CryptoStar Corp. Announces Second Quarter 2020 Financial Results

TSXV: CSTR

TORONTO, Oct. 14, 2020 /CNW/ - CryptoStar Corp. (TSXV: CSTR) ("CryptoStar" or the "Company"), a cryptocurrency mining and data centre operator, today announced its financial results for the second quarter ended June 30, 2020. For the full condensed consolidated interim financial statements and management discussion and analysis for the second quarter ended June 30, 2020, please visit SEDAR at www.sedar.com. All values in this news release are in United States Dollars unless otherwise specified.

"CryptoStar's prudent decision to restructure operations has strengthened the Company. Our long term expansion plans into low cost energy regions in North America continued throughout the second quarter, solidifying CryptoStar's objective to become one of the lowest cost Bitcoin producers in North America." said David Jellins, Chief Executive Officer of CryptoStar.

"More recently, the Company has been transitioning from a self-mining, Bitcoin only, company to a one-stop shop for cryptocurrency mining customers and the inherent risks and exposure associated with self-mining Bitcoin only have been significantly reduced. Future growth will be driven through mining Bitcoin and other cryptocurrencies in addition to offering high quality GPU and ASIC miners, logistics and shipping and hosting solutions for customers worldwide at low power rate data centres in China, Canada and other data centres around the world." added Mr. Jellins.

Q2 2020 Highlights

• The Company signed a power supply agreement with an Alberta-based private energy company effective April 17, 2020 securing up to 30 megawatts (MW) at among the lowest electricity rates in North America with operations to commence as soon as possible.

     Highlights of the Transaction:

1. Projected power cost will be amongst the lowest in the Province of Alberta.
2. Non-dilutive transaction to Cryptostar Corp.'s minority shareholders through the generous support of the major shareholder.
3. The Company's position further strengthened to become one of the lowest cost Bitcoin producers in North America.

• The Company's first facility in Newfoundland and Labrador, Canada continued to mine Bitcoin with the first new generation miners commissioned on March 30, 2020. Tier 1 has applied for NL Hydro power permits in excess of 20 MW to facilitate CryptoStar's long term expansion plans in Newfoundland and Labrador under the Agreement and is awaiting approvals of these permits. The approval of these permit applications has been delayed by restrictions relating to the outbreak of the COVID-19 pandemic.
  
  
  
  
• During the Company's relocation to new lower power cost locations in Canada, the Company's corporate overhead during Q2, 2020 was reduced by 37% compared to Q2, 2019. Site operating costs during Q2, 2020 were reduced by 90% compared to Q2, 2019.

About CryptoStar Corp.:

CryptoStar has cryptocurrency mining operations with data centres located in the U.S.A. and Canada. CryptoStar is currently dedicated to becoming one of the lowest cost cryptocurrency producers in North America and a major supplier of GPU and ASIC miners worldwide.

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

Non-GAAP Measures

This press release presents certain non-GAAP ("GAAP" refers to Generally Accepted Accounting Principles) financial measures to assist readers in understanding the Company's performance. These non-GAAP measures do not have any standardized meaning and therefore are unlikely to be comparable to similar measures presented by other issuers and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

Management uses these non-GAAP measures to supplement the analysis and evaluation of operating performance.

The following terms are used, which are not found in the Chartered Professional Accountants of Canada Handbook and do not have a standardized meaning under GAAP.

• "EBITDA" (Earnings before Interest, Taxes, Depreciation, and Amortization) represents net income or loss excluding net finance income or expense, income tax or recovery, depreciation, and amortization.
• "Adjusted EBITDA" represents EBITDA adjusted to exclude share-based compensation, fair value loss or gain on remeasurement of digital assets, and costs associated with one-time transactions (such as listing fees).
• "Adjusted EBITDA margin" represents Adjusted EBITDA as a percentage of revenue.
• "Mining Profit" represents gross profit (revenue less cost of revenue), excluding depreciation.
• "Mining Profit Margin" represents Mining Profit as a percentage of revenue.

 

SOURCE CryptoStar Corp.