back on further investments into its business segments in favour of preserving cash, while evaluating its next steps. The Company will maintain operation of its key businesses and crypto inventory, which largely remains staked and earning revenue.
"The last two years have been difficult for micro-cap stocks in the crypto sector. We have been successful in building innovative products and services for web3 for ourselves and third parties. However, these projects require continued capital for R&D and marketing to scale them successfully and cover their associated overhead," said Andrew Kiguel, CEO. "As a result, we have made the decision to reduce our operating overhead to preserve shareholder capital as the Company contemplates its next steps."
Part of management’s evaluation is exploring the sale of its domain name portfolio, including Tokens.com. Management believes that the Tokens.com domain name has tremendous value. CitiGPS predicts the tokenization of all physical and digital assets by the end of the decade is inevitable. As such, management believes that the opportunity to sell the domain name could provide substantial financial compensation to the Company. As a point of reference for its value, it is widely reported online that the domain name crypto.com was sold in 2018 between USD$10-12 million by Monaco, which subsequently rebranded as Crypto.com. NFTs.com is widely reported online to have sold for US$15 million in 2022.
Based on our last reported quarter, Tokens.com has approximately USD$12.2 million in cash and crypto tokens. Tokens.com expects to release its audited year-end result in mid-December 2023. Further information on our year-end audited results will be forthcoming in November 2023. The Company does not anticipate any issues completing its audit on time.
Tokens.com currently focuses on several operating segments, which are described fulsomely below. Through sharing resources and infrastructure across these business segments, Tokens.com is able to incubate these businesses from inception to revenue.
While the review process is ongoing, the Company’s management remains committed to executing on the Company’s strategy and business plan, including in the manner set out below.
Crypto Staking
The Company’s crypto staking segment involves the validation of blockchain transactions via a process called staking. In order to perform this task, a staker needs to own tokens of the asset it wishes to stake. In return, the staker is compensated with additional tokens of the underlying digital asset. We note, this is not a lending process and there is no counterparty risk. It is a process of validation using existing inventory similar to an electronic voting mechanism.
Since the end of 2021, this segment has been negatively impacted by declining crypto prices. To address this, the Company has narrowed the scope of its ownership of tokens to focus on larger names, primarily Ethereum.
Below is a table showing our current crypto ownership and corresponding value as of November 06, 2023.
Strategically, such assets underpin our valuation. We may strategically sell or buy more tokens in the future depending on our capital needs and market conditions. We note that a portion of our assets (denoted in the table above) are held with Genesis Global Trading that is undergoing a restructuring. As a result, some or all of those holdings may not be recovered.
Metaverse Group
Metaverse Group started as a business that purchased and rented out digital land in various metaverses. This business has evolved. As the hype cycle around the metaverse disappeared in 2022 and in 2023, the focus has shifted away from buying digital land and to providing third party clients with an ability to connect to consumers through 3D experiences. This includes the creation of customized games for clients. Today, Metaverse Group does not focus on web3, but instead on creating immersive experiences within web2 games like Roblox and Fortnite. This segment has been successful in attracting several high profile clients.
Since the June 2023 acquisition by the Company of the remaining interest in Metaverse Group which the Company did not own, management has been disappointed in its ability to generate revenue and scale. Revenues in this segment have also been affected by cuts in marketing budgets of potential clients. As a result, we have determined to downsize this business to a level that corresponds with its revenues.
Metaverse Group also owns US$1.56M in digital real estate in various metaverse platforms including Sandbox and Decentraland. While this digital land may have appreciation opportunities in the future, management is exploring the disposition of these digital assets.
Helix Worlds
Helix World is a proprietary ecommerce tool within Metaverse Group that will allow for product placement and advertising within virtual gaming worlds. The product has been in development for over a year and has recently launched.
The consumer ecommerce experience has not changed substantially in the last 20 years. However, with the advent and popularity of new 3D platforms such as Roblox and Fortnite, brands are seeking innovative ways to evolve their ecommerce solutions. Through Helix World, brands have the unprecedented opportunity to place their products into games and 3D environments without breaking the immersive experience. Helix World was innovated for brands to market their products to a new audience and for consumers to enjoy an improved shopping experience. Helix World is platform agnostic and will be available across multiple platforms and popular games such as Roblox and Fortnite.
Hulk Labs
Tokens.com’s video gaming initiatives reside within Hulk Labs. During the last 5 months, Hulk has pivoted from operating a player network in Africa, to developing a data platform called Yeti, that provides data services to the web3 gaming industry and the development of a web3 game called Astraeus Defense. While this may seem like a significant pivot, in reality, Hulk Labs utilized the IP it had already developed and repurposed to areas management feels have more upside.
In a recent report from Deloitte, 96% of Millenials, Gen Alpha and Gen Z located in the United States, play video games, regularly averaging 11-13 hours per week. Web3 gaming is growing rapidly in both the quality and number of games following $4.5 billion dollars invested in web3 games in 2022. Citi GPS estimates web3 gaming will surge up to 100 million players by 2025.
The average age of gamers is around 31 to 35 years old, with the most common age group being between 18 and 34, accounting for 38% of the gaming demographic. This points to the maturity and purchasing power of the average player?.
Going forward, Hulk will focus on the continued development and scaling of Yeti, a web3 gaming dashboard.
About Tokens.com
Tokens.com is a technology company that builds products and services that connects brands to consumers in 3D internet environments, including popular gaming and metaverse platforms. The Company also earns revenues through staking an inventory of owned cryptocurrencies.
Our solutions give our clients a more engaging way to connect with their existing clients, and access to a new generation of consumers who spend time on platforms such as Roblox and Fortnite.
Our key areas of focus are: i) branded virtual stores, sales centres, and 3D branded content, ii) web2 and web3 game development and game analytics, and iii) innovative e-commerce solutions that integrate shopping into existing popular gaming platforms.
Tokens.com also manages an inventory of valuable cryptocurrency, digital real estate, and a collection of top ranked crypto related domain names.
Visit https://Tokens.com to learn more.
Keep up-to-date on Tokens.com developments and join our online communities on X, LinkedIn, and YouTube.
Forward-Looking Statements
This news release includes certain forward-looking statements as well as management’s objectives, strategies, beliefs and intentions. Forward looking statements are frequently identified by such words as "may", "will", "plan", "expect", "anticipate", "estimate", "intend" and similar words referring to future events and results. Forward-looking statements in this news release include statements relating to the strategic review process and the work of the Committee; whether a strategic change, transaction or any outcome will result from or be consummated or implemented as a result of the strategic review process; and whether any transaction resulting from the strategic review process, if any, will ultimately enhance shareholder or stakeholder value in the long term.
Forward-looking statements are based on the current opinions and expectations of management. All forward-looking information is inherently uncertain and subject to a variety of assumptions, risks and uncertainties, including the speculative nature of cryptocurrencies, as described in more detail in our securities filings available at www.sedar.com. Actual events or results may differ materially from those projected in the forward-looking statements and we caution against placing undue reliance thereon. We assume no obligation to revise or update these forward-looking statements except as required by applicable law.
View source version on businesswire.com: https://www.businesswire.com/news/home/20231108753201/en/
Contacts
Tokens.com Corp.
Andrew Kiguel, CEO
Telephone: +1-647-578-7490
Email: mailto://contact@tokens.com
Jennifer Karkula, Head of Communications
Email: mailto://contact@tokens.com
Recent COIN News
- Bitcoin Surges Post Jobs Report, Coinbase Reveals $1.2 Billion 1Q Net Profit, and More Crypto News • IH Market News • 05/03/2024 07:26:30 PM
- Coinbase Releases First Quarter 2024 Shareholder Letter • Business Wire • 05/02/2024 08:11:00 PM
- Block Innovates Bitcoin Mining, DOJ Proposes 3-Year Prison for Changpeng Zhao, and More Crypto News • IH Market News • 04/24/2024 05:50:55 PM
- AKT Token Skyrockets on Upbit Listing, IBIT Holds Strong in Top 10 ETFs, and More Crypto News • IH Market News • 04/23/2024 04:34:08 PM
- BTC Mining Activity Surges Post-Halving, GatlingX Unveils Revolutionary EVM and More Crypto News • IH Market News • 04/22/2024 06:33:32 PM
- Li Auto Stock Drops 7.3% Amid Tesla Price Cuts, Salesforce Retreats from Informatica Deal, and Other Market Updates • IH Market News • 04/22/2024 12:09:21 PM
- Expectations for Bitcoin Halving, Tether Expands Stablecoins on TON Blockchain, and More Crypto News • IH Market News • 04/19/2024 05:26:46 PM
- Coinbase Announces Date of First Quarter 2024 Financial Results • Business Wire • 04/18/2024 08:05:00 PM
- Samsung Surpasses Apple in Q1 Smartphone Market; Salesforce in Talks to Acquire Informatica, and More News • IH Market News • 04/15/2024 11:06:48 AM
- Coinbase to Launch PEPE Futures, Uniswap Grapples with SEC, and Latest Crypto News • IH Market News • 04/11/2024 07:14:34 PM
- Crypto: Cardano Implements Critical Updates, dYdX Faces Disruption, and More • IH Market News • 04/08/2024 06:05:22 PM
- Boeing Down in Pre-Market Due to CEO Developments and Denver Incident; MicroStrategy Surges 11% with BTC Spike, and More • IH Market News • 04/08/2024 11:17:49 AM
- Crypto: Morgan Stanley and UBS Compete for Leadership in Bitcoin ETFs, Risks in Ethena’s USDe Strategy, and More • IH Market News • 04/05/2024 06:15:55 PM
- Crypto: Bitcoin Cash Surges Post-Halving, PayPal Launches PYUSD International Transfers and More Updates • IH Market News • 04/04/2024 07:15:41 PM
- Coinbase obtains registration as a Restricted Dealer in Canada • GlobeNewswire Inc. • 04/04/2024 02:00:00 PM
- BTC and ETH Suffer Sharp Decline on Tuesday; Key Crypto Market Events in April, and More News • IH Market News • 04/02/2024 07:02:46 PM
- Walgreens Slashes Annual Profit Forecast; MillerKnoll Nosedives 17% on Bleak 4Q Outlook, and Latest News • IH Market News • 03/28/2024 01:48:04 PM
- Crypto: AI Token Merger, Hashdex ‘DEFI’ ETF Launch, and Latest News • IH Market News • 03/27/2024 08:06:59 PM
- Super Micro Computer and Seagate Shares Surge on Analyst Optimism in Pre-Market Trading, and Latest News • IH Market News • 03/26/2024 11:20:49 AM
- Crypto: Bitcoin ETFs Experience 3 Consecutive Days of Outflows, CryptoPunk Fetches $16.42M in Sale, and More • IH Market News • 03/21/2024 07:17:25 PM
- JPMorgan boosts dividends, Chipotle unveils 50:1 stock split, and Latest News • IH Market News • 03/20/2024 11:15:48 AM
- Crypto: Bitcoin Plummets, Grayscale Promises Lower Fees, and Latest News • IH Market News • 03/19/2024 05:16:16 PM
- Crypto: Solana Surges to $200, Base Explodes Post-Dencun Update, and Latest News • IH Market News • 03/18/2024 03:53:15 PM
- Coinbase Announces Pricing of Upsized Offering of $1.1 Billion of 0.25% Convertible Senior Notes Due 2030 • Business Wire • 03/14/2024 12:03:00 AM
- Crypto: Toncoin Surges Following Telegram’s IPO Plans, Coinbase Secures $1 Billion via Convertible Bonds, and More News • IH Market News • 03/13/2024 03:28:56 PM
NanoViricides Reports that the Phase I NV-387 Clinical Trial is Completed Successfully and Data Lock is Expected Soon • NNVC • May 2, 2024 10:07 AM
ILUS Files Form 10-K and Provides Shareholder Update • ILUS • May 2, 2024 8:52 AM
Avant Technologies Names New CEO Following Acquisition of Healthcare Technology and Data Integration Firm • AVAI • May 2, 2024 8:00 AM
Bantec Engaged in a Letter of Intent to Acquire a Small New Jersey Based Manufacturing Company • BANT • May 1, 2024 10:00 AM
Cannabix Technologies to Deliver Breath Logix Alcohol Screening Device to Australia • BLO • Apr 30, 2024 8:53 AM
Hydromer, Inc. Reports Preliminary Unaudited Financial Results for First Quarter 2024 • HYDI • Apr 29, 2024 9:10 AM