Mr. Frank Holmes reports
HIVE ANNOUNCES SALE OF NORWEGIAN SUBSIDIARY WITH ASSOCIATED DEBT AND HODL UPDATE
Hive Blockchain Technologies Ltd. has sold its Norwegian subsidiary Kolos Norway AS to the local Municipality Narvik under a share purchase agreement. Under the agreement, the company transferred all of the shares of Kolos to the Municipality of Narvik, along with a $200,000 (U.S.) payment. This allows the company to focus on its data centres located in Sweden and Iceland, which mine Ethereum continuously on the cloud.
As previously announced, in early December, 2018, the Norwegian Parliament approved a legislative bill that cryptocurrency miners will no longer be subject to the relief on power consumption at the same rate as other power-intensive industries. This change was included in the state budget for 2019. As a result of this legislative change and the uncertainty around the development of this greenfield project, management concluded that it was no longer probable that the company will be able to meet the development conditions. As a result, the land development rights were impaired and were written down to nil from $15-million as at March 31, 2019.
"Hive would like to express our appreciation to the local community of Narvik, who has been supportive of the challenging position that the company was facing," said executive chairman Frank Holmes.
Mr. Holmes further stated: "We are unfortunate that it has come to this, but glad that the property has been retained by the local community so that the community can focus on developing this greenfield property for many uses. This deal was made before myself or our CFO had assumed executive duties. We are pleased that our management team can now continue to focus on more immediate needs like upgrading our current facilities while expanding existing operations in Sweden, Iceland and Canada."
As a result of this transaction, Hive has extinguished loans which were assumed as part of the original transaction in May, 2018, with a balance of $3.1-million based on the company's most recently filed financial statements for the period ended Dec. 31, 2020. Original warrants granted for milestones associated with the Kolos land development that have not been met will naturally be cancelled.
Coin inventory (hodl)
Throughout calendar 2021, Hive has continued to be a holder of mined Bitcoin and Ethereum coins, and has been banking them in cold wallets. Its strategy is one to continue holding coins, as the company feels that it will benefit its shareholders. The current dollar value of its crypto assets is approximately $109-million (U.S.) (based on $3,900 (U.S.) Ethereum and $59,000 (U.S.) Bitcoin), and cash is $33-million (U.S.).
This hodl strategy has led to the strengthening of the company's balance sheet and liquidity, which is a substantial improvement from where it was a year ago.
About Hive Blockchain Technologies Ltd.
Hive Blockchain is a growth-oriented, TSX Venture Exchange-listed company, building a bridge from the blockchain sector to traditional capital markets. Hive owns state-of-the-art green-energy-powered data centre facilities in Canada, Sweden and Iceland, which produce newly minted digital currencies like Bitcoin and Ethereum continuously on the cloud. Its deployments provide shareholders with exposure to the operating margins of digital currency mining, as well as a portfolio of crypto-coins.
We seek Safe Harbor.
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