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CST: 18/07/2019 17:14:33   

UnitedCorp Releases Q1 2019 Financial Results as well as Regulatory, Legal and Operational Highlights

62 Days ago

BlockchainDome Heat Station operations continue to contribute positive earnings

MIAMI, May 17, 2019 (GLOBE NEWSWIRE) -- via OTC PR WIRE -- On May 15, 2019, Miami-based United American Corp ("UnitedCorp" or the "Company") (OTC: UAMA) released the financial results of its first quarter ended March 31, 2019. It also provided corporate updates regarding regulatory, legal and operational matters.

UnitedCorp reported positive results for the first quarter of 2019 including revenues of US $1.4 million, consolidated net earnings of $388,414 and consolidated EBITDA of $639,125. Revenues accrued are exclusively from its Canadian subsidiary, which owns and operates its BlockchainDome Heat Stations and also provides technical and management consulting services.

These results represent the first complete quarter of BlockchainDome operations at its current installed capacity of 4 BlockchainDome Heat Stations.  In February 2019, the Company also purchased the property where the 4 BlockchainDomes are located.

2019 Q1 Highlights
(all figures in US dollars)

  • Revenue in the quarter of $1,423,485 was primarily generated through the BlockchainDome Heat Station for hosting, management and power and includes $276,628 of consulting revenue with an operating profit of $854,684(1), with dome operations contributing $578,077 to the operating profit
  • Consolidated net earnings for the quarter were $388,414
  • Consolidated EBITDA for the period was $639,125(2)
  • Increase in tangible assets to $3,887,763
  • 5,000 miners in service at (8.5 megawatts)

(1) Gross profit is a non-IFRS measure. Since the Company bills in advance for services and pays its main direct costs in arrears, gross profit as a percentage of revenue may be higher during the growth cycles. 

(2) EBITDA is a non-IFRS measure 

Financial Review

  3 months
ended
 Annual year
ended

 
(US$)
  Mar 31, 2019 D ec 31, 2018
Total Revenue $ 1,423,485 $ 1,703,259
Cost of Revenue   568,802   911,574
Gross Profit   854,684   791,685
General Expenses   215,559   451,843
Financial Expenses   42,130   37,363
Depreciation   58,963   52,786
Foreign Exchange   149,618   -
     
Net Income   388,414   249,693
EBITDA   639,125   339,842

While the Company will continue to develop its BlockchainDome Heat Station business in 2019 as a primary source of revenue, it will also continue to develop its business in other strategic areas.

Financial Statements

The Company's financial statements are available at www.otcmarkets.com under UnitedCorp's profile.

TNW Wireless Spectrum License Deemed Transfer Approval

On March 21, 2019, the Company announced the completion of the acquisition of TNW Wireless Inc. ("TNW Wireless"). The transaction was subject to regulatory approval of the deemed transfer of ownership to UnitedCorp by Industry Science and Economic Development Canada ("ISED") under the Framework Relating to Transfers, Divisions and Subordinate Licensing of Spectrum Licenses for Commercial Mobile Spectrum.  On April 26, 2019 the Company received written confirmation from ISED that the deemed transfer had been approved.

With all regulatory matters completed, the Company is pleased to announce that TNW Wireless is now a wholly-owned subsidiary of UnitedCorp.  Approval documentation can be viewed at:

http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf11505.html.

Canadian Radio-television and Telecommunications Commission ("CRTC") Notice of Consultation: Review of mobile wireless services

On July 3, 2017, TNW Wireless submitted a Part 1 Application to the CRTC which sought to compel Bell Mobility Inc. and Telus Communications Inc. to provide TNW Wireless with wholesale roaming services and to rule that TNW Wireless' iPCS Smartphone over IP technology was eligible for mandated wholesale roaming services. On February 28, 2019 the CRTC issued its Decision 2019-56 on the Application. In its decision the CRTC ruled that Bell and Telus were in fact required to provide TNW Wireless with wholesale roaming services, however it determined that iPCS did not fit the criteria for mandated wholesale roaming under the current regulatory framework

On the same day and immediately following the release of the TNW Wireless Decision, the CRTC issued a Notice of Consultation ("NOC") 2019-57 for the review of wireless services in Canada. Citing the TNW Wireless 2017 Part 1 Application and its related decision as part of the basis for the consultation, 2019-57 will examine the level of competition in Canada and review and revise the country's regulatory framework for wireless services.

The Company is encouraged both by the timing of the NOC and that the CRTC has already stated that an appropriate outcome for the proceeding would be to mandate that national wireless carriers provide national wholesale access to smaller carriers for what is referred to as MVNO (or Mobile Virtual Network Operator) service, which is part of the requirements to provide iPCS service in Canada.   

TNW was deemed to be an automatic participant in the NOC and as such it submitted its first intervention to the CRTC on May 15, 2019. The Company has also requested to appear in person before the CRTC at hearings to be held beginning January 13, 2020.

The TNW Wireless intervention can be obtained at http://www.unitedcorp.com/corporate/regulatory/

Decision on Power Rates for BlockchainDome Heat Station Operations

On June 14, 2018, Hydro-Québec, the government-owned supplier of electricity in the Province of Quebec, made an application to the Quebec Régie de l'énergie (the "Régie") to fix and potentially increase electricity tariffs and set conditions of service for operations related to cryptocurrency mining.  Although the Company does not receive power directly from Hydro-Québec, it does receive power from an independent electrical cooperative which in turn purchases power from Hydro-Québec.  Hydro-Québec argued that this was necessary due to the sudden and massive number of requests for power related to cryptocurrency it received over the previous year (in the order of several thousand megawatts) and that it could not meet this demand. UnitedCorp, through its BlockchainDome Heat Station operation in Quebec, was one of the intervenors at the hearings of the Régie on this matter.

On April 29, 2019, the Régie rejected Hydro-Québec's application to increase tariffed rates for cryptocurrency operations and grandfathered existing power contracts for operators. This means that the Company's contract for 12.3 megawatts of power will remain valid for the foreseeable future at its favorable rate and will allow the Company to expand operations up to this amount under the existing contract. 

The Régie also mandated a 300 megawatt block of power for cryptocurrency operations which meet certain economic benefit criteria in order to be eligible for access to the block.  The criteria includes a 10% environmental evaluation component for heat recovery, which the Company believes is a direct result of its intervention at the hearings as no other intervenor discussed environmental considerations. The Company believes this factor will be a competitive advantage when seeking additional power in the future.

With the current cryptocurrency prices on the rise, the Company has received more interest in its technology for BlockchainDome Heat Stations and Data Centers and is currently evaluating various options in these areas.

CPTAQ Matter

In April 2018, the Company's then landlord received a Notice of Infraction from the Commission de Protection du Territoire Agricole de Quebec ("CPTAQ"), the provincial body which oversees agricultural land in Quebec, related to its BlockchainDome Heat Campus #1. The Notice questioned whether the BlockchainDome Heat Station was an appropriate use of agricultural land, as based on their perception the BlockchainDome Heat Station was a non-agricultural commercial operation.  On June 27, 2018, the Company and its legal counsel addressed the complaint at a hearing of the CPTAQ and stated its position that the operation was fully compliant with all existing rules and regulations, as the operation's final output was for agricultural purposes. Furthermore, the BlockchainDome Heat Station is consistent with the province's sustainable development guidelines and policies of encouraging more local food production.

The matter was then transferred to an independent provincial administrative tribunal for further review. Subsequently on March 26, 2019, the Company, its Counsel and its agricultural experts addressed the Tribunal Administratif du Québec (the "Tribunal") at a hearing on this matter. The Tribunal is an independent provincial body which is intended to be a non-judicial arbitrator for matters regarding provincial boards. The Tribunal has no judicial or injunctive powers and decisions are appealable by companies and individuals to judicial courts up to and including the Québec Court of Appeal. 

On April 25, 2019 the Company received notification that the Tribunal had rejected the Company's position and supported the CPTAQ complaint.  The Company and its Counsel believe that the Tribunal erred both in fact and in law in rendering its decision and as such on May 15, 2019, the Company filed for permission to appeal the decision to the Quebec Court within the 30 days prescribed. The filing is available at:

 http://www.unitedcorp.com/wp-content/uploads/Demande-permission-appeler.pdf

The Company is also reviewing other available administrative options including an application to formally approve use of BlockchainDome Heat Stations on the site, as the Tribunal did not exclude this.  Further updates will be provided in the near future.

United America Corp versus Bitmainet al.

Further to the litigation announced on December 6, 2018 against Bitmain, Bitcoin.com, Roger Ver, Kraken Bitcoin Exchange and others, Alleging Hijacking of the Bitcoin Cash Network, the Company has been successful at serving additional defendants and has also received permission from the Court to extend the period required to serve other individual and corporate defendants located overseas.

iFramedPatent Infringement Litigation

The Company is currently moving to optimize the legal process related to various iFramed patent infringement suits.  It is currently expediting litigation against Snap Inc. in Canada as well as Facebook/Instagram.

TNW Networks

On June 30, 2017, the Company announced the intent to acquire TNW Networks Corp. ("TNW Networks"). The potential acquisition of TNW Networks' assets is deemed by Management to support the Company's development plan, including TNW Wireless and iFramed. The Company was aware that on November 18, 2016, two of TNW Networks' clients (the "Petitioners") filed a Notice of Intention to make a Proposal pursuant to the Bankruptcy and Insolvency Act. This led to proceedings under the Companies' Creditors Arrangement Act (the "Proceedings") on November 25, 2016. 

As a result of the Proceedings, certain of TNW client relationships and 3rd party assets, both of which TNW Networks and the Company believe were not assets of the Petitioners, were nevertheless claimed in the Proceedings by the CCAA Monitor. In two instances during the course of the Proceedings, the determination of ownership by the Monitor was appealed to the British Columbia Court of Appeal and in both instances the Court of Appeal ruled unanimously against the Monitor. On March 18, 2019, a portion of certain 3rd party assets were released by the Monitor and will be transferred to the Company. The exact list and value of such assets is currently being determined.

On April 23, 2019, the British Columbia Court of Appeal granted yet a third leave to appeal related to determination of ownership of the balance of assets in question. The date for the appeal to be heard is currently being scheduled.

About United American Corp

Established in 1992, United American Corp is a Florida-based development and management company focusing on telecommunications and information technologies. The company currently owns telecommunications assets and holds the rights to manage a portfolio of patents and proprietary technology in telecommunications, social media and Blockchain technology, and owns and operates the BlockchainDomes which are designed to provide heat for agricultural operations using computer equipment in naturally cooled data centers where efficiency and low-cost operations are a priority.

About TNW Wireless Inc.

TNW Wireless is a licensed wireless operator for wholesale and retail services in Canada and a wholly-owned subsidiary of United American Corp. The company currently holds 25MHz bandwidth tier-2 850 MHz licences and is a registered wireless carrier. It is licensed to provide communication services to the Northwest region of Canada and can provide global communication services through its proprietary iPCS Smartphone-over-IP technology.

About the BlockchainDome Heat Station

The UnitedCorp BlockchainDome Heat Station was designed to provide heat for agricultural operations using ASIC (application-specific integrated circuit chip) mining operations where efficiency and low-cost operations are a priority, as well as for more traditional data center operations. The BlockchainDomes, which utilize a proprietary passive cooling ground-coupled heat-exchanger technology, are particularly suited for situations where rapid cluster deployment is required as they can be erected and commissioned in a matter of weeks rather than up to a year using the traditional "Bricks and Mortar" approach. BlockchainDomes can be configured in a wide range of sizes to service any type of greenhouse operation.

How BlockchainDomes work can be seen at: https://www.youtube.com/watch?v=YDmhhaJKHLg

This news release contains forward-looking statements that are subject to various risks and uncertainties. The Company's actual results could differ materially from those anticipated in such forward-looking statements as a result of numerous factors that may be beyond the Company's control. Forward-looking statements are based on the expectations and opinions of the Company's management on the date the statements are made, and the Company assumes no obligation to update forward-looking statements should circumstances in management's expectations or opinions change.

Source:
United American Corp

Contact:
Jenna Trevor-Deutsch
Investor Relations
investorrelations@unitedcorp.com
604 398 5000 ext: 109

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/fb313230-5901-4ebc-9186-c4842a677b70 

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