Digihost Reports Positive Adjusted EBITDA for Q2 2023
15 Agosto 2023 - 7:00AM
Digihost Technology Inc. (“
Digihost” or the
“
Company”) (Nasdaq: DGHI; TSXV: DGHI), an
innovative U.S. based blockchain technology and computer
infrastructure company, is pleased to provide a summary of the
Company’s unaudited financial results for the second quarter ended
June 30, 2023. All amounts reported herein are presented in U.S.
dollars, unless otherwise indicated. The Company’s unaudited
consolidated financial statements and management’s discussion and
analysis (“
MD&A”) for the three and six month
period ended June 30, 2023 have been filed and made accessible
under the Company’s continuous disclosure profile on SEDAR at
www.sedar.com and are also accessible on the U.S. Securities and
Exchange Commission’s EDGAR website at www.sec.gov/EDGAR.
Comparative Financial Highlights for the
Three-Month Period Ended June 30, 2023
- Revenue from digital currency
mining and sale of energy of $5.9 million reported for the
three-month period ended June 30, 2023, compared to $7.5 million
for the three-month period ended June 30, 2022. The decrease in
revenue is primarily driven by the period-over-period decline in
the price of Bitcoin (“BTC”);
- The Company mined approximately 191
BTC for the three-month period ended June 30, 2023, at an average
BTC price of approximately US$28,021 (calculated from BTC prices
per CoinMarketCap), compared to the three-month period ended June
30, 2022 in which the Company mined approximately 252 BTC at an
average price of Bitcoin of approximately US$33,032 (calculated
from BTC prices per CoinMarketCap);
- Adjusted EBITDA* for the
three-month period ended June 30, 2023 of $1.43 million, an
increase of approximately 92% from the Company’s reported Adjusted
EBITDA* for the three-month period ended March 31, 2023;
- Total assets of $50.8 million as at
June 30, 2023 (Q1 2023: $51.9 million);
- Cash and cash equivalents of $3.4
million as at June 30, 2023 (Q1 2023: $3.4 million);
- Property, plant, and equipment
consisting primarily of the Company’s BTC miners and mining
infrastructure of $40.3 million (Q1 2023: $41.3 million);
- During the quarter, the Company
spent approximately $1.5 million on capital expenditure and mining
infrastructure support equipment. Digihost continues to monitor its
capital expenditures closely with self-funding to avoid equity
dilution for its shareholders.
(U.S.$ in thousands except per share data) |
Six Months Ended |
|
June 30,2023 |
June 30,2022 |
Revenue from digital currency mining |
9,165 |
|
14,773 |
|
Revenue from sale of energy |
809 |
|
- |
|
Cost of sales |
(6,078 |
) |
(9,127 |
) |
Cost of power plant operations |
(783 |
) |
- |
|
Depreciation and amortization |
(6,289 |
) |
(4,204 |
) |
Gross profit (loss) |
(3,176 |
) |
1,442 |
|
General and administrative and other expenses |
(2,180 |
) |
(2,848 |
) |
Gain on sale of property, plant, and equipment |
- |
|
2,341 |
|
Foreign exchange |
(1,322 |
) |
1,043 |
|
Gain on disposition of cryptocurrencies |
815 |
|
(12,174 |
) |
Change in FV of loan payable |
(220 |
) |
- |
|
Other Income |
90 |
|
157 |
|
Change in fair value - Miner Lease Agreement |
(268 |
) |
(895 |
) |
Loss on revaluation of digital currencies |
(54 |
) |
(2,948 |
) |
Share based compensation |
(883 |
) |
(1,638 |
) |
Operating (loss) |
(7,198 |
) |
(15,520 |
) |
Revaluation of warrant liabilities |
(5,020 |
) |
33,734 |
|
Net financial expenses |
(184 |
) |
(238 |
) |
Net income (loss) before income taxes |
(12,402 |
) |
17,976 |
|
Deferred tax recovery |
- |
|
2,947 |
|
Net income (loss) for the year |
(12,402 |
) |
20,923 |
|
Foreign currency translation adjustment |
1,212 |
|
(872 |
) |
Revaluation of digital currency, net of tax |
- |
|
(3,707 |
) |
Total comprehensive income (loss) for the year |
(11,190 |
) |
16,344 |
|
Basic and diluted income (loss) per share |
(0.44 |
) |
0.79 |
|
Weighted average number of subordinate voting shares outstanding –
diluted |
28,438,731 |
|
26,647,397 |
|
|
* Adjusted EBITDA is a non-IFRS financial
measure and should be read in conjunction with and should not be
viewed as alternatives to or replacements of measures of operating
results and liquidity presented in accordance with IFRS. Readers
are referred to the reconciliations of non-IFRS measures included
in the Company’s MD&A and at the end of this press release.
The Company achieved significant milestones
year-to-date 2023:
- The Company mined approximately 359
BTC;
- Digihost has acquired approximately
2,000 high performance BTC miners;
- The Company completed an all-cash
acquisition of a 60 MW power plant in North Tonawanda, NY;
- The Company is currently mining at
a rate of approximately 1 EH;
- Consistent with management’s
ongoing commitment to avoid equity dilution for its shareholders,
the Company has continued to monetize a portion of its BTC
production to fully fund its energy costs.
At-the-Market Financing
Update
On March 4, 2022, the Company entered into an
offering agreement with H.C. Wainwright & Co., LLC as agent
(the “Agent”), pursuant to which the Company
established an at-the-market equity program (the “ATM
Program”). From the commencement of the ATM Program
through March 31, 2023, the Company issued 235,566 subordinate
voting shares in exchange for gross proceeds of $383,059, at an
average share price of $1.66, and received net proceeds of $367,601
after paying commissions of $11,492 to the Agent and incurring
$3,965 of other transaction fees.
During the quarter ended June 30, 2023, the
Company issued 45,579 subordinate voting shares in exchange for
gross proceeds of $80,481, at an average share price of $1.77, and
received net proceeds of $76,679 after paying commissions of $2,414
to the Agent and incurring $1,388 of other transaction fees.
About Digihost
Digihost is a growth-oriented technology company
focused on the blockchain industry. The Company operates from three
sites in the U.S. and in addition to managing its own operations
provides joint venture partners with hosting arrangements at its
facilities.
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 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; development of additional
facilities to expand operations may not be completed on the
timelines anticipated by the Company; ability to access additional
power from the local power grid; an increase in natural gas prices
may negatively affect the profitability of the Company’s power
plant; 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.
The following table provides a
reconciliation of income to Adjusted EBITDA for the three months
ended June 30, 2023 and 2022:
|
Three months ended |
|
|
2023 |
|
2022 |
|
|
$ (thousands |
) |
$(thousands |
) |
Income (loss) before other items |
(3,039 |
) |
3,577 |
|
Taxes and Interest |
25 |
|
(3,162 |
) |
Depreciation |
3,066 |
|
2,673 |
|
Revaluation of warrant liabilities |
(597 |
) |
(16,448 |
) |
FV Changes |
1,496 |
|
14,583 |
|
Share based compensation |
482 |
|
873 |
|
Adjusted EBITDA |
1,433 |
|
2,096 |
|
|
|
|
|
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