Metrospaces August 2021 Shareholder Letter
New York, NY - (NewMediaWire) - August 19, 2021 - Metrospaces Inc. (MSPC):
LETTER TO OUR SHAREHOLDERS
What began as an already surprisingly positive year for the company’s economic situation continues to surprise on the upside. The company has not only has successfully initiated its business transformation from a traditional real estate developer into a prop-tech company, but in only 8 months is now running on an EBITDA-positive. Additionally, it has reduced total liabilities by 65% in the fist 6 months of 2021, with strong expectations to have a positive balance sheet and shareholder equity by end of 3rd quarter of this year. However, the most exciting part of the company’s transformation is that we are clearly in a position to be a leader in the prop-tech industry, with the tokenization of real estate assets being our main driver. We see a clear opportunity to be a transformational and innovative force in this industry.
Partnership with Shokworks: Shokworks is a world-class blockchain and crypto venture builder, with industry expertise matched by very, very few. They have been involved in 5-6 blockchain projects with renowned success. As a reference, Shokworks’ notable clients include industry leaders such as Cryptobucks, the world’s first payment platform to accept credit cards, debit cards and crypto payments; Kinesis Money, a 1-to-1 fully allocated gold and silver bullion-backed monetary system that includes a yield engine, money transfer, exchange and physical and digital debit card that has generated over $10 billion in transactions since inception and has over 70,000 users, currently; and Compass Mining, a Bitcoin-first, decentralized hashrate growth and strengthening the network security system by helping more people learn, explore and mine bitcoin. This track record gives us the confidence that we have the IT partner that could help us become the most successful player in the real estate tokenization industry.
Metrohouse - Co-Living Platform: We began the development of the co-living platform at the beginning of May of this year. The development phase has been happening within the expected time frame, and we believe the core platform will be done by September 15, as originally announced. However, we are now looking at several JV partnerships with multi-family residential building owners to incorporate as inventory into the platform, that were simply not there, or probably even imaginable only 1-2 months ago. Therefore, we will push the launch date of the platform until October 30th to give us time to incorporate these new JVs with potentially new buildings into the platform. The delay, not significant in the scope of our business plan, will allow for a bigger and more robust launch since this new inventory will basically leapfrog us many months ahead of what we first forecasted. In short, a delay in the launch of the platform will likely give us several months of revenue growth ahead of what we first envisioned the launch of Metrohouse to produce. We will refrain from giving a forecast on the economics of the platform until such time we are completely able to tie down these partnerships down.
Metrocrowd – Tokenization platform: The company is full-steam ahead with the development of its own tokenization platform, which will not only cater to 3rd party real estate owners and developers but also allow the company to be a principal. The platform will be launched in several stages, with October 30th being the date for the launch of the first stage, with continuous rollouts until mid-December when we expect to have the final version active. The platform will be offered to world-class real estate developers and owners as a 3rd party service. Additionally, we will seek to be principals to assets that we will later tokenize on the platform. It is not our intention to be a hard-asset company, but we will certainly look to take advantage of any exceptional opportunity we find in the market. We will use a variation of strategies to fund these acquisitions, including partnering with private equity investors and other off-balance sheet structures. We believe that the leader in this space will not only be the one that develops the best technology, but the one that is able to bring the most profitable and unique real estate assets to the platform. With a strong background in real estate ownership and development, our management team has extraordinary access to deal flow to real estate assets, both with 3rd party owners and assets for acquisition. This is the reason we believe the acquisition of the Brazos Atrium building in Houston is a fundamental acquisition. On the short term, it will give the company enough NOI to be EBITDA-positive; however, on a mid-term basis, this asset will represent an amazing investment opportunity to anyone that acquires the token we will eventually sell based on this asset. Our plan will be to implement all sorts of proptech-based management solutions that will lower operating costs and thus increases NOI. The company acquired this asset at a 12% capitalization rate. On a levered basis, we expect this asset to generate an IRR of >30% for the company, and future token investors. This case study will help us shape our business plan and show the industry what our vision is and what we are capable of doing.
Other Acquisitions: The company sees an extraordinary opportunity to grow organically, however, M&A and real estate asset acquisition will also be a strong driver of our business plan. We will refrain from generating expectations on any additional acquisition opportunities as we prefer to announce finalized deals, then to talk about possibilities. The Brazos Atrium building is a case in point.
Investment in IQSTel, Inc.: Even though we are still strong believers and big shareholders of IQSTel, Inc. (OTC: IQST), we will look to divest from this investment slowly and completely so we can use our capital to continue to grow our current business. Although once the IQSTel investment was a big part of our business plan, we simply see better allocation opportunities for our capital.
Balance Sheet and Capital Structure: We understand shareholder concern regarding the issue of new shares to pay down debt. However, we can assure our shareholders that we are conducting a responsible plan to issue the lowest number of shares possible to completely pay down debt. We are of the full conviction that paying these loans with new share issue is the best allocation of our capital and that paying down this debt will be a huge near-term driver of our business valuation. We understand that this can cause short-term volatility in our valuation, but this is why we stress that Metrospaces shareholders should be mid-to-long term investors and should focus on our business plan, and not so much on our shares outstanding. We believe, that if not all, most of our outstanding debt will be paid down by 3rd quarter of this year. This, along with the continued growth of our assets, will give us a positive balance sheet by September 30th of this year, hopefully. On a hard-number basis, just this year, we have increased assets from $213,130 to $1,453,595 while lowering all liabilities from $14,810,640 to $5,430,996 from December 30th, 2020, to June 30th, 2021. This caused a decrease of our net shareholders’ liabilities from $14,597,510 to $4,007,401 during the same period. We will see this situation to continue to improve as we consolidate into our financial statements the acquisition of the Brazos Atrium building and continue to pay down debt.
Management Team: We recently strengthened our management team by incorporating Alejandro Laplana and Daniel Laplana from Shokworks, as CTO and SVP of Business Development, respectively, whose CV and past success simply speak for themselves. We are also looking to incorporate a CFO in the coming weeks. We believe these new team members will continue to help us leapfrog our business plan to become a leader in the co-living and real estate tokenization.
Communication to Shareholders: We recognize that our public statements have, on a few occasions, not been up to the highest standard and that we have sometimes mistakenly given information that was not completely accurate. We sincerely apologize for these mistakes, as integrity is one of our fundamental values. Again, we sincerely apologize and promise that by incorporating more people to our team, we will do a much better job at this. Thank you for your trust and understanding. We are also looking at better and more continued ways to communicate with our shareholders, which we will incorporate in the coming weeks.
Safe Harbor Statement: Statements in this news release may be "forward-looking statements". Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements are based on current expectations, estimates and projections about our business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may, and are likely to, differ materially from what is expressed or forecasted in forward-looking statements due to numerous factors. Any forward-looking statements speak only as of the date of this news release and Metrospaces Inc. undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this news release.
Source: Metrospaces, Inc.