HIVE Digital Technologies Ltd.

Good morning. I'd like to welcome everyone to today's webcast for HIVE's fiscal 2021 financial results for the first quarter ended June 30th, 2020. My name is Darcy DeBaris, and I'm the Chief Financial Officer for HIVE. I'm joined on today's call by Frank Holmes, the Interim Executive Chairman. Before we begin, I'd like to remind you that during today's presentation, we will be making comments containing forward-looking information. I invite you to read our financial disclosure for some of the risks and uncertainties that may affect highest performance in the future, and as such, actual results may differ materially from the views expressed today. For further information on these risks and uncertainties, please consult our most recent MD&A and filings on CDAR. We will also be referencing non-IFRS measures. Reconciliations of these measures are included in our MD&A. Unless otherwise indicated, please note all figures referred to on today's presentation are in U.S. dollars. I'll now turn the call over to Frank Holmes.

Thank you, Darcy. I'm Frank Holmes, the interim executive chairman and CEO. I think I'm really delighted to be able to talk to everyone and give you an update and As Darcy just mentioned, he's the CFO and Darcy joined Hive at the same time that I became the interim executive chair and took on the role of repositioning the company. And we've made tremendous strides through the crypto bear winter season and then the rebound is taking place. And so I'd like to give you some highlights that's just recently taken place. We've assumed control of Iceland data center operations in June 2020. marks the last step in the 18-month process to take full control of Hive's global data center operations from former strategic partner. We anticipated to result in a 50% reduction in operational costs in Iceland beginning just now, currently upgrading and expanding data center operations. That's a big, big focus right now is upgrading all of our GPU chips from 4 gigabytes to 8 gigabytes, and we'll talk a little bit more of that in the presentation. And we've also completed a similar transition, which we talked about previously in Sweden. So it's all really constructive and positive. And they'll also give you some comments in the presentation on Ethereum. We're a diversified business by acquiring operations in Canada during the COVID. It's in Canada and Quebec. And it's had its challenges with Bitcoin, getting equipment. and other things, but it's interesting as trying to focus on being truly global in our strategy. We've had a third straight quarter profitability driven by Ethereum mining, increases in operational efficiencies, and just starting and expanding our Bitcoin footprint in production. We've increased the tangible assets, ongoing capital investments, appreciation of digital currency portfolio due to the increase of Ethereum and Bitcoin. It's really important for all investors to recognize the DNA of volatility of crypto. The S&P 500's daily volatility is plus or minus 1% for 70% of the time. For gold, it's 70% of the time, 1%, exactly the same. But when we step out to crypto, it's plus or minus 5%, which is just a huge difference. So it's a non-event for Ethereum or Bitcoin to go up or down 5%. And the stocks behind that even have a higher multiple. So in the presentation, we'll sort of highlight that. how Hive has become a proxy for those who want to trade crypto, not through an exchange, a crypto exchange, but through the capital markets, and Hive has become that proxy. Next, please.

Great. To Darcy now? Thank you, Darcy. Perfect. Thank you very much, Frank. So turning on to slide eight, we generated income from digital currency mining in the first quarter of 2021 of 6.6 million. And this is from coin production of approximately 25,500 Ethereum and about 154 Bitcoin. The decrease in revenues that we experienced versus the same period in fiscal 2020 was primarily due to a decline in the production of Bitcoin mining stemming from the shutdown of prior cloud mining agreements in Q3 of fiscal 2020 due to their unprofitability. This was offset by an increase in Ethereum mining that we experienced driven by the reboot of our flagship Sweden data center operation in July of 2019 after being offline during the first quarter of fiscal 2020. The production of Bitcoin mining on the cloud resumed during the first quarter of fiscal 2021, following our acquisition of our new data center in Canada. Our gross mining margin, which equates to our revenues minus direct operating and maintenance costs, decreased in absolute dollars, but has stayed strong as percentage of revenues at 39%. Gross mining margin is also partially dependent on various external network factors, This includes things like the mining difficulty, the amount of digital currency rewards the miners receive, and the market price of the digital currencies at the time of mining. Turning to slide nine, our adjusted EBITDA dropped in this first quarter of fiscal 2021 to $2.6 million versus $4.3 million in the prior year comparative quarter. The Ethereum mining margins that we experienced during this quarter enabled us to acquire additional data center assets and assist us in diversifying our business. As Frank had mentioned, we're proud to continue to record consecutive quarters of positive adjusted EBITDA and profitability, which is a reflection of our attention on reducing operational and overhead costs in the organization from top to bottom. I will highlight that gross mining margin and adjusted EBITDA are non-IFRS figures. The net income for the first quarter of fiscal 2021 was $1.8 million compared to $5.6 million in the prior year comparative. This decrease was driven predominantly by gains recorded on investments and digital currencies in the prior year period. Moving over to slide 10. You can see that we have a very and continue to have a healthy balance sheet. Our cash position stood at $1.2 million at June 30, 2020. This was strengthened along with an additional $6.6 million in digital currencies, primarily, as you can see, in Ethereum and Bitcoin. We also have $12.5 million in amounts receivable and prepaid. and we maintain a strong net cash position and healthy working capital to fund our operations and growth. During subsequent to the quarter end, as we reported, we did receive over $2.5 million from the Swiss tax authorities from VAT returns that were due to us. So that was very encouraging to be able to get those accounts receivable in and help to once again strengthen our business. our balance sheet and our cash on hand. At this point, I'd like to turn it back to Frank.