Earnings release
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DMG Blockchain Solutions Reports Second Quarter 2025 Results News Release - Vancouver, BC, May 21, 2025 – 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 second quarter 2025 financial results. All financial references are in Canadian Dollars unless specified otherwise. Readers are encouraged to review the Company’s March 31, 2025 quarterly unaudited financial statements and management’s discussion and analysis thereof for an assessment of the Company’s performance and applicable risk factors, available at www.sedarplus.ca. Q2 2025 Financial Results Highlights ● Revenue: $12.6 million in Q2 2025, up 9% from $11.6 million in Q1 2025 and up 26% from $10.0 million in Q2 2024 ● Bitcoin Mined: 91 bitcoin mined in Q2 2025, down from 97 bitcoin in Q1 2025 ● Cash Flow from Operations: -$1.0 million in Q2 2025, as the Company mined $7.1 million more bitcoin than it sold ● Hashrate: 1.76 EH/s average for Q2 2025, up 8% from Q1 2025 and up 82% from Q2 2024 ● Cash, Short-term Investments and Digital Assets: $61.9 million as of quarter-end Q2 2025, down 3% from Q1 2025 and up 42% from Q2 2024 ● Total Assets : $129.5 million as of quarter-end Q2 2025, down 6% from Q1 2025 and up 9% from Q2 2024 ● Net Income: -$0.02 per share in Q2 2025 versus -$0.02 in Q1 2025 and $0.00 per share in Q2 2024 DMG’s CEO, Sheldon Bennett, commented: “In Q2, we continued to increase our Bitcoin mining hashrate, as we deployed our hydro direct-liquid-cooled miners. In addition, we advanced our AI strategy with the purchase of 2 megawatts of prefabbed data center infrastructure and have been making progress with respect to engaging Canadian public sector entities and private enterprises for off-take agreements, which we believe will be instrumental in aiding DMG in pursuing non-dilutive financing opportunities. Finally, the Systemic Trust, our digital asset custody platform, is currently focused on building on its platform development execution to gain customer adoption, ramp revenue and broaden its platform capabilities throughout calendar 2025.” Financial Second Quarter 2025 Financial Results Review Revenue increased by $1,011,749 to $12,644,574 for the three months ended March 31, 2025 compared to the prior quarter. During the three months ended March 31, 2025, the Company received in its wallets from mining activity 91.27 bitcoin and ended the period with a balance of 458.07 bitcoin. Operating and maintenance expenses for the three months ended March 31, 2025 were $7,625,097, up from $5,270,851 in the prior year period. This increase is primarily due to a $1,796,739 rise in utilities expenses, driven by expanded digital currency mining operations with additional operating miners and fluctuating energy prices. Furthermore, new hosting fees paid to third parties, totaling $682,756, also contributed to this increase. Research costs for the three months ended March 31, 2025 increased by $122,232 compared to the prior year period. Research in fiscal 2025 continues to focus on software and relates to work on Systemic Trust, Helm, Reactor and Blockseer Explorer.
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General and administrative costs for the three months ended March 31, 2025 were $1,936,402 in comparison to $1,846,398 in the prior year period. General and administrative costs consist mostly of wages, professional fees, consulting fees and financing costs. The overall increase of $90,004 is attributable mainly to financing costs related to the Company’s credit facility with Sygnum Bank. Depreciation for the three months ended March 31, 2025 was $4,314,108 compared to $3,805,988 in the prior year period. Net income decreased by $3,348,566 to a net loss of $3,346,351 for the three months ended March 31, 2025 from the prior year period. Total assets as of March 31, 2025 were $129,506,488, an increase of $25,637,507 from the end of the prior year end. The increase is mainly attributable to the Company’s purchase of $7,116.500 short-term investments and a net increase in digital currency of $19,695,408 due to the increased price of bitcoin. Second Quarter 2025 Results Conference Call Details The Company will host a conference call to review its results and provide a corporate update on May 22, 2025 at 4:30 PM ET. Participants should register for the call via the 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 May 22, 2025. About DMG Blockchain Solutions Inc. DMG is a publicly traded and vertically integrated blockchain and data center technology company that manages, operates and develops end-to-end digital solutions to monetize the digital asset and artificial intelligence compute ecosystems. Systemic Trust Company, a wholly owned subsidiary of DMG, is an integral component of DMG’s carbon-neutral Bitcoin ecosystem, which enables financial institutions to move bitcoin in a sustainable and regulatory-compliant manner. 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
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DMG Blockchain Solutions Inc. Condensed Consolidated Interim Statements of Financial Position (Expressed in Canadian Dollars) Notes As at March 31, 2025 (unaudited) As at September 30, 2024 (audited) ASSETS $ $ Current Cash and cash equivalents 804,771 1,679,060 Amounts receivable 6 3,888,754 4,910,251 Digital currency 5 54,023,111 34,327,703 Prepaid expense and other current assets 494,184 337,042 Marketable securities 8 231,944 316,803 Short-term investment 9 7,116,500 - Assets held for sale 30,408 - Total current assets 66,589,672 41,570,859 Long-term deposits 10 5,791,547 2,047,682 Property and equipment 11 50,066,817 53,798,978 Intangible asset 276,040 - Long-term investments 12 45,000 45,000 Amount recoverable 7 6,737,412 6,406,462 Total assets 129,506,488 103,868,981 LIABILITIES AND SHAREHOLDERS' EQUITY Current Trade and other payables 13 5,024,344 5,183,107 Deferred revenue 19 113 - Current portion of lease liability 99,641 43,483 Current portion of loans payable 14 20,421,551 13,928,462 Total current liabilities 25,545,649 19,155,052 Long-term lease liability 131,012 51,842 Total liabilities 25,676,661 19,206,894 Shareholders' Equity Share capital 15(a) 120,326,738 113,086,455 Reserves 15(b)(c) 55,773,443 45,853,100 Accumulated other comprehensive income 18,905,080 10,448,614 Accumulated deficit (91,175,434) (84,726,082) Total shareholders' equity 103,829,827 84,662,087 Total liabilities and shareholders' equity 129,506,488 103,868,981 The disclosed notes are integral to these condensed consolidated financial statements
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DMG Blockchain Solutions Inc. Condensed Consolidated Interim Statements of Income (Loss) and Comprehensive Income (Loss) (Expressed in Canadian Dollars, except for number of shares) (Unaudited) For the Three Months Ended For the Six Months Ended Notes March 31, 2025 March 31, 2024 March 31, 2025 March 31, 2024 $ $ $ $ Revenue 17 12,644,574 10,015,659 24,277,399 19,706,423 Expenses Operating and maintenance costs 18(a) 7,625,097 5,270,851 14,304,940 10,418,502 General and administrative 18(b) 1,936,402 1,846,398 3,773,081 2,732,459 Stock-based compensation 737,114 398,010 1,415,642 766,502 Research and development 608,448 486,216 1,162,412 924,395 Provision (recovery) for doubtful accounts (1,976) 42 (6,719) 3,806 Depreciation 11 4,314,108 3,805,988 8,663,578 8,147,770 Total expenses 15,219,193 11,807,503 29,312,934 22,993,434 Loss before other items (2,574,619) (1,791,844) (5,035,535) (3,287,011) Other income (expense) Interest and other income 7 166,648 170,044 330,950 335,825 Provision of sales tax receivable (668,685) (381,690) (976,424) (635,590) Gain (loss) on disposition of assets (1,618) 4,809 (1,619) 4,809 Foreign exchange loss 7,414 (28,341) (901,975) (122,926) Unrealized gain on revaluation of digital currency 5 - 1,019,456 28,083 9,182,316 Realized gain (loss) on sale of digital currency (147,601) 1,143,489 154,208 1,995,359 Gain (loss) on change in fair value of marketable securities (127,890) (133,708) (84,859) 111,043 Gain (loss) on fair value of investments - - 37,819 (609,120) Net income (loss) (3,346,351) 2,215 (6,449,352) 6,974,705 Other comprehensive income Items that may be reclassified subsequently to income or loss: Unrealized revaluation gain (loss) on digital currency 5 (6,830,755) 15,472,215 8,488,687 15,472,215 Cumulative translation adjustment (810) (11,278) (32,221) (1,196) Comprehensive income (loss) (10,177,916) 15,463,152 2,007,114 22,445,724 Basic and diluted income (loss) per share 15(d) (0.02) 0.00 (0.03) 0.04 Weighted average number of shares outstanding 15(d) - basic 203,242,018 169,029,065 194,424,988 168,585,910 - diluted 203,242,018 172,516,428 194,424,988 173,248,160 The disclosed notes are integral to these condensed consolidated interim financial statements
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DMG Blockchain Solutions Inc. Condensed Consolidated Interim Statements of Cash Flows (Expressed in Canadian Dollars) (Unaudited) For the Six Months Ended March 31, 2025 March 31, 2024 $ $ OPERATING ACTIVITIES Net income (loss) for the period (6,449,352) 6,974,705 Non-cash items: Accretion 7,827 23,272 Depreciation 8,663,579 8,147,770 Share-based payments 1,415,642 766,502 Unrealized foreign exchange loss 911,046 40,351 Loss (gain) on disposition of assets 1,618 (4,809) Loss (gain) on change in fair value of marketable securities 84,860 (111,043) Loss (gain) on fair value of investment (37,819) 609,120 Provision for sales tax receivable 976,424 635,590 Bad debt (recovery) expense (6,719) 3,806 Digital currency related revenue (23,409,103) (18,355,313) Unrealized gain on digital currency (28,083) (9,182,315) Digital currency sold 12,389,905 20,173,781 Realized gain on sale of digital currency (154,208) (1,995,359) Non-cash interest income (330,950) (329,914) Accrued interest 748,459 - Changes in non-cash operating working capital: Prepaid expenses and other current assets 1,433,405 (144,388) Amounts receivable 144,544 (212,015) Deferred revenue 113 11,277 Trade and other payables (76,596) 1,144,920 Net cash provided by operating activities (3,715,408) 8,195,938 INVESTING ACTIVITIES Purchase of property and equipment (4,772,107) (830,859) Purchase of intangible assets (276,040) - Deposits on mining equipment (7,324,024) (18,102,867) Purchase of short-term investment (7,116,500) (609,120) Refund of security deposits 1,792,907 - Net cash used by investing activities (17,695,764) (19,542,846) FINANCING ACTIVITIES Proceeds from issuance of units 17,254,945 - Share issuance costs (1,570,875) - Proceeds from option exercises 60,913 438,024 Principal lease payments (37,596) (61,187) Proceeds from secured loan 5,829,013 10,791,288 Repayment of loans payable (1,000,000) (1,668) Net cash provided by financing activities 20,536,400 11,166,457 Impact of currency translation on cash 483 17 Change in cash (874,289) (180,434) Cash, beginning 1,679,060 1,789,913 Cash, end 804,771 1,609,479 The disclosed notes are integral to these condensed consolidated interim financial statements
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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, the development of Systemic Trust including generating revenues, the potential for a 2-megawatt prefabricated data center, improving fleet efficiency and continuing to execute on Core+ software initiatives 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. Future changes in the Bitcoin network-wide mining difficulty or Bitcoin hashrate 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 hashrate and 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. 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 (which includes energy 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
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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.