HIVE Blockchain Technologies Ltd (OTCMKTS:HVBTF) is on a roll right now. Its price has skyrocketed in the last few months to a high $4.35. News of the firm’s plans to transform the capital market has been met positively by the market and it looks like things are going uphill for the company.
In this piece, we provide details on the company and its possible future outlook. Take a look at the stock’s price movement:
HIVE Blockchain Technologies Ltd. was established in June 1987 and its head office is located in Vancouver, Canada. The firm has garnered a reputation as a result of its attempts to create a link between the blockchain sector and the traditional capital markets. Already, the firm has established a strategic partnership with Genesis Mining Ltd., a major cryptocurrency mining hash rate provider on a global scale in a bid to create the next level of blockchain infrastructure.
HIVE presently has an ultramodern GPU-based cryptocurrency mining facility based in Iceland, concluded by May 2017, which successfully mines cryptocurrencies such as Ethereum all day. HIVE is also in possession of an option to purchase four more facilities in Iceland or Sweden from Genesis. Genesis enables HIVE with data center equipment knowledge and holds the largest stake in the company.
In March 2018, HIVE Blockchain Technologies announced that it had gone into a set of agreements whose terms required that HIVE agreed to undertake the acquisition of all of the issued and outstanding shares of Kolos. Through the purchase of an additional Norwegian company for total estimated payment of $9.9 million, 4.75 million common shares and 1.25 million warrants.
Chief Executive Officer, Harry Pokrandt explained that this was another huge achievement in their ongoing global growth as a principal cryptocurrency and blockchain infrastructure company. Kolos will be a leading data center project for HIVE for a long time to come and could possibly lead the firm to expand to more than 1 GigaWatt of green hydroelectricity consumption committed to blockchain infrastructure.
To put it in perspective, the firm’s advanced mining activities in Sweden and Iceland will altogether consist of 44.2 MegaWatts of power consumption – which will also originate from green sources. This acquisition will provide HIVE with huge scalability for future development. Its vision is to carry out the project in stages to become one of the biggest and most energy-efficient datacentres globally. The firm intends to continue its exploration of its non-dilutive financing alternatives to start the build immediately.
HIVE has publicly stated its dedication to being a major player in developing a clean energy future for the blockchain industry. The Kolos project, which is to be carried out on completely green, renewable power, is a huge project which will prove this commitment. The foremost asset belonging to Kolos is a 64-hectare area situated in Ballangen, Norway.
Based on the agreement, HIVE will pay a cash amount in the estimated range of $7.23 million, liabilities worth $2.7 million and an issue 4.75 million of common stock of the firm and 1.25 million warrants to acquire common stock of the firm. These share warrants along with the 2.65 million common shares of HIVE are to be delivered based on some stated conditions. The warrants will remain exercisable for a set period of five years from the date the warrants are issued and have an exercise price to be chosen at the close of the Acquisition.
The close of the transaction is dependent on a set of customary closing requirements which includes the authorization of the TSX Venture Exchange and is required to be closed in 60 days.
For 2017, there were no revenues reported, a trend which has been so from as back as 2014. It is expected that in years to come, the firm will move out of this growth phase and generate revenues from the sale of its products.
In the same period, operating expenses which only consisted of research and development expenses fell by 48%, an indicator that the firm may have improved its operational efficiency. As there was no operating income, operating loss for the year was recorded at $61,587. It should be noted that it is a regular trend for developing companies to be unable to generate revenues while still incurring costs in the growth years.
Net loss for the year was $0.7 million, a drop from the prior year loss of $0.81 million revealing that the income statement consisted mostly of its operating and interest expense for the year.
The statement of financial position reveals that the firm is very highly geared. On its books, its total debt is worth just $3.5 million, resulting in an extremely low debt-to-equity ratio. It also has a very low liquidity ratio of 0.012
HIVE’s plan to turn around the capital market transacting system could revolutionize capital markets and make the firm one of the top blockchain companies in the world.
Disclosure: We have no position in HVBTF and have not been compensated for this article.