ZUG, Switzerland and
VANCOUVER, April 22, 2019 /CNW/ - HIVE Blockchain
Technologies Ltd. (TSX.V:HIVE) (OTCQX:HVBTF) (the "Company"
or "HIVE") advises that on April 19,
2019 Genesis Mining ("Genesis"), the largest shareholder of
the Company, holding approximately 26.3% of the Company's
outstanding shares, has requisitioned a meeting of shareholders for
the purpose of removing directors independent of Genesis and
electing a board of directors, the majority of whom would be senior
officers and employees of Genesis. On April
20, 2019, the HIVE Board met and appointed an independent
Special Committee of the Board to deal with the requisition and
related contractual disputes between Genesis and HIVE which gave
rise to the requisition. The Special Committee will act in the
interests of all HIVE shareholders and the Special Committee will
set a date for the requisitioned meeting to be held within four
months of proper delivery of the requisition notice.
The meeting requisition is in reaction to a formal notice which
HIVE provided on April 2, 2019 to
Genesis regarding material breaches of the Master Service Agreement
("MSA") between the parties. Initially following that notice,
the Genesis representatives on HIVE's Board convened a Board
Meeting to remove Frank Holmes as
interim Chairman and Chief Executive Officer, but were
unsuccessful. Discussions have been ongoing between HIVE and
Genesis regarding the MSA for several months and the formal notice
was issued after it became apparent to HIVE that the matters could
not be solved through good-faith negotiation. HIVE estimates
that the various breaches are valued at approximately US$50 million to HIVE. Under the MSA,
unless such material breaches are cured, HIVE will have the right
to terminate the MSA and applicable services orders for cause,
which will lead to the right for HIVE to require Genesis to
repurchase the mining equipment.
"Discussions with Genesis for full disclosure of all costs for
all mining operations have been ongoing since September 2018," said Frank Holmes, Interim Executive Chairman and
Interim CEO. "We are frustrated that Genesis unilaterally gave
notice of increased costs in Sweden and services under the MSA have not
been 'performed in a professional and workmanlike manner in
accordance with the highest industry standards' as required by the
MSA. It is disappointing that Genesis has reacted by attempting to
eliminate the dispute by taking control of the HIVE board but I am
confident that HIVE shareholders will understand that the meeting
requisition is a blatant attempt to take control of HIVE for
Genesis' sole benefit to the detriment of all other
shareholders".
By way of background HIVE has asked Genesis on multiple
occasions to provide a review of electricity pricing in
Iceland and Sweden. HIVE is entitled to be charged
Genesis' cost for power pursuant to the MSA but despite numerous
requests, Genesis has failed to provide full information as to
whether HIVE is being charged Genesis' cost for power in
Iceland and Sweden. This despite unilateral increases to
power charges to HIVE issued by Genesis.
In the face of Genesis' actions to the contrary, HIVE will
continue to protect and promote the interests of HIVE shareholders.
HIVE is actively seeking alternative service providers to Genesis
to provide transparency and superior value to HIVE and its
shareholders, and in particular with respect to HIVE's equipment
and operations in Sweden which
have recently become dormant through the course of the dispute
with Genesis.
About HIVE Blockchain Technologies Ltd.
HIVE Blockchain Technologies Ltd. is a growth oriented,
TSX.V-listed company building a bridge from the blockchain sector
to traditional capital markets. HIVE is strategically partnered
with Genesis Mining Ltd. to build the next generation of blockchain
infrastructure. HIVE owns state-of-the-art GPU-based digital
currency mining facilities in Iceland and Sweden, which produce newly minted digital
currencies like Ethereum continuously as well as cloud-based
ASIC-based capacity which produces newly minted digital currencies
like Bitcoin. Our deployments provide shareholders with exposure to
the operating margins of digital currency mining as well as a
growing portfolio of crypto-coins.
For more information and to register to HIVE's mailing list,
please visit www.HIVEblockchain.com. Follow @HIVEblockchain on
Twitter and subscribe to HIVE's YouTube channel.
On Behalf of HIVE Blockchain Technologies Ltd.
"Frank Holmes"
Interim Executive Chairman
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this news release.
Forward-Looking Information
Except for the statements of historical fact, this news
release contains "forward-looking information" within the meaning
of the applicable Canadian securities legislation that is based on
expectations, estimates and projections as at the date of this news
release. "Forward-looking information" in this news release
includes information about the dispute with Genesis, including
potential outcomes and quantum of recoverable damages; the
requisition of shareholders meeting by Genesis and potential
outcomes; the Company's ability to continue operations (including
resuming operations in Sweden or
otherwise profitably utilizing its equipment) without Genesis;
alternative service providers to HIVE; the Company's long
term growth of the Company; the business goals and objectives of
the Company, and other forward-looking information includes but is
not limited to information concerning the intentions, plans and
future actions of the parties to the transactions described herein
and the terms thereon.
Factors that could cause actual results to differ materially
from those described in such forward-looking information include,
but are not limited to, the ongoing dispute with Genesis may not be
resolved in a timely manner or to HIVE's advantage; the
requisitioned meeting and resulting costs of a proxy dispute may
have a material adverse effect on HIVE; HIVE may not be able to
resume operations in Sweden or
otherwise profitably utilize its equipment; HIVE may not be
able to secure alternative service providers to Genesis on terms
that are advantageous to HIVE, or at all; the ongoing costs and
distraction to management of the dispute with Genesis will have a
material adverse effect on the Company; the digital currency
market; the Company's ability to successfully mine digital
currency; the Company may not be able to profitably liquidate its
current digital currency inventory, or at all; a decline in digital
currency prices may have a significant negative impact on the
Company's operations; the volatility of digital currency prices;
and other related risks as more fully set out in the Filing
Statement of the Company dated and other documents disclosed under
the Company's filings at www.sedar.com.
The forward-looking information in this news release reflects
the current expectations, assumptions and/or beliefs of the Company
based on information currently available to the Company. In
connection with the forward-looking information contained in this
news release, the Company has made assumptions about the Company's
ability to dispute the terms of the MSA with Genesis, including
material breaches and repurchase of equipment; the Copay's ability
to contest a proxy dispute with Genesis; the Company's ability to
engage alternate service providers to Genesis; the Company's
ability to profitably liquidate its digital currency inventory as
required; historical prices of digital currencies and the ability
of the Company to mine digital currencies will be consistent with
historical prices; and there will be no regulation or law that will
prevent the Company from operating its business. The Company has
also assumed that no significant events occur outside of the
Company's normal course of business. Although the Company believes
that the assumptions inherent in the forward-looking information
are reasonable, forward-looking information is not a guarantee of
future performance and accordingly undue reliance should not be put
on such information due to the inherent uncertainty
therein.
SOURCE HIVE Blockchain Technologies Ltd.