Digihost Technology Inc. (Form: 6-K, Received: 01/13/2022 06:01:30)

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 January, 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 ☒

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 January 12, 2022, the Registrant filed with the Canadian Securities Regulatory Authorities on the System for Electronic Data Analysis and Retrieval (SEDAR) (i) Restated Condensed Interim Consolidated Financial Statements for the three and nine months ended September 30, 2021 and 2020, (ii) Restated Management’s Discussion and Analysis for the three and nine month periods ended September 30, 2021 and (iii) a material change report that includes a copy of a press release, copies of which are attached hereto as Exhibits 99.1, 99.2 and 99.3, respectively, and which are incorporated herein by reference.

Exhibits

Exhibit No.		Description

99.1		Restated Condensed Interim Consolidated Financial Statements for the three and nine months ended September 30, 2021 and 2020
99.2		Restated Management’s Discussion and Analysis for the three and nine month periods ended September 30, 2021
99.3		Material Change Report dated January 12, 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: January 12, 2022

Exhibit 99.1

DIGIHOST TECHNOLOGY INC.

RESTATED CONDENSED INTERIM CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED

SEPTEMBER 30, 2021 AND 2020

(EXPRESSED IN UNITED STATES DOLLARS)

(UNAUDITED)

Notice to Reader

Digihost Technology Inc. (the “Company”) has restated its previously reported unaudited condensed interim consolidated financial statements and management’s discussion and analysis for the three and nine months ended September 30, 2021 and 2020 (the “Restated Financial Statements”) as the result of management’s review of the financial statements. The restatement occurred as a result of the re-assessment of existing timing differences and corresponding deferred tax liability. As a result, the Company had a net loss of $771,154, compared to the previously reported net income of $762,931, for the three months ended September 30, 2021, and had a net loss of $977,046, compared to the previously reported net income of $521,039, for the nine months ended September 30, 2021. Furthermore, at September 30, 2021, total liabilities were $7,501,696, rather than the previously reported $5,493,626, and total shareholders’ equity was $66,978,402, rather than the previously reported $68,986,473. The restatements had no impact on the Company’s record revenue from digital currency mining, gross profit, operating income, EBITDA or adjusted EBITDA for both the three and nine months ended September 30, 2021, on the Company’s cash flows for the nine months ended September 30, 2021 or on the Company’s cash or total assets at September 30, 2021.

Details of the changes are fully described in Note 3 and Note 19 to the Restated Financial Statements as filed

on SEDAR on January 12, 2022.

The previously filed unaudited condensed interim consolidated financial statements and management’s discussion and analysis for the three and nine months ended September 30, 2021 and 2020 were originally filed by the Company on SEDAR on October 21, 2021. The following restated unaudited condensed interim consolidated financial statements and management’s discussion and analysis replace and supersede the respective previously filed original unaudited condensed interim consolidated financial statements and related management’s discussion and analysis. There have been no other changes other than those described herein. This notice supersedes the previously filed notice.

Digihost Technology Inc.

Condensed Interim Consolidated Statements of Financial Position

(Expressed in United States Dollars) (Unaudited)

	As at September 30, 2021			As at December 31, 2020
	Restated - Note 3
ASSETS
Current assets
Cash	$	17,286,760		$	31,250
Digital currencies (note 6)		22,811,962			4,508,042
Amounts receivable and prepaid expenses (note 5)		528,967			12,622
Loan receivable (notes 7 and 17)		141,552			141,552
Total current assets		40,769,241			4,693,466

Property, plant and equipment (note 8)		28,630,044			6,497,634
Right of use assets (note 11)		2,265,002			2,413,720
Intangible asset (note 10)		1,475,568			1,572,500
Goodwill (notes 4 and 9)		1,340,244			1,342,281
Total assets	$	74,480,099		$	16,519,601

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities
Accounts payable and accrued liabilities	$	1,176,492		$	920,914
Lease liabilities (note 12)		122,636			111,672
Loans payable (note 13)		-			2,010,172
Deposit payable		1,788,500			-
Total current liabilities		3,087,628			3,042,758

Lease liabilities (note 12)		2,340,360			2,434,488
Loans payable (note 13)		-			532,911
Deferred tax liability (note 19)		2,073,709			65,638

Total liabilities		7,501,697			6,075,795

Shareholders’ equity
Share capital (note 14)		54,796,263			12,541,038
Contributed surplus		15,885,980			1,267,551
Cumulative translation adjustment		(526,274	)		118,162
Digital currency revaluation reserve		3,423,877			1,982,501
Deficit		(6,601,444	)		(5,465,446	)

Total shareholders’ equity		66,978,402			10,443,806

Total liabilities and shareholders’ equity	$	74,480,099		$	16,519,601

Nature of operations (note 1)
Subsequent event (note 21)

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

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Digihost Technology Inc.

Condensed Interim Consolidated Statements of Comprehensive Income (Loss)

(Expressed in United States Dollars) (Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
	Restated - Note 3						Restated - Note 3

Revenue from digital currency mining (note 6)	$	5,485,754		$	437,813		$	15,365,382		$	2,366,000
Cost of digital currency mining
Operating and maintenance costs		(1,882,023	)		(1,224,911	)		(5,234,390	)		(2,834,704	)
Depreciation and amortization		(891,386	)		(1,089,869	)		(2,362,810	)		(2,543,029	)
Gross profit (loss)		2,712,345			(1,876,967	)		7,768,182			(3,011,733	)

Expenses
Office and administrative expenses		(478,275	)		(78,746	)		(698,023	)		(37,087	)
Professional fees		(115,443	)		(70,965	)		(936,936	)		(309,507	)
Regulatory fees		(24,756	)		(1,549	)		(142,086	)		(53,320	)
Gain on sale of property, plant and equipment		-			-			939,516			-
Loss on settlement of debt		959			-			(278,111	)		-
Foreign exchange		1,399,701			-			621,889			-
Gain on sale of digital currency (note 6)		-			10,079			-			25,237
Other income		58,519			-			58,519			44,068
Insurance proceeds		-			-			-			109,900
Share based compensation (note 16)		(2,766,955	)		214,207			(6,538,261	)		(693,999	)

Operating income (loss)		786,095			(1,803,941	)		794,689			(3,926,441	)
Net financial expenses (note 18)		(59,164	)		(19,633	)		(273,650	)		(48,364	)

Net income (loss) before income taxes		726,931			(1,823,574	)		521,039			(3,974,805	)
Deferred tax expense (notes 3 and 19)		(1,498,085	)		-			(1,498,085	)		-

Net loss for the period		(771,154	)		(1,823,574	)		(977,046	)		(3,974,805	)

Other comprehensive income (loss)
Items that will be reclassified to net income
Foreign currency translation adjustment		(1,452,384	)		-			(644,436	)		-

Items that will not be reclassified to net income
Revaluation of digital currency		3,081,643			164,315			1,441,376			256,195

Total comprehensive income (loss) for the period	$	858,105		$	(1,659,259	)	$	(180,106	)	$	(3,718,610	)

Basic and diluted loss per share	$	(0.01	)	$	(0.05	)	$	(0.02	)	$	(0.12	)

Weighted average number of subordinate voting shares outstanding - basic and diluted		74,934,331			40,073,661			62,023,064			33,492,221

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

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Digihost Technology Inc.

Condensed Interim Consolidated Statements of Cash Flows

(Expressed in United States Dollars) (Unaudited)

	Nine Months Ended
	September 30,
	2021			2020
	Restated - Note 3

Operating activities
Net loss for the period	$	(977,046	)	$	(3,974,805	)
Adjustments for:
Digital currency sold		-			1,252,948
Gain on sale of digital currency		-			(25,237	)
Digital currency mined		(15,365,382	)		(2,366,000	)
Digital currency received		(47,670	)		-
Gain on sale of property, plant and equipment		(939,516	)		-
Depreciation of right-of-use assets		148,718			-
Depreciation and amortization		2,214,092			2,543,029
Interest on lease liabilities		177,516			48,364
Share based compensation		6,538,261			693,999
Loss on settlement of debt		236,616			-
Deferred tax expense		1,498,085			-
Foreign exchange gain		(619,804	)		-
Non-cash working capital items:
Amounts receivable and prepaid expenses		(516,345	)		(28,690	)
Accounts payable and accrued liabilities		255,578			120,023
Deposit payable		1,788,500			-

Net cash used in operating activities		(5,608,397	)		(1,736,369	)

Investing activities
Purchase of property, plant and equipment		(24,249,559	)		(393,660	)
Net funds for loan receivable		-			1,074,257

Net cash (used in) provided by investing activities		(24,249,559	)		680,597

Financing activities
Proceeds from private placement, net of costs		50,265,763			(39,355	)
Repurchase of shares		(390,029	)		-
Loans payable		1,473,495			-
Repayment of loan payable		(3,975,083	)		-
Lease payments		(260,680	)		(201,977	)

Net cash provided by (used in) financing activities		47,113,466			(241,332	)

Net change in cash		17,255,510			(1,297,104	)

Cash, beginning of period		31,250			1,303,937

Cash, end of period	$	17,286,760		$	6,833

Supplemental information

Interest paid	$	117,697		$	6,507

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

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Digihost Technology Inc.

Condensed Interim Consolidated Statement of Changes in Shareholders’ Equity

(Expressed in United States Dollars) (Unaudited)

	Number of shares													Digital
	Subordinate voting shares			Proportionate voting shares		Share capital			Contributed surplus		Cumulative Translation Adjustment			currency revaluation reserve		Deficit			Total
														Restated - Note 3		Restated - Note 3			Restated - Note 3
Balance, December 31, 2019		6,530,560			-	$	20		$	-	$	-		$	-	$	(274,733	)	$	(274,713	)
Issuance of Old Digihost shares for transfer of lease and property and equipment and intangibles (notes 8, 10, 11 and 12)		-			-		4,264,000			-		-			-		-			4,264,000
Cancellation of founder shares (note 14(b)(ii))		-			-		(20	)		-		-			-		-			(20	)
Shares issued pursuant to reverse takeover transaction (note 4)		29,820,000			-		5,914,916			-		-			-		-			5,914,916
Private placement (note 14(b)(i))		5,592,487			-		4,021,033			-		-			-		-			4,021,033
Share exchange for proportionate voting shares (note 14(b)(i))		(1,999,997	)		10,000		-			-		-			-		-			-
Shares issued as payment for accounts payable (note 14(b)(iii))		130,611			-		94,639			-		-			-		-			94,639
Share based compensation		-			-		-			693,999		-			-		-			693,999

Transaction with owners		40,073,661			10,000		14,294,588			693,999		-			-		(274,733	)		14,713,854

Revaluation of digital currency		-			-		-			-		-			256,195		-			256,195
Net loss for the period		-			-		-			-		-			-		(3,974,805	)		(3,974,805	)

Total comprehensive loss for the period		-			-		-			-		-			256,195		(3,974,805	)		(3,718,610	)

Balance, September 30, 2020		40,073,661			10,000	$	14,294,588		$	693,999	$	-		$	256,195	$	(4,249,538	)	$	10,995,244

Balance, December 31, 2020		40,073,661			10,000	$	12,541,038		$	1,267,551	$	118,162		$	1,982,501	$	(5,465,446	)	$	10,443,806
Private placements (note 14(b)(vi)(vii)(viii)(ix)(x))		34,667,022			-		50,059,301			5,044,691		-			-		-			55,103,992
Cost of issue - cash (note 14(b)(viii)(ix)(x))		-			-		(4,838,229	)		-		-			-		-			(4,838,229	)
Cost of issue - broker warrants (note 14(b)(viii)(ix)(x))		-			-		(3,035,477	)		3,035,477		-			-		-			-
Shares issued as payment for accounts payable (note 14(b)(v))		200,000			-		305,055			-		-			-		-			305,055
Share cancelled (note 14(b)(iv))		(379,600	)		-		(235,425	)		-		-			-		(158,952	)		(394,377	)
Units issued as commission (note 14(b)(vii))		148,148			-		-			-		-			-		-			-
Share based compensation		-			-		-			6,538,261		-			-		-			6,538,261

Transaction with owners		74,709,231			10,000		54,796,263			15,885,980		118,162			1,982,501		(5,624,398	)		67,158,508

Revaluation of digital currency, net of taxes		-			-		-			-		-			1,441,376		-			1,441,376
Net income (loss) for the period		-			-		-			-		(644,436	)		-		(977,046	)		(1,621,482	)

Total comprehensive income for the period		-			-		-			-		(644,436	)		1,441,376		(977,046	)		(180,106	)

Balance, September 30, 2021		74,709,231			10,000	$	54,796,263		$	15,885,980	$	(526,274	)	$	3,423,877	$	(6,601,444	)	$	66,978,402

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

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Digihost Technology Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2021

(Expressed in United States Dollars) (Unaudited)

1. Nature of operations

Digihost Technology Inc. (the “Digihost”) was incorporated in British Columbia, Canada, on February 18, 2017 as Chortle Capital Corp and subsequently changed its name to HashChain Technology Inc. on September 18, 2017, and again to Digihost Technology Inc. on February 14, 2020. Digihost and its subsidiary, Digihost International, Inc., (together the “Company”) is a blockchain technology company with operations in cryptocurrency mining. The head office of the Company is located at 1001 East Delavan Avenue, Buffalo, New York, 14215.

On February 14, 2020, a reverse takeover transaction (the “RTO Transaction”) between Digihost International, Inc. (“Old Digihost”) and HashChain Technology Inc. (“HashChain”) was completed (note 4). On completion of the RTO Transaction, Old Digihost was determined to be the accounting acquirer and accordingly, the financial statements are a continuation of the Old Digihost. In connection with completion of the RTO Transaction, HashChain has changed its name to “Digihost Technology Inc.”. The Company carried on the business of HashChain as a Tier 2 technology issuer under the symbol “DGHI”. Digihost subordinate voting shares were listed for trading on the TSX Venture Exchange (“TSXV”) February 20, 2020.

These unaudited condensed interim consolidated financial statements of the Company were reviewed, approved and authorized for issue by the Board of Directors on January 12, 2022.

2. Significant accounting policies

(a) Statement of compliance

The Company applies IFRS as issued by the International Accounting Standards Board (“IASB”) and interpretations issued by the IFRS Interpretations Committee. These unaudited condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34 - Interim Financial Reporting. Accordingly, they do not include all of the information required for full annual financial statements.

The policies applied in these unaudited condensed interim consolidated financial statements are based on IFRS issued and outstanding as of January 12, 2022, the date the Board of Directors approved the statements. The same accounting policies and methods of computation are followed in these unaudited condensed interim consolidated financial statements as compared with the most recent annual financial statements as at and for the year ended December 31, 2020. Any subsequent changes to IFRS that are given effect in the Company’s annual financial statements for the year ending December 31, 2021 could result in restatement of these unaudited condensed interim consolidated financial statements.

(b) Standards, amendments and interpretations to existing standards that are not yet effective and have not been adopted early by the Company.

At the date of authorization of these unaudited condensed interim consolidated financial statements, several new, but not yet effective, standards and amendments to existing standards, and interpretations have been published by the IASB. None of these standards or amendments to existing standards have been adopted early by the Company. Management anticipates that all relevant pronouncements will be adopted for the first period beginning on or after the effective date of the pronouncement. New standards, amendments and interpretations not adopted in the current year have not been disclosed as they are not expected to have a material impact on the Company’s unaudited condensed interim consolidated financial statements.

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Digihost Technology Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2021

(Expressed in United States Dollars) (Unaudited)

2. Significant accounting policies (continued)

The preparation of these financial statements in conformity with IFRS requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. These financial statements include estimates that, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the year in which the estimate is revised and future years if the revision affects both current and future years. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Significant assumptions about the future that management has made that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to, but are not limited to, the following:

Significant judgements

(i) Income from digital currency mining

The Company recognizes income from digital currency mining from the provision of transaction verification services within digital currency networks, commonly termed “cryptocurrency mining”. As consideration for these services, the Company receives digital currency from each specific network in which it participates (“coins”). Income from digital currency mining is measured based on the fair value of the coins received. The fair value is determined using the spot price of the coin on the date of receipt. The coins are recorded on the statement of financial position, as digital currencies, at their fair value less costs to sell and re- measured at each reporting date. Revaluation gains or losses, as well as gains or losses on the sale of coins for traditional (fiat) currencies are included in profit or loss in accordance with the Company’s treatment of its digital currencies as a traded commodity.

There is currently no specific definitive guidance in IFRS or alternative accounting frameworks for the accounting for the mining and strategic selling of digital currencies and management has exercised significant judgement in determining appropriate accounting treatment for the recognition of income from digital currency mining for mining of digital currencies. Management has examined various factors surrounding the substance of the Company’s operations, including the stage of completion being the completion and addition of a block to a blockchain and the reliability of the measurement of the digital currency received.

(ii) Business combination

Management uses judgement to determines whether assets acquired and liabilities assumed constitute a business. A business consists of inputs and processes applied to those inputs that have the ability to create outputs.

The Company completed the RTO Transaction in February 2020 (note 4) and concluded that the entity acquired did qualify as a business combination under IFRS 3, “Business Combinations”, as significant processes were acquired. Accordingly, the RTO Transaction has been accounted for as a business combination.

(iii) Leases – incremental borrowing rate

Judgment is applied when determining the incremental borrowing rate used to measure the lease liability of each lease contract, including an estimate of the asset-specific security impact. The incremental borrowing rate should reflect the interest rate the Company would pay to borrow at a similar term and with similar security.

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Digihost Technology Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2021

(Expressed in United States Dollars) (Unaudited)

2. Significant accounting policies (continued)

Significant judgements (continued)

(iv) Income, value added, withholding and other taxes

The Company is subject to income, value added, withholding and other taxes. Significant judgment is required in determining the Company’s provisions for taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. The determination of the Company’s income, value added, withholding and other tax liabilities requires interpretation of complex laws and regulations. The Company’s interpretation of taxation law as applied to transactions and activities may not coincide with the interpretation of the tax authorities. All tax related filings are subject to government audit and potential reassessment subsequent to the financial statement reporting period. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the tax related accruals and deferred income tax provisions in the year in which such determination is made.

Significant estimates

(i) Determination of asset and liability fair values and allocation of purchase consideration

Significant business combinations require judgements and estimates to be made at the date of acquisition in relation to determining the relative fair value of the allocation of the purchase consideration over the fair value of the assets. The information necessary to measure the fair values as at the acquisition date of assets acquired requires management to make certain judgements and estimates about future events, including but not limited to availability of hardware and expertise, future production opportunities, future digital currency prices and future operating costs.

(ii) Useful lives of property, plant and equipment

Depreciation of data miners and equipment are an estimate of its expected life. In order to determine the useful life of computing equipment, assumptions are required about a range of computing industry market and economic factors, including required hashrates, technological changes, availability of hardware and other inputs, and production costs.

(iii) Digital currency valuation

Digital currencies consist of cryptocurrency denominated assets (note 6) and are included in current assets. Digital currencies are carried at their fair value determined by the spot rate less costs to sell. The digital currency market is still a new market and is highly volatile; historical prices are not necessarily indicative of future value; a significant change in the market prices for digital currencies would have a significant impact on the Company’s earnings and financial position.

(iv) Impairment of goodwill

Goodwill is tested for impairment if there is an indicator of impairment and annually for all CGUs with goodwill. The Company considers both external and internal sources of information for indications that goodwill is impaired. External sources of information we consider include changes in the market and economic and legal environment in which the CGU operates that are not within its control and affect the recoverable amount of goodwill. Internal sources of information considered include the strategic plans for the Company including estimates of revenue and other indications of economic performance of the assets.

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Digihost Technology Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2021

(Expressed in United States Dollars) (Unaudited)

3. Correction of errors

The unaudited condensed consolidated interim financial statements for the three and nine months ended September 30, 2021 have been restated to amend the following items relating to the three and nine months ended September 30, 2021:

An income tax provision of $1,498,085 and corresponding increase in deferred tax liability has been recorded to account for an estimate of taxes that are owed but not due to be paid until a future date.

An income tax provision in other comprehensive income of $509,986 and corresponding increase in deferred tax liability has been recorded to account for an estimate of taxes that are owed but not due to be paid until a future date related to the cumulative revaluation of digital currency.

As a result of the above noted changes, the Company had a net loss of $771,154, compared to the previously reported net income of $762,931, for the three months ended September 30, 2021, and had a net loss of $977,046, compared to the previously reported net income of $521,039, for the nine months ended September 30, 2021.

Total comprehensive income for the three months ended September 30, 2021 is $858,105 rather than the previously reported 2,866,176. For the nine months ended September 30, 2021, the Company had a total comprehensive loss of $180,106 compared to the previously reported total comprehensive income of $1,827,965.

Furthermore, at September 30, 2021, total liabilities were $7,501,696, compared to the previously reported $5,493,626, and total shareholders’ equity was $66,978,402, rather than the previously reported $68,986,473. There was no impact on total assets.

4. Reverse takeover

On February 14, 2020, there was a RTO Transaction between Old Digihost and HashChain. In connection with completion of the RTO Transaction, HashChain acquired all the issued and outstanding shares of Old Digihost in exchange for 29,820,000 subordinate voting shares of the Company. In substance, the transaction involves Old Digihost shareholders obtaining control of the Company; accordingly, the transaction is considered to be a reverse acquisition transaction under which Old Digihost is identified as the accounting acquirer.

At the time of the transaction, HashChain had operations in cryptocurrency mining and met the definition of a business, and the transaction was accordingly considered a business combination. The purpose of the RTO Transaction was to acquire the operations of HashChain and to obtain listing on a public exchange. The transaction costs associated with this RTO Transaction was $59,149.

As Old Digihost was deemed to be the acquirer for accounting purposes, these consolidated financial statements present the historical financial information to the date of the Transaction are those of Old Digihost presented as a continuation of Old Digihost.

Pursuant to the business combination transaction, the net assets acquired from the acquisition are to be recorded at their estimated fair values in accordance with IFRS 3. The allocation of the purchase consideration is as follows:

Consideration

Fair value of 6,530,560 subordinate voting shares of HashChain ⁽¹⁾	$	2,957,458
Net assets acquired
Property, plant and equipment	$	2,244,509
Accounts payable and other payables		(576,957	)
		1,667,552
Goodwill acquired ⁽²⁾		1,289,906
	$	2,957,458

⁽¹⁾

The common shares issued were valued based on the HashChain closing price of CAD$0.60 on the TSXV on February 14, 2020.

⁽²⁾

The goodwill acquired from the RTO Transaction is primarily attributable to the synergies expected to arise from vertical integration of the cryptocurrency mining operations which is the only segment of the Company.

- 9 -

Digihost Technology Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2021

(Expressed in United States Dollars) (Unaudited)

5. Amounts receivable and prepaid expenses

	As at September 30,		As at December 31,
	2021		2020
Prepaid insurance	$	197,387	$	12,622
Amounts receivable		331,580		-
	$	528,967	$	12,622

6. Digital currencies

The Company’s holdings of digital currencies consist of the following:

	As at September 30,		As at December 31,
	2021		2020
Bitcoin	$	19,807,612	$	4,508,042
Ethereum		3,004,350		-
	$	22,811,962	$	4,508,042

The continuity of digital currency was as follows:

	Number of Bitcoin			Amount			Number of Ethereum		Amount

Balance, December 31, 2020		154		$	4,508,042			-	$	-
Bitcoin mined		348			15,365,382			-		-
Received from sale of property, plant and equipment		13			735,197			63		204,318
Received from private placement		1			47,671			-		-
Exchange of digital currencies		(63	)		(3,219,388	)		938		3,219,388
Revaluation adjustment⁽¹⁾		-			2,370,708			-		(419,356	)
Balance, September 30, 2021		453		$	19,807,612			1,001	$	3,004,350
Bitcoin - current⁽²⁾		453		$	19,807,612			1,001	$	3,004,350

⁽¹⁾

Digital assets held are revalued each reporting period based on the fair market value of the price of Bitcoin and Ethereum on the reporting date. As at September 30, 2021, the prices of Bitcoin and Ethereum were $43,791 and $3,002, respectively resulting in revaluation (loss) gain of $(2,370,708) and $419,356, respectively and recorded to other comprehensive income.

⁽²⁾

Digital currencies that are held by the Company and available for use as at September 30, 2021.

- 10 -

Digihost Technology Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2021

(Expressed in United States Dollars) (Unaudited)

7. Loan receivable

As at September 30, 2021, Nyam, LLC, a company controlled by the Chief Executive Officer (“CEO”) was owed $141,552 (December 31, 2020 - $141,552). These amounts are non-interest bearing, unsecured and due on demand.

8. Property, plant and equipment

	Data						Leasehold			Powerplant
	miners			Equipment			improvement			in progress		Total
Cost
Balance - December 31, 2019	$	-		$	-		$	-		$	-	$	-
Additions		3,558,280	⁽¹⁾		2,760,000	⁽²⁾		1,040,000	⁽²⁾		-		7,358,280
Acquired from RTO Transaction		2,244,509			-			-			-		2,244,509

Balance - December 31, 2020	$	5,802,789		$	2,760,000		$	1,040,000		$	-	$	9,602,789
Additions		20,878,123	⁽³⁾		438,285			-			2,933,151		24,249,559
Disposal		(487,939	)		-			-			-		(487,939	)
Balance - September 30, 2021	$	26,192,973		$	3,198,285		$	1,040,000		$	2,933,151	$	33,364,409

Accumulated depreciation
Balance - December 31, 2019	$	-		$	-		$	-		$	-	$	-
Depreciation		2,538,211			479,888			87,056			-		3,105,155

Balance - December 31, 2020	$	2,538,211		$	479,888		$	87,056		$	-	$	3,105,155
Depreciation		1,594,216			444,937			78,006			-		2,117,159
Disposal		(487,949	)		-			-			-		(487,949	)

Balance - September 30, 2021	$	3,644,478		$	924,825		$	165,062		$	-	$	4,734,365

Net carrying value
As at December 31, 2020	$	3,264,578		$	2,280,112		$	952,944		$	-	$	6,497,634
As at September 30, 2021	$	22,548,495		$	2,273,460		$	874,938		$	2,933,151	$	28,630,044

⁽¹⁾

Mining assets of $2,404,020 purchased by the Company in February 2020 from Nyam, LLC.

⁽²⁾

Assets acquired as part of facility lease assignment prior of the closing of the RTO Transaction (see note 12).

⁽³⁾

On May 12, 2021, the Company signed a definitive purchase agreement to acquire approximately 10,000 high-performance Bitcoin miners. The miners were sourced from Northern Data AG for approximately CAD$54,000,000.

Pursuant to the terms of the purchase agreement, the Company has concurrently entered into a hosting agreement with Northern Data in connection with the miners, whereby Northern Data will provide services to the Company including the installation and hosting of the miners in proprietary pre-manufactured performance optimized mobile data centres to be located at Digihost’s company-owned facility.

As at September 30, 2021, the Company has acquired approximately $20,878,123 of miners.

- 11 -

Digihost Technology Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2021

(Expressed in United States Dollars) (Unaudited)

9. Goodwill

	As at September 30, 2021			As at December 31, 2020
Balance, beginning of period	$	1,342,281		$	-
RTO transaction		-			1,289,906
Foreign currency translation		(2,037	)		52,375
Balance, end of period	$	1,340,244		$	1,342,281

For the realization of its impairment test, management has used the approach of fair value less costs to sell. The fair value is derived from the market capitalization of the Company as September 30, 2021 and management determined that the fair value less cost of sales, was higher than the carrying value of the CGU. Following this analysis, management has determined that no impairment was necessary. For these tests, the Company allocates all of its goodwill to a single CGU, the Company as a whole, since this is the lowest level at which goodwill is monitored for internal purposes.

10. Intangible asset

Intangible asset relates to the right of use of an electric power facility.

	As at			As at
	September 30,			December 31,
	2021			2020
Balance, beginning of period	$	1,572,500		$	-
Addition at cost		-			1,680,000
Amortization		(96,932	)		(107,500	)
Balance, end of period	$	1,475,568		$	1,572,500

11. Right-of-use assets

As at As at

September 30, December 31,

2021 2020

Balance, beginning of period $ 2,413,720 $ -

Additions - 2,588,107

Depreciation (148,718 ) (174,387 )

Balance, end of period $ 2,265,002 $ 2,413,720

Rights-of-use assets are depreciated over a 13 year term. Refer to note 12 for further details.

12. Lease liabilities

On February 14, 2020, prior to the closing of the RTO Transaction, BIT Management, LLC, Nyam, LLC and BIT Mining International, LLC (collectively the “Sellers”, all companies controlled by the CEO of Digihost) sold to the Company leasehold improvements and equipment and transferred and assigned the lease of the 1001 East Delavan facility. As consideration, Digihost issued 164,000 common shares. These transactions resulted in increases in equipment of $2,760,000, leasehold improvements of $1,040,000, intangible assets of $1,680,000 and right of use assets and lease liabilities of $2,588,107 for a total of $5,480,000 recorded in share capital.

- 12 -

Digihost Technology Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2021

(Expressed in United States Dollars) (Unaudited)

12. Lease liabilities (continued)

The leases have an initial term ending in March 2023 and have renewal options. The Company intends to renew the leases for an additional 10 years. When measuring lease liability, the Company’s incremental borrowing rate applied was estimated to be 10% per annum.

Nyam, LLC made security deposits of $37,917 on the lease. The lease is also guaranteed personally by the CEO.

The continuity of the lease liabilities are presented in the table below:

	As at September 30,			As at December 31,
	2021			2020
Balance, beginning of period	$	2,546,160		$	-
Additions		-			2,588,107
Interest		177,516			216,434
Lease payments		(260,680	)		(258,381	)
Balance, end of period	$	2,462,996		$	2,546,160
Current portion	$	122,636		$	111,672
Non-current portion		2,340,360			2,434,488
Total lease liabilities	$	2,462,996		$	2,546,160

Maturity analysis - contractual undiscounted cash flows

As at September 30, 2021
Less than one year	$	350,274
One to five years		1,405,736
More than five years		2,284,320
Total undiscounted lease obligations	$	4,040,330

- 13 -

Digihost Technology Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2021

(Expressed in United States Dollars) (Unaudited)

13. Loans payable

The Company procured loans as follows:

	As at September 30,		As at December 31,
	2021		2020
Loans at interest rate of 8%, payable on demand. Secured by Bitcoin equivalent to 120% of the value of the loan. When the market value of the collateral drops to less than 110% or exceeds 120% of the loan, Bitcoin must be transferred to or from the lender to maintain the collateral amount.	$	-	$	1,182,333
Loans at interest rate of 6.5% and 9.5%, maturing in January 2021. Secured by Bitcoin equivalent to 80% of the value of the loan. When the market value of the collateral drops to less than 80% or exceeds 120% of the loan, Bitcoin must be transferred to or from the lender to maintain the collateral amount.		-		385,750
Loan at interest rate of 17.5%, maturing on April 1, 2022. The loan is to be repaid in 24 monthly payment of $19,873, capital and interest. The loan is secured by Bitcoin equivalent to 120% of the value of the loan.		-		400,000
Loan at interest rate of 17.5%, maturing on April 1, 2022. The loan is to be repaid in 24 monthly payment of $28,568, capital and interest. The loan is secured by Bitcoin equivalent to 120% of the value of the loan.		-		575,000
Total loans	$	-	$	2,543,083
Current	$	-	$	2,010,172
Non-current	$	-	$	532,911

⁽¹⁾

On February 18, 2021, the Company received loan proceeds in the amount of approximately $41,495 under the Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act, provides loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable after eight weeks as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the eight-week period. The Company utilized the funds received as intended and the loan was forgiven during the third quarter of 2021.

	As at September 30,			As at December 31,
	2021			2020
Balance, beginning of the period	$	2,543,083		$	-
New loans		1,473,495			2,543,083
Repayment of loans		(3,975,083	)		-
Forgiveness of loan		(41,495	)		-
Balance, end of the period	$	-		$	2,543,083

- 14 -

Digihost Technology Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2021

(Expressed in United States Dollars) (Unaudited)

14. Share capital

a) Authorized share capital

Unlimited subordinate voting shares without par value and conferring 1 vote per share.

Unlimited proportionate voting shares without par value, conferring 200 votes per share, convertible at the holder’s option into subordinate voting shares on a basis of 200 subordinate voting shares for 1 proportionate voting shares.

b) Subordinate voting shares and proportionate voting shares issued

(i) In 2019, the Company closed a non-brokered private placement, for aggregate gross proceeds of $4,064,431 (CAD$5,395,338) from the sale of 5,481,912 common share subscription receipts at a price of CAD$0.96, with each common share subscription receipt exchangeable for one common share of Digihost, and 110,575 unit subscription receipts at a price of CAD$1.20 per unit subscription receipt, with each unit subscription receipt exchangeable for one unit. Each unit consisted of one subordinate voting share and one subordinate voting share purchase warrant of Digihost. Each warrant entitles the holder thereof to acquire one subordinate voting share at a price of CAD$1.75 with expiry date August 14, 2021. The proceeds were received prior to December 31, 2020 and were recorded as subscription liability. In February 2020, prior to the closing of the RTO transaction, the subscription receipts were exchanged for 5,592,487 common shares of Digihost and then exchanged for 5,592,487 subordinate voting shares of the Company.

The grant date fair value of the 110,575 warrants was estimated as $20,000.

In addition, immediately prior to completion of the RTO Transaction, the Company exchanged 1,999,997 subordinate voting shares of Digihost owned by the CEO and director of Digihost for 10,000 proportionate voting shares.

(ii) On February 14, 2020, the Company cancelled the 2 founder shares of Old Digihost.

(iii) On February 14, 2020, the Company issued 130,911 subordinate voting shares as settlement of payables of $59,149.

(iv) On December 7, 2020, the Company announced that it has received approval to undertake, at the Company’s discretion, a normal course issuer bid program to purchase up to 2,003,683 of its subordinate voting shares for cancellation (the “Bid”). The Company received acceptance from the TSXV to commence the Bid on December 10, 2020. The Bid will terminate on December 10, 2021, or on an earlier date in the event that the maximum number of subordinate voting shares sought in the Bid has been repurchased. The Company reserves the right to terminate the Bid at any time. As at September 30, 2021, the Company repurchased and cancelled 379,600 subordinate voting shares.

(v) On February 9, 2021, the Company issued 200,000 subordinate voting shares (valued at $305,055) to settle a debt of $40,000 with two third-party creditors.

(vi) On January 8, 2021, the Company closed a non-brokered private placement for 349,876 subordinate voting shares for CAD$0.81 for gross proceeds of $220,551.

(vii) On February 18, 2021, the Company closed a non-brokered private placement financing for 4,938,271 subordinate voting shares for CAD$0.81 for gross proceeds of $3,124,018 (CAD$4,000,000). In connection with the private placement, the Company will pay a commission of 148,148 Shares to third party advisors.

- 15 -

Digihost Technology Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2021

(Expressed in United States Dollars) (Unaudited)

14. Share capital (continued)

(viii) On March 16, 2021, the Company closed a non-brokered private placement financing for 9,363,296 units for CAD$2.67 per unit for gross proceeds of $19,985,611 (CAD$25 million). Each unit consists of 9,363,296 subordinate voting shares of the Company and warrants to purchase 9,363,296 subordinate voting shares. The warrants have an exercise price of CAD$3.14 per Share and exercise period of three years from the issuance date.

H.C. Wainwright & Co. acted as the exclusive placement agent and received cash commission and expenses totalling $1,978,303 and 749,064 non-transferable broker warrants. Each broker warrant entitles the holder to purchase one subordinate voting share at an exercise price of CAD$3.3375 at any time for a period of three years from the issuance date. The warrants and broker warrants were assigned an aggregate value of $1,976,106 using the residual method.

(ix) On April 9, 2021, the Company closed a non-brokered private placement financing for 11,682,243 units for CAD$2.14 per unit for gross proceeds of $19,748,795 (CAD$25 million). Each unit consists of 11,682,243 subordinate voting shares of the Company and warrants to purchase 11,682,243 subordinate voting shares. The warrants have an exercise price of CAD$2.37 per Share and exercise period of four years from the issuance date.

H.C. Wainwright & Co. acted as the exclusive placement agent and received cash commission and expenses totalling $1,695,460 and 934,579 non-transferable broker warrants. Each broker warrant entitles the holder to purchase one subordinate voting share at an exercise price of CAD$2.675 at any time for a period of four years from the issuance date. The warrants and broker warrants were assigned an aggregate value of $4,054,513 using the residual method.

(x) On June 18, 2021, the Company closed a non-brokered private placement financing for 8,333,336 units for CAD$1.80 per unit for gross proceeds of $12,025,016 (CAD$15 million). Each unit consists of 8,333,336 subordinate voting shares of the Company and warrants to purchase 6,250,002 subordinate voting shares. The warrants have an exercise price of CAD$1.99 per subordinate voting share and exercise period of three years from the issuance date.

H.C. Wainwright & Co. acted as the exclusive placement agent and received cash commission and expenses totalling $1,164,466 and 666,667 non-transferable broker warrants. Each broker warrant entitles the holder to purchase one subordinate voting share at an exercise price of CAD$2.25 at any time for a period of three years from the issuance date. The warrants and broker warrants were assigned an aggregate value of $2,049,549 using the residual method.

15. Warrants

	Number of Warrants			Weighted Average Exercise Price (CAD$)
Balance, December 31, 2019	-			-
Issued (note 14(b)(i))		110,575			1.75
Balance, September 30, 2020		110,575			1.75
Balance, December 31, 2020		110,575			1.75
Issued (note 14(b)(viii)(ix)(x))		29,645,851			2.56
Expired		(110,575	)		1.75
Balance, September 30, 2021		29,645,851			2.56

- 16 -

Digihost Technology Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2021

(Expressed in United States Dollars) (Unaudited)

15. Warrants (continued)

The following table reflects the warrants issued and outstanding as of September 30, 2021:

Number of Warrants Outstanding		Exercise Price (CAD$)		Weighted Average Contractual Life (years)		Expiry Date
	9,363,296		3.14		2.46	March 16, 2024
	749,064		3.3375		2.46	March 16, 2024
	6,250,002		1.99		2.72	June 18, 2024
	666,667		2.25		2.72	June 18, 2024
	11,682,243		2.37		3.53	April 9, 2025
	934,579		2.675		3.53	April 9, 2025
	29,645,851		2.56		2.97

16. Stock options

The Company has a stock option plan whereby the maximum number of shares subject to the plan, in the aggregate, shall not exceed 10% of the Company’s issued and outstanding shares. The exercise price shall be no less than the discount market price as determined in accordance with TSXV policies.

The following table reflects the continuity of stock options for the periods presented below:

	Number of Stock Options		Weighted Average Exercise Price (CAD$)
Balance, December 31, 2019	-		-
Granted (i)		1,875,000		0.96
Balance, September 30, 2020		1,875,000		0.96
Balance, December 31, 2020		1,875,000		0.96
Granted (ii)(iii)(iv)(v)(vi)		5,470,491		2.01
Balance, September 30, 2021		7,345,491		1.74

(i) On February 14, 2020, the Company granted stock options to directors, officers and consultants of the Company to acquire an aggregate of 1,875,000 subordinate voting shares. The stock options may be exercised at a price of CAD$0.96 per share and expire on February 14, 2025. The stock options vest six months after grant date.

A value of CAD$0.88 per option was estimated for the 1,875,000 stock options on the date of grant with the following assumptions and inputs: share price of CAD$0.96; exercise price of CAD$0.96; expected dividend yield of 0%; expected volatility of 154% which is based on comparable companies; risk-free interest rate of 1.37%; and an expected average life of five years. An expense of $1,247,551 was recorded during the year ended December 31, 2020.

- 17 -

Digihost Technology Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2021

(Expressed in United States Dollars) (Unaudited)

16. Stock options (continued)

(ii) On January 5, 2021, the Company granted stock options to directors, officers, employees and consultants of the Company to acquire an aggregate of 1,650,491 subordinate voting shares. Each stock option is exercisable into a subordinate voting share at a price of CAD$1.25 and expire on January 5, 2026. The stock options vest fully on the six-month anniversary of the date of grant.

A value of CAD$0.92 per option was estimated for the 1,650,491 stock options on the date of grant with the following assumptions and inputs: share price of CAD$1.01; exercise price of CAD$1.25; expected dividend yield of 0%; expected volatility of 155% which is based on comparable companies; risk-free interest rate of 0.39%; and an expected average life of five years. For the nine months ended September 30, 2021, an expense of $1,181,970 was recorded.

(iii) On February 24, 2021, the Company granted stock options to consultants of the Company to acquire an aggregate of 150,000 subordinate voting shares. Each stock option is exercisable into a subordinate voting share at a price of CAD$4.64 and expire on February 24, 2026. The stock options vested immediately.

A value of CAD$4.26 per option was estimated for the 150,000 stock options on the date of grant with the following assumptions and inputs: share price of CAD$4.64; exercise price of CAD$4.64; expected dividend yield of 0%; expected volatility of 155% which is based on comparable companies; risk-free interest rate of 0.73%; and an expected average life of five years. For the nine months ended September 30, 2021, an expense of $512,670 was recorded.

(iv) On March 26, 2021, the Company granted stock options to directors, officers, employees and consultants of the Company to acquire an aggregate of 1,600,000 subordinate voting shares. Each stock option is exercisable into a subordinate voting share at a price of CAD$2.49 and expire on March 25, 2026. The stock options vest fully on the six-month anniversary of the date of grant.

A value of CAD$2.29 per option was estimated for the 1,600,000 stock options on the date of grant with the following assumptions and inputs: share price of CAD$2.49; exercise price of CAD$2.49; expected dividend yield of 0%; expected volatility of 155% which is based on comparable companies; risk-free interest rate of 0.90%; and an expected average life of five years. For the nine months ended September 30, 2021, an expense of was recorded.

(v) On May 17, 2021, the Company granted stock options to directors, officers, employees and consultants of the Company to acquire an aggregate of 1,290,000 subordinate voting shares. Each stock option is exercisable into a subordinate voting share at a price of CAD$2.45 and expire on May 17, 2026. The stock options vest fully on the six-month anniversary of the date of grant.

A value of CAD$2.03 per option was estimated for the 1,290,000 stock options on the date of grant with the following assumptions and inputs: share price of CAD$2.62; exercise price of CAD$2.45; expected dividend yield of 0%; expected volatility of 105% which is based on comparable companies; risk-free interest rate of 0.95%; and an expected average life of five years. For the nine months ended September 30, 2021, an expense of $501,184 was recorded.

(vi) On June 22, 2021, the Company granted stock options to directors, officers, employees and consultants of the Company to acquire an aggregate of 780,000 subordinate voting shares. Each stock option is exercisable into a subordinate voting share at a price of CAD$1.40 and expire on June 22, 2026. The stock options vest fully on the six-month anniversary of the date of grant.

A value of CAD$1.02 per option was estimated for the 780,000 stock options on the date of grant with the following assumptions and inputs: share price of CAD$1.34; exercise price of CAD$1.40; expected dividend yield of 0%; expected volatility of 105% which is based on comparable companies; risk-free interest rate of 0.95%; and an expected average life of five years. For the nine months ended September 30, 2021, an expense of $27,864 was recorded.

- 18 -

Digihost Technology Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2021

(Expressed in United States Dollars) (Unaudited)

16. Stock options (continued)

The following table reflects the stock options issued and outstanding as of September 30, 2021:

Expiry Date	Exercise Price (CAD$)		Weighted Average Remaining Contractual Life (years)		Number of Options Outstanding		Number of Options Vested (exercisable)		Number of Options Unvested
February 14, 2025		0.96		3.38		1,875,000		1,875,000		-
January 5, 2026		1.25		4.27		1,650,491		1,650,491		-
February 24, 2026		4.64		4.41		150,000		150,000		-
March 25, 2026		2.49		4.48		1,600,000		1,600,000		-
May 17, 2026		2.45		4.63		1,290,000		-		1,290,000
June 22, 2026		1.40		4.73		780,000		-		780,000
		1.74		4.20		7,345,491		5,275,491		2,070,000

17. Related party transactions

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control. Related parties include key management personnel and may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. Related party transactions are recorded at the exchange amount, being the amount agreed to between the related parties.

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly. Key management personnel include the Company’s executive officers and members of the Board of Directors.

Remuneration of key management personnel of the Company was as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Professional fees⁽¹⁾	$	18,849	$	10,320	$	72,239	$	31,181
Share based compensation⁽²⁾		2,500,175		144,138		5,248,423		582,959
	$	2,519,024	$	154,458	$	5,320,662	$	614,140

⁽¹⁾

In September 2019, Ms. Cindy Davis was appointed Chief Financial Officer of the Company. Ms. Davis is also a senior employee of Marrelli Support Services Inc. (“Marrelli Support”). Marrelli Support also provides accounting services to the Company. On April 29, 2021, Mr. Paul Ciullo was appointed as the Chief Financial Officer replacing Ms. Davis.

⁽²⁾

Represents the share based compensation for officer and directors.

A Surety Bond of $341,000 issued to a supplier is guaranteed by Nyam, LLC, a company controlled by the CEO.

See notes 7, 8, 12 and 13 for additional related party transactions.

- 19 -

Digihost Technology Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2021

(Expressed in United States Dollars) (Unaudited)

18. Additional information on the nature of comprehensive loss components

	Nine Months Ended September 30,
	2021		2020
Expenses for employee benefits
Operating and maintenance costs	$	349,833	$	108,313
Professional fees		72,239		31,181
Share based compensation		6,538,261		693,999
	$	6,960,333	$	833,493
Net financial expenses
Interest in loans	$	96,134	$	20,280
Interest on lease liabilities		177,516		48,364
	$	273,650	$	68,644

19. Income taxes

a. Deferred tax liability

Deferred taxes are measured at a tax rate of 26.14%, based on tax rates expected to apply for years in which the temporary differences are expected to reverse. The Company’s net deferred tax liability as of September 30, 2021 was $2,073,709 and relate primarily to temporary differences on property, plant, and equipment, digital currencies and share based compensation.

b. Deferred taxes included in profit or loss

Nine Months Ended September 30,	2021
Current year	$	1,414,645
Prior year		83,440
	$	1,498,085

c. Effective tax rate for the nine months ended September 30:

Nine Months Ended September 30,	2021
Income before income taxes	$	521,039
Combined statutory income tax rate		27.00	%
Income tax expense at the statutory tax rate		140,680
Non-deductible expenses		162,035
Share based compensation		1,279,239
Effect of lower tax rate of subsidiary		(4,480	)
Prior period adjustments and other		(79,389	)
Deferred income tax provision	$	1,498,085
Composition of deferred income taxes in the income statement
Inception and reversal of temporary differences	$	1,414,645
Prior period adjustments and other		83,440
Deferred Income tax provision	$	1,498,085

- 20 -

Digihost Technology Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2021

(Expressed in United States Dollars) (Unaudited)

20. Segmented reporting

The Company has one operating segment being cryptocurrency mining located in the United States. The operations of the Company are located in two geographic locations, Canada and the United States. Geographic segmentation is as follows:

As at September 30, 2021	Canada		United States		Total
Current assets	$	129,177	$	40,640,064	$	40,769,241
Non-current assets		1,340,244		32,370,614		33,710,858
Total assets	$	1,469,421	$	73,010,678	$	74,480,099

As at December 31, 2020	Canada		United States		Total
Current assets	$	-	$	4,693,466	$	4,693,466
Non-current assets		1,342,281		10,483,854		11,826,135
Total assets	$	1,342,281	$	15,177,320	$	16,519,601

21. Subsequent event

On October 28, 2021, the Company consolidated the outstanding subordinate voting shares and proportionate voting shares of the Company on the basis of three (3) pre-consolidation shares for every one (1) post-consolidation share in order to facilitate a proposed listing of its subordinate voting shares on the Nasdaq Capital Market and satisfy the minimum share price requirement set by Nasdaq.

The Company previously had 75,078,831 subordinate voting shares and 10,000 proportionate voting shares issued and outstanding, and following the consolidation, there was approximately 25,026,277 subordinate voting shares and 3,333 proportionate voting shares issued and outstanding. The exercise price and number of subordinate voting shares issuable upon the exercise of the Company’s outstanding options and warrants were proportionately adjusted upon completion of the consolidation. The Company did not issue any factional post-consolidation shares as a result of the consolidation. Instead, each fractional share remaining after conversion were rounded down to the nearest whole post (1) consolidation share.

- 21 -

Exhibit 99.2

DIGIHOST TECHNOLOGY INC.

RESTATED MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE AND NINE MONTH PERIODS ENDED

SEPTEMBER 30, 2021

Notification to Reader on Restated MD&A

The Company is amending its Management’s Discussion & Analysis for the interim period ended September 30, 2021 (the “Restated MD&A”). The Company has prepared the Restated MD&A as a result of the amending and restating of the Company’s Restated Financial Statements, together with the accompanying notes thereto.

The Restated Financial Statements and Restated MD&A (collectively, the “Restatements”) have been prepared as a result of the re-assessment of existing timing differences and corresponding deferred tax liability. As a result, the Company had a net loss of $771,154, compared to the previously reported net income of $762,931, for the three months ended September 30, 2021, and had a net loss of$977,046, compared to the previously reported net income of $521,039, for the nine months ended September 30, 2021. Furthermore, at September 30, 2021, total liabilities were $7,501,696, rather than the previously reported$5,493,626, and total shareholders’ equity was $66,978,402, rather than the previously reported $68,986,473. The restatements had no impact on the Company’s record revenue from digital currency mining, gross profit, operating income, EBITDA or adjusted EBITDA for both the three and nine months ended September 30, 2021, on the Company’s cash flows for the nine months ended September 30, 2021, or on the Company’s cash or total assets at September 30, 2021.

For further detail regarding the amendments, please refer to the Restated Financial Statements under Note 3 and Note 19, and review the entirety of the Restatements so as to appreciate the impact of this revision.

The Management’s Discussion & Analysis that was originally filed by the Company on SEDAR on October 21, 2021, is replaced and superseded by this Restated MD&A. Such previously filed Management’s Discussion & Analysis should be disregarded.

DIGIHOST TECHNOLOGY INC.

Management’s Discussion & Analysis

For the three and nine month period ended September 30, 2021

January 12, 2022

Introduction

The following management’s discussion & analysis (“MD&A”) of the financial condition and results of operations of Digihost Technology Inc. (the “Company” or “Digihost”) constitutes management’s review of the factors that affected the Company’s financial and operating performance for the three and nine month periods ended September 30, 2021. This MD&A was written to comply with the requirements of National Instrument 51-102 – Continuous Disclosure Obligations. This discussion should be read in conjunction with the audited consolidated financial statements of the Company for the years ended December 31, 2020, and 2019, together with the notes thereto. Results are reported in United States dollars, unless otherwise noted. The Company’s consolidated financial statements and the financial information contained in this MD&A, unless otherwise indicated, are prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations of the IFRS Interpretations Committee. Information contained herein is presented as of January 12, 2022, unless otherwise indicated.

For the purposes of preparing this MD&A, management, in conjunction with the Board of Directors (the “Board”), considers the materiality of information. Information is considered material if: (i) such information results in, or would reasonably be expected to result in, a significant change in the market price or value of Company’s common shares; (ii) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision; or (iii) it would significantly alter the total mix of information available to investors. Management, in conjunction with the Board, evaluates materiality with reference to all relevant circumstances, including potential market sensitivity.

Information about the Company and its operations can be obtained from the offices of the Company or on the System for Electronic Documents Analysis and Retrieval (“SEDAR”) and is available for review under the Company’s profile on the SEDAR website (www.sedar.com).

COVID-19

Since the beginning of 2020, the outbreak of the novel strain of coronavirus known as “COVID-19” has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused material disruption to businesses globally resulting in an economic slowdown. Global equity markets have experienced significant volatility. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The Company’s employees, directors and consultants have fortunately not had any known cases of COVID-19. The duration and impact of the COVID-19 pandemic is unknown at this time, as is the efficacy of the government and central bank interventions. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of the Company in future periods.

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DIGIHOST TECHNOLOGY INC.

Management’s Discussion & Analysis

For the three and nine month period ended September 30, 2021

January 12, 2022

Description of Business

Digihost and its US operating subsidiary (together “Digihost” or the “Company”) is a blockchain technology company currently focussed on bitcoin mining. The Company’s growth-oriented strategy is to continuously exploit opportunities that increase mining hash rate, reduce energy costs through favourable contracts and vertical integration, and increase the Company’s inventory of coins mined and held. The Company’s operating facility is located in Buffalo, New York, with over 70,000 square feet of usable space and a 115,000 KVA outdoor substation under lease with an option to lease additional space totaling 240,000 square feet. The Company focuses on validation through mining, hosting solutions and blockchain software solutions.

The Company’s operating strengths include the following:

	●	Data: Digihost utilizes low-cost power and infrastructure in upstate New York and currently operates approximately 9,000 miners. The Company is in the process of adding an additional 18MW to its existing facility.

	●	Acquisitions: Focused on sourcing industry-low energy costs through the acquisition of independent power plants.

●

Currently working through the approval process to complete the acquisition of a 60MW independent power project in upstate New York to accommodate approximately 17,000 new miners.

The head office of the Company is located at 1001 East Delavan Avenue, Buffalo, New York, 14215.

Recent Highlights

Financings

On February 19, 2021, the Company announced the closing of a non-brokered private placement financing for aggregate gross proceeds of CAD$4,000,000. Pursuant to the financing, the Company issued 4,938,271 subordinate voting shares of the Company at a price of CAD $0.81 per share. (Can you please put the bullet back in, thx)

●

On March 17, 2021, the Company announced the closing of a private placement of 9,363,296 units at a price of CAD$2.67 per unit for gross proceeds of CAD$25 million. Each unit consists of one subordinate voting shares and one warrant to purchase one subordinate voting shares. The warrants have an exercise price of CAD$3.14 per share and an exercise period of three years from the issuance date.

H.C. Wainwright & Co. acted as the exclusive placement agent and received (i) a cash commission equal to 8.0% of the gross proceeds of the offering and (ii) 749,064 non-transferable broker warrants. Each broker warrant entitles the holder to purchase one subordinate voting share at an exercise price of CAD$3.3375 at any time for a period of three years from the issuance date.

●

On April 6, 2021, the Company announced the closing of a private placement of 11,682,243 units at a price of CAD$2.14 per unit for gross proceeds of CAD$25 million. Each unit consisted of one subordinate voting share and one warrant to purchase one subordinate voting share, at a purchase price of CAD$2.37 per share. The warrants have an exercise period of four years from the issuance date.

H.C. Wainwright & Co. acted as the exclusive placement agent and received (i) a cash commission equal to 8.0% of the gross proceeds of the Offering and (ii) 934,579 non-transferable broker warrants. Each broker warrant entitles the holder to purchase one subordinate voting share at an exercise price of CAD$2.675 at any time for a period of four years from the issuance date.

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DIGIHOST TECHNOLOGY INC.

Management’s Discussion & Analysis

For the three and nine month period ended September 30, 2021

January 12, 2022

●

On June 21, 2021, the Company announced the closing of a non-brokered private placement of 8,333,336 units at a price of CAD$1.80 per unit for gross proceeds of CAD$15 million. Each unit consists of 8,333,336 subordinate voting shares of the Company and warrants to purchase 6,250,002 subordinate voting shares. The warrants have an exercise price of CAD$1.99 per subordinate voting share and exercise period of three years from the issuance date.

Acquisitions and Joint Ventures

●

On March 24, 2021, the Company announced the signing of a binding agreement for the purchase of a 60 MW power plant (“Digifactory1”) located in upper New York state, bringing the Company’s total power capacity to approximately 102 MW.

Under the terms of the agreement, the Company will pay to the vendor cash consideration of US$3,500,000 and issue to the vendor 437,318 common shares of the Company with a deemed value of US$750,000 (US$1.72 per share).

The transaction is subject to New York regulatory approval as well as the approval of the TSX Venture Exchange. The securities issuable in connection therewith will be subject to a statutory four month and a day hold period.

●

On March 29, 2021, the Company announced the acquisition of 700 Bitmain S17+ 76TH miners for a total purchase price of $2.975 million, that increased the Company’s hashrate by 50PH, or approximately 20% in the second quarter of 2021.

●

On May 14, 2021, the Company announced that it had signed a definitive purchase agreement to acquire approximately 9,900 high-performance Bitcoin miners that will increase the Company’s current hashrate by approximately 925PH to approximately 1.2 EH, with delivery of the Miners to occur between November of this year and the Q1 of 2022.

The Miners have been sourced from Northern Data AG, a leading infrastructure supplier for BTC mining and other high-performance computing infrastructure solutions.

Pursuant to the terms of the Purchase Agreement, the Company has concurrently entered into a hosting agreement”) with Northern Data in connection with the Miners, whereby Northern Data will provide services to the Company including the installation and hosting of the Miners in proprietary pre-manufactured performance optimized mobile data centers to be located at Digihost’s company-owned facility. Miners associated with this agreement began arriving at the Company’s premises for setup in October 2021. Both parties are in advanced discussions to expand the Purchase Agreement beyond the initial 9,900 Miners up to a total of 30,000 miners, giving Digihost the potential to increase its current hashrate to approximately 3.0EH.

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DIGIHOST TECHNOLOGY INC.

Management’s Discussion & Analysis

For the three and nine month period ended September 30, 2021

January 12, 2022

●

On June 10, 2021, that it had entered into a strategic co-mining agreement with Bit Digital USA, Inc (“BTBT) (Nasdaq: BTBT). Pursuant to the terms of the agreement, the Company will provide certain premises to BTBT for the purpose of the operation and storage of a 20 MW bitcoin mining system to be delivered by BTBT, and the Company will also provide services to maintain the premises for a term of two years. Miners under this agreement are expected to begin arriving in Q1 of 2022. The collaboration between Digihost and BTBT is expected to generate an increase in hashrate of approximately 400 PH between the companies.

●

On July 26, 2021, the Company and BTBT announced that they had entered into a second strategic co-mining agreement. Pursuant to the terms of the agreement, Digihost will provide certain premises to Bit Digital for the operation of a 100 MW bitcoin mining system to be delivered by Bit Digital for a term of two years. This expanded collaboration between Digihost and Bit Digital is expected to facilitate an additional increase in hashrate of approximately 2 EH between the companies, and a total increase in hashrate between the two companies of approximately 2.4 EH including the initial collaboration agreement. Miners under this agreement are expected to begin arriving in the second half of 2022.

Under the terms of the agreements, the Company will provide power for the operation of the miners and will also provide management services necessary to maintain 95% uptime on the miners. In consideration for these services, after paying Digihost a very competitive rate for power, Digihost and BTBT will participate in a profit-sharing arrangement based on a fixed distribution formula.

Mining Operations

As of September 30, 2021, the Company held a total of 452.24 bitcoins. During the first nine months of 2021, Digihost mined a total of 348.25 bitcoins, with 133.02 bitcoins mined during Q3 2021, 109.97 bitco mined during Q2 2021 and 105.26 BTC mined during Q1 2021.

During May 2021, the Company elected to differentiate its cryptocurrency holdings by converting approximately 31 BTC into Ethereum (ETH). In September 2021, approximately 32 additional BTC were converted to ETH. As of the date of this MD&A, Digihost holds 1,000.89 ETH in its inventory, which at the approximate Ethereum price of $4,150 per ETH, values the Ethereum holdings at approximately $4,153,700.

As of the date of this MD&A, Digihost held 472.58 bitcoins, which at the approximate bitcoin price of $66,000 values the bitcoin inventory at approximately $31,190,300.

NASDAQ Application

As of the date of this MD&A, the Company is currently in the advanced stages of the application process for a listing of its securities on the Nasdaq Stock Exchange (the “NASDAQ”). In conjunction with the application process, the Company filed a registration statement with the Securities and Exchange Commission on June 22, 2021.

On October 5, 2021, the Company announced that it intends to consolidate the outstanding subordinate voting shares and proportionate voting shares of the Company on the basis of three (3) pre-consolidation shares for every one (1) post-consolidation share in order to facilitate a proposed listing of its subordinate voting shares on the Nasdaq Capital Market and satisfy the minimum share price requirement set by Nasdaq. The consolidation ratio is subject to change by the Company based upon the trading value of the shares at the time of consolidation.

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DIGIHOST TECHNOLOGY INC.

Management’s Discussion & Analysis

For the three and nine month period ended September 30, 2021

January 12, 2022

Green Initiative

Currently, 90% of the energy consumed by Digihost operations is from sources that create zero-carbon emissions, with more than 50% of the energy consumed being generated from renewable sources. As Digihost intends to purchase and bring online its own power generation facilities, the Company will focus on powering these facilities using “bridge” power sources for low-carbon or renewable sources of energy where available.

Current Carbon-Netruality Efforts & Initiatives include:

	●	100% Carbon Neutral: Digihost plans for 100% of its operations to achieve carbon neutrality with a net-zero footprint by the end of 2025, and 100% renewable by 2030.

	●	Digigreen Initiative: A Digihost initiative focused on immediate steps to create sustainable, environmentally, and economically sound in-house practices, distinguishing the Company as an industry leader in lowering/eliminating its carbon footprint while maintaining profitability.

	●	Crypto Climate Accord: Digihost has joined a private sector-led initiative for the entire crypto community focused on decarbonizing the cryptocurrency industry in record time.

●

Proof of Green: Digihost has begun initial research into developing proprietary standards for measuring the Company’s carbon impact. Using these standards as an environmental audit tool for the various operations, we will be able to generate accountability reports and to advise Directors and Shareholders on efforts to minimize the Company’s the carbon footprint.

Normal Course Issuer Bid Facility

On December 7, 2020, the Company announced that it has received approval to undertake, at the Company’s discretion, a normal course issuer bid program to purchase up to 2,003,683 of its subordinate voting shares for cancellation. The Company received acceptance from the TSXV to commence utilizing the facility on December 10, 2020. The facility will terminate on December 10, 2021, or on an earlier date in the event that the maximum number of common shares bought pursuant to the facility have been purchased. The Company reserves the right to terminate the facility at any time.

Custodial services for digital currencies

The Company currently custodies approximately 20% of its mined digital currencies with bitFlyer USA Inc. (“bitFlyer USA”) in San Francisco, CA. bitFlyer USA is a subsidiary of bitFlyer Inc., headquartered in Tokyo, Japan, which operates one of the largest Bitcoin exchanges by volume in the world. The Company uses the wallet services of bitFlyer USA, and bitFlyer USA is responsible for holding/safeguarding mined digital currencies. bitFlyer USA is not a Canadian financial institution or foreign equivalent. The Company is not aware of anything with regards to the custodian’s operations that would adversely affect the Company’s ability to obtain an unqualified audit opinion on its audited financial statements.

In April 2021, the Company transferred all of its coin previously held by other custodial parties into cold storage wallets. In total, as of the date of this MD&A, Digihost has approximately 194 coins held in a number of cold storage wallets.

During April 2021, the Company was approved for an account with Gemini Trust Company, LLC (Gemini). Gemini is a digital currency exchange and custodian that allows customers to buy, sell, and store its digital assets. As of the date of this MD&A, the Company has holdings of 187.89 BTC and 1000.89 ETH coins in its Gemini account.

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DIGIHOST TECHNOLOGY INC.

Management’s Discussion & Analysis

For the three and nine month period ended September 30, 2021

January 12, 2022

The Company performs credit due diligence in the normal course of business when beginning a relationship with counterparties, as well as during on-going business activities. The Company has not been able to insure its mined digital currency. Given the novelty of digital currency mining and associated businesses, insurance of this nature is generally not available, or uneconomical for the Company to obtain which leads to the risk of inadequate insurance cover.

Selected Financial Information

	Period ended September 30, 2021 ($)			Year ended December 31, 2020 ($)			Year ended December 31, 2019 ($)
Revenue		15,365,382			3,553,362			nil
Net income (loss)		(977,046	)		(5,190,713	)		(269,968	)
Net income (loss) per share – basic and diluted		(0.02	)		(0.15	)		(742	)

Period ended

September 30,
2021

($)

As at

December 31,
2020

($)

As at

December 31,
2019

($)

Total assets

74,480,099

16,519,601

3,897,511

Total long-term liabilities

4,414,069

3,003,037

nil

Selected Quarterly Information

A summary of selected information for each of the eight most recent quarters prepared in accordance with IFRS is as follows:

			Net Income or (Loss)
Three Months Ended	Revenues ($)		Total ($)			Per Share - Basic ($)			Per Share - Diluted ($)
2021-September 30		5,485,754		(771,154	)		(0.02	)		(0.02	)
2021-June 30		5,112,553		(278,849	)		(0.00	)		(0.00	)
2021-March 31		4,767,075		72,957			0.00			0.00
2020-December 31		1,187,362		(959,580	)		(0.02	)		(0.02	)
2020-September 30		437,813		(2,171,782	)		(0.05	)		(0.05	)
2020-June 30		1,089,877		(1,293,527	)		(0.03	)		(0.03	)
2020-March 31		838,310		(765,824	)		(0.04	)		(0.04	)
2019-December 31		—		(80,692	)		(40,346	)		(40,346	)

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DIGIHOST TECHNOLOGY INC.

Management’s Discussion & Analysis

For the three and nine month period ended September 30, 2021

January 12, 2022

Results of Operations

For the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020:

For the nine months ended September 30, 2021, the Company’s net loss was $977,046 compared to a net loss of $3,974,805 for the nine months ended September 30, 2020. The year over year decrease in net loss of $2,997,759 is a result of the following:

	●	During the nine months ended September 30, 2021, the Company recognized gross profit of $7,768,182 as a result of the mining of digital currencies from its cryptocurrency mining operations as opposed to a net loss of $3,011,733 in the prior year.

●

As an offset to net income, during the nine months ended September 30, 2021, the Company recorded share-based compensation of $6,538,261 (2020: $693,999). This represents the expense associated with the vesting of stock options during the periods.

Liquidity and Financial Position

As of September 30, 2021, the Company had working capital of $37,681,613, which includes cash of $17,286,760 and digital currencies of $22,811,962. The Company commenced earning revenue from digital currency mining in mid-February 2020, however it has limited history and no assurance that historical performance will be indicative of future performance.

The Company’s ability to continue as a going concern is dependent on the Company’s ability to efficiently mine and liquidate digital currencies, manage operational expenses, and raise additional funds through debt or equity financing.

Cash flows

Operating Activities

Cash used in operating activities for the reporting period ended September 30, 2021, was $5,608,397. Cash flows resulted from an increase in accounts payable and digital currencies.

Investing Activities

Cash used in investing activities for the reporting period ended September 30, 2021, was $24,259,559 for the purchase of mining and data centre equipment.

Financing Activities

Cash provided by financing activities for the reporting period ended September 30, 2021, was $47,113,466. The Company received proceeds from a private placement of $50,265,763, made lease payments of $260,679, repaid custodial loans of $3,975,083, repurchased shares of $390,029 and received net funds from loans of $1,473,495.

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DIGIHOST TECHNOLOGY INC.

Management’s Discussion & Analysis

For the three and nine month period ended September 30, 2021

January 12, 2022

ADJUSTED EBITDA – NON-GAAP MEASURE

“Adjusted EBITDA” is a metric used by management which is income (loss) from operations, as reported, before interest, tax, and adjusted for removing other non-cash items, including the stock-based compensation expense, depreciation, and further adjusted to remove acquisition related costs. Management believes “Adjusted EBITDA” is a useful financial metric to assess its operating performance on a cash basis before the impact of non-cash items and acquisition related activities.

	Nine months ended Sept 30
	2021			2020
	$			$
Loss before other items		(977,046	)		(3,974,805	)
Share-based compensation		6,538,261			693,999
Taxes		1,498,085			-
Depreciation		2,362,810			2,543,029
Adjusted EBITDA		9,422,110			(737,777	)

Loan Receivable (Payable) and Related Party Transactions

Loan receivable from related party

During the year ended December 31, 2019, Nyam, LLC, a company controlled by the Chief Executive Officer (“CEO”) received net loan proceeds of $2,431,655. In February 2020, $2,404,020 of this amount was settled through the purchase of data miners from Nyam. These amounts are non-interest bearing, unsecured and due on demand.

Related Party Transactions

Key management personnel are those persons having authority and responsibility for planning, directing, and controlling the activities of the Company, directly or indirectly. Key management personnel include the Company’s executive officers and members of the Board of Directors.

Remuneration of key management personnel of the Company was as follows:

	Nine Months Ended September 30, 2021		Nine Months Ended September 30, 2020
Professional fees ⁽¹⁾		72,239		31,181
Share based compensation⁽²⁾		5,248,423		582,959
Total	$	5,320,662	$	614,140

⁽¹⁾

⁽²⁾

Represents the share-based compensation for officer and directors.

A Surety Bond of $341,000 issued to a supplier is guaranteed by NYAM, LLC, a company controlled by the CEO.

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DIGIHOST TECHNOLOGY INC.

Management’s Discussion & Analysis

For the three and nine month period ended September 30, 2021

January 12, 2022

Share Capital

As September 30, 2021, the Company has 74,709,231 common shares outstanding.

As September 30, 2021, the Company 7,345,491 stock options and 29,645,851 warrants.

Off-Balance Sheet Arrangements

As at the date of this MD&A, the Company did not have any off-balance sheet arrangements.

Adoption of new accounting policies

(a) Basis of consolidation

These consolidated financial statements include the accounts of Digihost and its wholly owned subsidiary: Digihost International, Inc. Subsidiaries are consolidated from the date of acquisition, being the date on which the Company obtains control, and continues to be consolidated until the date that such control ceases. Control is achieved when an investor has power over an investee to direct its activities, exposure to variable returns from an investee, and the ability to use the power to affect the investor’s returns. All inter-company transactions and balances have been eliminated upon consolidation.

(b) Functional and presentation currency

These financial statements are presented in United States Dollars. The functional currency of Digihost is the Canadian dollar and the functional currency of Digihost International, Inc. is the United States Dollars. All financial information is expressed in United States Dollars, unless otherwise stated.

Monetary assets and liabilities denominated in foreign currencies are translated to United States dollars at exchange rates in effect at the reporting date. Non-monetary assets and liabilities are translated at historical exchange rates at the respective transaction dates. Revenue and expenses are translated at the rate of exchange at each transaction date. Gains or losses on translation are included in foreign exchange expense.

The results and financial position of an entity whose functional currency are translated into a different presentation currency are treated as follows:

	●	assets and liabilities are translated at the closing rate at the reporting date;

	●	income and expenses for each income statement are translated at average exchange rates at the dates of the period; and

●

all resulting exchange differences are recognized in other comprehensive income as cumulative translation adjustments.

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DIGIHOST TECHNOLOGY INC.

Management’s Discussion & Analysis

For the three and nine month period ended September 30, 2021

January 12, 2022

(d) Revenue recognition

The Company recognizes revenue from the provision of transaction verification services within digital currency networks, commonly termed “cryptocurrency mining”. As consideration for these services, the Company receives digital currency from each specific cryptocurrency mining pool in which it participates. Revenue is measured based on the fair value of the digital currencies received. The fair value is determined using the spot price of the digital currencies on the date of receipt. Digital currencies are considered earned on the completion and addition of a block to the blockchain, at which time the economic benefit is received and can be reliably measured.

(e) Digital currencies

Digital currencies consist of Bitcoin. Digital currencies meet the definition of intangible assets in IAS 38 Intangible Assets as they are identifiable non-monetary assets without physical substance. They are initially recorded at cost and the revaluation method is used to measure the digital currencies subsequently. Where digital assets are recognized as revenue, the fair value of the bitcoin received is considered to be the cost of the digital assets. Under the revaluation method, increases in fair value are recorded in other comprehensive income, while decreases are recorded in profit or loss. The Company revalues its digital currencies at the end of each quarter. There is no recycling of gains from other comprehensive income to profit or loss. However, to the extent that an increase in fair value reverses a previous decrease in fair value that has been recorded in profit or loss, that increase is recorded in profit or loss. Decreases in fair value that reverse gains previously recorded in other comprehensive income are recorded in other comprehensive income. Gains and losses on digital currencies sold between revaluation dates are included in profit or loss.

Digital currencies are measured at fair value using the quoted price on Cryptocompare. Cryptocompare is a pricing aggregator, as the principal market or most advantageous market is not always known. The Company believes any price difference amongst the principal market and an aggregated price to be immaterial. Management considers this fair value to be a Level 2 input under IFRS 13 Fair Value Measurement fair value hierarchy as the price on this source represents an average of quoted prices on multiple digital currency exchanges.

(f) Property, plant, and equipment

Details as to the Company’s policies for property, plant and equipment are as follows:

Asset	Measurement Basis	Amortization Method	Amortization Rate
Data miners	Cost	Straight-line	12 - 36 months
Equipment	Cost	Straight-line	36 - 120 months
Leasehold improvement	Cost	Straight-line	120 months

Property, plant, and equipment are recorded at cost less accumulated depreciation. Cost includes all expenditures incurred to bring assets to the location and condition necessary for them to be operated in the manner intended by management.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any replaced parts is derecognized. All other repairs and maintenance are charged to profit or loss during the fiscal period in which they are incurred.

Gains and losses on disposal are determined by comparing the proceeds with the carrying amount and are recognized in profit or loss.

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DIGIHOST TECHNOLOGY INC.

Management’s Discussion & Analysis

For the three and nine month period ended September 30, 2021

January 12, 2022

(g) Intangible assets

intangible assets that qualify for separate recognition are recognized as intangible assets at their fair values. Right of use of an electric power facility is depreciated over 13 years.

(h) Impairment of non-financial assets

The Company reviews the carrying amounts of its non-financial assets, including property, plant, and equipment, when events or changes in circumstances indicate the assets may not be recoverable. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs. Assets carried at fair value, such as digital currencies, are excluded from impairment analysis.

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows to be derived from continuing use of the asset or cash generating unit are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Fair value less costs of disposal is the amount obtainable from the sale of an asset or cash generating unit in an arm’s length transaction between knowledgeable, willing parties, less the cost of disposal. When a binding sale agreement is not available, fair value less costs of disposal is estimated using a discounted cash flow approach with inputs and assumptions consistent with those of a market participant. If the recoverable amount of an asset or cash generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash generating unit is reduced to its recoverable amount. An impairment loss is recognized immediately in net income. Where an impairment loss subsequently reverses, the carrying amount of the asset or cash generating unit is increased to the revised estimate of its recoverable amount, such that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized.

(i) Leases and right-of-use assets

All leases are accounted for by recognizing a right-of-use asset and a lease liability except for:

	●	Leases of low value assets; and

●

Leases with a duration of twelve months or less.

Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate determined by the incremental borrowing rate on commencement of the lease is used. Variable lease payments are only included in the measurement of the lease liability if they depend on an index or rate. In such cases, the initial measurement of the lease liability assumes the variable element will remain unchanged throughout the lease term. Other variable lease payments are expensed in the period to which they relate.

On initial recognition, the carrying value of the lease liability also includes:

	●	Amounts expected to be payable under any residual value guarantee;

	●	The exercise price of any purchase option granted if it is reasonable certain to assess that option;

●

Any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of termination option being exercised.

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DIGIHOST TECHNOLOGY INC.

Management’s Discussion & Analysis

For the three and nine month period ended September 30, 2021

January 12, 2022

Right-of-use assets are initially measured at cost, which includes the initial amount of the lease liability, reduced for any lease incentives received, and increased for:

	●	Lease payments made at or before commencement of the lease;

	●	Initial direct costs incurred; and

●

The amount of any provision recognised where the Company is contractually required to dismantle, remove, or restore the leased asset.

Lease liabilities, on initial measurement, increase as a result of interest charged at a constant rate on the balance outstanding and are reduced for lease payments made.

Right-of-use assets are amortized on a straight-line basis over the remaining term of the lease or over the remaining economic life of the asset if this is judged to be shorter than the lease term.

When the Company revises its estimate of the term of any lease, it adjusts the carrying amount of the lease liability to reflect the payments to make over the revised term, which are discounted at the same discount rate that applied on lease commencement. The carrying value of lease liabilities is similarly revised when the variable element of future lease payments dependent on a rate or index is revised. In both cases an equivalent adjustment is made to the carrying value of the right-of-use asset, with the revised carrying amount being amortised over the remaining (revised) lease term or recorded in profit or loss if the right-of-use asset is reduced to zero.

(j) Goodwill

The Company measures goodwill as the fair value of the cost of the acquisition less the fair value of the identifiable net assets acquired, all measured as of the acquisition date. Goodwill is carried at cost less accumulated impairment losses.

(k) Share capital and equity

Share capital represents the amount received on the issue of shares, less issuance costs, net of any underlying income tax benefit from these issuance costs. When warrants are issued in connection with shares, the Company uses the residual method for allocating fair value to the shares and then to warrants.

Contributed surplus include the value of outstanding warrants and stock options. When warrants and stock options are exercised, the related compensation cost and value are transferred to share capital.

Deficits include all current and prior year losses.

Digital currency revaluation reserve includes gains and losses from the revaluation of digital currencies, net of tax.

Cumulative translation reserve includes foreign currency translation differences arising from the translation of financial statements of foreign entities into United States dollars.

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DIGIHOST TECHNOLOGY INC.

Management’s Discussion & Analysis

For the three and nine month period ended September 30, 2021

January 12, 2022

(l) Share-based compensation

The granting of stock options to employees, officers, directors, or consultants of the Company requires the recognition of share-based compensation expense with a corresponding increase in contributed surplus in shareholders’ equity. The fair value of stock options that vest immediately are recorded as share-based compensation expense at the date of the grant. The expense for stock options that vest over time is recorded over the vesting period using the graded method, which incorporates management’s estimate of the stock options that are not expected to vest. For stock options where vesting is subject to the completion of performance milestones, the estimate for completion of the milestone is reviewed at each reporting date for any change in the estimated vesting date, and to the extent there is a material change in the vesting date estimate, the amortization to be recognized is recalculated for the new timeline estimate and adjusted on a prospective basis in the current period. The effect of a change in the number of stock options expected to vest is a change in an estimate and the cumulative effect of the change is recognized in the period when the change occurs. On exercise of a stock option, the consideration received, and the estimated fair value previously recorded in contributed surplus is recorded as an increase in share capital.

Stock options awarded to consultants are measured based on the fair value of the goods and services received unless that fair value cannot be estimated reliably. If the fair value of the goods and services cannot be reliably measured, then the fair value of the equity instruments granted is used to recognize the expense.

Critical accounting judgements, estimates and assumption

The preparation of these financial statements in conformity with IFRS requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. These financial statements include estimates that, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions, and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Significant judgements

(i) Income from digital currency mining

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DIGIHOST TECHNOLOGY INC.

Management’s Discussion & Analysis

For the three and nine month period ended September 30, 2021

January 12, 2022

(ii) Business combination

Management uses judgement to determines whether assets acquired, and liabilities assumed constitute a business. A business consists of inputs and processes applied to those inputs that have the ability to create outputs.

The Company completed the RTO Transaction in February 2020 (note 3) and concluded that the entity acquired did qualify as a business combination under IFRS 3, “Business Combinations”, as significant processes were acquired. Accordingly, the RTO Transaction has been accounted for as a business combination.

(iii) Going concern

The assessment of the Company’s ability to continue as a going concern involves judgment regarding future funding available for its operations and working capital requirements as discussed in note 1.

(iv) Leases – incremental borrowing rate

(v) Income, value added, withholding and other taxes

Significant estimates

(i) Determination of asset and liability fair values and allocation of purchase consideration

(ii) Useful lives of property, plant, and equipment

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DIGIHOST TECHNOLOGY INC.

Management’s Discussion & Analysis

For the three and nine month period ended September 30, 2021

January 12, 2022

(iii) Digital currency valuation

Digital currencies consist of cryptocurrency denominated assets (note 4) and are included in current assets. Digital currencies are carried at their fair value determined by the spot rate less costs to sell. The digital currency market is still a new market and is highly volatile; historical prices are not necessarily indicative of future value; a significant change in the market prices for digital currencies would have a significant impact on the Company’s earnings and financial position.

(iv) Impairment of goodwill

Disclosure of Internal Controls

Management has established processes to provide it with sufficient knowledge to support representations that it has exercised reasonable diligence to ensure that (i) the consolidated financial statements do not contain any untrue statement of material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it is made, as of the date of and for the periods presented by the financial statements, and (ii) the consolidated financial statements fairly present in all material respects the financial condition, results of operations and cash flow of the Company, as of the date of and for the periods presented.

In contrast to the certificate required for non-venture issuers under National Instrument 52-109 - Certification of Disclosure in Issuers’ Annual and Interim Filings (“NI 52-109”), the Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (“DC&P”) and internal control over financial reporting (“ICFR”), as defined in NI 52-109. In particular, the certifying officers filing such certificate are not making any representations relating to the establishment and maintenance of:

(i)

controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized, and reported within the time periods specified in securities legislation; and

(ii)

a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with the issuer’s GAAP (IFRS).

The Company’s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in the certificate. Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost-effective basis DC&P and ICFR as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.

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DIGIHOST TECHNOLOGY INC.

Management’s Discussion & Analysis

For the three and nine month period ended September 30, 2021

January 12, 2022

Risks and Uncertainties

An investment in the securities of the Company is highly speculative and involves numerous and significant risks. Such investment should be undertaken only by investors whose financial resources are sufficient to enable them to assume these risks and who have no need for immediate liquidity in their investment. Prospective investors should carefully consider the risk factors that have affected, and which in the future are reasonably expected to affect, the Company and its financial position. Please refer to the section entitled “Risks and Uncertainties” in the Company’s Annual MD&A for the fiscal year ended December 31, 2020, available on SEDAR at www.sedar.com.

Cautionary Note Regarding Forward-Looking Information

This MD&A contains certain forward-looking information and forward-looking statements, as defined in applicable securities laws (collectively referred to herein as “forward-looking statements”). These statements relate to future events or the Company’s future performance. All statements other than statements of historical fact are forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “continues”, “forecasts”, “projects”, “predicts”, “intends”, “anticipates” or “believes”, or variations of, or the negatives of, such words and phrases, or statements that certain actions, events or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those anticipated in such forward-looking statements. The forward-looking statements in this MD&A speak only as of the date of this MD&A or as of the date specified in such statement. The following table outlines certain significant forward-looking statements contained in this MD&A and provides the material assumptions used to develop such forward-looking statements and material risk factors that could cause actual results to differ materially from the forward-looking statements. In particular, this MD&A contains forward-looking statements pertaining to the following:

	●	the impact of the ongoing novel coronavirus disease outbreak (COVID-19) on the business, operations, financial results, and prospects of the Company;

	●	the impact of the Bitcoin Halving in May 2020 on the price of BTC and the normalization after the Bitcoin Halving to pre-Bitcoin Halving profitability levels;

	●	future debt levels, financial capacity, liquidity, and capital resources;

	●	anticipated future sources of funds to meet working capital requirements;

	●	future capital expenditures and contractual commitments;

	●	expectations respecting future financial results;

	●	expectations regarding benefits of certain transactions and capital investments;

	●	the Company’s objectives, strategies, and competitive strengths and growth strategy;

	●	expectations with respect to future opportunities;

	●	expectations with respect to the Company’s financial position;

	●	the Company’s capital expenditure programs and future capital requirements;

	●	capital resources and the Company’s ability to raise capital; and

	●	industry conditions pertaining to the cryptocurrency industry;

●

the other factors discussed under “Risk Factors”.

This list of factors should not be construed as exhaustive.

Additional Information

Additional information concerning the Company is available on SEDAR at www.sedar.com.

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Exhibit 99.3

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

January 12, 2022

Item 3 News Release

The press release attached as Schedule “A” was released on January 12, 2022.

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

January 12, 2022

SCHEDULE “A”

DIGIHOST REPORTS A RECORD 172 BITCOINS MINED IN Q4 2021 IN ADDITION
TO A 328% INCREASE IN Q4 Y/Y BITCOIN PRODUCTION AND ANNOUNCES
RESTATEMENT OF Q3 2021 FINANCIAL STATEMENTS

Toronto, ON – January 12, 2022 – Digihost Technology Inc. (“Digihost” or the “Company”) (Nasdaq: DGHI; TSXV: DGHI), an innovative North American based Bitcoin self-mining company, is pleased to provide unaudited Bitcoin (“BTC”) production updates for the quarter and month ended December 31, 2021. All amounts are expressed in USD unless otherwise indicated.

Year-Over-Year Quarterly Comparison

The Company mined approximately 108.11 more BTC in Q4 2021, compared to Q4 2020, representing an increase of approximately 168%. Using the December 31, 2021 and December 31, 2020 closing BTC prices (from CoinDesk), the value of the Company’s BTC mined in Q4 2021 increased by approximately $6.6 million, or 328% compared to Q4 2020.

Figure 1. Year-over-year Quarterly BTC Production

	Q4 2020		Q4 2021		QoQ Increase
Mined BTC		64.27		172.38		108.11
Approximate BTC value	$	29,002	$	46,306	$	17,305
Value	$	1,863,959	$	7,982,228	$	6,118,270

Production Highlights for December 2021

●

Mined 61.53 BTC during the month, increasing total holdings to 631.86 BTC valued at approximately $29.3 million as of December 31, 2021, based on a BTC price of $46,306.

●

Total Ethereum (“ETH”) holdings of 1,000.89 ETH valued at approximately $3.7 million as of December 31, 2021, based on an ETH price of $3,683.

●

Total digital asset inventory value consisting of BTC and ETH of approximately $33 million as of December 31, 2021.

●

Year-to-date deposits of approximately $34.5 million on equipment and infrastructure targeted to be installed in Q1 2022 pertaining to the Company’s BTC mining operations.

●

During the month of December, the Company received 2,480 new, technologically advanced, high-performance M30 BTC miners (the “Miners”) for use in its mining operations.

●

The Company’s current hashrate was approximately 415PH at December 31, 2021 and is expected to increase to approximately 1.2EH by the end of Q1 2022.

Bitcoin Mining Update

For the 12-month period ended December 31, 2021, the Company’s mining fleet produced 520.63 BTC, with production broken down as follows:

●

Quarter 1, 2021: 105.26 BTC

January: 33.70

February: 35.02

March: 36.54

●

Quarter 2, 2021: 109.97 BTC

April: 37.52

May: 34.26

June: 38.19

●

Quarter 3, 2021: 133.02 BTC

July: 51.28

August: 44.07

September: 37.67

●

Quarter 4, 2021: 172.38 BTC

October: 41.84

November: 69.01

December: 61.53

Year-Over-Year Monthly Comparison

The Company mined approximately 35.15 more BTC in December 2021, compared to December 2020, representing an increase of approximately 133%. Using the December 31, 2021 and the December 31, 2020 closing BTC prices (from CoinDesk), the value of the Company’s BTC mined in December 2021 increased by approximately $2.3 million, or 455%, over December 2020.

Figure 2. Year-over-year Monthly BTC Production

	Dec-20		Dec-21		MoM Increase
Mined BTC		26.38		61.53		35.15
Approximate BTC value	$	29,002	$	46,306	$	17,305
Value	$	513,220	$	2,849,208	$	2,335,988

Quarter-Over-Quarter Comparison

The Company mined an additional 39.36 BTC during Q4 2021 compared to Q3 2021, representing an increase of 30%. Based on December 31, 2021 and September 30, 2021 closing BTC prices (from CoinDesk), the value of the Company’s BTC mined in Q4 2021 increased by approximately $2.2 million, or 37%, quarter over quarter.

Figure 3. Quarter-over-quarter BTC Production

	Q3 2021		Q4 2021		QoQ Increase
Mined BTC		133.02		172.38		39.36
Approximate BTC value	$	43,791	$	46,306	$	2,516
Value	$	5,825,079	$	7,982,228	$	2,157,149

Corporate Updates for December 2021

●

As announced by the Company in a press release on May 12, 2021, the Company previously agreed to purchase approximately 10,000 new Miners from Northern Data AG. As of December 31, 2021, approximately 6,500 of those Miners had been received. The remaining Miners from that order are expected to arrive at Digihost’s data center over the course of the next two months in the following tranches:

2,000 in January 2022

1,400 in February 2022

●

Digihost continues to participate in demand response programs in New York State to reduce marginal carbon emissions at its facility.

●

The Company’s strategic co-mining agreement with Bit Digital USA, Inc (“BTBT) (Nasdaq: BTBT) is in process, with expected completion of the deployment of BTBT miners in Digihost’s premises by the end of Q2 2022.

●

The Company executed a 99-year ground lease of its mining farm.

●

A portion of the Miners received during Q4 2021 were related to the Company’s Miner Lease Agreement with Northern Data, NY LLC, pursuant to which the parties have agreed to split a portion of the mining rewards received and energy costs incurred for the Miners put in service pursuant to that lease agreement. 100% of the Miners subject to that lease agreement are expected to be in service by the end of Q1 2022.

●

As announced in a March 24, 2021 press release, the Company previously signed a binding agreement for the purchase of a 60 MW power plant located in the State of New York. As of December 31, 2021, Digihost had received all planning board permits and compliance approvals required to ramp up the facility build-out, with an expected completion timeframe of mid-February 2022. The Company is currently continuing to wait for final Public Service Commission approval of the power plant acquisition.

Management Commentary

Michel Amar, the Company’s CEO, stated: “The final quarter of 2021 proved to be an extremely productive quarter for our mining operations, as we increased our Bitcoin production by 30% over the prior quarter. We finished the year by mining the single highest amount of Bitcoin mined by the Company in any given quarter in the Company’s history, and, with shipments of our previously purchased miners accelerating over the coming months, we expect our Bitcoin production to continue to increase as we scale up our operations.”

Restatement of Interim Financial Statements

The Company also announces a restatement and reissue of its interim unaudited financial statements for the three and nine months ended September 30, 2021 (the “Amended Interim Statements”), as well as a restatement and reissue of the accompanying MD&A for the three and nine months ended September 30, 2021 (the “Amended MD&A”). The Amended Interim Statements and Amended MD&A are available under the Company’s profile on www.sedar.com.

As a result of a reassessment of existing timing differences (in connection with a review of the Company’s financial statements by the Company’s independent auditors), management determined that a deferred tax provision of $1,498,085 should be recorded as an expense for Q3 2021, increasing the Company’s total long-term deferred tax liability to $2,073,709 at quarter end. The Company’s deferred tax balance relates primarily to timing differences between accounting and tax reporting related to the recording of depreciation expense on the Company’s property, plant, and equipment, unrealized gains and losses on digital currencies and share based compensation. The deferred tax provision recorded by the Company in the Amended Interim Statements is a non-cash charge for fiscal 2021 and is recorded on the Company’s balance sheet as a long-term, deferred tax liability. This deferred tax provision is an estimate of potential future taxes payable with the timing of payment being indeterminable as of September 30, 2021.

The Company has sufficient tax attributes available to offset taxable income generated during the nine month period ended September 30, 2021.

As a result of the updates to the Amended Interim Statements, the Company had a net loss of $771,154, compared to the previously reported net income of $762,931, for the three months ended September 30, 2021, and had a net loss of $977,046, compared to the previously reported net income of $521,039, for the nine months ended September 30, 2021. Furthermore, at September 30, 2021, total liabilities were $7,501,696, rather than the previously reported $5,493,626, and total shareholders’ equity was $66,978,402, rather than the previously reported $68,986,473. The restatements had no impact on the Company’s record revenue from digital currency mining, gross profit, operating income, EBITDA or adjusted EBITDA for both the three and nine months ended September 30, 2021, on the Company’s cash flows for the nine months ended September 30, 2021 or on the Company’s cash or total assets at September 30, 2021.

For more information, please refer to Note 3 and Note 19 of the Amended Interim Statements, where the change is described, as well as the entirety of the Amended Interim Statements and the Amended MD&A.

Grant of Restricted Share Units

The Company also announces the grant of restricted share units (“RSUs”) to certain officers, directors, management, key consultants and employees of the Company.

The Company granted an aggregate of 1,424,250 RSUs pursuant to the Company’s Restricted Share Unit Plan. Each RSU entitles the holder thereof to receive one subordinate voting share of the Company. The RSUs will vest in three equal tranches, on January 4, 2023, 2024 and 2025.

About Digihost Technology Inc.

Digihost is a growth-oriented blockchain technology company primarily focused on Bitcoin mining. Through its self-mining operations and joint venture agreements, the Company is currently hashing at a rate of approximately 415PH with plans to expand to a hashrate of 3.6 EH by the end of 2022.

For further information, please contact:

Digihost Technology Inc.

www.digihost.ca

Michel Amar, Chief Executive Officer

Email: michel@digihostblockchain.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 news 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 U.S. and Canadian securities laws. Forward-looking information in this news release includes information about hashrate and infrastructure expansion, diversification of operations, potential further improvements to profitability and efficiency across mining operations, potential for the Company’s long-term growth, and the business goals and objectives of the Company. Factors that could cause actual results, performance or achievements to differ materially from those described in such forward-looking information include, but are not limited to: 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; the ability to establish new facilities for the purpose of cryptocurrency mining; receipt of Public Service Commission approval or other regulatory or board approvals; the ability to establish new facilities for the purpose of research & development; a decrease in cryptocurrency pricing, volume of transaction activity or, generally, the profitability of cryptocurrency mining; delivery of mining rigs for self-mining and for hosting may not be realized in the number anticipated, or at all, or on the schedule anticipated, and resulting hashing power may materially differ from that anticipated; 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; risks related to the Company’s restatement of its financial statements as discussed in this release (including, without limitation, potential inquiries from regulators and the potential adverse effect on the price of the Company’s subordinate voting shares) and other 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; 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 uncertainty therein. Except as expressly required by applicable securities laws, the Company undertakes no obligation to update or revise any forward-looking information, whether as a result of new information, changed circumstances or future events or for any other reason.