DMG Blockchain Solutions Announces Q1
Progress: Cryptocoin Mining Service Capacity Sells
Out, Up to a 85 Megawatt Mine Construction Underway, Closes First
M&A Deal, Strategic Partnerships Inked
DMG Blockchain Solutions Inc. (TSX-V:DMGI) (“
DMG”
or the “
Company”), a diversified blockchain and
cryptocurrency company, announced today that it has sold out its
current capacity of 2,650 mining rigs for its cryptocoin
Mining-as-a-Service (MaaS) business. Under DMG’s unique MaaS
business model, customers purchase the mining rigs and receive
their mined the bitcoin directly, while DMG provides hosting and
management services - a stable and predictable revenue
stream. Additionally, the Company’s operational achievements
in 2018 to date include the commencement of construction of a new
mining facility with up to 85 megawatts of power, the acquisition
of A.I. leader Blockseer, and initiatives with key partners
including D-Link, Primary Engineering, Emerald Health Therapeutics,
Mogo, Foreside Financial, and Bitmasters.
DMG’s CEO, Dan Reitzik commented, “This is our
first report for our shareholders and the first of many to
come. We continue to provide our shareholders with
opportunities other crypto players do not see or are unable to
execute upon due to our experience and relationships built over
several years in the industry. DMG is not only establishing
itself as the leader in crypto mining but also in blockchain and AI
platform development with our recent acquisition of
Blockseer. Our pipeline is strong and exciting, and few have
it. In fact, market weakness has created more opportunities
for DMG as power providers are becoming more educated as to whom
they want to deal with. We thank our investors and customers
for all of their support to date.”
MaaS Currently Sold Out
To date, DMG has received strong demand for its
MaaS offering, as DMG is currently completely sold out of available
capacity (4 megawatts) allocated to this service. Major orders have
come from leading Japanese clients including Foreside Financial and
Bitmasters. An additional 40 megawatts of capacity is expected to
be in place mid-2018, and we are now in discussions for additional
orders, primarily from Asian clients.
DMG Focus
DMG recognized from inception that an
experienced management team with deep knowledge of cryptocurrency
and blockchain technology is requisite to be successful. Our team
includes three former Bitfury personnel (considered to be the
world’s second largest bitcoin mining company). Our technology team
includes Danny Yang, a Stanford Ph.D. in Computer Science and
Artificial Intelligence, and Tim Eller, Ph.D. (Mathematics), a
graduate of UCLA, Cambridge and Harvard. The team includes
developers having worked at Uber, Lyft, Google, and Facebook. With
Blockseer’s deep understanding of Blockchain transactions, DMG is
poised to be a leader in cryptocurrency forensics. DMG’s Forensics
business is led by Certified Fraud Examiner (CFE) Simon Padgett, an
English chartered accountant (ACCA) with a Canadian CPA and MBA
from University of Oxford.
DMG Business Strategy
DMG’s primary objective is to monetize the
Blockchain ecosystem. DMG does this in three ways: 1) mining
cryptocurrency on an industrial scale (processing global bitcoin
transactions), 2) extracting rich data analytics from public
blockchains, and 3) providing enterprises with permissioned
blockchain solutions that create efficiencies and new sources of
revenue by combining DMG’s proprietary blockchain technology with
the customer’s deep domain knowledge. To achieve this, DMG brings
unique expertise for: 1) mining at scale - tens of megawatts of
mining, which may expand to hundreds, and 2) merging artificial
intelligence (AI) with blockchain technology, which together can
enable new business models for monetization of data.
DMG Operations
DMG is building an organization focused on
operational excellence. DMG aims to achieve this in several ways:
1) further expand the team with the experience to meet and exceed
set goals, 2) implement a tightly integrated supply chain whereby
suppliers and subcontractors are partners integral to the
operations planning process, and 3) diligently manage complexity by
continuously simplifying both the business model and operational
procedures.
Bitcoin Mining
DMG is on track to becoming one of North
America’s leading bitcoin mining companies and is in the process of
adding significant new capacity for bitcoin mining. Under the
leadership of Sheldon Bennett, who previously led Bitfury’s
Canadian industrial mining deployment, DMG has begun to energize
this new flagship facility, which at capacity should have up to 85
megawatts of power. Once fully operational, this would be North
America’s largest single location crypto mining facility. To
add context, 85 megawatts can power a small city with a population
of about 50,000 residents. The facility is currently equipped with
over 4 megawatts, and we expect an additional 40 megawatts to be
readied by mid-2018. The remaining infrastructure is expected to be
ready by Fall 2018, which is able to provide 85 megawatts in
total.
Blockseer and AI
DMG has brought together the worlds of
blockchain and artificial intelligence with the acquisition of
Silicon Valley-based Blockseer (Datient Inc.). Blockseer has an
expanding team of blockchain, AI, and data scientists based in
Silicon Valley and an existing established customer base that
includes Bitstamp, Intuit, and Blockchain.info, one of the world’s
largest cryptocurrency wallet providers. This acquisition also
vaults DMG into a leadership position in Blockchain Forensics, with
proprietary analytics to service a variety of clients, including
government agencies such as the FBI, Homeland Security, and the IRS
as well as legal and accounting firms. The merging of AI and
blockchain technologies have a wide variety of possible
applications, including anti-money laundering (AML), cryptocurrency
trading analytics, anonymized data mining of permissioned
blockchains and blockchain solutions where data itself is the
asset. AI is a significant growth market with “a compound annual
growth rate (CAGR) of 57% between 2017 and 2025 to become a $36
billion market,” according to Grand View Research.
Key partnerships
Blockchain technology enables the ‘Automation of
Trust.’ This may disrupt many industries, as it has the
potential for cost savings through greatly improved efficiencies as
well as reducing the fraud and friction native to legacy
trust-based industries. Bitcoin and other cryptocurrencies are
simply the FIRST successful and widely adopted applications of
blockchain technology. Our goal as a company is to use our
blockchain expertise in partnership with our clients to develop
enterprise platforms tailored to their particular use cases.
As announced on December 4, 2017, DMG and
Element Fleet Management (TSX:EFN) are working towards the
development of a leading-edge Artificial Intelligence and
Blockchain solution for fleet-management that is expected to result
in greater efficiencies and cost-savings for Element’s fleet
customers and business partners. This platform will enable
predictive analytics based on the extensive data that Element has
gathered on their vehicles and drivers. In addition to having
Element as a collaborative partner, Element also purchased
approximately 9.9% of DMG.
On January. 23, 2018 DMG signed a new agreement
with Mogo Finance Technology Inc. (TSX: MOGO), one of Canada's
leading financial technology companies through the formation of its
new subsidiary – Mogo Blockchain Technology Inc. Mogo Blockchain
plans to begin bitcoin mining through an agreement with DMG bitcoin
mining hosting (mining as a service or MaaS) and diversified
blockchain platform development. The expansion into bitcoin
mining follows Mogo's announcement of the launch of its MogoCrypto
– a new product that will allow Canadians to easily buy and sell
bitcoin through their MogoAccount and will bring a new level of
convenience and transparency to bitcoin ownership.
As announced on January 26, 2018, CannaChain,
which is a partnership between DMG and Emerald Health Therapeutics
(TSX-V:EMH), one of Canada’s largest Licensed Producers for
cannabis. Blockchain technology is ideally suited for the cannabis
industry, as ensuring consumer safety, tracking provenance of
product and regulatory/tax reporting are all key requirements. The
supply chain management platform will enable irrefutable tracking
of product from licensed producers to end patients and consumers
nationwide. This platform can be customized for other governments
and regions based on their requirements.
Select Media Coverage
CBC News | What's fuelling the potential bitcoin
mining boom in CanadaMotley Fool | Marijuana and Blockchain: A
Match Made in Heaven?Inc. | Cryptocurrencies Are Creating
Billion-Dollar Industries. The Next? Mining As A Service
Investor Relations
Materials
https://www.dmgblockchain.com/investors.html
DMG Press Releases
https://www.dmgblockchain.com/news.html
About DMG
DMG Blockchain Solutions Inc. is a diversified
blockchain and cryptocurrency company that manages, operates and
develops end-to-end solutions to monetize the blockchain ecosystem.
DMG intends to be the global leader in bitcoin mining hosting -
Mining as a Service (MaaS), bitcoin mining, blockchain
forensics/analytics, and blockchain platform development.
On behalf of the Board of
Directors,
Daniel Reitzik, CEO & Director
For further information, please contact:
Investor Relations: John Martin
Toll Free: 1-888-702-0258Email: investors@dmgblockchain.comWeb:
www.dmgblockchain.comDirect: 778-868-6470
Cautionary Note Regarding
Forward-Looking Information
This news release contains forward-looking
information based on current expectations. Statements about the
Company’s plans and intentions, other potential transactions, the
expansion and build-out of the flagship facility, adding more
megawatts of power, product development, events, courses of action,
and the potential of the Company’s technology and operations, among
others, are all forward-looking information. 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, 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 achieve
goals and the price of bitcoin. Given these risks,
uncertainties and assumptions, you should not place undue reliance
on these forward-looking statements.
There can be no assurance that DMG will add additional megawatts
of power to its flagship facility or that it will add additional
cryptocurrency miners to its flagship facility.
The securities of DMG are considered highly speculative due to
the nature of DMG’s business.
Factors that could cause the 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, 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,
increase in operating costs, lack of demand for DMG’s products and
services, increase in equipment and labor costs, 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.
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.
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