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HashChain Technology Reports First Quarter Fiscal 2020 Financial Report and Provides Update on Proposed Reverse Takeover

Tickers: XTSX:KASH, XOTC:HSSHF
Tags: #Technology, #Blockchain



VANCOUVER, BC - TheNewswire - January 28, 2020 - HashChain Technology Inc. ("HashChain" or the "Company") (TSXV:KASH); (OTC:HSSHF) today announced its financial and operating results for the quarter ended November 30, 2019.

Quarterly Highlights

  • - Mined approximately 200 newly minted Bitcoin.

    - Recognized operating revenue totaling $2.3 million from digital currency mining.

Financial Information

The Company's net losses resulting for the three months November 30, 2019 was $2,269,384.

General and administrative expenses for the aforementioned three months were $172,670 and consisted primarily of legal and professional fees.

Operating and maintenance costs for the three months ended November 30, 2019 were $3,730,540, 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 is a non-cash charge for depreciation of $699,060.

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

On March 28, 2019, the Company announced that it has entered into a Definitive Agreement with shareholders of Digihost International, Inc. ("Digihost") 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 (the "Proposed Transaction"), constituting a "reverse-takeover" of the Company by Digihost under the policies of the TSX Venture Exchange (the "Exchange").

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.

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, who 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, LLC pursuant to the hosting services agreement; and

    - 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 MW of computing power with electricity at an average all-in cost of USD$0.05/kWh. The operating facility is located in Buffalo, New York, with over 70,000 square feet under a five-year lease and an option to lease additional facility space totaling 240,000 square feet after 3 years. HashChain will focus on validation through mining, hosting solutions and blockchain software solutions.

The Proposed Transaction was approved by the shareholders of the Company at the annual and special meeting of the Company held on January 14, 2020. The completion of the Proposed Transaction remains subject to a number of additional conditions precedent (as described in prior press releases of the Company), including approval of the Proposed Transaction by the Exchange and there can be no assurance that the Proposed Transaction will be completed as proposed or at all. Review of the Proposed Transaction by the Exchange remains ongoing.

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.

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 TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) 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.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this press release.

Copyright (c) 2020 TheNewswire - All rights reserved.

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