UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of September 2022
Commission File Number: 001-40527
DIGIHOST TECHNOLOGY INC.
(Exact Name of Registrant as Specified in Its Charter)
18 King Street East, Suite 902, Toronto, Ontario, Canada M5C 1C4
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ¨ Form 40-F x
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
On September 7, 2022, the Registrant filed with the Canadian Securities Regulatory Authorities on the System for Electronic Data Analysis and Retrieval (SEDAR) a material change report that includes a copy of a press release, and an early warning report, a copy of each of which is attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and which is incorporated by reference to the Registrant’s Registration Statement on Form F-10 (File No. 333-263255).
| Exhibits | ||
| Exhibit No. | Description | |
| 99.1 | Material Change Report dated September 7, 2022 | |
| 99.2 | Early Warning Report dated September 7, 2022 | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| DIGIHOST TECHNOLOGY INC. | |||
| By: | /s/ Michel Amar | ||
| Name: | Michel Amar | ||
| Title: | Chief Executive Officer | ||
Date: September 7, 2022
Exhibit 99.1
FORM 51-102F3
MATERIAL CHANGE REPORT
| Item 1 | Name and Address of Company |
Digihost Technology Inc. (formerly HashChain Technology Inc.)
18 King Street East, Suite 902
Toronto, ON M5C 1C4
| Item 2 | Date of Material Change |
September 7, 2022
| Item 3 | News Release |
The press release attached as Schedule “A” was released on September 7, 2022 through an approved Canadian newswire service.
| Item 4 | Summary of Material Change |
The material change is described in the press release attached as Schedule “A”.
| Item 5 | Full Description of Material Change |
The material change is described in the press release attached as Schedule “A”.
| Item 6 | Reliance of subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
| Item 7 | Omitted Information |
Not applicable.
| Item 8 | Executive Officer |
Inquires in respect of the material change referred to herein may be made to:
Michel Amar, Chief Executive Officer
T: 1-818-280-9758
E: michel@digihostblockchain.com
| Item 9 | Date of Report |
September 7, 2022
SCHEDULE “A”
DIGIHOST ANNOUNCES Y/Y 54% INCREASE IN MONTHLY BITCOIN PRODUCTION AND PROVIDES OPERATIONS UPDATE
This news release constitutes a “designated news release” for the purposes of the Company’s prospectus supplement dated March 4, 2022 to its short form base shelf prospectus dated February 23, 2022.
Toronto, ON – September 7, 2022 – Digihost Technology Inc. (“Digihost” or the “Company”) (Nasdaq: DGHI; TSXV: DGHI), an innovative U.S. based Bitcoin (“BTC”) mining company, is pleased to provide unaudited comparative BTC production results for the month ended August 31, 2022, combined with an operations update. All monetary references are expressed in USD unless otherwise indicated.
Production Highlights for August 2022
| · | Mined 67.97 BTC, resulting in total holdings of 176.61 BTC at the end of August valued at approximately $3.54 million based on a BTC price of $20,050 as of August 31, 2022. |
| · | Ethereum (“ETH”) holdings of 1,000.89 ETH at the end of August valued at approximately $1.56 million based on an ETH price of $1,554 as of August 31, 2022. |
| · | Total digital asset inventory value, consisting of BTC and ETH, of approximately $5.10 million as of August 31, 2022. |
| · | To avoid equity dilution for its shareholders, management sold a portion of its BTC production during August to fund its energy costs. |
| · | The Company remains debt free as of August 31, 2022. |
| · | In continuing its support of the power needs of the local community, the Company reduced its overall energy consumption during the month of August 2022 with its operation running predominantly at off-peak hours. |
Year-Over-Year Monthly Comparison
The Company mined approximately 23.90 more BTC in August 2022, compared to August 2021, representing an increase of approximately 54.2%.
Figure 1. Year-over-year Monthly BTC Production
| Aug-22 | Aug-21 | MoM Increase | |
| Mined BTC | 67.97 | 44.07 | 23.90 |
| Approximate BTC value | $20,050 | $47,167 | ($27,117) |
| Production Value | $1,362,799 | $2,078,650 | ($715,851) |
Year-Over-Year YTD Comparison
The Company mined approximately 184.36 more BTC on a year-to-date basis as of August 31 2022, as compared to the same period ended August 31 2021, representing an increase of approximately 47.6%.
Figure 2. Year-over-year YTD BTC Production
| YTD 2022 | YTD 2021 | YTD Increase | |
| Mined BTC | 571.80 | 387.45 | 184.36 |
| Approximate BTC value | $20,050 | $47,167 | ($27,117) |
| Production Value | $11,464,590 | $18,274,854 | ($4,930,758) |
Alabama Site Build-Out
Digihost is pleased to announce that during the month of August it received Public Service Commission approval for an economic rider rate discount. This discount, coupled with the lower direct energy costs it has negotiated with Alabama Power, will lead to an overall reduction in Digihost’s operating costs. The Alabama Power agreements provide the Company with very competitive power costs in today’s inflationary environment further reinforcing Digihost’s strategic decision to expand and diversify its operation to Alabama.
The Company continues the development of the facilities build-out and construction work in Alabama on schedule and on budget. Digihost is building out the necessary infrastructure to provide the property with power capacity of 22 MW during the fourth quarter of 2022 and a total of 55 MW by the end of the first quarter of 2023.
Cancellation of Stock Options
The Company also announces that it and certain officers and directors of the Company have agreed to cancel an aggregate of 1,149,998 stock options (options in respect of 166,666 shares formerly exercisable at $2.88 per share, options in respect of 266,666 shares formerly exercisable at $3.75 per share, options in respect of a total of 558,333 shares formerly exercisable at $7.47 per share, and options in respect of 158,333 shares formerly exercisable at $4.20 per share). The cancelled options were voluntarily surrendered by the holders thereof for no consideration.
Grant of Incentive Shares
The Company also plans to make an inducement grant pursuant to a stand-alone award agreement outside the Company’s equity incentive plans as an inducement material to the Company’s vice- president of operations entering into employment with the Company. The inducement grant was approved by the Company’s Board of Directors and consists of the issuance of 19,391 subordinate voting shares of the Company (the “Inducement Shares”) at a deemed price of C$6.54 per Inducement Share. The issuance of the Inducement Shares is subject to regulatory approval, including the TSX Venture Exchange.
Early Warning
The Company announces that Michel Amar, Chief Executive Officer of the Company, has filed an early warning report in respect of his holdings of the Company as a result of an acquisition of shares of the Company. On September 2, 2022, Mr. Amar acquired an aggregate of 55,344 shares of the Company through a series of acquisitions conducted through the facilities of NASDAQ for aggregate total consideration of USD$39,328.55 (the “Series of Acquisitions”).
Immediately prior to the Series of Acquisitions, Mr. Amar owned directly or indirectly 4,803,928 subordinate voting shares of the Company (“SV Shares”) and 3,333 proportionate voting shares of the Company ( “PV Shares”), or approximately 17.16% of the then issued and outstanding SV Shares on an undiluted basis and approximately 19.09% on a partially diluted basis. Following the Series of Acquisitions, Mr. Amar owns directly or indirectly 4,859,272 SV Shares and 3,333 PV Shares, or approximately 17.36% of the issued and outstanding SV Shares on an undiluted basis and approximately 19.28% on a partially diluted basis. Since the filing of Mr. Amar’s previous Early Warning Report on March 1, 2021, the capital of the Company increased and Mr. Amar’s holdings in the securities of the Company have decreased by more than 2% of the issued and outstanding SV Shares as a result of dilution.
Mr. Amar reviews his holdings from time to time and may increase or decrease his position as future circumstances may dictate. This news release is being issued in accordance with National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues in connection with the filing of an early warning report dated September 7, 2022. The early warning report has been filed on the System for Electronic Document Analysis and Review (“SEDAR”) under the Company’s issuer profile at https://www.sedar.com.
About Digihost
Digihost is a growth-oriented blockchain technology company primarily focused on BTC mining. Through its self-mining operations and joint venture agreements, the Company is currently hashing at a rate of approximately 650 PH/s.
All hosting fees and joint venture profit sharing are treated as production costs in the Company’s consolidated financial statements.
For further information, please contact:
Digihost Technology Inc.
www.digihost.ca
Michel Amar, Chief Executive Officer
T: 1-818-280-9758
Email: 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 and increasing 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; 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; approval of the Public Service Commission or other regulatory or board approvals being received on a timely basis, or at all; the acquisition of North Tonawanda, New York facilities closing on timely basis, or at all; ability to access additional power from the local power grid; 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.
Exhibit 99.2
EARLY WARNING REPORT FILED PURSUANT TO
PART 3 OF NATIONAL INSTRUMENT 62-103
Form 62-103F1
Required Disclosure under the Early Warning Requirements
Item 1 – Security and Reporting Issuer
| 1.1 | State the designation of securities to which this report relates and the name and address of the head office of the issuer of the securities. |
Digihost Technology Inc. (the “Issuer”)
The registered head office of the Issue is:
18 King Street East, Suite 902
Toronto, Ontario
M5C 1C4
| 1.2 | State the name of the market in which the transaction or other occurrence that triggered the requirement to file this report took place. |
Mr. Michel Amar purchased subordinate voting shares of the Issuer (the “SV Shares”) through the facilities of NASDAQ.
Item 2 – Identity of the Acquiror
| 2.1 | State the name and address of the acquiror. |
Michel Amar (the “Acquiror”)
1001 East Delavan Avenue
Buffalo, NY
14215
| 2.2 | State the date of the transaction or other occurrence that triggered the requirement to file this report and briefly describe the transaction or other occurrence. |
On September 2, 2022, the Acquiror, through a series of acquisitions conducted through the facilities of NASDAQ, acquired an aggregate of 55,344 SV Shares (the “Series of Acquisitions”).
| 2.3 | State the names of any joint actors. |
Not applicable.
| 1 |
Item 3 – Interest in Securities of the Reporting Issuer
| 3.1 | State the designation and number or principal amount of securities acquired or disposed of that triggered the requirement to file this report and the change in the acquiror’s securityholding percentage in the class of securities. |
The Acquiror acquired, through the Series of Acquisitions, 55,344 SV Shares at an average price of approximately US$0.71 per SV Share, for aggregate total consideration of US$39,328.55.
Immediately prior to the Series of Acquisitions, the Acquiror owned directly or indirectly 4,803,928 SV Shares and 3,333 proportionate voting shares of the Issuer (the “PV Shares”), or approximately 17.16% of the then issued and outstanding SV Shares on an undiluted basis and approximately 19.09% on a partially diluted basis.
Following the Series of Acquisitions, the Acquiror owns directly or indirectly 4,859,272 SV Shares and 3,333 PV Shares, or approximately 17.36% of the issued and outstanding SV Shares on an undiluted basis and approximately 19.28% on a partially diluted basis.
Since the filing of the Acquiror’s previous report on March 1, 2021, the capital of the Issuer increased and as a result, the Acquiror’s holdings in the securities of the Issuer have decreased by more than 2% of the issued and outstanding SV Shares, which triggered the requirement to file this report.
| 3.2 | State whether the acquiror acquired or disposed ownership of, or acquired or ceased to have control over, the securities that triggered the requirement to file this report. |
See Item 2.2.
| 3.3 | If the transaction involved a securities lending arrangement, state that fact. |
Not applicable.
| 3.4 | State the designation and number or principal amount of securities and the acquiror’s securityholding percentage in the class of securities, immediately before and after the transaction or other occurrence that triggered the requirement to file this report. |
See Item 3.1.
| 3.5 | State the designation and number or principal amount of securities and the acquiror’s securityholding percentage in the class of securities referred to in Item 3.4 over which |
| 2 |
| (a) | the acquiror, either alone or together with any joint actors, has ownership and control, |
See Item 3.1.
| (b) | the acquiror, either alone or together with any joint actors, has ownership but control is held by persons or companies other than the acquiror or any joint actor, and |
Not applicable.
| (c) | the acquiror, either alone or together with any joint actors, has exclusive or shared control but does not have ownership. |
Not applicable.
| 3.6 | If the acquiror or any of its joint actors has an interest in, or right or obligation associated with, a related financial instrument involving a security of the class of securities in respect of which disclosure is required under this item, describe the material terms of the related financial instrument and its impact on the acquiror’s securityholdings. |
Not applicable.
| 3.7 | If the acquiror or any of its joint actors is a party to a securities lending arrangement involving a security of the class of securities in respect of which disclosure is required under this item, describe the material terms of the arrangement including the duration of the arrangement, the number or principal amount of securities involved and any right to recall the securities or identical securities that have been transferred or lent under the arrangement. |
State if the securities lending arrangement is subject to the exception provided in section 5.7 of NI 62-104.
Not applicable.
| 3.8 | If the acquiror or any of its joint actors is a party to an agreement, arrangement or understanding that has the effect of altering, directly or indirectly, the acquiror’s economic exposure to the security of the class of securities to which this report relates, describe the material terms of the agreement, arrangement or understanding. |
Not applicable.
Item 4 – Consideration Paid
| 3 |
| 4.1 | State the value, in Canadian dollars, of any consideration paid or received per security and in total. |
See Item 3.1.
| 4.2 | In the case of a transaction or other occurrence that did not take place on a stock exchange or other market that represents a published market for the securities, including an issuance from treasury, disclose the nature and value, in Canadian dollars, of the consideration paid or received by the acquiror. |
Not applicable.
| 4.3 | If the securities were acquired or disposed of other than by purchase or sale, describe the method of acquisition or disposition. |
Not applicable.
Item 5 – Purpose of the Transaction
State the purpose or purposes of the acquiror and any joint actors for the acquisition or disposition of securities of the reporting issuer. Describe any plans or future intentions which the acquiror and any joint actors may have which relate to or would result in any of the following:
| (a) | the acquisition of additional securities of the reporting issuer, or the disposition of securities of the reporting issuer; |
| (b) | a corporate transaction, such as a merger, reorganization or liquidation, involving the reporting issuer or any of its subsidiaries; |
| (c) | a sale or transfer of a material amount of the assets of the reporting issuer or any of its subsidiaries; |
| (d) | a change in the board of directors or management of the reporting issuer, including any plans or intentions to change the number or term of directors or to fill any existing vacancy on the board; |
| (e) | a material change in the present capitalization or dividend policy of the reporting issuer; |
| (f) | a material change in the reporting issuer’s business or corporate structure; |
| (g) | a change in the reporting issuer’s charter, bylaws or similar instruments or another action which might impede the acquisition of control of the reporting issuer by any person or company; |
| 4 |
| (h) | a class of securities of the reporting issuer being delisted from, or ceasing to be authorized to be quoted on, a marketplace; |
| (i) | the issuer ceasing to be a reporting issuer in any jurisdiction of Canada; |
| (j) | a solicitation of proxies from securityholders; |
| (k) | an action similar to any of those enumerated above. |
The SV Shares were acquired by the Acquiror for investment purposes, and depending on market and other conditions, the Acquiror may from time to time in the future increase or decrease his ownership, control or direction over securities of the Issuer, through market transactions, private agreements, or otherwise.
Item 6 – Agreements, Arrangements, Commitments or Understandings With Respect to Securities of the Reporting Issuer
Describe the material terms of any agreements, arrangements, commitments or understandings between the acquiror and a joint actor and among those persons and any person with respect to securities of the class of securities to which this report relates, including but not limited to the transfer or the voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. Include such information for any of the securities that are pledged or otherwise subject to a contingency, the occurrence of which would give another person voting power or investment power over such securities, except that disclosure of standard default and similar provisions contained in loan agreements need not be included.
Not applicable.
Item 7 – Change in Material Fact
If applicable, describe any change in a material fact set out in a previous report filed by the acquiror under the early warning requirements or Part 4 in respect of the reporting issuer’s securities.
Not applicable.
Item 8 – Exemption
If the acquiror relies on an exemption from requirements in securities legislation applicable to formal bids for the transaction, state the exemption being relied on and describe the facts supporting that reliance.
Not applicable
| 5 |
Item 9 – Certification
The acquiror must certify that the information in this report is true and complete in every respect. In the case of an agent, the certification is based on the agent’s best knowledge, information and belief but the acquiror is still responsible for ensuring that the information filed by the agent is true and complete.
This report must be signed by each person on whose behalf the report is filed or his or her authorized representative.
It is an offence to submit information that, in a material respect and at the time and in the light of the circumstances in which it is submitted, is misleading or untrue.
Certificate
The certificate must state the following:
I, as the acquiror, certify, or I, as the agent filing this report on behalf of an acquiror, certify to the best of my knowledge, information and belief, that the statements made in this report are true and complete in every respect.
Date: September 7, 2022
| Per: | (signed) “Michel Amar” | |
| Michel Amar |
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