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DMG Blockchain Solutions Reports Third Quarter Results Ending June 30, 2023

VANCOUVER, British Columbia, Aug. 29, 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 third quarter 2023 auditor reviewed financial results. All financial references are in Canadian Dollars unless specified otherwise.

Recent Highlights

  • Revenue of $7.5 million, 195.7 mined bitcoin on 0.8 EH/s of realized hashrate, net loss of $4.3 million, $0.03 net loss per share
  • Cash and digital currency of $22.4 million in Q3, up 3% Q/Q and 88% Y/Y, $1.0 million debt
  • Completed installation of 1 EH/s of nameplate capacity; targeting 1.2 EH/s with additional miners to be installed by the December quarter
  • Targeting initial deployment of immersion cooling technology in the December quarter
  • Invested in additional developers for our Core+ business to accelerate development of new products

Readers are encouraged to review the Company’s June 30, 2023 quarterly auditor reviewed 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, “In the June quarter, we focused our software effort for enabling scalability of Terra Pool, as growing our pool is foundational to our ability to generate revenue from our other software initiatives. We are also encouraged that the market for cryptocurrency has improved slightly during the last quarter, suggesting the market is in a holding pattern, as it waits for the regulators to potentially approve spot bitcoin ETFs.”

Steven Eliscu, Chief Operating Officer, added, “Our balance sheet has remained strong with $22.4 million of cash and digital currency, up from $21.7 million the prior quarter, and we are encouraged that our income before other items less depreciation and stock-based compensation, a proxy for operating cash flow, rose to $2.0 million or 27% of revenue from 22% the prior quarter. This improved liquidity position is enabling us to continue to invest in infrastructure, including power distribution equipment for our purchased mining containers as well as equipment and materials for our first 12-megawatt tranche of immersion cooling infrastructure. This spending will enable us to have the infrastructure in place to rapidly grow to 2 EH/s or more with new miner purchases.”

Financial Highlights

Revenue for the third fiscal quarter ending June 30, 2023 was $7.5 million versus $10.5 million in the year-ago quarter, a decrease of 29%. This decline was primarily driven by a 9% year-over-year decrease in the quarterly average bitcoin price and a decrease in the amount of mined bitcoin to 195.71, down from 212.46 in the prior-year period.

Operating and maintenance costs for the quarter ended June 30, 2023 were $4.2 million as compared to $3.6 million in the year-ago period. This increase was due to higher utility costs of $0.5 million associated with an increase in digital currency mining activity. The Company had 9,581 miners installed as of June 30, 2023, up from 7,272 installed at June 30, 2022.

General and administrative expenses declined to $875 thousand in the quarter ending June 30, 2023 versus $930 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 $4.3 million, versus a net loss of $12.2 million in the prior-year period. The decline in the loss for the period ending June 30, 2023 compared to the prior-year period, was primarily the result of lower revenues combined with increasing operating and maintenance costs, lower unrealized revaluation losses on digital currency and lower realized losses on the sale of digital currency.

Earnings per share for the third fiscal quarter ending June 30, 2023 was negative $0.03 versus negative $0.07 in the prior year period.

As of June 30, 2023, the Company had cash of $1.8 million, digital currency of $20.6 million and total assets of $91.2 million.

For more details, please refer to the Company’s filings.

DMG Blockchain Solutions Inc. Third Quarter 2023 Financial Results and Corporate Update Call

Company management will host a conference call to review third quarter 2023 financial results and provide a corporate update on August 30, 2023 at 4:30 pm ET. Participants are asked to pre-register for the call through this link. Registered participants will receive a Financial Results and Corporate Update Call weblink and dial-in information in their confirmation email.

As there will be no live Q&A session, management will address pre-submitted questions during the call. Those wishing to submit a question may do so via using the subject line ‘Conference Call Question Submission’ through 2:00 pm ET on August 30, 2023.

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:

On behalf of the Board of Directors,

Sheldon Bennett, CEO & Director
Tel: 516-222-2560

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 potential of Core+ strategies and plans, Terra Pool, 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
  June 30, 2023 June 30, 2022 
  $ $ 
Revenue 7,495,257 10,529,315 
Operating and maintenance costs 4,156,305 3,568,483 
General and administrative 875,197 930,172 
Stock-based compensation 544,966 574,419 
Research and development 480,815 553,509 
Provision for doubtful accounts (34,853)6,009 
Depreciation 5,334,219 5,531,655 
Amortization of intangible assets - 262 
Total expenses 11,356,649 11,164,509 
Income (loss) before other items (3,861,392)(635,194)
Other income (expense)   
Interest and other income 124,303 - 
Gain on disposition of assets - 1,154,776 
Foreign exchange gain (loss) (3,792)221,198 
Loss on settlement of legal claims - (30,000)
Loss on modification of amount recoverable (555,075)- 
Impairment of amounts recoverable - (1,261,330)
Gain on write-down of accounts payable - - 
Unrealized revaluation loss on digital currency - (8,089,448)
Realized gain (loss) on sale of digital currency (156,791)(2,909,548)
Gain (loss) on change in fair value of marketable securities 179,215 (683,179)
Net income (loss) (4,273,532)(12,232,725)
Other comprehensive income   
Items that may be reclassified subsequently to income or loss:   
Unrealized revaluation gain (loss) on digital currency 2,690,110 (2,611,125)
Cumulative translation adjustment (39,736)(114,004)
Net loss and comprehensive loss (1,623,158)(14,957,854)
Basic and diluted income (loss) per share (0.03)(0.07)
Weighted average number of shares outstanding   
- basic & diluted 167,681,377 167,254,729 

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

 As at
June 30, 2023
 As at
September 30, 2022
Cash and cash equivalents1,779,410 1,247,513 
Amounts receivable4,245,919 6,320,533 
Digital currency20,644,465 9,319,790 
Prepaid expense and other current assets177,703 258,289 
Current portion of lease receivable- 36,883 
Marketable securities485,933 401,542 
Total current assets 27,333,430  17,584,550 
Long-term deposits7,037,598 14,526,569 
Property and equipment50,353,305 58,083,429 
Long-term investments45,000 75,000 
Amount recoverable6,436,960 6,632,501 
Total assets 91,206,293  96,902,049 
Trade and other payables4,441,697 4,854,517 
Deferred revenue11,926 103,678 
Current portion of lease liability65,309 131,612 
Current portion of loans payable319,596 291,881 
Total current liabilities 4,838,528  5,381,688 
Long-term lease liability46,573 92,809 
Secured loan payable944,568 - 
Total liabilities 5,829,669  5,474,497 
Shareholders' Equity  
Share capital110,478,267 110,381,441 
Reserves45,409,379 43,959,280 
Accumulated other comprehensive income6,224,455 121,623 
Accumulated deficit(76,735,477)(63,034,792)
Total shareholders' equity 85,376,624  91,427,552 
Total liabilities and shareholders' equity 91,206,293  96,902,049 

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

For the nine months ended June 30,2023 2022 
  $  $ 
Net income (loss) for the period(13,700,685)(7,139,380)
Non-cash items:  
Accretion38,425 6,777 
Amortization of intangible assets- 42,125 
Depreciation17,279,768 13,836,891 
Share-based payments1,483,175 2,527,097 
Unrealized loss on revaluation of digital currency- 8,089,448 
Unrealized foreign exchange loss56,086 22,127 
Gain on sale of assets(70,429)(1,156,564)
Gain on write-down of accounts payable- (2,050,827)
Unrealized loss (gain) on marketable securities(84,391)1,075,395 
Impairment of amounts recoverable- 1,261,330 
Bad debt expense79,524 33,730 
Digital currency related revenue(20,915,310)(31,935,210)
Digital currency sold15,957,866 31,397,207 
Realized loss on sale of digital currency(172,101)(6,061,114)
Non-cash interest income(450,636)(3,878)
Accrued interest(129)(98,672)
Loss on amount recoverable modification555,075 - 
Changes in non-cash operating working capital:   
Prepaid expenses and other current assets110,586 250,598 
Amounts receivable2,076,703 (3,240,121)
Amounts recoverable(9,458)- 
Deferred revenue(91,752)25,533 
Trade and other payables1,302,640 3,731,015 
Digital currencies- 5,661,116 
Net cash provided by operating activities3,444,957 16,274,623 
Purchase of property and equipment(1,415,329)(4,193,256)
Deposits on mining equipment(2,423,564)(34,363,490)
Proceeds on sale of equipment4,829 3,678,311 
Refund of security deposit- 100,498 
Proceeds from sublease37,012 109,582 
Net cash used by investing activities(3,797,052)(34,668,355)

Proceeds from option exercises63,750 44,000 
Proceeds from warrant exercise- 55,000 
Principal lease payments(129,345)(155,850)
Proceeds from secured loan950,665 - 
Net cash provided by (used in) financing activities885,070 (56,850)

Impact of currency translation on cash(1,078)410 
Change in cash531,897 (18,450,172)
Cash, beginning 1,247,513  19,686,777 
Cash, end1,779,410 1,236,605 


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