Breaking News: DMG CEO Report Q1

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

Key Achievements & Operational Highlights

  1. 2,650 Mining Rigs Sold: MaaS allocated 4 megawatts of power sold out
  2. Power Update: DMG expects an additional 40 megawatts ready for mid-2018
  3. Bitcoin Mining: Launching what could be the largest industrial bitcoin mining complex in North America with power capacity of up to 85 megawatts
  4. Blockseer and AI: Carefully managed M&A plan underway with the acquisition of leading Silicon Valley-based artificial intelligence (AI) and Blockchain company, Blockseer
  5. Key partnerships that can be catalysts for growth and margin expansion (Bitmasters, Foreside Financial, Mogo, Emerald Health Therapeutics, Element Fleet Management, D-Link, Primary Engineering and CannaChain)
  6. More than $35 million raised in 2017 with institutional ownership of more than 20%

DMG Blockchain Solutions Inc. (OTC: DMGGF) (TSX-V: DMGI), 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.

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