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
Ethereum ETFs Aren’t Blockchain But Is A Revolutionary Tech: Top 6 Amazing Reasons To Invest In Them
The financial landscape is rapidly evolving, with the integration of blockchain technology and cryptocurrencies becoming more prominent. Among these, Ethereum ETFs (Exchange-Traded Funds) have emerged as a significant investment vehicle, offering exposure to the Ethereum blockchain’s native cryptocurrency, Ether (ETH), without requiring direct ownership. However, it’s crucial to understand that Ethereum ETFs are distinct from the blockchain itself and serve different purposes in the investment world.
Understanding Ethereum and ETFs
Ethereum: A decentralized platform that enables the creation and execution of smart contracts and decentralized applications (dApps). It operates using its cryptocurrency, Ether (ETH), which fuels the network.
ETF (Exchange-Traded Fund): A type of investment fund that holds a collection of assets and is traded on stock exchanges. ETFs can include various asset classes, such as stocks, commodities, or bonds.
Ethereum ETFs: The Intersection of Traditional Finance and Cryptocurrency
An Ethereum ETF provides a way for investors to gain exposure to the price movements of Ether without directly purchasing the cryptocurrency. This is achieved through an ETF structure, where the fund holds assets linked to the value of Ether, and investors can buy shares of the ETF on traditional stock exchanges.
Key Features of Ethereum ETFs:
- Indirect Exposure: Investors gain exposure to Ether’s price changes without needing to manage or store the cryptocurrency themselves.
- Regulatory Compliance: Unlike the relatively unregulated cryptocurrency market, ETFs operate under the oversight of financial regulators, offering a layer of investor protection.
- Accessibility: Ethereum ETFs are available through traditional brokerage platforms, making them accessible to a broader range of investors.
Why Invest in an Ethereum ETF?
- Diversification: Including an Ethereum ETF in a portfolio can provide exposure to the cryptocurrency market, potentially enhancing diversification beyond traditional assets.
- Convenience and Familiarity: ETFs are a familiar investment product, simplifying the process of investing in cryptocurrencies.
- Professional Management: ETF managers handle the investment decisions, including the buying and selling of assets, which can be advantageous for those less familiar with the cryptocurrency space.
- Regulatory Oversight: ETFs are subject to regulatory scrutiny, potentially offering more safety and transparency compared to direct cryptocurrency investments.
- Potential for Growth: As the cryptocurrency market grows, ETFs linked to assets like Ether may benefit from rising prices.
Key Differences Between Ethereum and Ethereum ETFs
While both are related to the Ethereum blockchain, Ethereum itself and Ethereum ETFs represent different forms of investment:
- Ethereum (ETH):
- Direct ownership of the cryptocurrency.
- Full exposure to Ethereum’s features, including staking and network participation.
- Traded on cryptocurrency exchanges.
- Highly volatile and largely unregulated.
- Ethereum ETF:
- Indirect exposure through shares representing Ether’s value.
- Traded on traditional stock exchanges under regulatory oversight.
- Offers a more stable and familiar investment structure.
- Typically lower volatility compared to direct cryptocurrency ownership.
Future Considerations for Ethereum ETFs
The approval and launch of Ethereum ETFs mark a significant milestone in bringing cryptocurrencies closer to mainstream finance. They offer a convenient and regulated means for investors to gain exposure to the growing digital assets market. However, they also come with limitations, such as not allowing direct participation in the Ethereum ecosystem’s innovations, like dApps and smart contracts.
As the market evolves, we may see more sophisticated financial products that better capture the full potential of the Ethereum ecosystem. For now, Ethereum ETFs provide a balanced option for those interested in cryptocurrency exposure within the framework of traditional finance.
In conclusion, while Ethereum ETFs offer a gateway into the world of digital assets, they should be viewed as complementary to, rather than a replacement for, direct investment in the underlying blockchain technologies. Investors should carefully consider their investment goals, risk tolerance, and the unique attributes of both Ethereum and Ethereum ETFs when making investment decisions.
Source: blockchainmagazine.net
The post Ethereum ETFs Aren’t Blockchain But Is A Revolutionary Tech: Top 6 Amazing Reasons To Invest In Them appeared first on HIPTHER Alerts.
Nexo, a leading institution in the digital assets industry, has reinforced its commitment to data security by renewing its SOC 2 Type 2 audit and attaining a new SOC 3 Type 2 assessment without any exceptions. This rigorous audit process, conducted by A-LIGN, a respected independent auditor specializing in security compliance, confirms Nexo’s adherence to stringent Trust Service Criteria for Security and Confidentiality.
Key Achievements and Certifications
- SOC 2 and SOC 3 Compliance:
- SOC 2 Type 2: This audit evaluates and reports on the effectiveness of an organization’s controls over data security, particularly focusing on the confidentiality, integrity, and availability of systems and data.
- SOC 3 Type 2: This public-facing report provides a summary of SOC 2 findings, offering assurance to customers and stakeholders about the robustness of Nexo’s data security practices.
- Additional Trust Service Criteria:
- Nexo expanded the scope of these audits to include Confidentiality, showcasing a deep commitment to protecting user data.
- Security Certifications:
- The company also adheres to the CCSS Level 3 Cryptocurrency Security Standard, and holds ISO 27001, ISO 27017, and ISO 27018 certifications, awarded by RINA. These certifications are benchmarks for security management and data privacy.
- CSA STAR Level 1 Certification:
- This certification demonstrates Nexo’s adherence to best practices in cloud security, further solidifying its position as a trusted partner in the digital assets sector.
Impact on Customers and Industry Standards
Nexo’s rigorous approach to data protection and compliance sets a high standard in the digital assets industry. By achieving these certifications, Nexo provides its over 7 million users across more than 200 jurisdictions with confidence in the security of their data. These achievements not only emphasize the company’s dedication to maintaining top-tier security standards but also highlight its proactive stance in fostering trust and transparency in digital asset management.
Nexo’s Broader Mission
As a premier institution for digital assets, Nexo offers a comprehensive suite of services, including advanced trading solutions, liquidity aggregation, and tax-efficient credit lines backed by digital assets. Since its inception, the company has processed over $130 billion, showcasing its significant impact and reliability in the global market.
In summary, Nexo’s successful completion of SOC 2 and SOC 3 audits, along with its comprehensive suite of certifications, underscores its commitment to the highest standards of data security and operational integrity. This dedication positions Nexo as a leader in the digital assets space, offering unparalleled security and peace of mind to its users.
Source: blockchainreporter.net
The post Nexo Reaffirms Commitment to Data Protection with SOC 3 and SOC 2 Compliance appeared first on HIPTHER Alerts.
Republican Senator Roger Marshall has withdrawn his support for the Digital Asset Anti-Money Laundering Act of 2023, a controversial bill he initially co-sponsored with Senator Elizabeth Warren and others. This bill, reintroduced in the Senate on July 27, 2023, aimed to bring the cryptocurrency industry into alignment with existing anti-money laundering (AML) and counter-terrorism financing (CTF) laws.
Key Provisions of the Bill
The legislation proposed stringent regulations on digital asset providers, including unhosted wallet providers, miners, and validators, by classifying them as financial institutions under the Bank Secrecy Act (BSA). It mandated these entities to adhere to BSA compliance requirements, which include extensive reporting and monitoring responsibilities. Additionally, the bill called for the Financial Crimes Enforcement Network (FinCEN) to establish regulations for reporting significant foreign digital asset holdings and to create compliance measures to address risks associated with anonymity-enhancing technologies.
Senator Marshall’s Shift
Marshall’s withdrawal from the bill comes as a surprise, particularly given his earlier criticisms of cryptocurrencies, which he has described as a “threat to national security.” This includes concerns over stablecoins like Tether potentially facilitating illegal activities and circumventing U.S. sanctions. Despite his earlier stance, Marshall’s departure from the legislation suggests a reconsideration of the bill’s implications or an alignment with broader political and industry perspectives on cryptocurrency regulation. His office has not provided a comment on the reasons for his withdrawal.
Political and Industry Reactions
The bill had garnered significant bipartisan support, with 18 co-sponsors, reflecting a broader concern in Congress over regulating the rapidly growing cryptocurrency market. However, it has also faced criticism for potentially imposing impractical compliance burdens that could stifle innovation and push crypto activities offshore. Critics argue that the bill’s stringent requirements could inadvertently drive users toward unregulated platforms, thereby undermining its intent to enhance security and regulatory oversight.
Broader Context
The withdrawal comes at a time when cryptocurrency regulation is a highly contentious issue in U.S. politics. Former President Donald Trump has promised to relax crypto regulations if elected, contrasting with the current administration’s more stringent stance. Under President Joe Biden, the Securities and Exchange Commission (SEC) and other regulatory bodies, led by figures like Gary Gensler, have taken a more rigorous approach to regulating the sector, which has drawn criticism for being overly restrictive.
Senator Marshall’s decision to step back from the Digital Asset Anti-Money Laundering Act reflects the complex and evolving nature of cryptocurrency regulation in the U.S. While the bill seeks to bring greater oversight and security to the crypto industry, it also raises concerns about regulatory overreach and its potential negative impact on innovation and privacy. As the debate continues, the U.S. legislative and regulatory landscape for cryptocurrencies remains in flux, balancing the need for security with the desire to foster technological innovation.
Source: decrypt.co
The post Marshall Becomes First US Senator to Walk from Controversial Crypto Bill He Co-Sponsored appeared first on HIPTHER Alerts.
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