DMG Blockchain Solutions Inc. (TSX-V:DMGI) has signed an agreement with Japanese tech firm Forside Financial Services Inc. to provide Bitcoin (available on Coinbase) hosting services, known as mining-as-a-service (MaaS), for Forside. The MaaS deal is worth over $3 million, under which DMG will purchase and set up hardware and receive recurring hosting revenues upon completion.
DMG’s business focus is to provide hosting services for its clients, allowing them to be “miners” essentially from anywhere in the world in a cost-effective manner. The MaaS offering provides turnkey operations for clients by charging a set-up and monthly hosting fee. This allows the company to capture the full benefit of Bitcoin (available on Coinbase)’s appreciating value
“We are excited and thankful to have DMG provide MaaS for our company and look forward to completing more business in the future with DMG. We conducted due diligence and spoke to many other companies and decided to do business with DMG due to its knowledge and expertise in this sector,” said the chairman of Forside.
Daniel Reitzik, CEO and Co-Founder of DMG Blockchain, added: “We are delighted to onboard our second major hosting client from Japan, which represents a significant market opportunity for us and further validation of our MaaS model.”
This contract with Forside marks the second deal DMG has signed to date. Recently, the company announced its acquisition of Blockseer, a blockchain data analytics company based in Silicon Valley, for consideration of up to $16 million.
The company currently operates a hybrid model under which its facilities and power access are used by both itself and its clients. This model allows DMG to balance out its capital costs and scale at a faster pace compared with the traditional mining model. It also expects to add another 1,000 mining machines next month.
DMG’s stock has gone from $1.22 to $1.87 — a 53% gain — in the space of two days following the Blockseer deal.
Cautionary Note Regarding Forward-Looking Information
This news release contains forward-looking information based on current expectations. Statements about the transaction with Forside, other potential transactions, product development, customer acquisitions, 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 Bitcoin (available on Coinbase)s; security threats, including a loss/theft of DMG’s Bitcoin (available on Coinbase)s; DMG’s relationships with its customers, distributors and business partners; 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 (available on Coinbase). 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. DMG can give no assurance that it will secure additional MaaS customers.
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, failure to obtain any permits required to operate the business, the impact of technology changes on the industry, competition, security threats including stolen Bitcoin (available on Coinbase)s 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, 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 release.
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In addition to writing financial content and analysis, Jackson has worked as a business journalist at Stockwatch and research analyst at various organizations. He obtained his MA Economics from Concordia University in Montreal and BA Economics from the University of British Columbia, with special emphasis on environmental and industrial economics.