Mr. Patrick Gray reports
HASHCHAIN TECHNOLOGY REPORTS THIRD QUARTER FISCAL 2019 FINANCIAL REPORT AND PROVIDES UPDATE ON PROPOSED REVERSE TAKEOVER
Hashchain Technology Inc. has released its financial and operating results for the quarter ended May 31, 2019.
8,395 bitcoin mining rigs in operation;
Mined 400 newly minted bitcoin;
- Recognized operating revenue totalling $2.8-million from digital currency mining.
The company's net losses resulting for the three and nine months ended May 31, 2019, were $1,301,928 and $8,096,457, respectively.
General and administrative expenses for the three and nine months were $136,310 and $1,930,371, respectively, which as of May 31, 2019, included a non-cash charge for share-based compensation of $758,704. Additional continuing general and administration expenses relate to the professional fees incurred by the company to execute current plans and compliance costs related to operating a public company.
Operating and maintenance costs for the three and nine months ended May 31, 2019, were $4,126,086 and $13,110,278, respectively, consisting primarily of fees transferred for electricity, daily monitoring and maintenance, facility costs, application of deposits to rent, and all other costs directly related to the maintenance and operation of the company's mining equipment. Included in this total are a non-cash charges for depreciation of $717,404 and $2,197,796, respectively.
A comprehensive discussion of Hashchain's financials and operations are provided in the company's management discussion and analysis and financial statements filed on SEDAR.
As of the date of this news release, the company has deployed 8,395 mining rigs. Upon deployment of the remaining 3,500 rigs previously acquired, the company will have a total of 11,895 in operation, bringing its digital currency mining footprint to 17.5 megawatts of computing power.
As disclosed in a news release dated March 28, 2019, the company announced that it has entered into a definitive agreement with shareholders of Digihost International Inc., whereby the business and assets of the company and Digihost will be combined by way of a share exchange between the company and shareholders of Digihost, constituting a reverse takeover of the company by Digihost under the policies of the TSX Venture Exchange.
Due to increasing costs of cryptocurrency mining and volatility in the valuation of mined cryptocurrencies, the hosting expenses paid by Hashchain to its co-location facility per coin mined are presently greater than the value of the coins mined. Completion of the proposed transaction will vertically integrate the hosting business to be acquired by Digihost with the mining operations of Hashchain, such that the cost of mining is significantly reduced.
The company and Digihost are in the process of preparing required disclosure with respect to the proposed transaction and otherwise working toward meeting the requirements of the TSX Venture Exchange with respect to the proposed transaction.
The Hashchain shares currently remain halted from trading and are not expected to resume trading until an information circular in respect of the proposed transaction has been prepared and filed on SEDAR, and the requirements of the TSX-V with respect to the proposed transaction have otherwise been fulfilled.
The proposed transaction cannot close until the required shareholder approvals are obtained and there can be no assurance that the proposed transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the proposed transaction, any information released or received with respect to the proposed transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Hashchain should be considered highly speculative.
The completion of the proposed transaction is subject to a number of conditions precedent (as described in prior news releases of the company), including approval of the proposed transaction by the exchange and the shareholders of Hashchain. Review of the proposed transaction by the exchange remains ongoing.
About Hashchain Technology Inc.
Hashchain is a blockchain company, and the first publicly traded Canadian cryptocurrency mining company to file a final prospectus supporting highly scalable and flexible mining operations across all major cryptocurrencies. Hashchain taps low-cost North American power, cool climate and high-speed Internet, the trifecta most critical to mining success, to create a competitive position for maximizing the number of mining wins.
We seek Safe Harbor.
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