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Published Dec 18, 2024 • 13 minute read
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VANCOUVER, British Columbia, Dec. 18, 2024 (GLOBE NEWSWIRE) — DMG Blockchain Solutions Inc. (TSX-V: DMGI) (OTCQB: DMGGF) (FRANKFURT: 6AX) (“DMG” or the “Company”), a vertically integrated blockchain and data center technology company, today announces its fiscal fourth quarter and full year 2024 financial results. All financial references are in Canadian Dollars unless specified otherwise.
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Q4 and Full Year 2024 Financial Results Highlights
- Revenue: $5.9 million in Q4 2024, down 29% sequentially; $33.9 million for the full year 2024, up 21% from the previous year
- Bitcoin Mined: 65 bitcoin mined in Q4 2024, reflecting a 26% sequential decrease due to the April halvening and network difficulty increases; 502.5 bitcoin mined in the full year 2024, down 43% from the previous year
- Cash Flow from Operations: $1.3 million in Q4 2024, contributing to $8.2 million for the full year 2024, a 69% increase from the previous year
- Hashrate: 0.96 EH/s for the full year 2024, up 21% from the previous year; now operating at 1.7 EH/s with plans to reach 2.1 EH/s by February 2025
- Fleet Efficiency: 24.6 J/TH in Q4 2024 and 26.7 J/TH for the full year 2024, an increase of 9% from the previous year; further improved to 23 J/TH in the current quarter with a target of 21 J/TH in February based on the Company’s previously announced 6 megawatt hydro miner deployment
- Cash and Digital Assets: $36.0 million as of quarter-end Q4 2024, up 90% year-over-year
- Net Loss: -$0.03 per share for the full year 2024 versus -$0.10 per share in 2023
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DMG’s CEO, Sheldon Bennett, commented: “2024 was a transformative year for DMG, driven by remarkable achievements in our Core+ strategy and Core operations. Our revenue grew by 21% year-over-year to $33.9 million, and we achieved $8.2 million in cash flow from operations, reflecting a 69% increase. We mined 65 bitcoin in the September quarter with a hashrate of 0.98 EH/s and fleet efficiency of 24.6 J/TH. Our cash and digital currency holdings reached $36.0 million, with total assets of $104 million at year-end. As we look to 2025, we expect to grow our hashrate to 2.1 EH/s by the end of February with a planned further expansion to 3 EH/s by year-end, leveraging hydro direct liquid cooling technology for enhanced efficiency. We also achieved key milestones in building our carbon neutral Bitcoin ecosystem with the development of Systemic Trust while revamping Terra Pool with a focus on both to onboard new clients in 2025. We also laid the foundation for cutting-edge generative artificial intelligence (AI) initiatives, including a 30 megawatt AI data center memo of understanding with the Malahat Nation. DMG is uniquely positioned for multipronged growth in the coming year that should deliver value to our stakeholders.”
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Financial Year 2024 Financial Results Review
Revenue increased by $6.0 million to $33.9 million in 2024 from $27.9 million in 2023. The increase is attributable to increases in digital currency mining revenues supported by a 125% increase in the average price of bitcoin over the year as compared to the previous year. The Company also added new mining equipment received in the year.
Operating and maintenance expenses for 2024 were $19.7 million, up from $16.8 million in the previous year. This increase is primarily attributed to a $2.6 million rise in utilities expenses, driven by expanded digital currency mining operations as miners were added during the year.
Research and development costs for 2024 were $2.1 million compared to $2.0 million in the previous year. These costs include salaries and wages for work on software, mainly on Systemic Trust, Terra Pool, Helm and Explorer, and subscription costs for servers related to development software.
General and administrative costs for 2024 were $5.9 million, up from $3.7 million in the previous year. General and administrative costs consist mostly of wages, professional fees, consulting fees and financing costs. These costs increased during the year mainly due to the ramp up of operations of the Company’s wholly owned subsidiary Systemic Trust. The Company also incurred additional interest expense related to its loan with Sygnum Bank, which contributed to financing costs increasing $0.6 million.
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Depreciation for 2024 was $18.9 million, down from $21.9 million in the previous year. The decrease is due to the timing of new installations, which did not ramp up until the later half of 2024.
Net loss decreased in 2024 by $11.2 million to $5.2 million from $16.5 million in the previous year. The decrease is a result of increases in revenue of $5.9 million, unrealized gains on digital currency of $4.9 million, realized gains on the sale of digital currency of $2.0 million and an overall decrease in depreciation on fixed assets of $3.0 million, offset by an overall increase in operating and maintenance costs of $2.9 million.
Regarding our Balance Sheet, total assets as of September 30, 2024 were $103.9 million, up from $82.6 million the previous year, an increase of $21.3 million. The increase is mostly attributable to an increase in digital currency of $17.2 million due to the increase in the fair value of BTC as compared to the previous year. Net property and equipment increased by $6.4 million, offset by a decrease in assets held for sale of $3.5 million.
Selected financial and operating information should be read in conjunction with the Company’s audited consolidated financial statements and related Management’s Discussion and Analysis for the year ended September 30, 2024, available at www.sedarplus.ca. All financial information in this news release is prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.
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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.
Fourth Quarter and Full Year 2024 Results Conference Call Details
The Company will host a conference call to review its results and provide a corporate update on Thursday, December 19, 2024 at 4:30 PM ET. Participants should register for the call via the registration link.
In addition to a live Q&A session via chat, management will also address pre-submitted questions. Those wishing to submit a question may do so via email at investors@dmgblockchain.com, using the subject line ‘Conference Call Question Submission,’ through 2:00 PM ET on December 19, 2024.
About DMG Blockchain Solutions Inc.
DMG is a publicly traded, sustainably-focused and vertically integrated blockchain and data center technology company that develops, manages and operates end–to-end digital solutions to monetize the blockchain and generative artificial intelligence compute ecosystems. DMG’s businesses are segmented into two business lines under the Core (data center infrastructure) and Core+ (software and services) strategies and unified through DMG’s vertical integration.
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For more information on DMG Blockchain Solutions visit: www.dmgblockchain.com
Follow @dmgblockchain on X and subscribe to DMG’s YouTube channel.
For further information, please contact:
On behalf of the Board of Directors,
Sheldon Bennett, CEO & Director
Tel: +1 (778) 300-5406
Email: investors@dmgblockchain.com
Web: www.dmgblockchain.com
For Investor Relations:
investors@dmgblockchain.com
For Media Inquiries:
Chantelle Borrelli
Head of Communications
chantelle@dmgblockchain.com
| DMG Blockchain Solutions Inc. Consolidated Statements of Financial Position | ||||
| As at September 30, 2024 | As at September 30, 2023 | |||
| ASSETS | $ | $ | ||
| Current | ||||
| Cash and cash equivalents | 1,679,060 | 1,789,913 | ||
| Amounts receivable | 4,910,251 | 2,476,679 | ||
| Digital currency | 34,327,703 | 17,142,683 | ||
| Prepaid expense and other current assets | 337,042 | 193,512 | ||
| Marketable securities | 316,803 | 386,984 | ||
| Assets held for sale | – | 3,451,024 | ||
| Total current assets | 41,570,859 | 25,440,795 | ||
| Long-term deposits | 2,047,682 | 3,256,324 | ||
| Property and equipment | 53,798,978 | 47,398,585 | ||
| Long-term investments | 45,000 | 45,000 | ||
| Amount recoverable | 6,406,462 | 6,446,251 | ||
| Total assets | 103,868,981 | 82,586,955 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||
| Current | ||||
| Trade and other payables | 5,183,107 | 4,178,104 | ||
| Deferred revenue | – | 64,361 | ||
| Current portion of lease liability | 43,483 | 50,555 | ||
| Loans payable | 13,928,462 | 1,272,397 | ||
| Total current liabilities | 19,155,052 | 5,565,417 | ||
| Long-term lease liability | 51,842 | 41,202 | ||
| Total liabilities | 19,206,894 | 5,606,619 | ||
| Shareholders’ Equity | ||||
| Share capital | 113,086,455 | 110,820,540 | ||
| Reserves | 45,853,100 | 45,507,272 | ||
| Accumulated other comprehensive income | 10,448,614 | 149,044 | ||
| Accumulated deficit | (84,726,082 | ) | (79,496,520 | ) |
| Total shareholders’ equity | 84,662,087 | 76,980,336 | ||
| Total liabilities and shareholders’ equity | 103,868,981 | 82,586,955 | ||
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| DMG Blockchain Solutions Inc. Consolidated Statements of Loss and Comprehensive Loss (Expressed in Canadian Dollars, except for number of shares) | ||||||
| For the years ended September 30, | ||||||
| 2024 | 2023 | |||||
| $ | $ | |||||
| Revenue | 33,900,083 | 27,940,995 | ||||
| Expenses | ||||||
| Operating and maintenance costs | 19,733,886 | 16,797,262 | ||||
| General and administrative | 5,860,448 | 3,729,643 | ||||
| Share-based compensation | 1,795,391 | 1,804,551 | ||||
| Research | 2,126,276 | 1,951,868 | ||||
| Provision for bad debt | 14,386 | 343,082 | ||||
| Depreciation | 18,946,204 | 21,902,282 | ||||
| Total expenses | 48,476,591 | 46,528,688 | ||||
| Operating loss before other items | (14,576,508 | ) | (18,587,693 | ) | ||
| Other income (expense) | ||||||
| Interest and other income | 634,510 | 506,610 | ||||
| Gain on disposition of assets | 4,809 | 70,429 | ||||
| Foreign exchange loss | (71,996 | ) | (118,280 | ) | ||
| Impairment of digital currencies | (345,160 | ) | (102,735 | ) | ||
| Loss on modification of amounts recoverable | (674,300 | ) | (692,859 | ) | ||
| Decline in fair value of investments | (609,120 | ) | (202,725 | ) | ||
| Provision of sales tax receivable | (896,205 | ) | (1,805,343 | ) | ||
| Unrealized revaluation gain on digital currency | 9,178,788 | 4,301,472 | ||||
| Realized gain on sale of digital currency | 2,195,801 | 183,954 | ||||
| Loss on change in fair value of marketable securities | (70,181 | ) | (14,558 | ) | ||
| Net loss | (5,229,562 | ) | (16,461,728 | ) | ||
| Other comprehensive income | ||||||
| Items that may be reclassified subsequently to income or loss: | ||||||
| Revaluation gain on digital assets | 10,293,248 | 19,465 | ||||
| Cumulative translation adjustment | 6,322 | 7,955 | ||||
| Net income (loss) and comprehensive income (loss) | 5,070,008 | (16,434,307 | ) | |||
| Basic and diluted loss per share | ($0.03 | ) | ($0.10 | ) | ||
| Weighted average number of shares outstanding | ||||||
| – basic and diluted | 169,226,226 | 167,709,852 | ||||
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| DMG Blockchain Solutions Inc. Consolidated Statements of Cash Flows (Expressed in Canadian Dollars) | ||||
| For the years ended September 30, | 2024 | 2023 | ||
| $ | $ | |||
| OPERATING ACTIVITIES | ||||
| Net loss for the period | (5,229,562 | ) | (16,461,728 | ) |
| Non-cash items: | ||||
| Accretion | 31,003 | 52,570 | ||
| Depreciation | 18,946,204 | 21,902,282 | ||
| Share-based payments | 1,795,391 | 1,804,551 | ||
| Unrealized gain on revaluation of digital currency | (9,178,788 | ) | (4,350,308 | ) |
| Unrealized foreign exchange loss (gain) | (23,924 | ) | 121,576 | |
| Gain on sale of assets | (4,809 | ) | (70,429 | ) |
| Unrealized loss on marketable securities | 70,181 | 14,558 | ||
| Impairment of digital currencies | 345,160 | 102,735 | ||
| Impairment of investment | 609,120 | 202,725 | ||
| Provision for sales tax receivable | 896,205 | 1,805,343 | ||
| Provision for bad debt | 14,386 | 343,082 | ||
| Digital currency related revenue | (31,612,827 | ) | (26,356,393 | ) |
| Digital currency sold | 34,303,469 | 23,087,300 | ||
| Realized gain on sale of digital currency | (2,195,801 | ) | (183,954 | ) |
| Non-cash interest income | (628,575 | ) | (600,471 | ) |
| Accrued interest | 491,926 | (129 | ) | |
| Loss on amount recoverable modification | 674,300 | 692,859 | ||
| Changes in non-cash operating working capital: | ||||
| Prepaid expenses and other current assets | (148,530 | ) | 45,973 | |
| Amounts receivable | (1,973,658 | ) | 1,732,308 | |
| Amounts recoverable | – | (9,442 | ) | |
| Deferred revenue | (52,435 | ) | (39,317 | ) |
| Trade and other payables | 1,082,095 | 1,031,284 | ||
| Net cash provided by operating activities | 8,210,531 | 4,866,975 | ||
| INVESTING ACTIVITIES | ||||
| Purchase of property and equipment | (2,387,295 | ) | (1,788,257 | ) |
| Deposits on mining equipment | (18,028,412 | ) | (3,354,595 | ) |
| Purchase of short-term investment | (609,120 | ) | (202,725 | ) |
| Proceeds on sale of equipment | 20,442 | 4,829 | ||
| Security deposit on utilities | (194,438 | ) | – | |
| Proceeds from sublease | – | 37,012 | ||
| Net cash used in investing activities | (21,198,823 | ) | (5,303,736 | ) |
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| FINANCING ACTIVITIES | ||||
| Proceeds from option exercises | 816,352 | 182,540 | ||
| Principal lease payments | (99,158 | ) | (152,996 | ) |
| Proceeds from loan | 12,161,909 | 950,665 | ||
| Repayment of loans payable | (1,668 | ) | – | |
| Net cash provided by (used in) financing activities | 12,877,435 | 980,209 | ||
| Impact of currency translation on cash and cash equivalents | 4 | (1,048 | ) | |
| Cash and cash equivalents, change | (110,853 | ) | 543,448 | |
| Cash and cash equivalents, beginning | 1,789,913 | 1,247,513 | ||
| Cash and cash equivalents, end | 1,679,060 | 1,789,913 | ||
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 planned conference call, DMG’s strategies and plans, increasing hashrate and the anticipated timelines, the expected arrival and operation of the hydro miners and containers, growing the Company’s hashrate to 2.1 EH/s by February 2025, with a further planned expansion to 3 EH/s by year-end, the development of Systemic Trust, improving fleet efficiency and continuing to execute on Core+ software initiatives, onboarding of new clients to Terra Pool, the opportunity and plans to monetize bitcoin transactions, the continued investment in Bitcoin network software infrastructure and applications, developing and executing on the Company’s products and services, increasing self-mining, efforts to improve the operation of its mining fleet, 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.
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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 bitcoin; security threats, including a loss/theft of DMG’s bitcoin; 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 www.sedarplus.ca. In addition, DMG’s past financial performance may not be a reliable indicator of future performance.
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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 viruses and diseases on the Company’s ability to operate, secure equipment, and hire personnel, competition, security threats including stolen bitcoin 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, equipment failures, 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.
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