CALGARY, Alberta, July 02, 2018 (GLOBE NEWSWIRE) -- Vogogo Inc. (CSE:VGO) (“Vogogo” or the “Company”) is pleased to announce that on June 29 it closed its previously announced acquisition (the “828 Acquisition”). In addition to the 14,000 Antminer S9 cryptocurrency mining machines, plus supporting infrastructure, all newly installed in a state of the art facility near Montreal, Quebec, Vogogo was also able to negotiate with 828 L.P. (the “Vendor”) the inclusion of certain additional supporting infrastructure beyond what is required to operate the 14,000 mining machines, at no additional cost to the Company. Vogogo acquired additional HVAC and electrical equipment, which, once installed and placed into service in the short term, will support cryptocurrency mining for an additional 6 megawatts of power at the facility. The added capacity will allow the Company to add 4,000 more mining machines, either mining for its own account or on a co-location basis for other miners.
As of the closing, approximately 10,500 mining machines are fully operational, with installation of the remaining mining machines continuing and expected to be completed by mid-July. Concurrent with closing, the Company entered into a lease agreement for the facility, which will have access to 30 megawatts of power for cryptocurrency mining, of which approximately 27 megawatts is used for mining and the balance for supporting HVAC and electrical systems. Vogogo also received confirmation from the Vendor that Hydro Quebec has confirmed the hydro power for the 828 Acquisition forms part of the 120 MW block of electricity that has already been allocated and approved for blockchain use in the Province of Quebec.
The total purchase price of $46 million was satisfied as to $36 million in cash plus a $10 million promissory note. Vogogo completed a convertible debenture financing on June 21, 2018 in the amount of $34.5 million, the net proceeds of which, along with cash on hand, were used to finance the cash portion of the purchase price. The promissory note bears interest at 8% per annum, for a two year term, with monthly interest payments during the term of the note. Principal is repayable as to $5 million on the first anniversary date of the loan and as to $5 million at maturity. The promissory note is secured by the mining machines and other assets acquired in the transaction.
At the closing, as previously announced, the Company has formalized the option agreement (the “Option”) whereby the Company has the option to purchase electrical and HVAC equipment (the “Option Equipment”) to be used for further expansion of its cryptocurrency mining activities, to be installed at a location to be determined. The purchase price for the Option Equipment under the Option is $20 million. The Option Equipment can service approximately 35 megawatts of electrical power. The Company can exercise the Option within 180 days of the closing of the 828 Acquisition.
"We are extremely pleased to have completed this important acquisition,” said John Kennedy FitzGerald, President and Chief Executive Officer of Vogogo. “Closing of the 828 transaction provides Vogogo with a total of 18,125 mining machines and 36 megawatts of available power, enough for current operations plus expansion capacity, and adds significant size and scale to the Company’s cryptocurrency mining operations. Vogogo is a proud Canadian company, creating employment and investment opportunities in Ontario and Quebec. With mining operations established, our team can now focus on other blockchain and cryptocurrency-related verticals,” added Mr. FitzGerald.
About Vogogo Inc.
Vogogo currently operates its cryptocurrency mining activities in Québec. This includes mining for cryptocurrencies for its own account and within mining pools. As it continues to embrace blockchain technology, Vogogo is exploring opportunities in all aspects of the cryptocurrency segment.
For further information please contact:
Jordan Greenberg
Chief Financial Officer
403-648-9292
Cautionary Note Regarding Forward-Looking Information
Certain statements in this document, including statements with respect to the impact of the 828 Acquisition, the timing for all mining machines to be fully operational, the expected additional power available, and that such power will be low cost, contain forward-looking statements which can be identified by the use of forward-looking terminology such as "believes", "expects", "may", "desires", "will", "should", "projects", "estimates", "contemplates", "anticipates", "intends", or any negative such as "does not believe" or other variations thereof or comparable terminology. No assurance can be given that potential future results or circumstances described in the forward-looking statements will be achieved or will occur. By their nature, these forward-looking statements necessarily involve risks and uncertainties, including the risk that the 828 Acquisition does not result in the impact on the Company that is expected, that the additional mining machines take significantly longer to be fully operational or that the price of power to the Company increases and other risks and uncertainties discussed herein, that could cause actual results to significantly differ from those contemplated by these forward-looking statements. Such statements reflect the view of the Company with respect to future events, and are based on information currently available to the Company and on assumptions, which it considers reasonable. Management cautions readers that the assumptions relative to the future events, several of which are beyond Management's control, could prove to be incorrect, given that they are subject to certain risk and uncertainties, and that actual results may differ materially from those projected. Other factors which could cause results or events to differ from current expectations include, among other things, the impact of general economic, industry and market conditions. Management 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 applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking information.
The Canadian Securities Exchange has not reviewed, approved or disapproved the content of this news release.