Item 1.01 Entry into a Material Definitive Agreement.
ROC Digital Joint Venture
On October 13, 2022, Bitmine Immersion Technologies, Inc. (the "Company")
entered into a joint venture with Roc Digital Mining Manager LLC ("ROC Manager")
with regard to a hosting location in Pecos, Texas which has a capacity of 5-6
megawatts over a five year period. Under the joint venture, the Company acquired
a 30% interest in ROC Manager, which is the manager of ROC Digital Mining I LLC
(the "ROC Operating"). The Company made a capital contribution to ROC Operating
of $1,056,000, consisting of one immersion container unit valued at $300,000,
six GE Protec 1500 KVA transformers valued at $750,000, and $6,000 cash. The
Company also sold ROC Operating four immersion container units for $1,200,000.
The purchase price for the containers is payable pursuant to a promissory note
that bears interest at 5% per annum and is payable through 42 monthly payments
of $31,203.64 until it is paid in full. In addition, the note is secured by a
lien against the four containers. The joint venture intends to purchase ASIC
miners to mine Bitcoin for its own account, rather than hosting miners for third
parties. ROC Operating is completing an offering of units for approximately
$2,000,000, which it will use to complete installation of the hosting equipment
and purchase ASIC miners. ROC expects to be operational by the end of November
2022.
In addition, the Company is entitled to locate one hosting container at the site
which it may use for mining for its own account or hosting for third parties,
and expects to pay a pro rata portion of the lease and other operating costs of
the site.
Line of Credit
On October 19, 2022, the Company entered into a Line of Credit Agreement (the
"LOC Agreement") with Innovative Digital Investors Emerging Technology, L.P.
("IDI"), a limited partnership controlled by Jonathan Bates, the Company's
Chairman, and Raymond Mow, the Company's Chief Financial Officer and a Director.
The LOC Agreement provides for loans of up to $1,000,000 at the request of the
Company to finance the purchase of equipment necessary for the operation of the
Company's business, and related working capital. Loans under the LOC Agreement
accrue interest at twelve percent (12%) per annum, compounded on a 30/360
monthly basis until the loans have been repaid in full. The Company has the
right to submit draw requests under the LOC Agreement until April 15, 2023. Each
draw request is subject to the approval of IDI in its sole discretion. The
amount drawn, plus all accrued interest therein, is repayable in full on
December 1, 2023.
Item 2.01 Termination of a Material Definitive Agreement.
On October 19, 2022, the Company entered into a Repurchase and Hosting Agreement
(the "TCC Agreement") with The Crypto Company ("TCC"), under which the Company
agreed to repurchase certain ASIC miners which it had previously sold to TCC,
purchase some additional ASIC miners owned by TCC, and terminate a hosting
agreement between the Company and TCC. On February 23, 2022, the Company sold
TCC 70 Antminer T-17's for $175,000 and 25 Whatsminers for $162,500, for a total
purchase price of $337,500. TCC paid 50% of the purchase price in cash, and the
balance by execution of a note payable to the Company for $168,750. Simultaneous
with the sale, the Company and TCC entered into a hosting agreement under which
the Company agreed to host the miners at its hosting facilities in Trinidad,
along with other miners owned by TCC. Under the hosting agreement, the Company
will (a) accept the return of the 70 Antminer TY-17s for a credit of $175,000 as
a warranty claim, (b) purchase the 25 Whatsminers for $62,500, and (c) purchase
72 Antminer T-19s from TCC for $144,000. The credit and purchase prices for the
equipment will be applied to cancel the note, with the balance of $212,500
payable by the Company in cash. Upon consummation of the TCC Agreement, the
hosting agreement will be terminated. The effective date of the TCC Agreement
will not occur until the Company pays the net price due to TCC. The TCC
Agreement will be null and void if the effective date does not occur within
seven business days of the date of the TCC Agreement. The Company plans to use
the 25 Whatsminers and 72 Antminer T-19s in its self-mining operations, as part
of its transition from a hosting company to a self-mining company. The Company
believes it can repair some of the 70 Antminer T-17s, which it will use for
self-mining.
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Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
On October 19, 2022, the Company entered into a line of credit with IDI. The
Company hereby incorporates by reference its discussion of such line of credit
in Item 1.01 herein.
Item 8.01 Other Events
Trinidad Operations
On October 18, 2021, the Company entered into a Master Services Agreement with
Telecommunications Services of Trinidad and Tobago Limited ("TSTT"), the largest
and oldest telecom company in Trinidad, to co-locate up to 125 800 kw containers
for hosting digital asset miners. TSTT has up to 93 potential locations for
co-location of our containers. Under the agreement, the Company has the option,
but not the obligation, to co-locate containers at its own pace. The Company
pays a fixed amount per container, plus the actual electricity costs incurred by
our containers in the amount billed to TSTT by the local electric utility
without any markup. The agreement provides that the Company's hosting containers
will be billed for electricity usage at the utility's standard rates under an
existing agreement between TSTT and the utility, which is the greater of $0.035
cents per kwh or 75% of the declared reserve capacity, which is equal to the
customer's highest expected monthly kilovolt-ampere demand at $7.40. The term of
the agreement expires on October 14, 2031. However, the Company has the right to
terminate our agreement with TSTT at any time that the price for electricity
consumption exceeds $0.05 per kwh.
In October 2022, we completed the installation of initial hosting containers
under our agreement with TSTT. However, prior to commencing operations, TSTT
advised us that the utility had refused to honor its existing agreement with
TSTT with respect to electricity supplied to our pilot hosting site, and instead
indicated that the rate would be approximately $0.09 per kwh. TSTT has informed
us that it does not believe that its contract with the utility entitles it to
vary the rate it charges for the use of electricity and has protested the
decision. At this time, we are unable to predict how this dispute between TSTT
and the utility will be resolved, what form any resolution may take or how long
any resolution may take. Accordingly, we are delaying the installation of
additional containers in Trinidad until this dispute is resolved. Until the
dispute between TSTT and the utility is resolved, we intend to focus our efforts
on purchasing or developing hosting locations in the United States and Canada,
either directly or in joint ventures with other industry participants.
Press Release
The Company issued a press release on October 19, 2022. A copy of the press
release is attached as Exhibit 99.1.
The information set forth in this Item 8.01 of Form 8-K is furnished pursuant to
Item 8.01 and shall not be deemed "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise
subject to the liabilities of that section, nor shall such information be deemed
incorporated by reference in any filing under the Securities Act of 1933 or the
Exchange Act, except as shall be expressly set forth by specific reference in
such filing.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Item No. Description
10.1 Line of Credit Agreement between the Company and Innovative
Digital Investors Emerging Technology, L.P. dated October 19,
2022.
10.2 Promissory Note executed by ROC Digital Mining I LLC dated
October 13, 2022.
10.3 Security Agreement executed by ROC Digital Mining I LLC and
the Company dated October 13, 2022.
10.4 Transfer, Bill of Sale and Assignment executed by ROC Digital
Mining I LLC and the Company dated October 13, 2022.
10.5 Limited Liability Company Operating Agreement of ROC Digital
Mining I LLC dated July 27, 2022.
10.6 Limited Liability Company Operating Agreement of ROC Digital
Mining Manager LLC dated July 27, 2022
99.1 Press Release dated October 19, 2022
The cover page from this Current Report on Form 8-K, formatted
104 in Inline XBRL
4© Edgar Online, source Glimpses
BITMINE IMMERSION TECHNOLOGIES, INC. 
