DMG Blockchain Q1 Earnings | Bitcoin Mining Stock Analysis & News Now | Top BTC News Today | DMGI

DMG Blockchain Q1 Earnings | Bitcoin Mining Stock Analysis & News Now | Top BTC News Today | DMGI

Welcome to McNallie Money, your daily dose of Stocks, Investments and Personal Finance!

Today we are covering Q1 2024 Earnings with the CEO of DMG Blockchain Solutions – Sheldon Bennet and COO Steven Eliscu, ticker DMGI. DMG Blockchain Solutions Inc. operates as a blockchain and cryptocurrency company in Canada. The company manages, operates, and develops digital solutions to monetize the blockchain ecosystem. It also offers transaction verification; co-location hosting; data center optimization; and high-performance computing services. In addition, the company provides infrastructure consulting in various fields, including location and power infrastructure review, air flow and cooling contact, high and low voltage power design and engineering, and facility power distribution design and engineering. Further, the company develops and licenses proprietary blockchain and cryptocurrency software, comprising Mining Pool, an audited mining pool; WalletScore, a blockchain audit and analytics platform; Mine Manager, an optimization software for mining facilities; Blockseer Intelligence, an analytics tool that enables the tracking of cryptocurrency on Bitcoin and Ethereum blockchains; Blockseer Breeze, an enterprise-grade custody solution to securely manage digital assets; and BlockSeer Freeze, a software product that watches BTC wallets and provides early notification of transactions on the blockchain network. Let me know what you think of DMG Blockchain Solutions and if you are currently holding any shares on DMGI in the comment section below! 👇

New stock/investing videos posted multiple times a week so be sure to SUBSCRIBE and click the bell icon to get notifications. 🔔

Thanks for watching and have a great day!

0:00 Opening
1:17 DMG Overview
7:58 Q1 Earning Highlights
19:05 Subscriber Questions
30:34 Sygnum Bank Loan
35:50 M&A Activity
41:54 Cold Temp. Vs Miners
43:50 Closing Thoughts

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Hey guys welcome and welcome back to the channel MCN money the new home of power mining analysis in today’s video we’ve welcomed back the dynamic duo from DMG blockchain solutions to walk us through their q1 2024 earnings we’ve got a lot to talk about in today’s video but

Before we do please take a second hit the like button you guys it’s a big help to myself Anthony and the channel it helps get this content to other people like yourself who may find Value and it’s 100% free to do if you’re not already subscribed MCN money feel free

To join and let me know in the comments section below if you’re currently holding shares of DMG what you thought about their quarterly results and your outlook for 2024 and with that being said let’s get into today’s interview okay guys so that’s right today’s video we’ve welcomed back the

CEO Sheldon Bennett and the CEO o Stephen lsq from DMG blockchain Solutions hot off the press today or I guess yesterday they just came out with q1 earnings from 2024 this is shaping up to be quite an exciting year for the Bitcoin space as a whole and DMG is

Really no exception so guys thanks so much for being back here and uh looking forward to getting into tonight’s convo thanks for inviting us back great thank you yeah you’re always welcome so I know it’s been a little time since you were on the program last so let’s start

Off with just a quick highle summary of what DMG blockchain is all about uh maybe your current operations and and just a high level summary sure I mean DMG blockchain Solutions we are a TSX Venture listed company we actually came out uh a day ago uh with a press release that we are

In the top 50 TSX Venture uh company so we won an award second place in technology this is the second time we’ won that uh we won that two years ago as well so um that’s a a great achievement for for a small company like ourselves

To be recognized in the the top 50 companies on the TSX exchange um we started the company back in 2018 as a public company uh previous to that in 2016 we were a private company operating out of your your area out of Alberta out of Edmonton uh before uh we moved all of

Our operations to a small town in BC in the Cy called Christina Lake um in Christina Lake we own 33 Acres we built our own private substation of 85 megawatts uh on our acreage we have a 30,000 ft building which houses uh the majority of our Fleet recently we

Announced that uh we’re expanding our our footage uh outside into containers and so we’re going to be doubling our capacity from one xah hash to 2x a hash in Christine lake with our eyes on 3xa hash uh hopefully during this calendar year but uh we’re not going to promise

That yet as we are busy uh with receipt of new equipment coming in from bitmain as well as converting our Fleet over to immersion Cooling in our building um DMG is sort of two companies in one we uh started a strategy a long time ago called core and core plus core is all

About our hash rate and building a hash rate and trying to run a very economic hash rate with low cost and a high return on our investment um core Plus is the software side of our business and the reason we have a software side of

Our business is we kind of looked at our Core Business of creating a Bitcoin whereby we create this Bitcoin once we sell it to pay some bills we keep it in our hodle hoping the value goes up but eventually we will sell it and we’re sort of done with Bitcoin after we’ve

Created it through our hashing core Plus is everything after we created a Bitcoin and so it’s really focusing on transacting in Bitcoin and continually getting transactional fees out of Bitcoin we made some great improvements in our core Plus offerings uh we had a great announcement about uh uh a new

Company that we formed in core Plus um that came out this morning as well which hopefully we’ll get into um and then you know outside of uh those two main areas you know DMG is invested in in a few other companies that are all uh pivotal to our overall strategy of

Growing our our stock price and growing our investor base and and um just generally trying to uh move our company up uh in a very responsible manner we’re very much interest in regulation and you’ll see that through the core Plus products we have uh as well as we’re very green focused

Um we’re all on renewable energy uh as well we own the only renewable energy pool called terap pool even has some comments yeah and one way to think about how it all fits together is at the base we have our core strategy we have Bitcoin mining above

That we have our software core plus we first have software infrastructure so we have our pool we have M management software for both observability as well as being able to control mining fleets and on top of that we have layer of applications such as the the trust our relationship with bosonic exchange

And also our Explorer and wallet score products so it all ties together and one of the things that’s unique in terms of being able to enable transactions to be processed utilizing renewable or carbon neutral energy is our technology called Petra and this is about being able to have transactions go

Through our pool ter and be able to ensured for financial institutions that want the option to be able to send Bitcoin without adding carbon they can do so in working with DMG and with all the pieces with a trust with a relationship with an investment and a partner to as an

Exchange and uh the and the ability to have those transactions go through our pool and a a base Bitcoin mining that allows us to be able to develop and support this we we are able to do things in a unique way that other companies aren’t able to do so for us this is

Really a really exciting time as we talked about on our earnings call we felt that the the trust piece having control over custodial a qualified custodial wallet solution was really key and there’s two pieces to that first is that the Canada only has one qualified custodian right now for digital assets

The market is underserved and the other thing is being able to have financial institutions to give them this choice to send transactions through tiol have having that piece is the enabler such that they can do that uh we described on our earnings call we we looked at the problem we tried various

Ways of solving that problem and the only way for us ultimately was to take control and to create a company to do that yeah it’s an excellent summary there’s so many facets of this organization you guys have weaved quite an intricate web and it does all go together quite nicely uh under that

Overall strategy so I appreciate the breakdown I always love chatting with DMG because you guys are located so close to my hometown here and Christina Lake Anthony says he’s coming to Canada this year and we’re going to drive out there uh in my new monster truck boys

And we’ll uh we’ll check out the facility so um great intro now moving along to the q1 earnings uh let’s get into some of the highlights there I realize you guys just did your earnings call as well so feel free to take a listen uh for anyone that’s watching but

What were’re some of the highlights or key things that people should be watching for yeah there there’s quite a few highlights the earings call um I think there is a link on our website so people can go and listen to the audio recording so feel free to do that um people can

Also ask us questions through our form that goes to our investor relations and eventually they come to stepen and I for some aners so feel free to follow follow off on any questions um but like I think one of the bigger highlights um is that we had a positive uh quarter $7 million

Around $7 million uh in a profit quarter not seen since I think it was 2002 the last time we had one of those um so you know from a you know a financial reporting point of view um there aren’t that many Bitcoin mining companies that actually are posting a profitable

Quarter you know let alone a profitable year um so that was a big thing for us um being able to show our investors that our strategy is paying off our way of buying equipment is paying off our I would call it our patience lot of investors don’t have a lot of patience

Our patience is paying off um and I think that um you know we’re hoping that we can continue more quarters like that this is a very tough business uh when you look at what’s happening with the upcoming happening when you look at the constraints on equipment uh that we’ve

Gone through um and and you just kind of look at the fact that you know our cost to produce of Bitcoin is going to effectively double and we don’t know where the price is going to go so you know for Bitcoin miners right now it’s it’s a tough time to make decisions and

I think for us to come out and have a positive cord like this is kind of shows you know how much Focus we’ve had on controlling cost and sometimes you know the decision not to do something has turned out to be a very good decision for us because there’s so many things

You could do that may or may not turn out but sometimes not doing something it’s actually a great decision we’ve looked at a few projects that we’re like oh we should do this or we should do that or we should buy this or we should buy that or we should merge with this

And and not doing that probably turned out for the better for us um Stephen knows our numbers I mean I I I love having Stephen on with us because he he likes to go through the the fine detail of our numbers and on our earnings call for anybody that’s not listened to F

It’s broken into two parts it’s usually me talking about the quarter from sort of a strategy operational point of view and then Stephen goes through all the numbers and he does a great job at that and then I kind of do the Q&A with Stephen um for questions we get so you

Know if you want to get more into the numbers and I’ll let Stephen rattle off a few of the good good numbers who had maybe he’ll he’ll he’ll talk a little bit more in detail about the hash rate issues that you know we’re going to fix uh with the happening as well as

Everyone else but um maybe I’ll pop over to Steve and let him say a few words yeah I think one of the exciting things is about cash generation and generating cash from operations 3.7 million 3.2 million of what other people call iida we just describe it as essentially our operating profit less depreciation

Amortization and stock-based comp it’s 33% margin that is the best that’s been in quite a number of quarters the Sheldon referred back to 2022 uh that’s been a long time and uh we were really proud of what we’ve been able to accomplish we ended our hash

Rate ended just under an ex ahash we gave guidance for that we more or less achieved that and as we look forward continue to make incremental improvements with our operation plus we have a t21 fleet which we’ve talked about just because we’re on a mining for we could talk more specifics about the

T21 and one of the things we liked about t21 Minor from bitm is it offers what they call a high energy mode and it’s the first time bit main has actually supported a minor that from a warranty and everything else point of view where they specify an overclocking mode and by

Overclocking the The Miner can get instead of the nominal 190 trash uh up to 233 trash uh and the the power consumption of course jumps and we’re essentially building our infrastructure to accommodate that and so the minor will run over 5 kilowatt in that mode with at

22 jewles of terahash one of the things we’ve talked about is getting the entire fleet under 25 uh the T having a a good chunk approximately half of our hash rate at 22 certainly gets us uh a good way there and uh because it’s bit Main’s first

Minor running in this high energy mode uh it’s still to be proved that it can run that way reliably uh the fallback of course is run it in its standard energy mode uh at uh 19 Jews of terahash and still a respectable 190 terahash uh so we’re designing our we’re

Laying out our infrastructure for high energy mode uh hopefully it’ll go well so that would get us uh what we’re excited about for $12.1 million to get a little over an ex aash translates to about $15 a terahash and we think think that is incredibly Capital efficient uh

Way of deploying all the other infrastructure around it the containers and all the electrical distribution uh we’ve done a really good job as well in terms of sourcing we do all the sourcing ourselves we’ve done uh a lot of work to really get the cost of all of the infrastructure down it also

Just kind of leads we think this is leading the way to how mining is going to be going forward we talked about how miners uh we think in terms of infrastructure three-phase power five kilowatts and up this is kind of the future of where mining will be whether

It’s in immersion or in air and uh we want to be at the Forefront of that and we think just as we think about what we’re going to deploy for immersion cooling we think it will likely end up being something like a t21 but optimized for immersion gotcha we and hopefully under

20 Jews of ter as well for sure we’ve seen a number of companies come out and uh opt for the t21 over the S21 for that overclocking benefit and that warranty protection so that’s great to see that you guys are are on that train of thought as well um I wanted to actually

Ask a question about your Fleet upgrade plans and Fleet efficiency so maybe I’ll just throw that in right now it sounds like your goal is sub 25 Jews per terahash in terms of efficiency and three x aash by calendar year end or fiscal year end is that what we’re

Hearing we haven’t specified the time frame but that when we would deploy immersion with sub20 Jewel per terahash miners for for 24 megawatts that would be in excess a 1.2x aash uh as somebody who’s been uh worked as an equity research analyst in the past I’m always

Very hesitant to give guidance so we’re not giving specific guidance we’re just saying what we would hope that Sheldon was referring to the end of the the calender year so Sheldon you want I me this is something that we’re trying to say it’s possible to get that out of our

Existing infastructure so it’s not not that we’ve got an order on on the books with somebody a man facturer but you know adding in the immersion bringing in the higher efficiency miners um it’s possible for us to get there as we said on earnings call we haven’t bought those

Additional miners but we see a path to be able to do that and you know we need to figure out some of the details of that path um but just knowing that it’s something we can achieve um that could be done you know potentially this year

Um you know we are watching the market um we’re hearing rumors of more uh manufacturers coming out with immersion ready miners um there right now aren’t many manufacturers that have immersion ready miners so if a few more come out and there’s a bit more Choice um different models uh different pricing

That could help us accelerate our ideas of of purchasing immersion ready miners versus retrofitting uh air cooled which we do not like doing but you know we we know how to do it and we will do it um so yeah we haven’t given any godance when but you know it’s possible for us

To do that perfect no also remember post happening we talked about on the call about that our hash rate would drop when we go to low power mode and for some of our Legacy Fleet so s9j Pros can get call it 24 Jewels terahash Pro pluses can get in the neighborhood of

22 so if you kind of look at that uh our immersion Fleet running Legacy miners we’ll probably still run those uh at their nominal spec because we really want to prove out the immersion we’re saying that on the call but when you combine 22 Jewel of trash

T2s uh J Pros J Pro pluses under 25 and then some J pros and immersion at above 25 it’s fairly straightforward to get that number below 25 and we said we are targeting below that so you should assume it’s a number that starts with two but does not end in five yeah we

Have a number of XPS as well in our yeah I’m sorry and the XPS of course those will just we continue to run those at 21 and a half perfect yeah I appreciate the clarification there you guys and we’re always prying we’re always prying for information so as much as you can give

Us that’s great now moving along here we had a couple uh questions from the subscriber base and in our patreon groups overall General consensus was phenomenal quarter um we monitor the chatter pretty closely and and everyone was pretty positive but we did have three specific questions that came up uh

So I’ll read them out here you guys uh mining pool Revenue so obviously DMG is very well known in the mining Pool World um revenue for the three months came in for a net loss just north of a million dollar can you give us a little bit of detail

There yeah I mean we we went over this the call as well um mining pools are a very fickle business um so at the end of the day you can pay full pay per share to your users which means they have a guaranteed Revenue by the hash they put

In but the actual pool has to win the blocks and if it doesn’t win uh and and they don’t win them in perfect uniformity it’s not like you get a block every two two days or every four hours or whatever it’s it’s still a mathematical equation that you’re

Competing with other pools against so um you know when we sometimes we win more blocks in a month than we expect sometimes we we win less overall over a long enough period of time it should equal up to be zero I mean you should get as many as you’re expecting to get

That’s sort of how the math Works um so you know in general when we look at our pool performance we look at other pools that we’ve mined on in the past we keep hash rate different places to you know to to understand what’s going on with

The competitors um you know our our math is showing that we’re winning enough blocks we’re where where where we should be um but on a month over month basis you we did have a shortfall and that’s you can see that shortfall in in our disclosure you know no reason we won’t

Have a gain one month and bring it back to zero or get close to zero yeah okay makes sense so just kind of the um our guess revision towards the towards the mean a there’s some months where you’ll benefit there’s some months where maybe you come up a little short

Just you due to the probability factor of the pools you’re seeing yeah I don’t think that um there’s a whole lot of other miners that have a pool that would be reporting like we do where you kind of seeing the back end of running a pool it’s not as common there

Are some other miners that self mine uh that don’t allow others in um but in general there aren’t a lot of miners out there that um are public and have a pool that you would get the backend information what’s happening in the pool instead of just the front end what the

Pool’s operating at sure yeah makes no and completely understandable uh next one subsequent to quarter end the company announced a commitment of about $3.5 million to establish an Alberta independent digital asset custody solution for institutional clients so obviously this is a pretty exciting step for the organization uh what is this one all

About yeah this is a a culmination of many events that have happened over the last few years um you know Stephen and I uh and the company in general have been trying to figure out how to bring the benefits of Terra pool the benefits of you know Carbon free movement of crypto

Um the benefits of building custom blocks which you know we’ve talked about with our ordinals in the past how we can build these large ordinals into our blocks um and we believed initially that it would be quite easy just to go to exchanges and Institutions and say hey

Start doing this start working with us um we’ve got this great Tech this great way to do this this is going to be good for you good for us good for the industry to be able to show that you know we can decarbonized transactions um the reality is you know

You’re fighting technology that’s in already in institutions and trying to get it to change is hard um if not impossible it’s kind of trying to try trying to tell your bank to change to suit your needs well they don’t do that right so so um we ended up um trying different things

Uh but at the you know at the end um we kind of broke it into a couple of Key Parts and one was um opening a custody company um for a number of reasons but for our own needs um and what we want to do with clean coins and renewable energy

And and and carbon fee transactions custody companies can talk to exchanges and institutions and work with their technology stack to move coins around whereas pools don’t really do that and so it’s hard for us to say hey move your transactions for between client a and

Client B to our pool and do them carbon free they don’t really look look at it that way they have a bunch of wallets that are managed by a wallet infrastructure that sits at a custody level and that custody has to kind of work with you so custodies can talk to

Custodies and move things around a lot easier than uh institutions can talk to a pool and so through that process um you know we tried different ways of of doing it without of creating our own um trust but at the end of the day it was much easier for us to do two

Things one you know as we announced start our own trust two to bring on a tech stack that is widely used across all the different exchanges and institutions that work in digital assets um and you know putting those two together um and integrating Terra pool into it as

Part of that uh we believe will be quite successful and so that we’ve really gone down this path of starting a trust to you know one like I say been able enable the use of a Petra and terol for clean energy transfers of of coins but two

When you just look at trust in Canada there’s only one um and you look at the market and how it’s growing and you look at how many digital assets there are now and how you know the growth of that you look at the ETFs in Canada the new ones

In the US and you just kind of look at this Market um and you go holy smokes like there’s only one in Canada has the whole Market that you know it’s underserviced there’s room for another when you know we started discussing this concept um with Alberta Treasury and we

Told them the things that we could do you know that we have uh you know the ability to build blocks that are ofac compliant that these blocks are you know Carbon free or carbon neutral uh that we can customize the transactions and take transactions just from you know one to

Another so it could be a named Bank to named Bank in Canada um and build blocks just of that and nothing else um they were in shock of what we had for technology and the ability to do this they didn’t understand a lot of the inner guts of how Bitcoin moved around

How block templates work how you know the energy is around it how hashing Works um and and why would they I mean that’s not really their world but when we got into the details of what we were trying to build um they I think we got them quite excited about us getting our

Full trust license because it’s really quite a unique way that we can work in the Bitcoin ecosystem the digital asset ecosystem uh with an offering that that nobody else has I mean other trusts uh and organizations don’t have mining pools they don’t have hash right don’t have the technology stack like we

Have I’m sure ad well it’s just we’re really excited uh to have brought on Lawrence who not only has brought a team but he has a vision Way Beyond what Sheldon and I could have imagined for us yeah we want the custodian yeah we wanted Petra enabled so it could send transactions through

Terol that’s all goodness but beyond that as Sheldon mentioned and enabling the a the tech stack that’s used not just for by systemic trust but by a good chunk of the industry so that gets that’s really exciting for us is now having something that’s just a lot more proliferated so we’re really excited

About that but longer term it’s about not just Bitcoin but digital assets and really custodians aren’t just they’re not just holding Bitcoin it could be any type of digital asset and we’re uh Lawrence has an amazing Vision that we’re just trying to say okay one thing

At a time and it’s just so great to see his energy and what is possible that it’s really opened up our eyes so Lawrence has not only brought enablement for what we think is the entire ecosystem to be able to have Petra but to think about custody Way Beyond just

Bitcoin or or ethereum so that’s for us such a huge win and we’re really I think for the DMG story now be really becomes a lot more exciting the whole core Plus just we’ve we’ve talked about a lot of things and we couldn’t talk about these things even bringing on

Lawrence uh even as we wanted to we had to wait until thing the things were were more uh ready but uh when we brought on Lawrence we already knew what needed to be done Lawrence ran with what we wanted to do and has built a vision Way Beyond

What we could have imagined yeah just to add to that I mean at some point in time you know we’d love to bring Lawrence on just to talk about the trust you know just with him but before that just for you that don’t know who Lawrence strong

Is um you know 25 years in sort of Securities regulation um previous to us he used to be the CEO of binance here in Canada on their on their trust and exchange side um and so you know he has a really good idea of the whole world of

Financial transactions when it comes to digital assets um obviously you know um binance even with its issues uh with binance International and the US government it’s still probably 65% of the world’s liquidity in digital assets um and so you know having worked with that team having the understanding

Globally of how digital assets move around how they’re custody how liquidity works you know he’s got a wealth of knowledge and this is what Steve and I were saying is like he’s kind of running off at all these things that you know we’re a Bitcoin miner that does some

Technology on that you know a tech stack on top of Bitcoin um and he’s in the world of financial transactions and you know the stuff he’s talking about with you know stable coins and collateral death and all sorts of things we’re just like Slow Down slow down one thing at a

Time Lawrence let’s let’s walk before we run just chomping at the bid he no that’s phenomenal and and obviously a very exciting space definitely a unique differentiator for DMG and I really enjoy talking to you guys because you are really at the Forefront of a lot of this technology and honestly I don’t

Understand this stuff the inner workings and the guts of these transactions as well as I could so I would welcome on at any time to kind of uh give us some details there and I’m sure the rest of the audience would enjoy that as well um

Now moving along you guys I know you just recently uh indicated you’re using some of your Bitcoin as collateral for a $9 million us uh agreement with Signum or Signum Bank sorry um what can we expect to see in terms of other options uh that you guys may be considering to

Kind of Finance growth and fund operations in 2024 here that’s a a great question um you know we we kind of talked about this today as well um of that approximate 9 million we have uh um uh that we can access with Signum uh we’ve

Taken 5.6 of it so far so we do actually have some room in there um we still have some obligation to bit made for the second half of our order of t21 so you know we will um probably end up taking the full 9 million uh on that agreement

Um and uh you know the outstanding balance most likely will fund with our own cash uh we’ve had a lot of thoughts about converting that into a longer term financing so you know conventional loan been looking at the interest rates the timing around it um I don’t know if

We’re quite ready to do that we really want to see what’s going to happen at the happening and what’s going to happen with Bitcoin price um so we’re not quite sure where we’re going to go but we have been uh quite open that you know our

Goal is to take on debt um we would go into using Equity uh as a way of raising money uh if we thought it was going to be uh affordable from a capital point of view um versus other options so we haven’t really ruled it out but um so

Far we’ve been doing what we’ve been saying which is we’re going to focus on debt first um you know one thing that our shareholders are aware of and any shareholder of a crypto mining company is aware of is that it’s expensive to build capacity um and so that’s just the

Nature of the beast of the game we’re in um we did announce that we have made progress on the second site in Canada um you know those cost money so we’re not sure exactly what we can do um on the the cash front we do sit on a lot a lot

Of you know Bitcoin or you know a cash equivalent to bitcoin right now so we’re trying to manage all of that uh in a way that really makes sense to our investors and you know we want to conserve Bitcoin or our cash so we always have a cash

Runway there is going to be a period of I don’t know how many months at The Happening where um you know it you know people may be running out a loss as they try and you know uh rejig their equipment change power mode do whatever they need to do if bitcoin price doesn’t

Appreciate to a level where it’s profitable keep running your machine so we’ve seen that in a few happenings Stephen and I are are not strangers to that um we have our strategies for that but we laid out but you know we’ve learned that having enough cash in the

Bank for for some of the the harder times is very important so we’re we’re really cognitive of cash management um using debt but you know we don’t want to get into a debt situation that some of our friends got into a few years ago or not even quite that long ago where their

Debt obligations were so big that they just couldn’t couldn’t make it and we saw some bankruptcies and restructurings from that so you know controlling that amount of debt you take and when you take it the terms of it are really important to us and um again this is

Kind of one of those things where sometimes saying no is a good idea because you you can live for another day and and and regroup and and and hone your strategy into something that won’t get you in trouble um longer term or shorter term depending on how you structure

Things yeah and we’re proud of just how we’ve managed through the downturn able to purchase new miners ahead of the havening uh at a a really attractive price uh so that overall has been good we’re not uh afraid to to raise Equity we’ve but I think we’ve pounded the

Table to say shareholder delution is something we want to avoid I mean ultimately uh it’s about getting return on on your assets generating cash as I mentioned we generated $3.7 million of cash flow from operations last quarter that ultimately is the way we want to

Fund our business but to be able to get to the kind of growth that we need and to uh be able to be successful with all the initiatives that we have on the table uh we’re going to have to continue to raise funds and so we’ve laid out the

Options and we’re just going to we’re saying we’re going to be as careful and as prudent as possible as to how how we proceed with that sure yeah ultimately there’s only so many levers at your disposal and like you said Sheldon in this industry it’s expensive and if

You’re not growing you’re you’re kind of dying right so you’ve got to keep up with the the pace um but appreciate the discussion there now final question we’ve done a pretty good job of talking about Fleet upgrade plans key differentiators here so I think we can

Kind of zoom out a little bit to a more macro view uh in your guys’ opinion are we going to see accelerated m&a going into the heaving here um or we going to see maybe a little bit later as some of these companies start to realize maybe the economics aren’t there they’re not

Able to get the power modes where they thought they could um is it going to be a little bit more delayed that’s a great question um you know m&a is happening out there um maybe not successful in the public eye um if you know you’re like us or any other

Public company um there’s a barrage of private companies trying to sell their operations uh I think every CEO I talk to is we’re all inundated with offers and and I understand why I mean the happing is coming some many people may have older fleets they won’t have don’t

Have the cash to upgrade them and you know being bought up by a larger player with cash reserves that can you know move their their asset forward and and help their private shareholders is a great thing and you know we look at those as we get them um but you know

When we look at these things there’s still this concept that you know when you look at buying a company that’s already operating uh and you look at say it’s got an ex aash and they want X dollars for the company and you go well we just bought an ex aash of 12.1

Million it gets really hard to buy a company that has an exra has for 40 million so and and you know people people have that you know Equity you know whether it’s Sweat Equity or equipment or whatever in their business and you know they want to get a return

For it their shareholders want to get a return for it but we look at it from our shareholders point of view and say well why would we pay $40 million for ex aash somebody else when we can buy one for 12 um you know now if you don’t have a

Location um then yeah you can add some on because you’d have to put the infrastructure in anyways but still um some of the expectations people have um are a bit High they’re trying to sort of sell you know megawatts in the future you could get if you invested money and

Built everything they’re trying to sell that Bitcoin will be worth more in the future so you should buy it now but we want you to pay a premium for it and it’s like so there there’s a lot of that happening um it is really hard to do m&a

From my point of view in crypto comp you know in you know crypto companies do that with each other there are just so many clashing ideas of how to run a crypto company um it it’s really tough to do the only one that’s really large that I’ve seen

And you guys have seen is is H um and that took a long time um we’ll see what the verdict is on how successful that is I don’t know I mean I I know the new CEO I I knew the last one I knew the one

Before that and people know who I am they know what I was doing before honey existed so um so yeah so I mean it’s it’s tough um valuations are the toughest part in all of this um and just it’s you know I wish it was easy um but

It’s not and I I think a lot of people believe there should be a lot more m&a um I just don’t think it’s that easy to do uh with so many options and such a variety of different things that you could be doing with your Capital to build your

Business yeah I mean have typical rationale for m&a is to create some type of Revenue or cost synergies and when you combine if Sheldon said it exactly right it’s like you could build an an xash for 12 million you know plus some incremental infrastructure versus 40 million for somebody who’s being shopped

Around it’s like there’s no comparison so clearly the idea of going out and uh trying to combine with somebody else doesn’t make a whole lot of sense I mean areas for m&a for us would be something more synergistic uh related to the core Plus strategy but right now we don’t have

Anything on the table we haven’t uh this is not an active area systemic and Lawrence is keeping us busy enough and just trying to run a big coin mining company lean as it should be yeah and as as we said you know um sort of a an investment return point of

View you know we went out and found another location we waited a long time to get the approvals for that location uh to meet what we were really shopping for um so we wish we would have gotten this new location in Canada sooner but you know I think good things come to

Those soon who are willing to wait um and we hopefully can get more information out uh once the definitive agreement’s done um but uh you know it it’s a lot easier for us to be doing these things whereby you know finding our own versus people presenting what

They built and trying to get you know quite a strong margin on what they built is um it’s it’s tough for us to be able to understand those valuations yeah it makes perfect sense why by used when you can get new cheaper right pretty logical business uh

Thinking and and glad that um you guys are being prudent and and considering the shareholder uh Equity when when making those decisions but um great discussion today you guys I really appreciate it as mentioned I learn a lot when you both come on here I’ll kick it

Back to you for any closing thoughts um but appreciate the time and uh looking forward to seeing what kind of comments we get on this one yeah I think there was one last question that you and Anthony were debating on a different uh chat you had about cold weather and

Minor efficiency you’re you’re right so the question was and we wanted to ask you guys um obviously we we’ve talked about hot weather impacts to the mining operations what are the cold weather impacts is it beneficial uh if you can actually mitigate the snow and ice and

All the rest I mean cold weather is great because you know the the chips need to be cooled um but there are a couple things and I I I remember watching this little while where you and Anthony were kind of going back and forth of a hot cold and and I think

There were kind of two things on my mind when I was watching that one was that um the some of the products like some of the bit M products don’t like to start when they’re cold so if you have to curtail and restart um it could can be

Hard to get them up and running again they when they’re really cold they just don’t want to fire up and operate again so that can be a potential problem uh once they’re running you know they’re they’re fine um the other thing that a lot of people don’t realize um in the

Facilities we keep ours really cold throughout the winter um but Network switches aren’t made to go up below zero and so one of the problems you have is that you know when you’re minus 15 outside um your network switches can freeze up and so we’ve had to like

Create these areas where hot air um from our machines are actually venting onto our Network switches so they don’t freeze up and stop working so they’re they’re you know definitely minus it’s great for the miners when they’re running obviously don’t want them to go off but uh you need to make sure that

Some of the other equipment can can run at such cold temperatures see this is why we need to come do the facility tour we’ll come do one in Winter and then we’ll come in summer and we can see the uh compare and contrast no thank you for bringing that

Up great memory and uh that was a question that we were we were scratching our heads about he you’re welcome okay guys appreciate it uh if you’re still watching the video at this point leave a comment in the section below specifically if you’re holding shares of

DMG what you thought about q1 if you’re not subscribed to the channel MCN money feel free to join you guys thanks so much for joining us we’ll see you in the next video and talk soon thank you