NR- DMG Blockchain Solutions Annual Review 2021-22

A word from our CEO, Sheldon Bennett

“2021 was a monumental year for DMG! We launched a clear strategy which was communicated through two initiatives - Core and Core+. Building strategic partnerships with the likes of Argo, Zodia, Brane and Bosonic, to name a few, put DMG at the forefront of industrial mining operations and software. The company has secured 1 exahash of mining equipment as well as successfully launched our first bitcoin mining pool with a second pool soon to become public. Looking back, the Company’s achievements will be a springboard for a banner growth year in 2022.”

Highlights of the Year

Core Operations - 2021 Reviewed

DMG continued to develop its Core operations in 2021, focusing on self mining and the completion of its data centre’s mining infrastructure in Christina Lake. DMG kicked off the year with independent testing of its immersion mining solution and ended the year with over one exahash of new generation mining equipment purchased, including the S19 XPs, with deliveries started in the Fall of 2021 and continuing throughout 2022.Early in the calendar year DMG changed its focus from majority hosting in its facility to focusing on self mining with a few strategic hosting clients. With this new focus DMG added nearly 4,250 S19J Pro miners by the end of 2021, reaching a peak of 420 Ph/s, with monthly additions planned throughout 2022 to reach over 1 exahash (1,000 Ph/s). DMG’s independent immersion testing results substantiated the company’s calculations that retrofitting from air to immersion cooling achieves an 18% decrease in miner power consumption with the same amount of computation hashrate. These results enable DMG to use less miners (thus reduce our capital spend) to reach our hashrate goals as well as extend their operating life compared to running fans cooled miners. Due to DMG’s research in immersion being validated the company will focus on implementation of this technology throughout 2022.During 2021, with the ongoing issues related to Covid and unforeseen disruptions in the global supply chain, DMG decided to take control of many of its manufacturing needs by making a strategic investment in Black Box Manufacturing, a company that specializes in the design and manufacture of electrical and mechanical enclosures for multiple industries including crypto mining. To date, the collaboration, specific to crypto, has produced 300 Power Distribution Units (PDUs) for DMG as well as 6 crypto mining containers for DMG and its clients with current production now averaging 4 containers per month.In 2022 DMG plans to continue focusing on projects at its Christina Lake site which diversify its revenue and increase its efficiencies in operations. The company has already completed a study on deploying solar panels on its property and installing up to one megawatt of Hydrogen production. Throughout the New Year DMG will assess the viability of moving forward with these, and many other projects, on this site. As well, DMG has been working with other power generators and utilities which may lead to DMG diversifying beyond Christina Lake in 2022. As these projects solidify, DMG will provide updates.

DMG has had a strong end to the Calendar year with December results of: Mined Bitcoin: 66.71 BTCDaily Average: 2.149 BTCMiners Added: 441 S19J ProsHashrate Added: 45 Ph/sDecember Max Hashrate: 420 Ph/s

DMG also made its live hashrate publicly available on its website banner, which has hit an all-time high of 464.47 Ph/s since the start of the New Year.

Core+ Platforms - 2021 ReviewedDMG announced its Core+ strategy early in 2021 and has been building this strategy using Blockseer’s technology and platforms as its foundation. DMG focused on hiring senior software engineers to accelerate its plans in the Core+ area, including experts in Front End, Back End and Database Design. Our long-term hiring strategy includes continuing to look for candidates who are interested in the space and can transfer their experience from more traditional sectors. This focus turned 2021 into a great year for DMG's Core+ platforms. Functionality, UI, and core database upgrades were made to Blockseer’s Helm platform to not only enhance its ability to manage the over 10,000 miners operating on it now, but to enable it to expand well into the hundreds of thousands of miners for the future.

In addition, part of DMG’s Core+ strategy is to build and operate mining pools that align with our strategic goals. We are delighted that we had the opportunity to do this in partnership with Marathon Digital Holdings, which successfully launched earlier in the year and has since found 370+ blocks. Terra Pool has also been performing well through our joint testing with Argo Blockchain, with over 20 blocks found and is planned to be launched for new participants in February of this year. This brings over 4 Eh/s across Blockseer built and managed pools with nearly 400 blocks mined.Blockseer entered into many new strategic partnerships during 2021. Zodia started a new partnership with us and has successfully tested the Petra platform during 2021. All told, Petra managed approximately 100 transactions which were testnet mined using a Blockseer mining pool. DMG has also been testing and successfully holding and transferring coins using Brane’s crypto wallet technology. Both companies are looking forward to finalizing and releasing Breeze and Freeze in 2022. Our partnership with Bosonic allowed us to complete beta integration and testing of their Layer 2 Exchange in 2021 and we are now working on a 2022 release date which will enable Blockseer users to access crypto exchange functionality.

In 2022, DMG will continue its software development and investments in Blockseer’s platforms and strategic partnerships. Blockseer’s original platforms Walletscore and Explorer will be re-architected similar to the work completed on Helm during 2021. Terra Pool will go through further development testing phases until its go-live market launch. And, in line with DMG’s focus on regulatory compliance, all Blockseer platforms are being built to meet SOC2 Compliance requirements in 2022.

Investments and Partnerships - 2021 Reviewed

DMG’s goal is to be the leading “Vertically Integrated” blockchain company. The company is driving its development by seeking investments and partnerships with various organizations that accelerate its strategy. During 2021 DMG licensed to Marathon Digital Holdings, the technology behind MaraPool. In partnership with Argo Blockchain PLC, Blockseer is close to publicly releasing Terra Pool. As well, Blockseer’s partnership with Zodia has achieved successful trials of Petra in record time.

Investments have been made into a yet undisclosed crypto exchange, Brane Inc. (crypto custody company), Bosonic (a Layer 2 Crypto Trading Platform), and Black Box Manufacturing (electrical & mechanical enclosures). DMG and Argo Blockchain PLC also announced their partnership in the Crypto Climate Accord (CCA) to promote the decarbonization of the cryptocurrency industry. DMG Blockchain has been an active member of the Bitcoin Mining Council (“BMC”) with CEO, Sheldon Bennett, recently presenting during the BMC’s Q3 Results on future crypto regulations. The BMC is an open forum of Bitcoin miners committed to the Bitcoin network and its core principles. The Council has provided great research into the consumption of energy revolving around Bitcoin mining. In 2022, DMG will continue to execute on its strategy and develop its partnerships and investments while updating its investors on its progress.

Key Financials

The Company is expecting to release its audited financials by January 31, 2022 and will conduct an investor conference call shortly after its statements are released.

Staff DMG is picking up pace with new projects and investments underway and has hired new staff members over the past few months. Some notable additions to the management team have been: