Ether Capital Announces Streamlined Strategic Direction and Focus on Profitability:

The Company intends to stake close to all of its Ether, significantly reduce operating cost structure by at least 45%, and will institute a normal-course-issuer-bid program

The Company also announces agreement with Purpose Investments to launch new products and upcoming changes to management and board of directors

TORONTO--(BUSINESS WIRE)--$ETHC--Ether Capital Corporation (“Ether Capital” or “the Company”) (NEO: ETHC) is announcing a new strategic plan reorienting the Company on a path towards profitability and is focused on delivering a strong net yield above core Ether asset exposure.

The Company’s strategic plan going forward is based upon three core pillars:

1. Increasing staking exposure to a target of more than 95% of its Ether balance and internalizing operations with custom built intellectual property (IP).
   
   
2. A targeted reduction in annual cash operating expenses of over $2 million, such that cash operating expenses for 2024 will be reduced by more than 45% over projected operating expenses for the current fiscal year. Management is implementing restructuring immediately and the full effects of the new operating cost structure are expected to be in place by the first quarter of fiscal year 2024.
   
   
3. Implementing a normal course issuer bid program (NCIB). The Company has received regulatory approval to initiate an NCIB program with the intention to purchase up to 2,566,662 of its common shares, representing 7.5% of its total issued and outstanding common shares.

“We are committing today to position Ether Capital on a course that will result in value accretion for our shareholders. Our strategy will continue to position the Company as the only access point in the capital markets offering Ether exposure plus the accretive value from staking activities. The material cost reductions being implemented are expected to result in higher profitability for shareholders,” said Brian Mosoff, Chief Executive Officer of Ether Capital. “Our new operating plan is designed to ensure that we meet our number one goal to maximize the total return through participating in the core value opportunity of owning Ether and staking our treasury asset at this time.” Mr. Mosoff stated.

The Company intends to move to a leaner operating model while internalizing its staking activities and bolstering control over its business operations. “We are taking action to consolidate operations and drive efficiencies targeting (pre-tax) annualized savings of more than 45% over our projected cash operating expenses for the current fiscal year,” said Jillian Friedman, Chief Operating Officer. Management expects some restructuring costs in Q2 and Q3 as the Company transitions to internalized staking and a leaner operating model and aims to achieve the targeted cost efficiencies by Q1 2024. “Over the rest of the fiscal year we intend to internalize staking operations to be better positioned to control costs, further develop in-house IP, and be at the forefront of new yield opportunities as they emerge.” said Ms. Friedman.

Over the next several months, Ether Capital intends to optimize the amount of its treasury exposure to staking activity. Currently approximately 78% of the treasury is staked and the Company plans to increase this amount to approximately 95% by the end of the year. The Company plans to achieve this by utilizing its own proprietary infrastructure and monitoring tools that it has developed over the past 18 months. Staking generates yield denominated in Ether and yield fluctuates on a daily basis. The price of Ether is volatile and as such, the Company’s future revenue from staking has the potential of being volatile as well. Note that any material reduction in the future staking revenue will have an impact on the net cash flow generated after Company expenses.

As part of its plan to implement changes that are accretive to shareholders, the Company has obtained approval from the NEO Exchange to implement a Normal Course Issuer Bid (“NCIB”) to purchase up to 2,566,662 of its common shares, representing 7.5% of its total issued and outstanding common shares. “We intend to be active with the NCIB to strategically buy shares as they trade at a discount to intrinsic value with an expectation to provide a strong total value return to our long-term shareholders.” said Mr. Mosoff.

The Company is also announcing the impending departure of Chief Financial Officer, Ian McPherson, effective August 31st, 2023. “Ian has been a great asset to the Company and I would like to thank him for his dedication and contributions. We wish him the best in his future endeavors. We are pleased that Ian has agreed to work with the team during the next few months to put in place new finance leadership.” said Brian Mosoff. The Company will provide further details on finance leadership when available.

In addition, John Ruffolo’s term as an independent director has ended and he will not be standing for re-election at the Company’s Annual General Meeting of Shareholders on June 16th. John's contributions were instrumental in the establishment of the Company in 2018. As one of Canada's distinguished finance executives, his insights and guidance have been invaluable. “We extend our heartfelt gratitude to John for being an integral part of our journey,” said Som Seif, Executive Chair of Board of Directors of the Company. As a result of John’s departure and as part of the Company’s ongoing efforts to adjust to a more lean and efficient structure, the board of directors will be reduced in size from five independent directors to four.

The Company has also reached an agreement with Purpose Investments to work together to develop and co-launch new quality digital asset investment products, leveraging Ether Capital’s intellectual property and its unique expertise in digital assets. Ether Capital’s contribution will result in higher financial participation than previously launched products (the Company will continue to receive consulting fees in respect of Purpose’s existing digital asset products, albeit at materially reduced rates of a 70-75% reduction). The parties intend to execute a formal contract over the coming month.

Forward-Looking Information

This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. The Company cautions the reader not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. Generally, but not always, forward-looking information can be identified by the use of forward-looking terminology such as “targeting”, “projected”, “plans,” “expects” or “does not expect,” “is expected,” “budget,” “scheduled,” “estimates,” “forecasts,” “intends,” “on pace,” “anticipates,” or “does not anticipate,” “believes,” and similar expressions or state that certain actions, events or results “may,” “could,” “would,” “should,” “might,” or “will” be taken, occur or be achieved.

Forward-looking statements are based on information available to management at the time they are made, management’s current plans, estimates, assumptions, judgments and expectations, including management’s expectations about its ability to implement anticipated cost reductions as a result of the anticipated reduction of workforce and related expenses, anticipated reduction in spending related to marketing, business development and professional services, and changes made to internalize staking costs and related implementation costs, and its ability to implement such cost reductions within its expected timeframe. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, shareholder returns, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to the overall macroeconomic environment and specifically the digital asset market, including volatility in the price of Ether; potential fluctuations and declines in the yield generated from staking Ether; potential fluctuations in consulting fee revenue which is linked to the future price of Bitcoin and Ether; differences between the projected and actual costs of staking Ether; the ability to achieve anticipated cost savings due to unforeseen events; the ability to achieve desired outcomes in executing the NCIB program; as well as the risk factors discussed in the Company’s Annual Information Form dated March 23, 2023, the Risk Factors section in its most recently filed Management Discussion and Analysis and its other filings available online at www.sedar.com. Although the forward-looking information contained in this press release is based on assumptions that the Company believes to be reasonable at the date such statements are made, there can be no assurance that the forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking information. In addition, the Company cautions the reader that information provided in this press release is provided to give context to the nature of some of the Company’s future plans and may not be appropriate for other purposes. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update or revise any forward-looking information, except in accordance with applicable securities laws.

About Ether Capital Corporation

Ether Capital (NEO: ETHC) is a public company that invests its balance sheet in Ethereum’s native utility token “Ether” as a core strategic asset while generating yield through staking the majority of its Ether balance with the primary goal of being a net-accumulator of Ether. It develops unique intellectual property in its pursuit to maximize profits and optimize total return from staking. Ether Capital’s management team and Board of Directors is composed of crypto natives, leading venture capitalists and traditional finance experts, which uniquely positions the company to identify and capitalize on opportunities in the digital asset ecosystem. For more information, visit http://ethcap.co.

The content of this document is for informational purposes only and is not being provided in the context of an offering of any securities described herein, nor is it a recommendation or solicitation to buy, hold or sell any security. The information is not investment advice, nor is it tailored to the needs or circumstances of any investor. Information contained in this document is not, and under no circumstances is it to be construed as, an offering memorandum, prospectus, advertisement, or public offering of securities. No securities commission or similar regulatory authority has reviewed this document and any representation to the contrary is an offence. Information in this press release is current only as of the date provided and Ether Capital is under no obligation to update this information, other than in accordance with applicable securities laws.

Brian Mosoff
Chief Executive Officer
brian@ethcap.co

Jillian Friedman
Chief Operating Officer
jillian@ethcap.co

Ashley Stanhope
Senior Associate, KPW Communications
ashley@kpwcomms.com