Articles > HashChain Technology enters into Purchase Order Agreement for 5,000 Mining Rigs and Commitment for 20 Megawatt Facility
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HashChain Technology Inc. (KASH) is pleased to announce that it has signed a commitment for space for Mining operations of up to 20 megawatts in a facility in Montana, USA. The Company has also signed a purchase order (the “Purchase Order”) with its supplier of cryptocurrency mining rigs (“Rigs”) to facilitate orders on behalf of the Company with a manufacturer to acquire 5,000 Rigs. Upon delivery and installation of these Rigs and the 770 Rigs previously disclosed, the Company’s total number of Rigs will increase to 5,870 and its total Mining capacity will increase to approximately 8.7 megawatts. The 5,000 Rigs are expected to be received in multiple deliveries betweenFebruary 28 and May 15, 2018, subject to HashChain closing the previously announced $26 million bought deal financing. The consideration payable by the Company in respect of the 5,000 Rigs and the sourcing of the 20 megawatt commitment at the Montana Facility is to be comprised of staged payments expected to total USD$20,452,500 plus applicable taxes (the “Expected Total Consideration”), subject to increase in certain circumstances (as described in greater detail below) of which USD$15,952,500 will be payable in cash and USD$4,500,000 will be payable in common shares of HashChain (the “Shares”), and a payment of 210,000 common shares of HashChain as a milestone payment for each megawatt (or portion thereof, pro-rata) that becomes operational (“Milestone Shares”). The Expected Total Consideration is based on the current price at which the Supplier is able to source Rigs from the Manufacturer. In the event that the Manufacturer increases the price at which it will make Rigs available to the Supplier or the Company, the Expected Total Consideration will be increased accordingly. The issuance of the Shares and Milestone Shares are subject to TSX Venture Exchange approval. The Shares are required to be issued in stages as the Company takes delivery of the Rigs. The Shares will be issued at a deemed issue price of CDN$3.00, converted to USD$2.34375, provided that in the event the Company’s share price is lower than CDN$3.00 at the time Rigs are delivered, the number of the applicable common shares will be adjusted based on the lower share price on date of delivery and using the same exchange rate. There can be no assurance that the 5,000 Rigs will be successfully acquired by the Company. See “Cautionary Note Regarding Forward Looking Statements” below.
As previously disclosed, In November 2017 the Company ordered 770 Rigs for a total purchase price of USD $2,461,940 (the “November 2017 Purchase”), pursuant to the supply agreement between the Company and the Supplier (the “November 2017 Supply Agreement”). The Company expects to receive the Rigs in January 2018. The Company will spend approximately 1 week installing and configuring the Rigs with expectation that Rigs will be mining by the end of this month increasing HashChain’s total Rigs in operations to 870 with 1.24 megawatts operational. The Company has paid USD$1,688,439 of the purchase price to date. As set out in the Company’s prospectus dated December 12, 2017 (the “Prospectus”), the balance of the purchase price of USD$773,500 was to be satisfied by the issuance of common shares of the Company at a deemed issue price of CDN$0.15 per share (the “Contingent Payment Shares”), being the price at which the Company had most recently issued common equity at the time of the November 2017 Purchase, at an exchange rate of $1.28CDN / $1.00USD, if the 770 Rigs are delivered on or before January 31, 2018. Based on the original terms of the November 2017 Purchase, 6,600,533 Contingent Payment Shares were to be issuable to the Supplier (not 603,906, the number included in the Prospectus as a result of a typographical error), however the Company and the Supplier have amended the terms of the November 2017 Supply Agreement to reduce the number of Contingent Payment Shares to 5.5 million, with 50% vesting immediately upon delivery of the Rigs, and another 50% vesting once the Rigs have been operational for 30 days.
A “Rig” is a high-performance computer system used for cryptocurrency Mining; each Rig is used to solve complex computation puzzles to confirm transactions on the Blockchain. “Mining” is the process in which individuals, often in collaboration and through the use of Rigs, solve complex, computation puzzles to confirm transactions to be added on a blockchain. Miners who successfully complete the mining process earn a reward in the form of cryptocurrency or other Blockchain coin or token.
Pat Gray, CEO and director of HashChain, commented, “Our recently announced $26 million bought financing will, upon closing, provide enough capital to fulfill the terms of these agreements and continue to execute on our business plan. According to the 2017 Global Cryptocurrency Benchmarking Study, North America meets all criteria for optimal cryptocurrency mining, including low cost of electricity, low temperature and high-speed internet. We continue to execute our plan of utilizing North America’s ideal setting”.
About HashChain Technology Inc.
HashChain is a Blockchain mining company, and the first publicly traded (TSXV:KASH) 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 100 Dash mining rigs, has purchased 770 Bitcoin rigs and has entered into a purchase order for an additional 5,000 Rigs. Once all Rigs are operational HashChain will be consuming approximately 8.7 megawatts of power. HashChain also acquired a Dash Masternode for approximately USD $280,000 which requires a collateral investment of 1,000 Dash coins. HashChain is based in Vancouver, British Columbia. HashChain Mining is a wholly owned subsidiary of HashChain Technology Inc. based out of Albany, New York.
For further details of the Company’s business, please refer to the Company’s final prospectus dated December 12, 2017, which is available on the Company’s SEDAR profile at www.sedar.com or visithttp://www.hashchain.ca.
On Behalf of the Board,
CEO & Director
For Further information please contact:
|HashChain Technology Inc.
Vice President, Marketing & Communications