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DMG Blockchain Solutions Reports Second Quarter Results Ending March 31, 2023

VANCOUVER, British Columbia, May 30, 2023 (GLOBE NEWSWIRE) -- DMG Blockchain Solutions Inc. (TSX-V: DMGI) (OTCQB US: DMGGF) (FRANKFURT: 6AX) (“DMG”), a vertically integrated blockchain and cryptocurrency technology company, today announces its second quarter ended March 31, 2023 unaudited financial results. All financial references are in Canadian Dollars unless specified otherwise.

Recent Highlights

  • Revenue of $7.6 million on 255.8 mined bitcoin, net loss of $3.8 million, $0.02 net loss per share
  • Realized first Petra-based revenue for placing ordinals during the quarter
  • Realized average hashrate of 0.89 EH/s
  • Purchased 350 Bitmain S19 Pro (35 PH/s), 350 Bitmain S19 XP (49 PH/s) and 850 Bitmain S19j Pro+ (104 PH/s) miners, totaling 1,550 units contributing 188 PH/s
  • Cash and digital currency balance up 98% from the prior quarter with $4.8 million in cash and $16.9 million in digital currency; $1 million of debt

Readers are encouraged to review the Company’s March 31, 2023 quarterly unaudited financial statements and management’s discussion and analysis thereof for a fulsome assessment of the Company’s performance and applicable risk factors, available at

Sheldon Bennett, DMG Blockchain Solutions’ Chief Executive Officer, commented, “DMG is poised to grow Terra Pool along with Petra-based carbon neutral ordinal inscriptions and bitcoin transactions. We are now focused on execution of our Blockseer software platform to more meaningfully contribute to DMG’s results. Additionally, the improved bitcoin market environment is allowing DMG to speed up its implementation of immersion cooling technology, which should enable greater mining capital efficiency to well position us ahead of the next Bitcoin block subsidy halvening expected to occur in less than a year.”

Steven Eliscu, Chief Operating Officer added, “While the Company continues to manage its spending prudently, with a focus on its software and immersion cooling initiatives, DMG is actively looking at how it can grow its hashrate beyond the announced 1 EH/s of installed and 0.2 EH/s of ordered capacity. Additionally, we believe we can expand our base of software, as the advent of ordinal inscriptions has opened up new possibilities for the Bitcoin blockchain. While our goal of monetizing bitcoin transactions is unchanged, Bitcoin is evolving to be much more than that – we aim to stay nimble to capture these new opportunities.”

Financial Highlights

Revenue for the second quarter ending March 31, 2023 was $7.6 million versus $11.9 million in the year-ago quarter, a decrease of 36%, driven primarily by a 41% year-over-year decline in the quarterly average bitcoin price, partially offset by a 31% increase in the amount of mined bitcoin to 255.8 from 195.9 in the prior-year period.

Operating and maintenance costs for the quarter ended March 31, 2023 were $4.6 million as compared to $3.2 million in the year-ago period. The majority of this increase was due to utility costs, which increased $1.2 million during the period. This increase was the result of an increase in digital currency mining activity from additional miners acquired during the year. The Company had 9,282 miners installed as at March 31, 2023, up from 6,378 installed as at March 31, 2022.

General and administrative expenses declined to $777 thousand in the quarter ending March 31, 2023 versus $972 thousand in the prior-year period. This decrease was primarily due to lower professional fees and lower regulatory and filing fees during the period.

Net loss for the quarter was $3.8 million, versus a net profit of $57 thousand in the prior-year period. The loss for the period ending March 31, 2023 compared to the prior-year period was primarily the result of lower revenues combined with increasing operating and maintenance costs, higher depreciation expenses, which was partially offset by lower share-based compensation expenses and lower R&D. It was also offset by a gain on the write down in accounts payable in the year-ago quarter that was not repeated in the current quarter as well as a realized loss on sale of digital currency in the year-ago quarter versus a gain in the second quarter of 2023.

Earnings per share for the second fiscal quarter ending March 31, 2023 were negative $0.02 versus $0.00 in the prior year period.

As at March 31, 2023, the Company had cash of $4.8 million, digital currency of $16.9 million and total assets of $94.3 million. For more details, please refer to the Company’s filings.

Management Call

Today the Company also announces that it will host its Second Quarter 2023 Financial Results and Corporate Update call on May 31, 2023 at 4:15 pm ET. Participants are asked to pre-register using the following link. A replay will be available on the company website.

Although there will be no live Q&A session, management will address pre-submitted questions during the call. Those who wish to submit a question may do so via using the subject line ‘Conference Call Question Submission’ through May 31, 2023, 2:00 pm ET.

About Terra Pool

Terra Pool is a cryptocurrency mining platform operated by DMG’s Blockseer software company. Terra Pool is the world's first Bitcoin mining pool focused on clean energy. The purpose of this initiative is to accelerate the shift from conventional power to clean energy and reduce the impact of Bitcoin mining on the environment.

About DMG Blockchain Solutions Inc.

DMG is an environmentally friendly vertically integrated blockchain and cryptocurrency company that manages, operates, and develops end-to-end digital solutions to monetize the blockchain ecosystem. DMG’s sustainable businesses are segmented into two business lines under the Core and Core+ strategies and unified through DMG’s vertical integration.

For more information on DMG Blockchain Solutions visit:
Follow @dmgblockchain on Twitter and subscribe to DMG's YouTube channel.

For further information, please contact:

DMG Blockchain Solutions Inc.

Investor Relations Contact:
CORE IR 516-222-2560

For Media Inquiries:
Jules Abraham

Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Cautionary Note Regarding Forward-Looking Information

This news release contains forward-looking information or statements based on current expectations. Forward-looking statements contained in this news release include statements regarding the upcoming management call, the potential of Core+ strategies and plans, growing Terra Pool, the implementation of immersion cooling, delivering products that enable the monetization of bitcoin transactions, developing and executing on the Company’s products and services, increasing self-mining, the launch of products and services, events, courses of action, and the potential of the Company’s technology and operations, among others, are all forward-looking information.

Future changes in the Bitcoin network-wide mining difficulty rate or Bitcoin hash rate may materially affect the future performance of DMG’s production of Bitcoin, and future operating results could also be materially affected by the price of Bitcoin and an increase in hash rate mining difficulty.

Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations, or intentions regarding the future. Such information can generally be identified by the use of forwarding-looking wording such as "may", "expect", "estimate", "anticipate", "intend", "believe" and "continue" or the negative thereof or similar variations. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company, including but not limited to, market and other conditions, volatility in the trading price of the common shares of the Company, business, economic and capital market conditions; the ability to manage operating expenses, which may adversely affect the Company's financial condition; the ability to remain competitive as other better financed competitors develop and release competitive products; regulatory uncertainties; access to equipment; market conditions and the demand and pricing for products; the demand and pricing of bitcoins; security threats, including a loss/theft of DMG's bitcoins; DMG's relationships with its customers, distributors and business partners; the inability to add more power to DMG's facilities; DMG's ability to successfully define, design and release new products in a timely manner that meet customers' needs; the ability to attract, retain and motivate qualified personnel; competition in the industry; the impact of technology changes on the products and industry; failure to develop new and innovative products; the ability to successfully maintain and enforce our intellectual property rights and defend third-party claims of infringement of their intellectual property rights; the impact of intellectual property litigation that could materially and adversely affect the business; the ability to manage working capital; and the dependence on key personnel. DMG may not actually achieve its plans, projections, or expectations. Such statements and information are based on numerous assumptions regarding present and future business strategies and the environment in which the Company will operate in the future, including the demand for its products, the ability to successfully develop software, that there will be no regulation or law that will prevent the Company from operating its business, anticipated costs, the ability to secure sufficient capital to complete its business plans, the ability to achieve goals and the price of bitcoin. Given these risks, uncertainties, and assumptions, you should not place undue reliance on these forward-looking statements. The securities of DMG are considered highly speculative due to the nature of DMG's business. For further information concerning these and other risks and uncertainties, refer to the Company’s filings on In addition, DMG’s past financial performance may not be a reliable indicator of future performance.

Factors that could cause actual results to differ materially from those in forward-looking statements include, failure to obtain regulatory approval, the continued availability of capital and financing, equipment failures, lack of supply of equipment, power and infrastructure, failure to obtain any permits required to operate the business, the impact of technology changes on the industry, the impact of Covid-19 or other viruses and diseases on the Company's ability to operate, secure equipment, and hire personnel, competition, security threats including stolen bitcoins from DMG or its customers, consumer sentiment towards DMG's products, services and blockchain technology generally, failure to develop new and innovative products, litigation, adverse weather or climate events, increase in operating costs, increase in equipment and labor costs, decrease in the price of Bitcoin, failure of counterparties to perform their contractual obligations, government regulations, loss of key employees and consultants, and general economic, market or business conditions. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The reader is cautioned not to place undue reliance on any forward-looking information. The forward-looking statements contained in this news release are made as of the date of this news release. Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Additionally, the Company undertakes no obligation to comment on the expectations of or statements made by third parties in respect of the matters discussed above.

DMG Blockchain Solutions Inc.

Consolidated Statements of Loss and Comprehensive Loss
(Expressed in Canadian Dollars)

 For the Three Months Ended
 March 31, 2023 March 31, 2022 
 $ $ 
Revenue7,623,323 11,899,546 
Operating and maintenance costs4,594,898 3,243,567 
General and administrative776,942 972,179 
Stock-based compensation423,079 613,735 
Research and development499,165 731,540 
Provision for doubtful accounts50,773 15,337 
Depreciation5,854,704 4,822,136 
Amortization of intangible assets- 263 
Total expenses12,199,561 10,398,757 
Income (loss) before other items(4,576,238)1,500,789 
Other income (expense)  
Interest and other income122,091 68,251 
Foreign exchange loss(26,014)(96,112)
Gain on write-down of accounts payable- 2,050,827 
Realized gain (loss) on sale of digital currency506,054 (3,057,853)
Gain (loss) on change in fair value of marketable
134,698 (409,436)
Net income (loss)(3,839,409)56,466 
Other comprehensive income  
Items that may be reclassified subsequently to income or loss:  
Unrealized revaluation gain (loss) on digital currency6,245,331 1,619,615 
Cumulative translation adjustment48,347 53,197 
Net loss and comprehensive loss2,454,269 1,729,278 
Basic and diluted income (loss) per share(0.02)0.00 
Weighted average number of shares outstanding  
- basic167,681,377 167,199,710 
- diluted167,681,377 167,199,710 

DMG Blockchain Solutions Inc.
Consolidated Statements of Financial Position
(Expressed in Canadian Dollars)

 As at
March 31, 2023
 As at
September 30, 2022
Cash and cash equivalents4,751,210 1,247,513 
Amounts receivable3,700,997 6,320,533 
Digital currency16,924,990 9,319,790 
Prepaid expense and other current assets235,641 258,289 
Current portion of lease receivable- 36,883 
Marketable securities306,719 401,542 
Total current assets25,919,557 17,584,550 
Long-term deposits8,483,171 14,526,569 
Property and equipment53,033,835 58,083,429 
Long-term investments45,000 75,000 
Amount recoverable6,867,734 6,632,501 
Total assets94,349,297 96,902,049 
Trade and other payables5,077,436 4,854,517 
Deferred revenue11,926 103,678 
Current portion of lease liability70,362 131,612 
Current portion of loans payable324,953 291,881 
Total current liabilities5,484,677 5,381,688 
Long-term lease liability63,097 92,809 
Secured loan payable931,047 - 
Total liabilities6,478,821 5,474,497 
Shareholders' Equity  
Share capital110,478,267 110,381,441 
Reserves44,864,413 43,959,280 
Accumulated other comprehensive income4,989,741 121,623 
Accumulated deficit(72,461,945)(63,034,792)
Total shareholders' equity87,870,476 91,427,552 
Total liabilities and shareholders' equity94,349,297 96,902,049 

DMG Blockchain Solutions Inc.
Consolidated Statements of Cash Flows
(Expressed in Canadian Dollars)

For the six months ended March 31,2023 2022 
  $  $ 
Net income (loss) for the period(9,427,153)5,093,345 
Non-cash items:  
Accretion25,466 4,755 
Amortization of intangible assets- 41,863 
Depreciation11,945,549 8,305,236 
Share-based payments938,209 1,952,678 
   Unrealized foreign exchange loss43,613 186,553 
   Gain on sale of assets(70,429)(2,088)
   Gain on write-down of accounts payable- (2,050,827)
Unrealized loss (gain) on marketable securities94,824 392,216 
   Bad debt expense114,377 27,721 
Digital currency related revenue(13,773,874)(23,206,768)
   Digital currency sold11,161,893 24,882,052 
Realized loss on sale of digital currency(328,892)(3,057,853)
Non-cash interest income(229,349)(3,878)
Accrued interest(129)(65,652)
Changes in non-cash operating working capital:   
Prepaid expenses and other current assets52,650 (102,807)
Amounts receivable3,000,466 (3,432,549)
Amounts recoverable(237,039)- 
Deferred revenue(91,752)4,164,463 
Trade and other payables1,895,676 2,055,909 
Net cash provided by operating activities5,114,106 15,184,369 
Purchase of property and equipment(572,044)(3,259,407)
Deposits on mining equipment(1,991,167)(25,385,968)
Proceeds on sale of equipment4,829 3,675 
Proceeds from sublease37,012 72,570 
Net cash used by investing activities(2,521,370)(28,569,130)

Proceeds from option exercises63,750 39,500 
Proceeds from warrant exercise- 55,000 
Principal lease payments(102,973)(99,536)
Proceeds from secured loan950,665 - 
Net cash provided by (used in) financing activities911,442 (5,036)

Impact of currency translation on cash(481)(151)
Change in cash3,503,697 (13,389,948)
Cash, beginning1,247,513 19,686,777 
Cash, end4,751,210 6,296,829 


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