Negative Points

• DMG Blockchain Solutions Inc ( DMGGF ) has not yet signed a definitive agreement with its offtake client for the 50-megawatt AI colocation project, and the timeline for servers running before year-end is now challenging, with no guidance on when the agreement will be completed.

• The company's Q3 2026 revenue decreased 13% sequentially to $6.4 million, and hash rate declined 14% due to miners being transported and seasonal weather, leading to a 10% drop in Bitcoin mined to 61.9 BTC.

• DMG Blockchain Solutions Inc ( DMGGF ) reported a net loss of $3.9 million or $0.02 per share for the quarter, with earnings before other items (excluding depreciation, amortization, and stock-based comp) only at $0.2 million, indicating limited profitability.

• The company faces potential delays and cost overruns in the AI data center project due to the need to select a general contractor and design firms, secure tradesmen, and manage long lead times for equipment like transformers, with capital expenditures already committed for fiber ahead of a definitive agreement.

• The digital asset financial services business is generating very limited revenue, and the company is not providing guidance on revenue, which may concern investors about the near-term contribution of this segment.

• DMG Blockchain Solutions Inc ( DMGGF ) may need to raise additional capital beyond debt financing, potentially leading to dilution for shareholders, as the company aims to maintain cash for opportunistic growth and new site acquisitions.

Q & A Highlights

Q: What type of details need to be hammered out with your tenant to reach a definitive agreement? A: Sheldon Bennett (CEO) explained that the definitive agreement and master service agreement involve two main challenges: the construction of the data center and agreeing on delivery timelines, which depend on a well-understood supply chain and in-service dates acceptable to the tenant. The second challenge is negotiating stringent service level agreements for uptime and environmental requirements with penalties. He emphasized that the contract is for 12 years with three renewal periods, extending over 25 years, making it critical to get the terms right for a long-term relationship.

Q: What is the estimated CapEx for the 50-megawatt conversion at Christina Lake? A: Steven Eliscu (COO) stated that the market pricing for such a project is in the order of USD10 million to USD12 million per megawatt. He noted that as a brownfield site, costs could be lower, especially by leveraging Chinese vendors for transformers and battery backup equipment, which can save significant capital. However, the need for speed may offset some savings, so the company is using that range as a planning assumption.

Q: Once the definitive agreement is signed, do you expect the project to be financeable primarily at the project level against cash flows, or will DMG shareholders incur the impact of seeking additional equity? A: Steven Eliscu (COO) said that minimizing dilution is a primary goal, but they do not expect 100% debt financing. Even if the project is fully debt-financed, they are likely to raise additional capital to be opportunistic, particularly for new site acquisitions and growing the digital assets business. The financing will likely combine multiple sources, some specifically for the project.

Q: Can you tell us whether the prospective tenant is already participating in the engineering and design process? Or are you currently designing the facility more generally for the AI market? A: Steven Eliscu (COO) clarified that there is no generic design for AI data centers. The attraction of Christina Lake to the tenant was the existing electrical work connecting medium-voltage transformers to well-spaced areas in the building, which requires engineering trade-offs and back-and-forth with the offtake client. The relationship has been collaborative, and they have a plan for the building extension.

Q: Why has the process to reach a definitive agreement with the Malahat stalled? A: Sheldon Bennett (CEO) stated that while the relationship with the Malahat is great, they haven't crossed the finish line yet. He believes the Malahat has a lot on their plate, similar to DMG, with limited time and staff. There is a push and pull where DMG is pushing on the AI side, while the Malahat is pulling on power infrastructure, prioritizing their new substation and agreements with BC Hydro. Both parties are aligned on common goals, and he expects a long, fruitful relationship.

Q: What is your view on uplisting to a US exchange? A: Sheldon Bennett (CEO) said that the right timing for an uplisting would be after nailing down Christina Lake as a 50-megawatt AI data center and demonstrating a pipeline of additional sites and growth. Assuming that gives them the momentum and valuation they expect, they would move in a timely manner, with execution being the key driver.

Q: What kind of banking and capital markets relationships do you have to raise this kind of capital? A: Steven Eliscu (COO) acknowledged the established relationships they have and noted continued discussions with both existing and new relationships. Given the scale of the project, they are likely to need additional banking relationships with larger institutions they haven't dealt with before. The combination will depend on the financial instrument they choose to raise.

Q: Concurrent with this project, how will we build out the necessary talent? A: Steven Eliscu (COO) acknowledged that the executive team works hard but has limited hours. Given the complexity and scope of future multiple sites and continuing to drive existing businesses, they will need more talent in finance, operations, marketing, and building out a bench, not just adding executives.

Q: DMG is selecting contractors and engineering partners before the definitive agreement is signed; how much capital will you commit prior to signing deposits, prepayments, etc.? A: Steven Eliscu (COO) said they have already committed capital for long-lead items like fiber connectivity, which took several months to lay. For contractors, they are trying to get them in line with needs, and there will likely be some capital committed for initial scoping to help finalize the definitive agreement.

Q: What's the ultimate use case for the site, specifically training versus inference? A: Steven Eliscu (COO) indicated the current use case will likely be largely focused on training, with some inference where longer latency is tolerated. For future sites, they are cognizant of the market moving toward inference and are thinking about achieving 2 milliseconds or less latency to major metropolitan areas. At Christina Lake, workloads are evolving, including agentic AI, and they want to offer capacity for growth.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .