Overview
Overview Squire Mining Ltd. (CSE:SQR) is a Canadian-based cryptocurrency mining company focused on the development, manufacturing and sale of data mining infrastructure and system technology. Their products support global blockchain applications in the mining space, including application specific integrated circuit (ASIC) chips and next-generation cryptocurrency mining rigs. Since Bitcoin was unveiled in 2009, the cryptocurrency market has grown to include several different types of tokens. Most cryptocurrencies are transacted across a decentralized network, or blockchain, where other users, known as miners, validate the transaction. Miners compete against one another for newly minted currency by solving cryptographic puzzles that determine who transcribes transactions on the block. To do this, companies dedicated to mining for cryptocurrencies require equipment that can mine continuously. Setting the standard for the industry, cryptomining giant Bitmain is the data mining infrastructure and system technology indicator for how the development of cryptomining technology, producing ASIC chips and cryptocurrency mining rigs. Bitmain generated $2.5 billion in revenue in 2017 and recorded a net profit of $1.1 billion in Q1 2018. Currently, Bitmain is gearing up for its IPO as a publicly-traded company on the Hong Kong Stock Exchange in either Q4 2018 or Q1 2019 and has a pre-IPO valuation of $14 billion according to Forbes. Looking to enter the same space, Squire is currently testing their prototype 10 nanometer ASIC chips and cryptomining rigs. Squire has signed an exclusive distributor agreement with Coingeek.com, which is subject to minimum purchase requirements and will be in charge of marketing, soliciting, selling and distributing Squires new ASIC chip and mining system under the Coingeek.com brand. Once these products go to market, the company will be turning its attention to developing seven or eight nanometer chips and rig systems that will address issues other seven nanometer systems are facing. Company Highlights Exclusive distribution agreement signed with Coingeek.com with minimum purchase requirements. Will be releasing latest 10 nanometer rigs and ASIC chips in Q4 2018. Rig sales to commence in 2019. Blockchain market is expected to grow at an CAGR of 37.2 percent and generate US$7.59 billion in revenue by 2024. Management is experienced in marketing, branding and raising capital. Cryptocurrencies Cryptocurrencies are decentralized and encrypted tokens that can be exchanged between users across a network. The transactions between users are validated across a decentralized public ledger, or blockchain, by other users on the network. Since the emergence of Bitcoin in 2009, the cryptocurrency market has developed into a comprehensive industry that includes numerous cryptocurrencies, such as Ethereum, Litecoin and Dash, that are hosted and transacted within blockchain networks. Cryptocurrencies have seen significant growth as they gain more traction and as multiple industries, such as banking, finance, mining, among others, begin to embrace blockchain technology solutions. Cryptocurrency mining As cryptocurrencies gained popularity, new businesses emerged that were focused on large scale cryptocurrency mining. These companies make money by solving cryptographic puzzles that are placed in a block and then verified by other miners. Once this is done, the miner that solved the puzzle receives a portion of the cryptocurrency being transacted. In order to deploy large-scale operations of this type, miners require dedicated hardware and software that is up to the task. Sensing the need for equipment in the growing cryptocurrency space, companies like as Bitmain, have been working on developing mining algorithms and software that can quickly and effectively solve cryptographic puzzles. The software lives within specialized hardware called rigs, which are designed to run continuously so they can mine 24 hours a day, which makes a life cycle of eight months to a year for the rigs according to Squire Mining EVP Richard Underhill. To help extend the life of the rig, certain conditions need to be met to ensure optimal performance. The rigs need to be in a cool environment to avoid overheating, supported by high-speed Internet and they should be situated in jurisdictions with low costs of power to ensure the profitability. With these three factors in mind, jurisdictions like Iceland, Venezuela and Georgia are becoming increasingly popular for the development of cryptocurrency mining warehouses. Currently, approximately 73.12 terawatt hours worth of power are dedicated to cryptocurrency mining operations across the world. The market has proven a profitable one. Within 2017 alone, Bitmain generated $2.5 billion in revenue where approximately 96 percent of their revenue was made from the sales of their mining rigs. Their Antminer rig line accounts for approximately 85 percent of the mining rigs sold globally. Blockchain Blockchain is a decentralized electronic transaction-processing and record keeping system, which allows various users to track information that is uploaded into the system. Blockchain can provide transparency, ease of access and legitimacy to transactions happening in variety of industries. Due to the variety of its applications, the blockchain market is expected to have a CAGR of 37.2 percent and will generate US$7.59 billion in revenue by 2024, according to a report by Grand View Research Inc. While blockchain technology was originally invented as a transaction record for Bitcoin miners, the applications for the technology are expanding into other sectors. As analysts question the longevity of cryptocurrencies, other applications for blockchain are emerging including supply chain tracking and validation for the food and cannabis industries, smart contract solutions in the financial services sector and more. Products Squire develops the equipment cryptocurrency miners need to run their operations. Currently Squire is testing its prototype 10 nanometer ASIC chips and rigs. The expected timeline for Squires chip and rig development is as follows: End of September 2018: Chip prototype tested Q4 2018: 60,000 chips tested in prototype rigs Q4 2018: Launch of the rig at the Coingeek Conference Q4 2018: Commencement of mass manufacturing of the chip Q1 2019: Commencement of rig manufacturing Q1 2019: Commencement of rig sales. After Squire has started to distribute their 10 nanometer microchip and cryptomining rigs, the company will be turning its attention to developing a seven or eight nanometer microchips and cryptomining rigs. Partnerships Coingeek.com In August 2018, Squire entered into an exclusive distributor agreement with an associate of Coingeek.com, the worlds largest miner of bitcoin cash. The distributer will market, solicit, sell and distribute Squires new ASIC chip and mining system to cryptocurrency miners under the Coingeek.com brand. The distribution of the chips and mining systems are subjected to a minimum purchase requirements over a three year term, which can be extended to five. Squire is currently in the process of solidifying a couple of manufacturing agreements with well known microchip and technology manufacturing companies to ensure that they are providing cryptocurrency miners with a quality product. Management Simon Moore Executive Chairman & CEO Simon Moore has over 30 years of corporate and strategic management experience and entrepreneurship, working across various industry sectors and in both public and private enterprise. A strategic planner by background, he has extensive expertise in digital innovation, technology development and workflow transformation. This includes sales management, education and training, venture capital, project management, cross-functional business leadership, branding, marketing, advertising and communication. Moore is the founder and past CEO of two Australian digital advertising agencies, chairman of a cloud integration company, and retired CEO of one of Australias largest e-learning development companies. Moore has been a sought-after executive in execution and corporate management. He was responsible for creating training programs utilized in the resource sector, developing core and site induction training programs for BHP Billiton, BHP Mitsubishi Alliance, BHP Mitsu Coal and Arrow Energy, to name just a few. Moore holds a Master of Business (research) from Queensland University of Technology, Australia. Richard Underhill Executive VP Richard Underhill is an award winning producer, writer, and director of independent films and network television. He has been responsible for producing more than 600 hours of network television and four feature films spanning a 15 year career in the entertainment industry. Underhill has independently created and developed 40 television projects with various sales to VH1, TLC, Discovery, Sony, Universal and Newline Cinema. To assist in the successful sales and execution of Underhills projects, he has been directly responsible for creating the branding of and marketing campaigns for each individual project working with some of the top entertainment industry branding and marketing departments in Hollywood. Additionally, Underhill has founded and developed two mobile broadcasting technology platforms and successfully raised millions of dollars in private funding to bring his technology and media projects to market. Richard Wheeless CFO Rich Wheeless is a seasoned Chief Financial Officer, with 15 years of financial leadership experience. Most recently, he was the Chief Financial Officer for the security software company Rivetz, Inc. Previous to that he was the Chief Financial Officer for LaunchKey, Inc. which was acquired by Iovation. Wheeless has done multiple successful turnarounds for State of Ohio funded companies under the administration of Governor John Kasich. Additionally, he has held executive positions in Canada, United States and the United Kingdom. His global experience is invaluable to his role. He originally started his career in the private equity division at Citigroup. Wheeless has an MBA in Finance with honors from Otterbein University. Justin Corinella Head of Technology Justin Corinella is the Co Founder and CTO of Dahrwin, a mesh network, communication technology company; with three issued patents and several more pending. Corinella is the primary inventor of this technology, which is lauded by many as an incredible leap forward and revolutionary for wireless networking that specifically allows any mobile device to directly and securely connect for communication without internet access or cellular infrastructure. In 2010, Corinella teamed up with multiple high-level venture capital firms to create Dahrwin LLC, in an effort to build out the technology it offers today. The technical team, lead by Corinella, constantly worked to better the functionality, expand the scope of industry usage and perfect the stability of the Dahrwin Mesh Network with proven success. Through his endeavors, Corinella has refined his knowledge and expertise, all of which began in the data storage and communications sectors. His deep insight into technology and wireless communications has positioned him as a lead in multiple R&D and Engineering departments working on various military and government based technologies. Corinella is a respected innovator in computer and communication engineering and a very sought after asset in these sectors. Marko Hytinkoski Head of Research Marko Hytinkoski has been an international business executive for over 20 years in many cities in Europe and Asia. He has worked in the technology sector in various high-level management roles and has lived in four continents while successfully executing those positions. Through the benefits of this experience and exposure, he has a very diverse and unique scope of global business practices, business etiquette and employee culture from multiple countries around the globe. Further, Hytinkoski has earned years of knowledge to cryptocurrencies, blockchain and initial coin offerings in investor, consultant and advisor roles. He has been an early adopter of the technology since 2011, well before most were aware of the existence of the technology. Hytinkoskis opportunities and experience have given him a rare vision into the birth of blockchain to the Internet of Things. He holds an EMBA and Master of Science (Economics) by education. David Rokoss Director David Rokoss has a twenty year career as an entrepreneur and consultant, working with a variety of private and publicly listed companies, focusing on concept development, finance and operational management. For the last decade, he has consulted with numerous early stage companies across the mining, clean tech, retail and technology sectors, focusing on business and corporate development opportunities. Rokoss is currently a Director of Blackheath Resources, a TSX venture listed mining company and a partner at Ptolemy Capital. He is a graduate of McMaster University. Garry Stock Director Garry Stock has worked in the resource industry for more than 20 years, helping build companies from inception to up to $500-million in market capitalization. Stock has been involved in $400-million in equity financings and has acquired/developed exploration assets across most commodities within Canadian, the U.S., Australian and British securities jurisdictions. He also holds an Honours BA in Economics and completed the CFA program in 1998. Peter Wielgosz Director Peter Wielgosz is a lawyer with more than 12 years experience across Australia, Europe and the Middle East with a particular focus on capital markets and structuring financial instruments. Over the last five years, Wielgosz has been a legal advisor to family offices and has worked on a variety of acquisitions, divestments and private equity deals as well as the establishment of various corporate investment/holding vehicles, SPVs and trusts and the governance structures that unite them. Prior thereto, Wielgosz was an attorney in the capital markets practice of Clifford Chance LLP in both its Dubai and London offices and in the banking and project finance team with Freehills in Melbourne, Australia. Wielgosz has a Juris Doctor from Melbourne University (Australia) and a bachelor in economics from McGill University (Canada). He recently studied private equity at Oxford University Said Business School and is a member of the Institute of Directors in London. Stefan Matthews Director Stefan Matthews has significant senior management and executive leadership experience totalling more than 30 years in the technology and online services sector, where he has been responsible for operations in Australia, Japan, Hong Kong, South Korea, Singapore, Spain, Malta and the United Kingdom at CIO, CTO and CEO level. He has been actively involved in several IPOs (Australia and USA) and multiple mergers and acquisitions. In 2015, Mr. Matthews was a founder and is currently Chairman of the nChain Group, known for global leadership in blockchain and bitcoin research. BMG, a division of the nChain Group has a significant investment in Bitcoin BCH mining, operating a diversified fleet in multiple locations. Mr. Matthews holds a Bachelor of Financial Administration and a MBA (International Business) from the University of New England.