Q1/19 Financial Results August 30, 2018

Transcription

1 Q1/19 Financial Results August 30,

2 Forward Looking Statements Except for the statements of historical fact, this presentation contains forward-looking information (within the meaning of the applicable Canadian securities legislation) that is based on expectations, estimates and projections of the Company and Genesis Mining as of August 29, The information in this presentation about the completion of any transaction including development of the Company s assets, the business goals and objectives of the Company, any estimate of potential earnings, the performance of any obligations of parties to transaction agreements, and other forward-looking information, includes but is not limited to information concerning the intentions, plans, and future actions of the parties to the transactions described herein and the terms thereon. Projections relating to annualized run-rate revenues and gross mining margins are subject to the assumptions including future cryptocurrency prices, which are based upon managements best estimates but are inherently speculative and there is no guarantee that such assumptions and estimates will prove to be correct. This presentation also contains financial outlook in the form of gross mining margins, which is intended to provide additional information only and may not be an appropriate or accurate prediction of future performance, and should not be used as such. The gross mining margins disclosed in this presentation are based on the assumptions disclosed in this presentation and in the Company s Management Discussion and Analysis for the first quarter ended June 30, 2018 available on which assumptions are based upon management s best estimates but are inherently speculative and there is no guarantee that such assumptions and estimates will prove to be correct. Factors that could cause actual results to differ materially from those described in such forward-looking information include, but are not limited to, risks related to the cryptocurrency markets generally (including continued or worsening volatility of cryptocurrency pricing), the Company s ability to successfully mine cryptocurrency, and other risks as more fully set out in the continuous disclosure filings of the Company which can be found at The forward-looking information in this presentation reflects the current expectations, assumptions and/or beliefs of the Company based on information currently available to the Company. In connection with the forward-looking information contained in this presentation, the Company has made assumptions, including, but not limited to assumptions about the Company s and Genesis Mining's ability to complete any contemplated transactions, the development of the Company s assets in Norway, historical prices of cryptocurrencies and the ability of the Company to successfully mine cryptocurrencies consistent with historical prices, and that there will be no regulation or law that will prevent the Company from operating its business. The Company has also assumed that no significant events occur outside of the Company's normal course of business. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein. Reference should be made to the continuous disclosure filings of the Company (available at for more detailed disclosure of the expectations and assumptions of the Company and Genesis Mining, and a detailed description of the risk factors relating to the Company s business. Any forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. In this presentation, HIVE or Company refers to HIVE Blockchain Technologies Ltd. (). 2

3 Today s Presenters Harry Pokrandt CEO, President & Director Frank Holmes Interim Executive Chairman Jessica Van Den Akker Chief Financial Officer Olivier Roussy Newton Interim President 3

4 Operational Highlights Completed in Q1/19 Q4/18 Q1/19 Completes Acquisition of Kolos Norway AS Completes agreement to acquire all assets of Kolos Norway AS 17.4MW Q4/18 Sweden May 1, 2018 May 22, 2018 June 30, MW May 1 Sweden Phase 3 Iceland +Kolos May MW Completes Sweden Phase 3 Completes construction and increases mining capacity by ~39%. Commences mining of Ethereum. Significantly expands coin inventory Held 33,000 Ethereum and 80,000 Ethereum Classic at the end of Q1/ MW Q1/19 +39% QoQ capacity, added +6.8 MW in Sweden, closed acquisition of Kolos 4

5 Highlights Subsequent to June 30, 2018 Norway Sweden 20.4MW +200 PH Cloud Based ASIC (Aug 15, 2018) Iceland 3.8 MW ~44MW +83% QoQ Cloud deployment lowers operating costs +83% QoQ capacity announced from addition of 200 PH of cloud based ASIC in September

6 Financial Highlights Total Revenues (US$M) Revenue per Average MW (US$M) Gross Mining Margin per Average MW (US$M) $12.0 $1.6 $1.6 $10.7 $9.6 $9.0 $1.2 $1.2 $0.9 $1.0 $6.0 $0.8 $0.7 $0.8 $0.7 $0.8 $3.3 $0.5 $0.5 $3.0 $0.4 $0.4 $0.3 $0.0 $0.2 Q2/18 Q3/18 Q4/18 Q1/19 $0.0 Q2/18 Q3/18 Q4/18 Q1/19 $0.0 Q2/18 Q3/18 Q4/18 Q1/19 High operating leverage and an advantageous corporate structure Note: Average MW: Q2/18 = 0.3 MW, Q3/18 = 3.61 MW, Q4/18 = 9.84 MW, Q1/19 = 21.98MW 6

7 Ethereum Price (USD) Ethereum Under Pressure YTD $1, $1,200 $800 $400 $284 $306 $358 $640 $1,104 $873 $626 $521 $679 $521 $464 $ Avg. Daily Hashrate (TH/s) $0 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug 0 Quarterly revenue impacted by price pressure on Ethereum Source: Coinmarketcap.com, Etherscan.io 7

8 Bitcoin Price (USD) Bitcoin Diversifies Business Model $16,000 60,000,000 $13,860 $12,000 $8,000 $4,000 $4,349 $4,353 $9,917 $10,167 $10,310 $6,926 $9,244 $7,487 $6,387 $7,123 $6,640 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 Avg. Daily Hashrate (TH/s) $0 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug 0 Source: Blockchain.com 8

9 Financial Position at June 30, 2018 (US$ millions) Cash on hand Accounts receivable & prepaids Digital currencies Total current assets (incl cash) Q $15.9 $2.0 $16.1 $34.0 Funding operations through sale of coins Strong financial position 9

10 Coin Inventory HIVE Coin Inventory Breakdown (US$M) (as at March 31, 2018) HIVE Coin Inventory Breakdown (US$M) (as at June 30, 2018) $0.78 $1.29 $6.94 $0.04 $14.78 $0.04 ~US$7.8M ~US$16.1M Note: Ethereum pricing as at March 31, 2018 and June 30, 2018 was $ and respectively; Ethereum Classic pricing as at March 31, 2018 and June 30, 2018 was $14.54 and respectively 10

11 Coin Holdings; Ethereum & Ethereum Classic 80,000 83,000 53,000 33,000 40,000 17,000 Q4/18 Q1/19 August 23 HIVE mined a higher number of Ethereum coins in Q1/19 than September 2017 to Q4/18 Note: Number of coins rounded to nearest thousand 11

12 Cryptocurrency Volatility Higher Than Indices 1000% 1000% 1000% 1000% 750% 750% 750% 750% 500% 500% 500% 500% 250% 250% 250% 250% 0% 0% 0% 0% Volatility (10-Day Std Dev) Volatility (10-Day Std Dev) Volatility (10-Day Std Dev) Volatility (10-Day Std Dev) S&P/TSX: 1.6% S&P/TSXV: 2.9% Bitcoin: 21.9% Ethereum: 22.1% 12

13 Take An Exclusive 360 VR Tour Inside HIVE 13

14 HIVE Media Presence 14

15 Management Update Frank Holmes Interim Executive Chairman CEO & CIO US Global Olivier Roussy Newton Interim President Co-Founder of HIVE Technology entrepreneur Partner at Latent Capital 15

16 Bench Strength In Europe Country Manager Switzerland Previously with KPMG Switzerland Cryptocurrency Expert Attorney-at-Law Certified Tax Expert Stephan Metz Country Manager for HIVE Switzerland Formerly with PwC 16

17 Bench Strength Globally Josh Ngo, CA Vice President, Asia Pacific Previously with CIBC Previously with Macquarie Capital Significant capital markets experience PwC alumni Taje Dhatt Vice President, North America Previously with BMO Previously with Macquarie Capital Significant capital markets experience 17

18 Investment Highlights The first publicly-listed blockchain miner globally Exclusive partnership with Genesis Mining Kolos acquisition in Norway represents significant opportunities for future growth A deep pipeline of growth projects including accretive M&A opportunities Early pioneers in blockchain provides deep understanding and complementary opportunities Executive team remains well aligned with shareholders 18

19 Growth Strategy Grow coin inventory through profitable mining at existing facilities Engaging local partners in Norway to build out the Kolos property Evaluate and execute on accretive M&A opportunities Assess opportunities to participate in the blockchain technology ecosystem 19

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