Vogogo Blockchain Announces 828 Cryptocurrency Mining Assets Acquisition
Blockchain Technology Company Vogogo Inc has announced the completion of all processes for the full acquisition of the 828 cryptocurrency mining assets.
As of the time of closing the deal, approximately 10,500 mining machines are fully operational, with installation of the remaining mining machines continuing and expected to be completed by mid-July.
The deal was completed same time as when 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.
Details Of The Vogogo-828 Acquisition
Vogogo says it is extremely pleased to have completed this important acquisition. According to 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.
The acquisition also comes with 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 inclusion of certain additional supporting infrastructure beyond what is required to operate the 14,000 mining machines, at no additional cost to the Company.
On top of that 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.
What Is The Acquisition Worth?
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.
The Acquisition Options
Vogogo has also formalized the option agreement whereby the Company has the option to purchase electrical and HVAC 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.