Blockchain Press Releases
Converge Technology Solutions Reports Second Quarter 2023 Financial Results
TORONTO and GATINEAU, QC, Aug. 9, 2023 /PRNewswire/ — Converge Technology Solutions Corp. (“Converge” or “the Company“) (TSX: CTS) (FSE: 0ZB) (OTCQX: CTSDF) is pleased to provide its financial results for the three and six months period ended June 30, 2023 (“Q2-23”). All figures are in Canadian dollars unless otherwise stated.
Financial Summary
|
In $000s except per share amounts |
Q2 2023  |
Q2 2022 |
H1 2023 |
H1 2022 |
||
|
Gross Sales1 |
957,219 |
729,678 |
1,922,477 |
1,403,607 |
||
|
Revenue |
665,813 |
515,196 |
1,344,011 |
1,009,236 |
||
|
Gross profit (GP) |
175,672 |
133,152 |
347,260 |
242,196 |
||
|
Gross profit (GP) % |
26.4 % |
25.8 % |
25.8 % |
24.0 % |
||
|
Adjusted EBITDA1 |
41,527 |
39,187 |
82,735 |
68,836 |
||
|
Adjusted EBITDA1 as a % of GP |
23.6 % |
29.4 % |
23.8 % |
28.4 % |
||
|
Adjusted EBITDA1 as a % of Revenue |
6.2 % |
7.6 % |
6.2 % |
6.8 % |
||
|
Net (loss) income |
(4,495) |
11,678 |
(7,856) |
9,270 |
||
|
Adjusted net income1 |
$25,124 |
29,900 |
$49,565 |
52,410 |
||
|
Adjusted EPS1 |
$0.12 |
$0.14 |
$0.24 |
$0.24 |
Q2-23 Financial Highlights:
- Gross sales1 of $957.2 million compared to $729.7 million in Q2-22; an increase of $227.5 million or 31%
- Gross services sales1 of $317.2 million increased by 33% year-over-year
- Gross Profit of $175.7 million compared to $133.1 million in Q2-22; an increase of $42.5 million or 32%
- Organic gross profit growth for Q2-23 was 2.5% driven by 14.4% increase in services organic gross profit
- Adjusted EBITDA1 of $41.5 million, increasing from $39.2 million in Q2-22 by 6%
- Revenue for Q2-23 of $665.8 million, an increase of 29% over Q2-22
- Product Bookings backlog2 at the end of Q2-23 was $447.6 million
- Achieved 112 net new logos3 in Q2-23, securing 215 net new logos in H1-23
|
___________________________________ |
|
1 This is a Non-IFRS measure (including non-IFRS ratio) and not a recognized, defined or a standardized measure under IFRS. See the Non-IFRS Financial Measures section of this news release for definitions, uses and a reconciliation of historical non-IFRS financial measures to the most directly comparable IFRS financial measures. |
|
2 Bookings backlog is calculated as purchase orders received from customers not yet delivered at the end of the fiscal period for North America Region. |
|
3 Statistic based on North American Region. |
Q2-23 Business Highlights & Subsequent to Quarter
- Board of Directors authorize second quarter dividend of $0.01 per common share to be paid on September 22nd, 2023 to shareholders of record at the close of business on September 8th, 2023
- Converge concluded its previously announced NCIB program after purchasing 4.28 million shares throughout Q2-23
- The Company announced that the Toronto Stock Exchange approved the Company’s Notice of Intention to make a Normal Course Issuer Bid. Pursuant to the NCIB, the Company may purchase for cancellation up to an aggregate of 19,427,276 common shares. All common shares acquired by the Company under the NCIB will be cancelled
“Converge continued to execute on its cross-sell strategy throughout the second quarter and drove high value solutions with clients by leveraging our advisory, implementation, and managed services across all practice areas. Today 60% of Converge sales representatives in North America are now driving more than 4 solution areas with their clients,” said Greg Berard, Converge Global CEO. “In today’s IT environment, Converge continues to shape and transform innovation, revolutionizing client-technology interactions. A distinguishing reason clients continue to partner with Converge is our ability to provide end-to-end solutions for cloud, hardware, and software, all while leveraging the technical expertise required for effective professional and managed services. Converge has built a unique set of skills supported by foundational partnerships across Analytics, AI, Cloud, and Cybersecurity and will continue to develop leading solutions to adapt with our clients’ growing needs. I am extremely proud of our team’s performance which has resulted in record gross profit in Q2-23.”
Conference Call Details:
Date: Wednesday, Aug 9th, 2023
Time: 8:00 AM Eastern Time
Participant Webcast Link:
Webcast Link – https://app.webinar.net/gkXqYQ1YE8v
Participant Dial-in Details with Operator Assistance:
Conference ID: 70789128
Toronto: 416-764-8609
North American Toll Free: 888-390-0605
International Toll-Free Numbers:
Germany: 08007240293
Ireland: 1800939111
Spain: 900834776
Switzerland: 0800312635
United Kingdom: 08006522435
You may register and enter your phone number to receive an instant automated call back via
https://emportal.ink/3OgdiaZ
Recording Playback:
Webcast Link – https://app.webinar.net/gkXqYQ1YE8v
Toronto: 416-764-8677
North American Toll Free: 1-888-390-0541
Replay Code: 789128 #
Expiry Date: August 16th, 2023
Please connect at least 15 minutes prior to the conference call to ensure time for any software download that may be required to access the webcast. A live audio webcast accompanied by presentation slides and archive of the conference call and webcast will be available by visiting the Company’s website at https://convergetp.com/investor-relations/.
About Converge
Converge Technology Solutions Corp. is a services-led, software-enabled, IT & Cloud Solutions provider focused on delivering industry-leading solutions. Converge’s global approach delivers advanced analytics, application modernization, cloud platforms, cybersecurity, digital infrastructure, and digital workplace offerings to clients across various industries. The Company supports these solutions with advisory, implementation, and managed services expertise across all major IT vendors in the marketplace. This multi-faceted approach enables Converge to address the unique business and technology requirements for all clients in the public and private sectors. For more information, visit convergetp.com.
Summary of Consolidated Statements of Financial Position
(expressed in thousands of Canadian dollars)
|
June 30, 2023 |
December 31, 2022 |
|||||
|
Assets |
||||||
|
Current |
||||||
|
Cash |
$ 78,443 |
$ 159,890 |
||||
|
Restricted cash |
2,611 |
5,230 |
||||
|
Trade and other receivables |
781,330 |
781,683 |
||||
|
Inventories |
160,411 |
158,430 |
||||
|
Prepaid expenses and other assets |
23,337 |
23,046 |
||||
|
1,046,132 |
1,128,279 |
|||||
|
Non-current |
||||||
|
Other assets |
17,943 |
4,646 |
||||
|
Property, equipment, and right-of-use assets, net |
73,659 |
88,352 |
||||
|
Intangible assets, net |
419,403 |
463,751 |
||||
|
Goodwill |
561,283 |
563,848 |
||||
|
Total assets |
$ 2,118,420 |
$ 2,248,876 |
||||
|
Liabilities |
||||||
|
Current |
||||||
|
Trade and other payables |
$ 814,855 |
$ 824,924 |
||||
|
Other financial liabilities |
63,082 |
123,932 |
||||
|
Deferred revenue |
47,475 |
60,210 |
||||
|
Borrowings |
398 |
421,728 |
||||
|
Income taxes payable |
7,816 |
7,112 |
||||
|
933,626 |
1,437,906 |
|||||
|
Non-current |
||||||
|
Other financial liabilities |
51,701 |
77,183 |
||||
|
Borrowings |
429,909 |
– |
||||
|
Deferred tax liabilities |
88,278 |
102,977 |
||||
|
Total liabilities |
$ 1,503,514 |
$ 1,618,066 |
||||
|
Shareholders’ equity |
||||||
|
Common shares |
604,144 |
595,019 |
||||
|
Contributed surplus |
9,243 |
7,919 |
||||
|
Exchange rights |
– |
1,705 |
||||
|
Accumulated other comprehensive income |
156 |
13,708 |
||||
|
Deficit |
(27,186) |
(18,441) |
||||
|
Total equity attributable to shareholders of Converge |
586,357 |
599,910 |
||||
|
Non-controlling interest |
28,549 |
30,900 |
||||
|
614,906 |
630,810 |
|||||
|
Total liabilities and shareholders’ equity |
$ 2,118,420 |
$ 2,248,876 |
||||
Summary of Consolidated Statements of Loss and Comprehensive Loss
(expressed in thousands of Canadian dollars)
|
Three months ended |
Six months ended |
|||||||||
|
2023 |
2022 |
2023 |
2022 |
|||||||
|
Revenues |
||||||||||
|
Product |
$ |
511,597 |
$ |
410,361 |
$ |
1,048,286 |
$ |
807,753 |
||
|
Service |
154,216 |
104,835 |
295,725 |
201,483 |
||||||
|
Total revenue |
665,813 |
515,196 |
1,344,011 |
1,009,236 |
||||||
|
Cost of sales |
490,141 |
382,044 |
996,751 |
767,040 |
||||||
|
Gross profit |
175,672 |
133,152 |
347,260 |
242,196 |
||||||
|
Selling, general and administrative expenses |
136,699 |
95,823 |
268,732 |
176,235 |
||||||
|
Income before the following |
38,973 |
37,329 |
78,528 |
65,961 |
||||||
|
Depreciation and amortization |
26,893 |
17,178 |
52,783 |
31,657 |
||||||
|
Finance expense, net |
10,652 |
3,094 |
20,002 |
4,912 |
||||||
|
Special charges |
13,292 |
5,559 |
17,576 |
11,280 |
||||||
|
Share-based compensation |
1,117 |
1,685 |
1,965 |
2,897 |
||||||
|
Other (income) expenses |
(6,529) |
(3,265) |
(4,060) |
3,138 |
||||||
|
Income before income taxes |
(6,452) |
13,078 |
(9,738) |
12,077 |
||||||
|
Income tax (recovery) expense |
(1,957) |
1,400 |
(1,882) |
2,807 |
||||||
|
Net (loss) income |
$ |
(4,495) |
$ |
11,678 |
$ |
(7,856) |
$ |
9,270 |
||
|
Net (loss) income attributable to: |
||||||||||
|
Shareholders of Converge |
(3,548) |
12,017 |
(5,505) |
10,223 |
||||||
|
Non-controlling interest |
(947) |
(339) |
(2,351) |
(953) |
||||||
|
$ |
(4,495) |
$ |
11,678 |
$ |
(7,856) |
$ |
9,270 |
|||
|
Other comprehensive (loss) income |
||||||||||
|
Item that may be reclassified subsequently to income: |
||||||||||
|
Exchange differences on translation of foreign operations |
(15,725) |
5,554 |
(13,552) |
(1,034) |
||||||
|
(15,725) |
5,554 |
(13,552) |
(1,034) |
|||||||
|
Comprehensive (loss) income |
$ |
(20,220) |
$ |
17,232 |
$ |
(21,408) |
$ |
8,236 |
||
|
Comprehensive (loss) income attributable to: |
||||||||||
|
Shareholders of Converge |
(19,273) |
17,571 |
(19,057) |
9,189 |
||||||
|
Non-controlling interest |
(947) |
(339) |
(2,351) |
(953) |
||||||
|
(20,220) |
17,232 |
(21,408) |
8,236 |
|||||||
|
Adjusted EBITDA |
41,527 |
39,187 |
82,735 |
68,836 |
||||||
|
Adjusted EBITDA as a % of Gross Profit |
23.6 % |
29.4 % |
23.8 % |
28.4 % |
||||||
|
Adjusted EBITDA as a % of Revenue |
6.2 % |
7.6 % |
6.2 % |
6.8 % |
||||||
Summary of Consolidated Statements of Cash Flows
(expressed in thousands of Canadian dollars)
|
For the three months |
For the six months ended June 30, |
||||||||
|
2023 |
2022 |
2023 |
2022 |
||||||
|
Cash flows (used in) from operating activities |
|||||||||
|
Net (loss) income |
$ |
(4,495) |
$ |
11,678 |
$ |
(7,856) |
$ |
9,270 |
|
|
Adjustments to reconcile net (loss) income to net |
|||||||||
|
Depreciation and amortization |
29,235 |
18,739 |
56,785 |
33,969 |
|||||
|
Unrealized foreign exchange (gains) losses |
(5,281) |
(2,968) |
(2,818) |
3,701 |
|||||
|
Share-based compensation expense |
1,117 |
1,685 |
1,965 |
2,897 |
|||||
|
Finance expense, net |
10,652 |
3,094 |
20,002 |
4,912 |
|||||
|
Gain on sale of property and equipment |
(598) |
– |
(598) |
– |
|||||
|
Change in fair value of contingent consideration |
6,551 |
– |
6,551 |
– |
|||||
|
Income tax (recovery) expense |
(1,957) |
1,400 |
(1,882) |
2,807 |
|||||
|
35,224 |
33,628 |
72,149 |
57,556 |
||||||
|
Changes in non-cash working capital items |
(40,349) |
9,214 |
(41,585) |
(44,290) |
|||||
|
(5,125) |
42,842 |
30,564 |
13,266 |
||||||
|
Income taxes paid |
(4,520) |
(16,272) |
(11,446) |
(17,025) |
|||||
|
Cash (used in) from operating activities |
(9,645) |
26,570 |
19,118 |
(3,759) |
|||||
|
Cash flows used in investing activities |
|||||||||
|
Purchase of property and equipment |
(2,091) |
(3,123) |
(7,197) |
(14,479) |
|||||
|
Proceeds on disposal of property and equipment |
3,681 |
– |
3,749 |
178 |
|||||
|
Payment of contingent consideration |
(975) |
– |
(9,935) |
(10,168) |
|||||
|
Payment of deferred consideration |
(4,066) |
(5,208) |
(29,720) |
(6,948) |
|||||
|
Payment of NCI liability |
– |
– |
(29,994) |
– |
|||||
|
Business combinations, net of cash acquired |
– |
(131,545) |
– |
(199,471) |
|||||
|
Cash used in investing activities |
(3,451) |
(139,876) |
(73,097) |
(230,888) |
|||||
|
Cash flows (used in) from financing activities |
|||||||||
|
Transfers from (to) restricted cash |
2,371 |
58,980 |
2,587 |
(4,513) |
|||||
|
Interest paid |
(7,365) |
(2,102) |
(15,242) |
(3,058) |
|||||
|
Dividend paid |
(2,067) |
(1,100) |
(2,067) |
(1,100) |
|||||
|
Payments of lease liabilities |
(5,089) |
(2,304) |
(10,224) |
(5,032) |
|||||
|
Repurchase of common shares |
(14,230) |
– |
(14,230) |
– |
|||||
|
Repayment of notes payable |
(40) |
(38) |
(80) |
(159) |
|||||
|
Net (repayment) proceeds from borrowings |
(22,815) |
22,351 |
11,384 |
184,819 |
|||||
|
Cash (used in) from financing activities |
(49,235) |
75,787 |
(27,872) |
170,957 |
|||||
|
Net change in cash during the period |
(62,331) |
(37,519) |
(81,851) |
(63,690) |
|||||
|
Effect of foreign exchange on cash |
1,746 |
4,526 |
404 |
(328) |
|||||
|
Cash, beginning of period |
139,028 |
217,168 |
159,890 |
248,193 |
|||||
|
Cash, end of period |
$ |
78,443 |
$ |
184,175 |
$ |
78,443 |
$ |
184,175 |
|
Non-IFRS Financial Measures
This release refers to certain performance indicators including Adjusted EBITDA that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. Management believes that these measures are useful to most shareholders, creditors, and other stakeholders in analyzing the Company’s results. These non-IFRS financial measures should not be considered as an alternative to the consolidated income (loss) or any other measure of performance under IFRS.
Adjusted EBITDA
Adjusted EBITDA represents net income or loss adjusted to exclude amortization, depreciation, interest expense and finance costs, foreign exchange gains and losses, share-based compensation expense, income tax expense, and special charges. Special charges consist primarily of restructuring related expenses for employee terminations, lease terminations, and restructuring of acquired companies, as well as certain legal fees or provisions related to acquired companies. From time to time, it may also include adjustments in the fair value of contingent consideration, and other such non-recurring costs related to restructuring, financing, and acquisitions.
The Company uses Adjusted EBITDA to provide investors with a supplemental measure of its operating performance and thus highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures. The Company believes that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Management also uses non-IFRS measures to facilitate operating performance comparisons from period to period, prepare annual operating budgets and assess the ability to meet capital expenditure and working capital requirements.
Adjusted EBITDA is not a recognized, defined or standardized measure under IFRS. The Company’s definition of Adjusted EBITDA will likely differ from that used by other companies and therefore comparability may be limited. Adjusted EBITDA should not be considered a substitute for or in isolation from measures prepared in accordance with IFRS. Investors are encouraged to review the Company’s financial statements and disclosures in their entirety and are cautioned not to put undue reliance on non-IFRS measures and view them in conjunction with the most comparable IFRS financial measures.
The Company has reconciled Adjusted EBITDA to the most comparable IFRS financial measure as follows:
|
For the three months ended June 30, |
For the six months ended June 30, |
||||
|
2023 |
2022 |
2023 |
2022 |
||
|
Net income (loss) before taxes |
$ (6,452) |
$ 13,078 |
$ (9,738) |
$ 12,077 |
|
|
Finance expense |
10,652 |
3,094 |
20,002 |
4,912 |
|
|
Share-based compensation expense |
1,117 |
1,685 |
1,965 |
2,897 |
|
|
Depreciation and amortization |
26,893 |
17,178 |
52,783 |
31,657 |
|
|
Depreciation included in cost of sales |
2,342 |
1,561 |
4,002 |
2,312 |
|
|
Foreign exchange loss (gain) |
(6,317) |
(2,968) |
(3,855) |
3,701 |
|
|
Special charges |
13,292 |
5,559 |
17,576 |
11,280 |
|
|
Adjusted EBITDA |
$ 41,527 |
$ 39,187 |
$ 82,735 |
$ 68,836 |
|
Adjusted EBITDA as a % of Gross Profit
The Company believes that Adjusted EBITDA as a % of Gross Profit is a useful measure of the Company’s operating efficiency and profitability. This is calculated by dividing Adjusted EBITDA by gross profit.
Adjusted Net Income (Loss) and Adjusted Earnings per Share (“EPS”)
Adjusted Net Income (Loss) represents net income (loss) adjusted to exclude special charges, amortization of acquired intangible assets, and share-based compensation. The Company believes that Adjusted Net Income (Loss) is a more useful measure than net income (loss) as it excludes the impact of one-time, non-cash and/or non-recurring items that are not reflective of Converge’s underlying business performance. Adjusted EPS is calculated by dividing Adjusted Net Income (Loss) by the total weighted average shares outstanding on a basic and diluted basis.
The Company has provided a reconciliation to the most comparable IFRS financial measure as follows:
|
For the three months |
For the six months |
|||
|
ended June 30, |
ended June 30, |
|||
|
2023 |
2022 |
2023 |
2022 |
|
|
Net (loss) income |
$ (4,495) |
$ 11,678 |
$ (7,856) |
$ 9,270 |
|
Special charges |
13,292 |
5,559 |
17,576 |
11,280 |
|
Amortization of acquired intangible assets |
21,527 |
13,946 |
41,735 |
25,262 |
|
Foreign exchange loss |
(6,317) |
(2,968) |
(3,855) |
3,701 |
|
Share-based compensation |
1,117 |
1,685 |
1,965 |
2,897 |
|
Adjusted Net Income: |
$ 25,124 |
$ 29,900 |
$ 49,565 |
$ 52,410 |
|
Basic |
0.12 |
0.14 |
0.24 |
0.24 |
Gross sales and gross sales for organic growth
Gross sales, which is a non-IFRS measurement, reflects the gross amount billed to customers, adjusted for amounts deferred or accrued. The Company believes gross sales is a useful alternative financial metric to net revenue, the IFRS measure, as it better reflects volume fluctuations as compared to net revenue. Under the applicable IFRS 15 ‘principal vs agent’ guidance, the principal records revenue on a gross basis and the agent records commission on a net basis. In transactions where Converge is acting as an agent between the customer and the vendor, net revenue is calculated by reducing gross sales by the cost of sale amount.
The Company has provided a reconciliation of gross sales to net revenue, which is the most comparable IFRS financial measure, as follows:
|
For the three months |
For the six months |
||||
|
ended June 30, |
ended June 30, |
||||
|
2023 |
2022 |
2023 |
2022 |
||
|
Product |
$ 639,996 |
$ 491,821 |
$ 1,305,306 |
$ 945,210 |
|
|
Managed services |
45,182 |
32,268 |
85,818 |
66,251 |
|
|
Third party and professional services |
272,041 |
205,589 |
531,353 |
392,146 |
|
|
Gross sales |
$ 957,219 |
$ 729,678 |
$ 1,922,477 |
$ 1,403,607 |
|
|
Adjustment for sales transacted as agent |
(291,406) |
(214,482) |
(578,466) |
(394,371) |
|
|
Net Revenue |
$ 665,813 |
$ 515,196 |
$ 1,344,011 |
$ 1,009,236 |
|
Organic Growth
The Company measures organic growth at the gross sales and gross profit levels, and includes the contributions under Converge ownership in the current and comparative period(s). In calculating organic growth, the Company therefore deducts gross sales and gross profit generated from companies that were acquired in the current reporting period.
Gross sales organic growth is calculated by deducting prior period gross sales, as reported in the Company’s public filings, from current period gross sales for the same portfolio of companies. Gross sales organic growth percentage is calculated by dividing organic growth by prior period reported gross sales.
The following table calculates gross sales organic growth for three and six months ended June 30, 2023:
|
For the three months |
For the six months |
|||||
|
ended June 30, |
ended June 30, |
|||||
|
2023 |
2022 |
2023 |
2022 |
|||
|
Gross sales |
$ 957,219 |
$ 729,678 |
$ 1,922,477 |
$ 1,403,607 |
||
|
Less: gross sales from companies not |
214,227 |
215,748 |
459,857 |
404,433 |
||
|
Gross sales of companies owned in |
$ 742,992 |
$ 513,930 |
$ 1,462,620 |
$ 999,174 |
||
|
Prior period gross sales |
729,678 |
452,120 |
1,403,607 |
860,220 |
||
|
Organic Growth – $ |
$ 13,314 |
$ 61,810 |
$ 59,013 |
$ 138,954 |
||
|
Organic Growth – % |
1.8 % |
13.7 % |
4.2 % |
16.2 % |
||
Gross profit organic growth is calculated by deducting prior period gross profit, as reported in the Companies public filings, from current period gross profit for the same portfolio of companies. Gross profit organic growth percentage is calculated by dividing organic growth by prior period reported gross profit.
|
For the three months |
For the six months |
||||
|
ended June 30, |
ended June 30, |
||||
|
2023 |
2022 |
2023 |
2022 |
||
|
Gross profit |
$ 175,672 |
$ 133,152 |
$ 347,260 |
$ 242,196 |
|
|
Less: gross profit from companies not |
39,239 |
40,737 |
83,836 |
72,545 |
|
|
Gross profit of companies owned in |
$ 136,433 |
$ 92,415 |
$ 263,424 |
$ 169,651 |
|
|
Prior period gross profit |
133,152 |
78,244 |
242,197 |
146,041 |
|
|
Organic Growth – $ |
$ 3,281 |
$ 14,171 |
$ 21,227 |
$ 23,610 |
|
|
Organic Growth – % |
2.5 % |
18.1 % |
8.8 % |
16.2 % |
|
Forward-Looking Information
This press release contains certain “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements“) within the meaning of applicable Canadian securities legislation regarding Converge and its business. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected” “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”. “estimates”, “believes” or intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Except as required by law, Converge assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change. The reader is cautioned not to place undue reliance on forward-looking statements.
For a detailed description of the risks and uncertainties facing the Company and its business and affairs, readers should refer to the Company’s filings statement available on SEDAR under the Company’s profile at www.sedar.com including its most recent Annual Information Form, its Management Discussion and Analysis and its Annual and Quarterly Financial Statements.
CONTACT : Converge Technology Solutions Corp., Email: [email protected], Phone: 416-360-1495
View original content:https://www.prnewswire.co.uk/news-releases/converge-technology-solutions-reports-second-quarter-2023-financial-results-301896732.html
Blockchain Press Releases
Bullish partners with the Gibraltar Government and GFSC to pioneer world’s first crypto clearing regulation
GIBRALTAR, May 13, 2025 /PRNewswire/ — Bullish, one of the fastest-growing regulated virtual asset exchanges, today announced its partnership with the Gibraltar Government and the Gibraltar Financial Services Commission (GFSC) to develop the world’s first regulation for the clearing and settlement of derivative contracts settled in virtual assets. This innovation will enable virtual asset derivative contracts to be cleared and settled in virtual assets by a recognized clearing house for the first time. This groundbreaking initiative moves beyond the limitations of traditional fiat-based clearing and settlement infrastructure and marks a significant milestone in the evolution of virtual asset regulation.
Over the past six months, Bullish and the GFSC have collaborated and agreed to create a regulatory framework that seamlessly adapts traditional finance clearing regulations with the unique requirements and capabilities of the virtual asset market.
For example, under the proposed clearing framework, select virtual assets may be eligible as collateral and settlement currency. The selection criteria will follow the principles underpinning existing traditional clearing regulations. Additionally, the framework will expand the range of institutions authorized to hold collateral, enhancing market integrity and participation while mitigating key risks.
Setting the standard for a crypto clearing solution
Major virtual asset exchanges have been performing the clearing function without appropriate regulatory oversight, leading to failures impacting customers. The proposed regime introduces a regulated clearing house entity, separate and independent from the exchange and its participants, with improved transparency and capitalization to strengthen market infrastructure protection.
In a separate announcement, His Majesty’s Government of Gibraltar expressed its enthusiasm for the framework, which fosters trust, resilience, and integrity in virtual asset markets. Bullish warmly welcomes their announcement and is excited to work alongside the government and GFSC to bring this groundbreaking regulatory framework to fruition.
“There is currently no regulation that specifically addresses the clearing needs of the crypto industry. We aim to change that by introducing a framework that manages risk for virtual asset trading and is aligned with traditional market infrastructure standards,” said Tom Farley, Bullish Group CEO. “While Central Counterparties have become more robust in other asset classes, this initiative will bring that same robust risk management and regulatory oversight to the crypto clearing space that EMIR & Dodd-Frank brought to traditional derivatives markets. We welcome the announcement from the government of Gibraltar and look forward to introducing our joint proposal to the market.”
The Hon Nigel Feetham KC MP, Minister for Financial Services adds, “Gibraltar is renowned for pioneering clear regulation and embracing forward-looking technology, being the first jurisdiction globally to introduce legislation for firms using Distributed Ledger Technology. We are excited to deepen our relationship with Bullish and to introduce this unprecedented virtual asset clearing solution to the market.”
Bullish exchange poised to become first regulated virtual asset clearing house globally
In anticipation of the new framework, Bullish plans to introduce its Clearing Services offering alongside Options trading later this year. This initial launch will integrate a variety of clearing benefits into the market as Bullish moves toward establishing a standalone clearing house under the new regulatory framework. With licenses from the GFSC, the German Federal Financial Supervisory Authority (BaFin), and the Hong Kong Securities and Futures Commission (SFC), Bullish is well-positioned to set the standard for virtual asset clearing solutions.
“Our long-term goal is to establish a robust regulatory framework that not only meets the current needs of the virtual asset ecosystem but also anticipates future developments. This initiative underscores our commitment to operating a regulated, compliant exchange that supports institutional participation with an end-to-end clearing solution,” said Randi Abernethy, Head of Clearing and Group Risk at Bullish. “Several market participants have already voiced strong support for our business model because they recognize the value of regulated central clearing. We look forward to Bullish becoming the first operational regulated digital assets clearing house in the world.”
In advance of this, Bullish will form a clearing member working group to bring industry leaders together to share their expertise, establish the initial clearing network, and enhance the robustness of Bullish’s clearing ecosystem.
Media contact
Bullish
[email protected]
HM Government of Gibraltar
[email protected]
Gibraltar Financial Services Commission
[email protected]
About Bullish exchange
With a focus on developing products and services for the institutional digital assets sector, Bullish has rewired the traditional exchange to benefit asset holders, enable traders and increase market transparency. Supported by the Group’s well-capitalized treasury, Bullish’s digital asset spot and derivatives trading services utilize high-performance central limit order matching and proprietary market making technology to deliver deep liquidity and tight spreads within a compliant framework.
Launched in November 2021, the exchange is available in 50+ select jurisdictions in Asia Pacific, Europe, Africa, and Latin America. Bullish prioritizes compliance and safeguarding customer assets through robust security measures and regulatory oversight. The business is licensed by the Hong Kong Securities and Futures Commission, German Federal Financial Supervisory Authority, and the Gibraltar Financial Services Commission. For more information on the Bullish exchange, please visit bullish.com and follow LinkedIn and X.
Forward-Looking Statements
This press release may include “forward-looking statements” relating to future events or the Bullish Group’s future financial or operating performance, business strategy, and potential market opportunity. Such forward-looking statements are based upon estimates and assumptions that, while considered reasonable by the Bullish Group, are inherently uncertain and are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. You should not place undue reliance on any such forward-looking statements, which speak only as of the date they are made, and the Bullish Group undertakes no duty to update these forward-looking statements.
View original content:https://www.prnewswire.co.uk/news-releases/bullish-partners-with-the-gibraltar-government-and-gfsc-to-pioneer-worlds-first-crypto-clearing-regulation-302453487.html
Blockchain
Blocks & Headlines: Today in Blockchain – May 12, 2025 | Rootstock, Zimbabwe Carbon Registry, Fastex, 21Shares, The Blockchain Group
Welcome to Blocks & Headlines, your daily op-ed style deep dive into the most pivotal blockchain and crypto stories shaping today’s market. In this edition—May 12, 2025—we cover:
-
Bitcoin DeFi Security Strengthens as Rootstock garners 81% of Bitcoin’s hashrate
-
Zimbabwe’s Blockchain Carbon Credit Registry aims to restore investor trust
-
Token2049 Dubai Highlights spotlight Fastex’s Web3 innovations
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21Shares’ New ETP for Cronos (CRO) bridges traditional finance and DeFi
-
The Blockchain Group’s €9.9 M Capital Raise fuels its Bitcoin treasury strategy
Below, each story is summarized with key takeaways and opinion-driven context.
Introduction
Today’s blockchain landscape is defined by two contrasting forces: institutional maturation—as legacy players and governments adopt tokenized assets and infrastructure—and startup-driven innovation—where Web3 pioneers push boundaries in DeFi, NFTs, and on-chain governance. Major trends include:
-
Security & Scalability: Layer-2 solutions and cross-chain bridges are gaining traction to secure and scale Bitcoin and Ethereum ecosystems.
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Transparency & Trust: From carbon credits to capital markets, blockchain is repeatedly chosen to enhance auditability and investor confidence.
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Mainstream Access: Crypto ETPs and regulated token offerings are lowering barriers for retail and institutional investors.
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Treasury Management: Public companies are increasingly using Bitcoin and token holdings as strategic assets to hedge against macro volatility.
Let’s unpack today’s five developments and their broader implications.
1. Bitcoin DeFi Security Strengthens with Rootstock’s Hashrate Share
What happened: A new Messari report finds that Rootstock (RSK), Bitcoin’s oldest layer-2 smart-contract platform, now commands 81% of Bitcoin’s total hashrate, up from 56% before major mining pools Foundry and SpiderPool onboarded in February. Transactions on Rootstock are 95% cheaper than on-chain Bitcoin and 55% cheaper than Ethereum, positioning RSK for sustained DeFi growth in 2025.
Source: CoinDesk
Analysis & commentary:
Rootstock’s dominant hashrate share underscores two key shifts:
-
Security by Convergence: By leveraging Bitcoin’s massive mining network, RSK mitigates the common 51% risk faced by smaller chains.
-
Cost-Efficiency for DeFi: Lower fees make RSK an attractive alternative to Ethereum for yield protocols, lending markets, and decentralized exchanges.
However, challenges remain. Smart-contract developers must integrate robust cross-chain bridges—Rootstock’s partnership with LayerZero is a start—to attract liquidity. Moreover, regulatory scrutiny of DeFi is rising; RSK’s governance will need transparent on-chain dispute resolution and compliance tooling to win institutional adoption.
2. Zimbabwe’s Blockchain Carbon Credit Registry to Revive Investor Confidence
What happened: In Harare on May 9, the Zimbabwean government launched the world’s first blockchain-enabled carbon credit registry, developed by Dubai’s A6 Labs. The immutable ledger will record issuance, trading, and retirement of credits, addressing the fallout from 2023’s abrupt project cancellations and a 50% revenue levy that spooked developers. The new Zimbabwe Carbon Markets Authority (ZCMA) will oversee licensing via the zicma.org.zw portal.
Source: Bloomberg
Analysis & commentary:
Zimbabwe’s registry is an instructive case study in how blockchain can restore transparency and rebuild market trust:
-
Immutable Audits: Every credit’s provenance is verifiable on-chain, deterring double-counting and fraud.
-
Regulatory Framework: A dedicated authority streamlines approvals, balancing market access with environmental integrity.
-
Investor Reassurance: By codifying rules in smart contracts, Zimbabwe signals that future policy shifts will be governed by code, not sudden ministerial edict.
Nonetheless, blockchain is not a panacea. Effective enforcement still depends on reliable on-the-ground measurement and reporting. The real test will be whether smaller African producers—Kenya, Zambia—adopt interoperable registries, creating a pan-continental carbon marketplace.
3. Web3 Innovation Takes Center Stage at Token2049 Dubai
What happened: Between April 30 and May 1, Token2049 Dubai convened industry leaders in the Emirates. Fastex, a platinum sponsor, showcased its Bahamut blockchain (PoSA consensus), the YoWallet custodial solution, and a wave of new apps—YoHealth, YoPhone/YoSIM, YoBlog—all designed to expand Web3 use cases beyond finance. Fastex also co-hosted regulatory forums with Solidus Labs and launched the Bahamut Grants program to seed developer innovation.
Source: Cointelegraph
Analysis & commentary:
Token2049’s Dubai edition highlights an ecosystem maturation where:
-
Compliance & Growth Coexist: Legal breakfasts signaled that self-regulation and layered oversight can lower entry barriers without stifling ingenuity.
-
Beyond Finance: By unveiling telecom and health apps, Fastex challenges the notion that blockchain is niche—real-world use cases can drive mainstream adoption.
-
Brand Ambassadors: Football legend Patrice Evra’s presence at YoHealth’s booth illustrates how cultural icons can amplify blockchain’s reach.
Moving forward, projects must demonstrate measurable end-user utility and scalable infrastructure to avoid the “pilot-only” trap. Dubai’s supportive regulatory sandbox remains an ideal proving ground.
4. 21Shares Launches ETP for Cronos (CRO) – Bridging TradFi and DeFi
What happened: Swiss issuer 21Shares listed a new ETP (CRON) on May 12, offering direct exposure to CRO, the native token of Cronos—a Layer 1 chain built for DeFi, NFTs, and cross-chain interoperability with Ethereum and Cosmos. Investors can now trade CRO through regular brokerages without managing private keys or wallets.
Source: The Paypers
Analysis & commentary:
Tokenizing blockchain assets into regulated ETPs remains one of the most powerful drivers of institutional capital inflows:
-
Familiar Interfaces: By packaging CRO as a ticker, 21Shares lowers the learning curve for asset managers and pension funds.
-
Regulatory Alignment: ETPs fall under securities law, offering clear governance compared to unregulated spot tokens.
-
Ecosystem Growth: Cronos stands to benefit from increased liquidity and brand recognition, which in turn fuels DeFi activity on its network.
ETPs also invite scrutiny: fees, redemption mechanics, and underlying custodial risks must be transparent to preserve investor trust. As competition heats up—with products for BTC, ETH, SOL, and more—issuers will vie on pricing, ease of access, and institutional credibility.
5. The Blockchain Group’s €9.9 M Capital Raise Advances Bitcoin Treasury Strategy
What happened: Europe’s first Bitcoin Treasury Company, The Blockchain Group (ALTBG), completed a €9.888 million capital increase at €1.0932 per share on May 7, 2025. Proceeds will bolster its strategy to accumulate Bitcoin per fully diluted share while expanding consulting and AI-driven blockchain services.
Source: ActusNews via MarketScreener
Analysis & commentary:
The Blockchain Group’s financing round underscores a new corporate paradigm where holding BTC is core to the business model:
-
Shareholder Alignment: By tethering equity value to Bitcoin accumulation, management and investors share upside in crypto markets.
-
Operational Synergies: Subsidiaries in data intelligence and decentralized consulting can monetize both service fees and on-balance-sheet Bitcoin appreciation.
-
Regulatory Compliance: As a publicly listed entity on Euronext Growth Paris, ALTBG navigates EU financial rules, offering a transparent vehicle for crypto exposure.
Yet this approach carries volatility risk: sudden BTC price swings can compress earnings per share and spur shareholder activism. Mitigation strategies—such as hedged derivatives and staggered BTC purchases—will be critical to sustain growth without alarming investors.
Conclusion
Today’s highlights reveal a blockchain industry at once foundational and frontier:
-
Security & Scale: Rootstock’s hashrate gains fortify Bitcoin DeFi’s underpinnings.
-
Transparent Markets: Zimbabwe’s carbon registry sets a template for blockchain-backed commodity markets.
-
Web3 Diversification: Token2049 Dubai shows that true mass adoption demands real-world applications in health, telecom, and beyond.
-
Institutional Access: ETPs like CRON democratize token ownership for mainstream investors.
-
On-Balance-Sheet Crypto: The Blockchain Group exemplifies the rising class of publicly traded crypto-native firms.
As blockchain extends into supply chains, tokenized securities, and identity, the winners will be those who blend innovative protocol design with pragmatic regulatory alignment. Keep tuning into Blocks & Headlines for tomorrow’s top stories.
The post Blocks & Headlines: Today in Blockchain – May 12, 2025 | Rootstock, Zimbabwe Carbon Registry, Fastex, 21Shares, The Blockchain Group appeared first on News, Events, Advertising Options.
Once live, the Input | Output (IO) led integration will bring full Cardano support to Brave Wallet, including Cardano native assets, as well as send, receive, swap, and signing capabilities- all natively embedded within Brave’s best-in-class browser wallet. This establishes Brave as a key partner to the Cardano community in the age of Voltaire.
SAN FRANCISCO and LONDON, May 12, 2025 /PRNewswire/ — Input | Output (IO), the preeminent Web3 blockchain infrastructure and engineering firm, today announced a strategic partnership with Brave Software, the creator of the leading privacy-first browser and integrated multi-chain Brave Wallet. Together, they will integrate Cardano into the Brave Wallet, enabling Cardano blockchain access and token management from within the Brave wallet.
“Our partnership with IO reflects Brave’s commitment to building a Web3 that maximizes interoperation for user choice, while giving them better tools to engage with decentralized ecosystems,” said Brendan Eich, CEO and co-founder of Brave and the Basic Attention Token (BAT). “Integrating Cardano into Brave Wallet not only expands multi-chain access, but also enhances security, governance participation, and the overall user experience.”
Through this integration, Brave users and the broader Cardano community will gain direct access to Cardano’s blockchain for activities such as governance participation and native asset management, all within the privacy-focused Brave Wallet. Additionally, Brave Wallet will support the execution of swaps with Cardano native tokens and other on-chain transactions. This major milestone enhances Brave’s multi-chain capabilities, adding to its existing support for networks like Ethereum and Solana. Cardano users will now be able to manage native assets like NIGHT, engage in governance, and seamlessly swap tokens—securely and privately—through Brave’s in-browser wallet.
“This collaboration with Brave is a natural fit,” said Charles Hoskinson, CEO of IO. “We share a vision for a more secure, accessible, and user-respecting Web3. By bringing Cardano into Brave Wallet, we are not only expanding functionality for Cardano users in the age of on-chain governance, but also advancing a new standard for how blockchain networks should empower individuals—protecting privacy while enabling active, on-chain participation.”
The partnership also sets the stage for future innovation around engagement with Cardano’s governance and Midnight, a blockchain developed by Shielded Technologies, an Input | Output spinout focused on confidential smart contracts and data protection.
Media Contacts:
Georgia Hanias
Input | Output (IO)
[email protected]
Catherine Corre
Brave Software
[email protected]
About Input | Output (IO)
Input |Output (IO) is a world-leading blockchain infrastructure and research engineering firm dedicated to building a sustainable Web3 ecosystem. IO is committed to advancing the next generation of blockchain innovation, focusing on scalability, security, and real-world adoption through pioneering research and cutting-edge engineering.
About Brave Wallet and Brave
Brave Wallet is the secure, multi-chain crypto wallet built directly into the Brave privacy browser—no extensions required. With Brave Wallet, users can manage tokens and NFTs; connect to DApps and onramp to Web3; and explore decentralized finance, social media, gaming, and more. Brave Wallet users can connect other “cold” wallets like Ledger & Trezor. They can buy, store, send, and connect to DApps on Solana, Ethereum and EVM chains, Zcash, and Filecoin.
Brave Wallet is available on desktop, Android, and iOS, and is free to use. To get started on desktop, Brave browser users can click the wallet icon near the address bar. On mobile, users can tap “⋮” (Android) or “…” (iOS), then tap the wallet icon.
Brave is a driving force leading the way for Web3 adoption, directly supporting Web3 into the broader Web through its privacy browser, independent search engine, and browser-native, multi-chain crypto wallet. Brave currently has over 85 million monthly active users. Learn more at brave.com.
Photo – https://mma.prnewswire.com/media/2683708/Charles_Hoskinson_Profile.jpg
Logo – https://mma.prnewswire.com/media/2683709/IO_Logo.jpg
View original content:https://www.prnewswire.co.uk/news-releases/input–output-partners-with-brave-to-integrate-cardano-into-brave-wallet-302451409.html
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