Digihost Technology Inc. (“
Digihost” or the
“
Company”) (Nasdaq: DGHI; TSXV: DGHI), an
innovative U.S. based Bitcoin (“
BTC”) mining
company, is pleased to provide unaudited comparative BTC production
results for the month ended August 31, 2022, combined with an
operations update. All monetary references are expressed in USD
unless otherwise indicated.
Production Highlights for August
2022
- Mined 67.97 BTC, resulting in total
holdings of 176.61 BTC at the end of August valued at approximately
$3.54 million based on a BTC price of $20,050 as of August 31,
2022.
- Ethereum (“ETH”) holdings of
1,000.89 ETH at the end of August valued at approximately $1.56
million based on an ETH price of $1,554 as of August 31, 2022.
- Total digital asset inventory
value, consisting of BTC and ETH, of approximately $5.10 million as
of August 31, 2022.
- To avoid equity dilution for its
shareholders, management sold a portion of its BTC production
during August to fund its energy costs.
- The Company remains debt free as of
August 31, 2022.
- In continuing its support of the
power needs of the local community, the Company reduced its overall
energy consumption during the month of August 2022 with its
operation running predominantly at off-peak hours.
Year-Over-Year Monthly
Comparison
The Company mined approximately 23.90 more BTC in August 2022,
compared to August 2021, representing an increase of approximately
54.2%.
Figure 1. Year-over-year Monthly BTC
Production
|
|
|
|
|
Aug-22 |
Aug-21 |
|
MoM Increase |
|
Mined BTC |
|
67.97 |
|
44.07 |
|
23.90 |
|
Approximate BTC value |
$20,050 |
$47,167 |
($27,117 |
) |
Production Value |
$1,362,799 |
$2,078,650 |
($715,851 |
) |
|
|
|
|
Year-Over-Year YTD
Comparison
The Company mined approximately 184.36 more BTC
on a year-to-date basis as of August 31 2022, as compared to the
same period ended August 31 2021, representing an increase of
approximately 47.6%.
Figure 2. Year-over-year YTD BTC Production
|
|
|
|
|
YTD 2022 |
YTD 2021 |
|
YTD Increase |
|
Mined BTC |
|
571.80 |
|
387.45 |
|
184.36 |
|
Approximate BTC value |
$20,050 |
$47,167 |
($27,117 |
) |
Production Value |
$11,464,590 |
$18,274,854 |
($4,930,758 |
) |
|
|
|
|
Alabama Site Build-Out
Digihost is pleased to announce that during the
month of August it received Public Service Commission approval for
an economic rider rate discount. This discount, coupled with the
lower direct energy costs it has negotiated with Alabama Power,
will lead to an overall reduction in Digihost’s operating costs.
The Alabama Power agreements provide the Company with very
competitive power costs in today’s inflationary environment further
reinforcing Digihost’s strategic decision to expand and diversify
its operation to Alabama.
The Company continues the development of the
facilities build-out and construction work in Alabama on schedule
and on budget. Digihost is building out the necessary
infrastructure to provide the property with power capacity of 22 MW
during the fourth quarter of 2022 and a total of 55 MW by the end
of the first quarter of 2023.
Cancellation of Stock
Options
The Company also announces that it and certain
officers and directors of the Company have agreed to cancel an
aggregate of 1,149,998 stock options (options in respect of 166,666
shares formerly exercisable at $2.88 per share, options in respect
of 266,666 shares formerly exercisable at $3.75 per share, options
in respect of a total of 558,333 shares formerly exercisable at
$7.47 per share, and options in respect of 158,333 shares formerly
exercisable at $4.20 per share). The cancelled options were
voluntarily surrendered by the holders thereof for no
consideration.
Grant of Incentive Shares
The Company also plans to make an inducement
grant pursuant to a stand-alone award agreement outside the
Company’s equity incentive plans as an inducement material to the
Company’s vice-president of operations entering into employment
with the Company. The inducement grant was approved by the
Company’s Board of Directors and consists of the issuance of 19,391
subordinate voting shares of the Company (the “Inducement
Shares”) at a deemed price of C$6.54 per Inducement Share.
The issuance of the Inducement Shares is subject to regulatory
approval, including the TSX Venture Exchange.
Early Warning
The Company announces that Michel Amar, Chief
Executive Officer of the Company, has filed an early warning report
in respect of his holdings of the Company as a result of an
acquisition of shares of the Company. On September 2, 2022, Mr.
Amar acquired an aggregate of 55,344 shares of the Company through
a series of acquisitions conducted through the facilities of NASDAQ
for aggregate total consideration of USD$39,328.55 (the
“Series of Acquisitions”).
Immediately prior to the Series of Acquisitions,
Mr. Amar owned directly or indirectly 4,803,928 subordinate voting
shares of the Company (“SV Shares”) and 3,333
proportionate voting shares of the Company (“PV
Shares”), or approximately 17.16% of the then issued and
outstanding SV Shares on an undiluted basis and approximately
19.09% on a partially diluted basis. Following the Series of
Acquisitions, Mr. Amar owns directly or indirectly 4,859,272 SV
Shares and 3,333 PV Shares, or approximately 17.36% of the issued
and outstanding SV Shares on an undiluted basis and approximately
19.28% on a partially diluted basis. Since the filing of Mr. Amar’s
previous Early Warning Report on March 1, 2021, the capital of the
Company increased and Mr. Amar’s holdings in the securities of the
Company have decreased by more than 2% of the issued and
outstanding SV Shares as a result of dilution.
Mr. Amar reviews his holdings from time to time
and may increase or decrease his position as future circumstances
may dictate. This news release is being issued in accordance with
National Instrument 62-103 – The Early Warning System and Related
Take-Over Bid and Insider Reporting Issues in connection with the
filing of an early warning report dated September 7, 2022. The
early warning report has been filed on the System for Electronic
Document Analysis and Review (“SEDAR”) under the
Company’s issuer profile at https://www.sedar.com.
About Digihost
Digihost is a growth-oriented blockchain
technology company primarily focused on BTC mining. Through its
self-mining operations and joint venture agreements, the Company is
currently hashing at a rate of approximately 650 PH/s.
All hosting fees and joint venture profit
sharing are treated as production costs in the Company’s
consolidated financial statements.
For further information, please contact:
Digihost Technology
Inc.www.digihost.caMichel Amar, Chief Executive
Officer T: 1-818-280-9758Email: michel@digihost.ca
Cautionary
Statement Trading in the securities of the Company
should be considered highly speculative. No stock exchange,
securities commission or other regulatory authority has approved or
disapproved the information contained herein. Neither the TSX
Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
Forward-Looking
Statements Except for the statements of historical
fact, this news release contains “forward-looking information” and
“forward-looking statements” (collectively, “forward-looking
information”) that are based on expectations, estimates and
projections as at the date of this news release and are covered by
safe harbors under Canadian and United States securities laws.
Forward-looking information in this news release includes
information about potential further improvements to profitability
and efficiency across mining operations including, as a result of
the Company’s expansion efforts, potential for the Company’s
long-term growth, and the business goals and objectives of the
Company. Factors that could cause actual results to differ
materially from those described in such forward-looking information
include, but are not limited to: future capital needs and
uncertainty of additional financing, including the Company’s
ability to utilize the Company’s at-the-market offering program
(the “ATM Program”) and the prices at which the Company may sell
securities in the ATM Program, as well as capital market conditions
in general; share dilution resulting from the ATM Program and from
other equity issuances; risks relating to the strategy of
maintaining and increasing Bitcoin holdings and the impact of
depreciating Bitcoin prices on working capital; regulatory and
other unanticipated issues that prohibit us from declaring or
paying dividends to our shareholders that are payable in Bitcoin;
continued effects of the COVID19 pandemic may have a material
adverse effect on the Company’s performance as supply chains are
disrupted and prevent the Company from operating its assets;
approval of the Public Service Commission or other regulatory or
board approvals being received on a timely basis, or at all; the
acquisition of North Tonawanda, New York facilities closing on
timely basis, or at all; ability to access additional power from
the local power grid; a decrease in cryptocurrency pricing, volume
of transaction activity or generally, the profitability of
cryptocurrency mining; further improvements to profitability and
efficiency may not be realized; the digital currency market; the
Company’s ability to successfully mine digital currency on the
cloud; the Company may not be able to profitably liquidate its
current digital currency inventory, or at all; a decline in digital
currency prices may have a significant negative impact on the
Company’s operations; the volatility of digital currency prices;
and other related risks as more fully set out in the Annual
Information Form of the Company and other documents disclosed under
the Company’s filings at www.sedar.com. The forward-looking
information in this news release reflects the current expectations,
assumptions and/or beliefs of the Company based on information
currently available to the Company. In connection with the
forward-looking information contained in this news release, the
Company has made assumptions about: the current profitability in
mining cryptocurrency (including pricing and volume of current
transaction activity); profitable use of the Company’s assets going
forward; the Company’s ability to profitably liquidate its digital
currency inventory as required; historical prices of digital
currencies and the ability of the Company to mine digital
currencies on the cloud will be consistent with historical prices;
the ability to maintain reliable and economical sources of power to
run its cryptocurrency mining assets; the negative impact of
regulatory changes in the energy regimes in the jurisdictions in
which the Company operates; the ability to adhere to Digihost’s
dividend policy and the timing and quantum of dividends based on,
among other things, the Company’s operating results, cash flow and
financial condition, Digihost’s current and anticipated capital
requirements, and general business conditions; and there will be no
regulation or law that will prevent the Company from operating its
business. The Company has also assumed that no significant events
occur outside of the Company's normal course of business. Although
the Company believes that the assumptions inherent in the
forward-looking information are reasonable, forward-looking
information is not a guarantee of future performance and
accordingly undue reliance should not be put on such information
due to the inherent uncertainties therein.
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