CYPHERPUNK HOLDINGS INC. INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED
JUNE, 2022 AND 2021
(Unaudited - Expressed in Canadian
Dollars)
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING
The accompanying interim condensed consolidated financial statements of Cypherpunk Holdings Inc. were prepared by management in accordance with International Financial Reporting Standards. The most significant of these standards have been set out in the note 2 of these interim condensed consolidated financial statements. Any applicable changes in accounting policies have also been disclosed in these financial statements. Management acknowledges responsibility for the preparation and presentation of the financial statements,
including responsibility for significant accounting judgments and estimates and the choice of accounting principles and methods that are appropriate to the Company's circumstances.
The Board of Directors is responsible for ensuring management fulfills its financial reporting responsibilities and for reviewing and approving the financial statements together with other financial information. The Audit Committee assists the Board of Directors in fulfilling this responsibility. The Audit Committee meets with management to review the internal controls over the financial reporting process and the period end financial statements together with other financial information of the Company. The Audit Committee reports its findings to the Board of Directors for its consideration in approving the financial statements together with other financial information of the Company for issuance to the shareholders.
Management recognizes its responsibility for conducting the Company's affairs in compliance with established financial standards, and applicable laws and regulations, and for maintaining proper standards of conduct for its activities.
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management is responsible for establishing and maintaining adequate control over its financial reporting. Management conducted an evaluation of the effectiveness of internal control over financial reporting based on "Internal Control Over Financial Reporting Guidance for Smaller Public Companies" issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the Company's internal control over financial reporting was effective as at June 30, 2022.
CONCLUSION RELATING TO DISCLOSURE CONTROLS AND PROCEDURES
An evaluation was performed under the supervision and with the participation of management, including the Chief Executive and Chief Financial Officers, of the effectiveness of the Company's disclosure controls and procedures as defined in the National Instrument 52-109. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the design and operation of the Company's disclosure controls and procedures were effective as at June 30, 2022.
NOTICE TO READER
Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the financial statements; they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.
The accompanying interim condensed consolidated financial statements of the Company have been prepared by and are the responsibility of the Company's management.
The Company's independent auditor has not performed a review of these interim condensed consolidated financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of financial statements by an entity's auditor.
CYPHERPUNK HOLDINGS INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (EXPRESSED IN CANADIAN DOLLARS)
June 30, | September 30, | |||||
2022 | 2021 | |||||
Assets | ||||||
Current Assets | ||||||
Cash and cash equivalents (note 4) | $ | 10,685,300 | $ | 876,757 | ||
Receivables and prepaid expenses (note 5) | 130,219 | 242,129 | ||||
Convertible loan receivable (note 6) | - | 256,112 | ||||
Treasury management investments | 33,363 | - | ||||
Bitcoin loan receivable (note 7) | - | 11,019 | ||||
10,848,882 | 1,386,017 | |||||
Cryptocurrencies (note 8) | 8,022,512 | 20,334,429 | ||||
Cryptocurrencies pledged as collateral (note 8 and 12) | - | 4,021,203 | ||||
Investments (note 9) | 3,254,346 | 4,620,462 | ||||
Other assets (note 10) | 1,051,420 | 868,750 | ||||
$ | 23,177,160 | $ | 31,230,861 | |||
Liabilities | ||||||
Current Liabilities | ||||||
Accounts payable and accrued liabilities (note 11 and 16) | $ | 296,799 | $ | 321,514 | ||
Loan payable (note 12) | - | 1,185,806 | ||||
296,799 | 1,507,320 | |||||
Deferred tax liability (note 20) | 1,882,000 | 1,882,000 | ||||
2,178,799 | 3,389,320 | |||||
Shareholders' Equity | ||||||
Capital stock (note 13) | 18,572,547 | 18,559,920 | ||||
Reserves | 17,186,178 | 15,895,629 | ||||
Accumlated other comprehensive income | 9,145,321 | 7,803,853 | ||||
Retained deficit | (23,905,684) | (14,417,861) | ||||
20,998,362 | 27,841,541 | |||||
$ | 23,177,160 | $ | 31,230,861 | |||
Nature of operations and going concern (note 1) | ||||||
SIGNED ON BEHALF OF THE BOARD | ||||||
(Signed) "Rubsun Ho" | (Signed) "Peter Tutlys" | |||||
Director | Director |
Page 1
The accompanying notes are an integral part of these consolidated financial statements.
CYPHERPUNK HOLDINGS INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (EXPRESSED IN CANADIAN DOLLARS)
Three Months Ended | Nine Months Ended | ||||||||||
June 30 | June 30 | ||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||
Income (loss) | |||||||||||
Other income | $ | 376,559 | $ | 25,007 | $ | 606,361 | $ | 39,782 | |||
Dividend income (note 9) | - | 135,014 | 208,699 | 135,014 | |||||||
Unrealized gain (loss) on investments (note 9) | (1,808,405) | (188,431) | (1,479,142) | (820,361) | |||||||
Realized gain (loss) on investments (note 9) | 574,967 | - | 4,099,246 | (3,910) | |||||||
(856,879) | (28,410) | 3,435,164 | (649,475) | ||||||||
Expenses | |||||||||||
Stock-based compensation (notes 14) | 312,812 | 243,866 | 1,293,176 | 270,707 | |||||||
Employment termination costs | - | 477,500 | - | 477,500 | |||||||
General and administrative | 79,693 | 186,448 | 265,565 | 313,655 | |||||||
Professional fees (note 16) | 37,535 | 236,400 | 160,377 | 257,644 | |||||||
Consulting fees (note 16) | 150,385 | 97,291 | 459,979 | 196,541 | |||||||
Foreign exchange (gain) loss | (604,943) | 19,169 | 121,341 | 593,871 | |||||||
Amortization (note 10) | 65,610 | 6,490 | 189,425 | 6,490 | |||||||
Rent and administrative services | - | 11,204 | - | 37,148 | |||||||
Director fees (note 16) | 15,000 | 18,750 | 45,000 | 33,750 | |||||||
56,092 | 1,297,118 | 2,534,863 | 2,187,306 | ||||||||
Income (loss) for the period | (912,970) | (1,325,528) | 900,302 | (2,836,781) | |||||||
Other comprehensive income (loss) | |||||||||||
Items that will not be reclassified to profit or loss | (11,052,834) | (11,070,282) | (9,046,657) | 6,088,853 | |||||||
Total comprehensive income (loss) | $ | (11,965,804) | $ | (12,395,810) | $ | (8,146,355) | $ | 3,252,072 | |||
Earnings (loss) per share - basic and diluted | $ | (0.01) | $ | (0.01) | $ | 0.01 | $ | (0.03) | |||
Weighted average number of shares outstanding - basic and diluted | 160,070,718 | 121,814,524 | 160,060,828 | 105,447,078 | |||||||
Page 2
The accompanying notes are an integral part of these consolidated financial statements.
CYPHERPUNK HOLDINGS INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (EXPRESSED IN CANADIAN DOLLARS)
Accumulated | |||||||||||
Other | |||||||||||
Common | Capital | Comprehensive | |||||||||
Shares | Stock | Reserves | Income Retained Deficit | Total | |||||||
Balance, September 30, 2020 | 100,266,482 | $ | 8,547,784 | $ | 12,155,116 | $ | 428,824 | $ | (14,462,210) | $ | 6,669,514 |
Units issued for cash in private placement (note 13) | 49,279,236 | 12,980,121 | - | - | - | 12,980,121 | |||||
Share issuance costs (note 13) | - | (924,467) | - | - | - | (924,467) | |||||
Issuance of warrants (note 15) | - | (3,286,005) | 3,286,005 | - | - | - | |||||
Issuance of broker warrants (13) | - | (455,542) | 455,542 | - | - | - | |||||
Warrants exercised (note 15) | 4,075,000 | 407,500 | - | - | - | 407,500 | |||||
Fair value of warrants exercised | - | 107,168 | (107,168) | - | - | - | |||||
Options exercised | 4,600,000 | 460,000 | - | - | - | 460,000 | |||||
Fair value of options excercised | - | 404,610 | (404,610) | - | - | - | |||||
Stock-based compensation (note 14) | - | - | 270,707 | - | - | 270,707 | |||||
Net income for the period | - | - | - | - | (2,836,781) | (2,836,781) | |||||
Unrealized gain on cryptocurrencies | - | - | - | 4,567,266 | - | 4,567,266 | |||||
Relialized gain on cryptocurrencies | - | - | - | (1,521,587) | 1,521,587 | - | |||||
Balance, June 30, 2021 | 158,220,718 | $ | 18,241,169 | $ | 15,655,592 | $ | 3,474,503 | $ | (15,777,404) | $ | 21,593,860 |
Options exercised | 1,750,000 | 175,000 | - | - | - | 175,000 | |||||
Fair value of options exercised | - | 153,451 | (153,451) | - | - | - | |||||
Stock-based compensation (note 14) | - | - | 393,488 | - | - | 393,488 | |||||
Net loss for the period | - | - | - | - | 1,662,284 | 1,662,284 | |||||
Unrealized gain on cryptocurrencies | - | - | - | 7,094,609 | - | 7,094,609 | |||||
Realized gain (loss) on cryptocurrencies | - | - | - | 302,741 | (302,741) | - | |||||
Items that may be reclassified to profit or loss | - | - | - | (3,068,000) | - | (3,068,000) | |||||
Balance, September 30, 2021 | 159,970,718 | $ | 18,559,920 | $ | 15,895,629 | $ | 7,803,853 | $ | (14,417,861) | $ | 27,841,541 |
Warrants exercised | 100,000 | 10,000 | - | - | - | 10,000 | |||||
Fair value of warrants exercised | - | 2,627 | (2,627) | - | - | - | |||||
Stock-based compensation (note 14) | - | - | 1,293,176 | - | - | 1,293,176 | |||||
Net income for the period | - | - | - | - | 900,302 | 900,302 | |||||
Unrealized gain on cryptocurrencies | - | - | - | (9,046,657) | - | (9,046,657) | |||||
Realized gain (loss) on cryptocurrencies | - | - | - | 10,388,125 | (10,388,125) | - | |||||
Balance, June 30, 2022 | 160,070,718 | $ | 18,572,547 | $ | 17,186,178 | $ | 9,145,321 | $ | (23,905,684) | $ | 20,998,362 |
Page 3
The accompanying notes are an integral part of these consolidated financial statements.
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Cypherpunk Holdings Inc. published this content on 15 March 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 March 2023 19:21:08 UTC.
