Mr. Patrick Gray reports
HASHCHAIN TECHNOLOGY REPORTS FOURTH QUARTER AND FULL YEAR 2019 FINANCIAL REPORT AND PROVIDES UPDATE ON PROPOSED REVERSE TAKEOVER
Hashchain Technology Inc. has released its results for the fourth quarter and full year ended Aug. 31, 2019.
Mined approximately 300 newly minted bitcoin;
- Recognized operating revenue totalling $4-million from digital currency mining;
- Incurred a net loss of $451,096 for the quarter.
Fiscal 2019 highlights:
- Generated income of $11,503,102 from mining of digital currencies;
- Mined 1,422 newly minted bitcoin;
- Extinguished outstanding debts owed through the completion of the sale of the NODE40 software platform;
- Incurred a net loss of $8,594,036 for the year.
A comprehensive discussion of Hashchain's financials and operations is provided in the company's management's discussion and analysis and financial statements filed on SEDAR, and can be found under the company's profile on
On March 28, 2019, the company announced that it had 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 currently 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.
Management of the company anticipates that the completion of the proposed transaction would provide a number of benefits to Hashchain, including:
- Reduced costs of cryptocurrency mining through the vertical integration of Hashchain's operations and the termination of the hosting services agreement with Bit.Management LLC, which the company currently pays for rent
for the physical space of its rigs and for the electricity used in its cryptocurrency operations;
- Release from accrued liabilities owing to Bit.Management pursuant to the hosting service agreement;
- Increased access to capital as a result of the minimum $5.4-million concurrent financing of Digihost to be completed prior to completion of the proposed transaction.
Upon completion of the proposed transaction, the mining operation will have 12,895 bitcoin mining rigs with the ability to expand to 17.5 megawatts of computing power with electricity at an average all-in cost of five U.S. cents per kilowatt-hour. The operating facility is located in Buffalo, N.Y., with over 70,000 square feet under a five-year lease and an option to lease additional facility space totalling 240,000 square feet after three years. Hashchain will focus on validation through mining, hosting solutions and blockchain software solutions.
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. The completion of the proposed transaction is subject to a number of conditions precedent (as described in prior press releases of the company), including approval of the proposed transaction by the TSX Venture Exchange and the shareholders of Hashchain. Review of the proposed transaction by the exchange is continuing.
We seek Safe Harbor.
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