Digihost Technology Inc. (“
Digihost” or the
“
Company”) (Nasdaq: DGHI; TSXV: DGHI), an
innovative North American based Bitcoin self-mining company, is
pleased to provide unaudited Bitcoin (“
BTC”)
production updates for the quarter and month ended December 31,
2021. All amounts are expressed in USD unless otherwise indicated.
Year-Over-Year Quarterly
Comparison
The Company mined approximately 108.11 more BTC
in Q4 2021, compared to Q4 2020, representing an increase of
approximately 168%. Using the December 31, 2021 and December 31,
2020 closing BTC prices (from CoinDesk), the value of the Company’s
BTC mined in Q4 2021 increased by approximately $6.6 million, or
328% compared to Q4 2020.
Figure 1. Year-over-year Quarterly BTC
Production
|
|
|
|
|
Q4 2020 |
Q4 2021 |
QoQ Increase |
Mined
BTC |
|
64.27 |
|
172.38 |
|
108.11 |
Approximate BTC value |
$29,002 |
$46,306 |
$17,305 |
Value |
$1,863,959 |
$7,982,228 |
$6,118,270 |
|
|
|
|
Production Highlights for December
2021
- Mined 61.53 BTC during the month,
increasing total holdings to 631.86 BTC valued at approximately
$29.3 million as of December 31, 2021, based on a BTC price of
$46,306.
- Total Ethereum
(“ETH”) holdings of 1,000.89 ETH valued at
approximately $3.7 million as of December 31, 2021, based on an ETH
price of $3,683.
- Total digital asset inventory value
consisting of BTC and ETH of approximately $33 million as of
December 31, 2021.
- Year-to-date deposits of
approximately $34.5 million on equipment and infrastructure
targeted to be installed in Q1 2022 pertaining to the Company’s BTC
mining operations.
- During the month of December, the
Company received 2,480 new, technologically advanced,
high-performance M30 BTC miners (the “Miners”) for
use in its mining operations.
- The Company’s current hashrate was
approximately 415PH at December 31, 2021 and is expected to
increase to approximately 1.2EH by the end of Q1 2022.
Bitcoin Mining Update
For the 12-month period ended December 31, 2021,
the Company’s mining fleet produced 520.63 BTC, with production
broken down as follows:
- Quarter 1, 2021: 105.26 BTC
- January: 33.70
- February: 35.02
- March: 36.54
- Quarter 2, 2021: 109.97 BTC
- April: 37.52
- May: 34.26
- June: 38.19
- Quarter 3, 2021: 133.02 BTC
- July: 51.28
- August: 44.07
- September: 37.67
- Quarter 4, 2021: 172.38 BTC
- October: 41.84
- November: 69.01
- December: 61.53
Year-Over-Year Monthly
Comparison
The Company mined approximately 35.15 more BTC
in December 2021, compared to December 2020, representing an
increase of approximately 133%. Using the December 31, 2021 and the
December 31, 2020 closing BTC prices (from CoinDesk), the value of
the Company’s BTC mined in December 2021 increased by approximately
$2.3 million, or 455%, over December 2020.
Figure 2. Year-over-year Monthly BTC
Production
|
|
|
|
|
Dec-20 |
Dec-21 |
MoM Increase |
Mined
BTC |
|
26.38 |
|
61.53 |
|
35.15 |
Approximate BTC value |
$29,002 |
$46,306 |
$17,305 |
Value |
$513,220 |
$2,849,208 |
$2,335,988 |
|
|
|
|
Quarter-Over-Quarter
Comparison
The Company mined an additional 39.36 BTC during
Q4 2021 compared to Q3 2021, representing an increase of 30%. Based
on December 31, 2021 and September 30, 2021 closing BTC prices
(from CoinDesk), the value of the Company’s BTC mined in Q4 2021
increased by approximately $2.2 million, or 37%, quarter over
quarter.
Figure 3. Quarter-over-quarter BTC Production
|
|
|
|
|
Q3 2021 |
Q4 2021 |
QoQ Increase |
Mined
BTC |
|
133.02 |
|
172.38 |
|
39.36 |
Approximate BTC value |
$43,791 |
$46,306 |
$2,516 |
Value |
$5,825,079 |
$7,982,228 |
$2,157,149 |
|
|
|
|
Corporate Updates for December
2021
- As announced by the Company in a
press release on May 12, 2021, the Company previously agreed to
purchase approximately 10,000 new Miners from Northern Data AG. As
of December 31, 2021, approximately 6,500 of those Miners had been
received. The remaining Miners from that order are expected to
arrive at Digihost’s data center over the course of the next two
months in the following tranches:
- 2,000 in January 2022
- 1,400 in February 2022
- Digihost continues to participate
in demand response programs in New York State to reduce marginal
carbon emissions at its facility.
- The Company’s strategic co-mining
agreement with Bit Digital USA, Inc is in process, with
expected completion of the deployment of BTBT miners in Digihost’s
premises by the end of Q2 2022.
- The Company executed a 99-year
ground lease of its mining farm.
- A portion of the Miners received
during Q4 2021 were related to the Company’s Miner Lease Agreement
with Northern Data, NY LLC, pursuant to which the parties have
agreed to split a portion of the mining rewards received and energy
costs incurred for the Miners put in service pursuant to that lease
agreement. 100% of the Miners subject to that lease agreement are
expected to be in service by the end of Q1 2022.
- As announced in a March 24, 2021
press release, the Company previously signed a binding agreement
for the purchase of a 60 MW power plant located in the State of New
York. As of December 31, 2021, Digihost had received all planning
board permits and compliance approvals required to ramp up the
facility build-out, with an expected completion timeframe of
mid-February 2022. The Company is currently continuing to wait for
final Public Service Commission approval of the power plant
acquisition.
Management Commentary
Michel Amar, the Company’s CEO, stated: “The
final quarter of 2021 proved to be an extremely productive quarter
for our mining operations, as we increased our Bitcoin production
by 30% over the prior quarter. We finished the year by mining the
single highest amount of Bitcoin mined by the Company in any given
quarter in the Company’s history, and, with shipments of our
previously purchased miners accelerating over the coming months, we
expect our Bitcoin production to continue to increase as we scale
up our operations.”
Restatement of Interim Financial
Statements
The Company also announces a restatement and
reissue of its interim unaudited financial statements for the three
and nine months ended September 30, 2021 (the “Amended
Interim Statements”), as well as a restatement and reissue
of the accompanying MD&A for the three and nine months ended
September 30, 2021 (the “Amended MD&A”). The
Amended Interim Statements and Amended MD&A are available under
the Company’s profile on www.sedar.com.
As a result of a reassessment of existing timing
differences (in connection with a review of the Company’s financial
statements by the Company’s independent auditors), management
determined that a deferred tax provision of $1,498,085 should be
recorded as an expense for Q3 2021, increasing the Company’s total
long-term deferred tax liability to $2,073,709 at quarter end. The
Company’s deferred tax balance relates primarily to timing
differences between accounting and tax reporting related to the
recording of depreciation expense on the Company’s property, plant,
and equipment, unrealized gains and losses on digital currencies
and share based compensation. The deferred tax provision recorded
by the Company in the Amended Interim Statements is a non-cash
charge for fiscal 2021 and is recorded on the Company’s balance
sheet as a long-term, deferred tax liability. This deferred tax
provision is an estimate of potential future taxes payable with the
timing of payment being indeterminable as of September 30,
2021.
The Company has sufficient tax attributes
available to offset taxable income generated during the nine month
period ended September 30, 2021.
As a result of the updates to the Amended
Interim Statements, the Company had a net loss of $771,154,
compared to the previously reported net income of $762,931, for the
three months ended September 30, 2021, and had a net loss of
$977,046, compared to the previously reported net income of
$521,039, for the nine months ended September 30, 2021.
Furthermore, at September 30, 2021, total liabilities were
$7,501,696, rather than the previously reported $5,493,626, and
total shareholders’ equity was $66,978,402, rather than the
previously reported $68,986,473. The restatements had no impact on
the Company’s record revenue from digital currency mining, gross
profit, operating income, EBITDA or adjusted EBITDA for both the
three and nine months ended September 30, 2021, on the Company’s
cash flows for the nine months ended September 30, 2021 or on the
Company’s cash or total assets at September 30, 2021.
For more information, please refer to Note 3 and
Note 19 of the Amended Interim Statements, where the change is
described, as well as the entirety of the Amended Interim
Statements and the Amended MD&A.
Grant of Restricted Share
Units
The Company also announces the grant of
restricted share units (“RSUs”) to certain
officers, directors, management, key consultants and employees of
the Company.
The Company granted an aggregate of 1,424,250
RSUs pursuant to the Company’s Restricted Share Unit Plan. Each RSU
entitles the holder thereof to receive one subordinate voting share
of the Company. The RSUs will vest in three equal tranches, on
January 4, 2023, 2024 and 2025.
About Digihost Technology
Inc.
Digihost is a growth-oriented blockchain
technology company primarily focused on Bitcoin
mining. Through its self-mining operations and joint venture
agreements, the Company is currently hashing at a rate of
approximately 415PH with plans to expand to a hashrate of 3.6 EH by
the end of 2022.
For further information, please contact:
Digihost Technology
Inc.www.digihost.caMichel Amar, Chief Executive Officer
Email: michel@digihostblockchain.com
Cautionary StatementTrading 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 news
release.
Forward-Looking StatementsExcept 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 U.S. and Canadian
securities laws. Forward-looking information in this news release
includes information about hashrate and infrastructure expansion,
diversification of operations, potential further improvements to
profitability and efficiency across mining operations, potential
for the Company’s long-term growth, and the business goals and
objectives of the Company. Factors that could cause actual results,
performance or achievements to differ materially from those
described in such forward-looking information include, but are not
limited to: 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; the ability to establish new facilities for the purpose of
cryptocurrency mining; receipt of Public Service Commission
approval or other regulatory or board approvals; the ability to
establish new facilities for the purpose of research &
development; a decrease in cryptocurrency pricing, volume of
transaction activity or, generally, the profitability of
cryptocurrency mining; delivery of mining rigs for self-mining and
for hosting may not be realized in the number anticipated, or at
all, or on the schedule anticipated, and resulting hashing power
may materially differ from that anticipated; 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; risks related to the Company's restatement of its
financial statements as discussed in this release (including,
without limitation, potential inquiries from regulators and the
potential adverse effect on the price of the Company's subordinate
voting shares) and other 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;
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 uncertainty therein. Except
as expressly required by applicable securities laws, the Company
undertakes no obligation to update or revise any forward-looking
information, whether as a result of new information, changed
circumstances or future events or for any other reason.
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