Ether Capital Corporation

Ether Capital said revenue increased nearly 150% in 2022, while operating expenses were just slightly above revenue. Staking generated $2.5 million in the year at a 5.13% yield on staked ETH, and the affiliate management-fee revenue contribution was about $1.2 million, down from $1.4 million. The company said digital assets declined materially in value from $210 million to $73 million at year-end, with shareholders’ equity around $76 million, cash in the bank, and no debt. Full-year net income per share was a loss of $1.73 versus a gain of $0.05 in the prior year, and net loss after other comprehensive income was $128 million, driven by mark-to-market changes in digital assets. Forward-looking, management said year-to-date Q1 staking yield was about 5.6%, and it wants to move toward staking 90%+ of treasury ETH once liquidity conditions allow.

Brian Mosoff’s main message was that Ether Capital wants to evolve from being seen as a passive ETH holder into an operating business built around Ethereum infrastructure. He reiterated a three-part strategy: accumulate ETH, make that ETH productive through staking and related yield strategies, and use some of that yield to build new products and services. His tone was constructive and candid, especially on the persistent discount to NAV, which he said is frustrating but likely won’t close until the company proves out more operating revenue.

Ian McPherson highlighted the financial shift from a mostly passive treasury model to an operating model: revenue was up nearly 150%, operating expenses were slightly above revenue, and the company hired from three people to 10. He cited $2.5 million of staking revenue at a 5.13% yield, about $1.2 million from the Purpose affiliate fee stream, and $3.9 million of operating expenses, including about $800,000 of non-cash share-based compensation. He also emphasized the balance sheet remained clean with no debt and cash in the bank, while the year’s reported losses were heavily affected by Ether’s price decline and the related accounting marks.

Analysts and shareholders focused on the discount to NAV, regulatory pressure on staking, and whether Ether Capital should buy back shares or pay a dividend. Management said the discount is frustrating and has widened, but closing it will likely require building operating businesses rather than only holding and staking ETH; they said an NCIB is possible but not committed, and there are no plans for a dividend. On regulation, Brian Mosoff said the U.S. environment is more challenging for exchanges and retail-facing staking, but Ether Capital does not face retail directly and does not see the same immediate issue in Canada. He also said the new dashboard product is in beta with fewer than 100 testers, has not been priced yet, and is being shaped around institutional staking/reporting needs.