Fortress Blockchain Announces Second Quarter Financial Results

VANCOUVER, British Columbia, Aug. 23, 2018 (GLOBE NEWSWIRE) -- Fortress Blockchain Corp. (“Fortress Blockchain” or the “Corporation”) (TSXV:FORT), a growth oriented blockchain mining company with operations established in low cost North American green-energy regions, reports its results of operations for the second quarter ended June 30, 2018. All amounts are in Canadian dollars unless otherwise specified. For the full condensed consolidated interim financial statements and management discussion & analysis for the second quarter ended June 30, 2018, please visit SEDAR at www.sedar.com.

“With the first six months of the fiscal year behind us, and our first full operating quarter in the books, we could not be more pleased with the results generated from operations to date,” stated Aydin Kilic, Co-Founder, CEO and Director of Fortress Blockchain Corp. “As a low cost leader in the industry we are pleased to report industry leading mining margins of 75% and EBITDA margins of 24% for the quarter despite the volatility in bitcoin prices. Our high margins exemplify and further validate our successful business model of driving efficiencies through operations and having access to some of the cheapest power in North America.”

“While cryptocurrency pricing has been under pressure, the Fortress team has performed extremely well,” continued Aydin Kilic. “We remain focused on scaling our operations to maximize shareholder value with our industry leading efficiency and secured low cost environment, which will continue to yield impressive results. Shareholders will take comfort in Fortress’ industry low breakeven mining prices, which provides the Company with flexibility to handle the volatility of the underlying spot prices.”

Second Quarter Financial Highlights:

• Total revenues during the quarter were $1,353,976 (March 31, 2018: $264,348). Revenue from the mining of digital currencies was $986,253 (March 31, 2018: $264,348). The Company had other revenue of $367,723 (March 31, 2018: Nil) from the sale of coupons to purchase ASIC hardware
• Fortress started mining cryptocurrencies at its Flagship Facility on March 7, 2018. Consequently, the revenue generated from cryptocurrency mining in the first quarter ended March 31, 2018 represents mining for the period from March 7, 2018 to March 31, 2018. The quarter ended June 30, 2018 was the first full quarter of mining operations for the Company. Consequently, the results of the two quarters are not comparable
• Gross mining margin during the quarter was $740,872 or 75%. The Company defines gross mining margin (a non-IFRS measure) as the revenue generated from mining activities less direct costs related to mining digital currencies – including rent for the Flagship Facility, power and costs directly relating to running the mine. Depreciation, being a non-cash cost, is not deducted to arrive at the gross mining margin. Gross mining margin is a non-standard measure of mining efficiency and should not be considered as a substitute for other IFRS operating and profitability measures of performance. 
• Earnings before interest, tax, depreciation and amortization “EBITDA” (a non-IFRS measure) during the quarter was $234,337 or 24%.
• Net Loss during the quarter was $268,741. The largest expenses were non-cash costs for depreciation $384,215 and share based compensation $355,712
• As at June 30, 2018 the Company had Cash on hand of $9,181,127 and digital currencies worth $1,024,455
• As at June 30, 2018, total assets were $21,373,441, primarily comprised of assets deployed at the flagship facility and cash balances
• During the quarter ended June 30, 2018, Fortress had mined 93.8 Bitcoins (24.4 Bitcoins during the quarter ended March 31, 2018) valued at $941,438 based on the price of Bitcoin ranging from US$5,908 to US$9,803 between April 1, 2018 to June 30, 2018. The value of Bitcoin declined to US$6,381 on June 30, 2018, resulting in a negative Bitcoin revaluation adjustment of $191,237 during the quarter
• During the quarter ended June 30, 2018, Fortress had mined 31.1 Bitcoin Cash valued at $44,815 based on the price of Bitcoin Cash ranging from US$610 to US$1,766 between April 1, 2018 to June 30, 2018. The value of Bitcoin Cash declined to US$748 on June 30, 2018, resulting in a negative Bitcoin Cash revaluation adjustment of $14,591 during the quarter.

Other Highlights:

• Fortress completed the acquisition of the Flagship Facility from WeHash on February 16, 2018.
• Subsequent to closing the acquisition of the Flagship Facility, the Company received its shipment of 1,400 S9 ASIC Hardware in the first week of March and deployed all of them by the end of March; and
• Executed Letters of Intent and started due diligence on a 9MW and a 100MW facility.

Subsequent Events:

• Mined 39 Bitcoins and 29 Bitcoin Cash from July 1 to August 22, 2018;
• As of August 22, 2018, Fortress has mined more than 157 Bitcoins and 60 Bitcoin Cash since inception; and,
• Worked with the TSX-V and other regulatory bodies to receive approval for our qualifying transaction with FCII, culminating in a successful listing on the TSX-V on August 22, 2018 under the ticker symbol “FORT”.

About Fortress Blockchain Corp.

Fortress Blockchain Corp. is a technology-oriented blockchain mining company committed to operating in low cost North American green-energy regions. Fortress’s resources are currently dedicated to achieving peak operational efficiency in industrial scale Bitcoin mining, to ultimately deliver an industry leading competitive advantage in performance. Fortress has strategically acquired a state-of-the-art mining facility in Washington state which has been in continuous operation since 2014, which serves as an R&D facility to optimize and build out the next generation of highly scalable blockchain mining infrastructure.

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Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

Forward Looking Statements:

Statements contained in this news release that are not historical facts are “forward-looking information” or “forward-looking statements” (collectively, “Forward-Looking Information”) within the meaning of applicable Canadian securities legislation. Forward Looking Information includes, but is not limited to, disclosure regarding possible events, anticipated revenue, conditions or financial performance that is based on assumptions about future economic conditions and courses of action. In certain cases, Forward-Looking Information can be identified by the use of words and phrases such as “plans”, “expects” or “does not expect”, “is expected”, budget”, “scheduled”, “suggest”, “optimize”, “estimates”, “forecasts”, “intends”, “anticipates”, “potential” or “does not anticipate”, believes”, “anomalous” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-Looking Information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the Forward-Looking Information. Although Fortress Blockchain has attempted to identify important factors that could affect Fortress Blockchain and may cause actual actions, events or results to differ materially from those described in Forward-Looking Information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that Forward-Looking Information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on Forward-Looking Information. Except as required by law, Fortress Blockchain does not assume any obligation to release publicly any revisions to Forward-Looking Information contained in this news release to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.