Digihost Announces Closing of Over-Subscribed US$6.6 Million Private Placement

Rhea-AI Summary

Digihost Technology (Nasdaq/TSXV: DGHI) has successfully closed an over-subscribed private placement, raising US$6.6 million in gross proceeds. The placement consisted of 2,503,601 subordinate voting shares and warrants exercisable for up to 1,251,805 shares at a combined purchase price of US$2.64 per unit.

The warrants have an exercise price of US$3.66 per share and a three-year exercise period. The company exercised its right to increase the placement size by 25% from the initial announcement on January 31, 2025. The proceeds will be primarily used for infrastructure expansion acquisitions and general working capital purposes.

The securities are subject to standard U.S. resale restrictions but have no resale restrictions in Canada. No securities were sold to Canadian residents during this placement.

Positive

• Successfully raised US$6.6 million through over-subscribed private placement
• 25% increase in placement size from initial announcement
• Three-year warrant exercise period provides future funding potential at US$3.66 per share

Negative

• Potential dilution of existing shareholders through new share issuance
• Warrant exercise price at US$3.66 represents significant premium to current placement price of US$2.64

Insights

Financial Analyst

The successful completion of an over-subscribed US$6.6 million private placement by Digihost represents a significant capital injection that strengthens the company's strategic position. The transaction's structure is particularly noteworthy, combining immediate equity with future upside potential through warrants.

The pricing dynamics reveal important insights: the US$2.64 combined unit price and the US$3.66 warrant strike price suggest strong investor confidence in Digihost's growth trajectory. The 38.6% premium on the warrant exercise price indicates that institutional investors anticipate substantial upside potential in the medium term.

The strategic timing of this capital raise is crucial, as it provides Digihost with dry powder for infrastructure expansion amid evolving market conditions. The over-subscription demonstrates robust institutional interest, while the warrant component creates a potential future capital injection of up to US$4.58 million if fully exercised.

For existing shareholders, while the issuance of 2.5 million new shares represents some dilution, the premium pricing and strategic deployment of capital for growth initiatives could offset this impact. The absence of Canadian participation and U.S. registration requirements suggests a focused institutional investor base, potentially adding stability to the shareholder structure.

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

MIAMI, Feb. 07, 2025 (GLOBE NEWSWIRE) -- Digihost Technology Inc. (“Digihost” or the “Company”) (Nasdaq / TSXV: DGHI), an innovative energy infrastructure company that develops cutting-edge data centers, is pleased to announce that it has closed its private placement of its equity securities (the “Private Placement”), previously announced on January 31, 2025. The Company exercised its right to increase the size of the Private Placement by up to 25%. The Private Placement was for gross proceeds of US$6,609,500 and consisted of the sale of 2,503,601 subordinate voting shares of the Company (“Shares”) and warrants (the “Warrants”) exercisable for up to 1,251,805 Shares of the Company, at a combined purchase price of US$2.64. Each Warrant has a per Share exercise price of US$3.66 and an exercise period of three years from the issuance date.

The net proceeds of the Private Placement will be used by the Company primarily for acquisitions related to infrastructure expansion and for general working capital purposes.

The securities issued under the Offering are subject to customary resale restrictions in the United States with no resale restrictions in Canada. No securities were offered or sold to Canadian residents in connection with the Private Placement.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This news release shall not constitute an offer of securities for sale in the United States. The securities being offered have not been registered under the United States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States absent registration under U.S. federal and state securities laws or an applicable exemption from such U.S. registration requirements.

About Digihost

Digihost is an innovative energy infrastructure company that develops cutting-edge data centers to drive the expansion of sustainable energy assets.

For further information, please contact:

Michel Amar, Chief Executive Officer
Digihost Technology Inc.
www.digihostpower.com
Digihost Investor Relations
T: 888-474-9222
Email: IR@digihostpower.com

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 the Private Placement, including closing of the Private Placement and approval of the TSX Venture thereof and the use of net proceeds from the Private Placement, 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: the failure to satisfy the conditions to closing of the Private Placement; future capital needs and uncertainty of additional financing; share dilution resulting from equity issuances; risks relating to the strategy of maintaining and increasing Bitcoin holdings and the impact of depreciating Bitcoin prices on working capital; effects on Bitcoin prices as a result of the most recent Bitcoin halving; development of additional facilities and installation of infrastructure to expand operations may not be completed on the timelines anticipated by the Company, 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; 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; 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.sedarplus.ca and www.SEC.gov/EDGAR. 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. 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 Company undertakes no obligation to revise or update any forward-looking information other than as required by law.

FAQ

How much did Digihost (DGHI) raise in its February 2025 private placement?

Digihost raised US$6.609 million in gross proceeds through its over-subscribed private placement.

What is the exercise price and duration of DGHI's warrants issued in February 2025?

The warrants have an exercise price of US$3.66 per share and can be exercised for a period of three years from the issuance date.

How many shares and warrants did Digihost (DGHI) issue in the February 2025 placement?

Digihost issued 2,503,601 subordinate voting shares and warrants exercisable for up to 1,251,805 shares.

What will DGHI use the February 2025 private placement proceeds for?

The proceeds will be used primarily for acquisitions related to infrastructure expansion and for general working capital purposes.

What was the combined purchase price per unit in DGHI's February 2025 placement?

The combined purchase price was US$2.64 per unit, which included both shares and warrants.