HashChain Technology Reports Second Quarter Fiscal 2019 Financial Report and Provides Update on Proposed Reverse Takeover
(via TheNewswire)
VANCOUVER / TheNewswire / April 26, 2019 - HashChain Technology Inc. ("HashChain" or the "Company") (TSXV: KASH; OTCQB: HSSHF) today announced its financial and operating results for the quarter ended February 28, 2019.
Quarterly Highlights
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- 8,395 Bitcoin mining rigs in operation.
- Increased total coins mined over previous quarter production by 24%.
- Recognized operating revenue totaling $2 million from digital currency mining.
Financial Information
The Company's net losses resulting for the three months and six ended February 28, 2019 were $2,541,496 and $6,361,199, respectively.
General and administrative expenses for the three and six months were $314,948 and $1,795,061 respectively, which as of February 28, 2019 included a non-cash charge for share-based compensation of $758,704. Additional ongoing general and administration expenses relate to the Company's growth plans and compliance costs related to operating a public company.
Operating and maintenance costs for the three and six months ended February 28, 2019 were $4,327,917 and $8,550,865 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 $751,525 and $1,480,392, respectively.
A comprehensive discussion of HashChain's financials and operations are provided in the Company's "Management Discussion & Analysis and Financial Statements" filed on SEDAR and can be found under the Company's profile on www.sedar.com.
Outlook
As of the date of this report, 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 press 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 (the "Proposed Transaction").
Due to increasing costs of cryptocurrency mining and volatility in the valuation of mined-cryptocurrencies, the hosting expenses paid by HashChain to its colocation 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 TSXV 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 TSXV 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.
Neither the TSX Venture Exchange, Inc. nor its Regulation Services Provider (as that term is defined in the polices of the TSX Venture Exchange) has in any way passed upon the merits of the Proposed Transaction and associated transactions and neither of the foregoing entities has in any way approved or disapproved of the contents of this press release.
About HashChain Technology Inc.
HashChain is a blockchain company, and the first publicly traded (TSXV: KASH; OTCQB: HSSHF) 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.' HashChain currently operates 8,395 Bitcoin Rigs with an additional 3,500 Rigs to be deployed from its previously announced acquisitions. Once all Rigs are operational, HashChain's mining operations will consist of 11,895 Rigs consuming approximately 17.5 megawatts of power.
HashChain Mining is a wholly owned subsidiary of HashChain Technology Inc. based out of Albany, New York, and an office in Vancouver, British Columbia.
On Behalf of the Board,
Patrick Gray
CEO & Director
For Further information please contact:
HashChain Technology Inc.
Paul Ciullo
Chief Financial Officer
607-760-7870
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.
Cautionary Note Regarding Forward Looking Statements: This release includes certain statements and information that constitute forward-looking information within the meaning of applicable Canadian securities laws, including statements regarding the performance of the Rigs, the expected consumption of 17.5 megawatts of power, the Company's expected operation of a total of 11,895 Rigs and the completion of the Proposed Transaction may constitute forward-looking statements. Generally, forward-looking statements and information can be identified by the use of forward-looking terminology such as "intends" or "anticipates", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should" or "would" occur. Forward-looking statements are based on certain material assumptions and analysis made by the Company and the opinions and estimates of management as of the date of this press release, that the Company will successfully operate an aggregate of 11,895 Rigs and such operation, including expected energy consumption, will be consistent with management's expectations, and that the Proposed Transaction will be completed. Although the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect, and the forward-looking statements in this release are subject to numerous risks, uncertainties and other factors that may cause future results to differ materially from those expressed or implied in such forward-looking statements. Such risk factors may include, among others, that the Company will not successfully operate a total of 11,895 Rigs and that the Rigs will not be performing optimally as anticipated by management, or the Proposed Transaction does not complete. Readers are cautioned not to place undue reliance on forward-looking statements. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. Readers are cautioned that reliance on such information may not be appropriate for other purposes. The Company does not intend, and expressly disclaims any intention or obligation to, update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.
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