BLOCK GAIN INC

Total revenue of $73.2 million for the three-month period ended March 31, 2023, as compared to $79.8 million for the same three-month period in 2022. The decrease was primarily driven by lower Bitcoin prices, which averaged $22,704 for the three-month period ended March 31, 2023, a decrease of 44% as compared to $41,241 for the three-month period ended March 31, 2022. The decrease in Bitcoin price was offset by a 51% increase in Bitcoin mined during the same three-month period in 2022. Produced 2,115 Bitcoin during the three-month period ended March 31, 2023, as compared to 1,405 Bitcoin during the same three-month period in 2022. Higher Bitcoin production was driven by a significant increase in miners deployed year over year.

The average cost to mine Bitcoin for the three-month period ended March 31, 2023 was $10,354 per Bitcoin, as compared to $13,590 per Bitcoin for the same three-month period of 2022. Earned $3.1 million in power curtailment credits for the three-month period ended March 31, 2023, as compared to $2.6 million in power curtailment credits earned for the same three-month period in 2022.

Mining revenue of $48.0 million for the three-month period ended March 31, 2023, as compared to $57.9 million for the same three-month period in 2022, primarily driven by lower Bitcoin prices and increased curtailment driven by our power strategy to reduce overall power costs. Data center hosting revenue of $9.0 million for the three-month period ended March 31, 2023, as compared to $9.7 million for the same three-month period in 2022, driven by reduced customer billings as a result of lower revenue share from customers due to lower Bitcoin prices. Engineering revenue of $16.1 million for the three-month period ended March 31, 2023, as compared to $12.1 million for the same three-month period in 2022, primarily driven by increased demand from third-party data center and engineering customers. Maintained industry-leading financial position, with $253.6 million in working capital, including $158.3 million in cash on hand (and excluding an additional $29.5 million in restricted cash), and $202.0 million Bitcoin (unaudited), all of which were produced by the Company’s self-mining operations, as of March 31, 2023.