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Bitfarms Announces US$20 Million Loan Financing and Special General Meeting Clarification

BROSSARD, Québec & RAMAT GAN, Israel–(BUSINESS WIRE)–Bitfarms Ltd. (the “Company”) (TASE: BLLCF) (OTCQX: BLLCF), one of the largest blockchain technology companies in the world through its ownership of Backbone Hosting Solutions Inc. (operating under the name, “Bitfarms”), today announced that Bitfarms has secured US$20,000,000 in strategic debt financing (the “Loan Financing”) to fund the Company’s ongoing operational expansion. In addition, the Company would like to remind shareholders of the upcoming Special General Meeting to be held on March 28, 2019 related to the proposed share exchange of Bitfarms Ltd. (Israel) and Bitfarms Ltd. (Canada) (the “Arrangement”) in support of the Company’s Canadian listing strategy.

US$20,000,000 Loan Financing

The secured Loan Financing is being provided by New York-based Dominion Capital LLC (“Dominion”) and will be made available in four (4) US$5,000,000 tranches tied to the ongoing satisfaction of customary covenants and various milestones including Bitfarms’ infrastructure build-out and associated mining hardware purchases. Amounts drawn under the facility will bear a 10% interest rate with each tranche carrying a 24-month term and balloon repayment on outstanding balances at maturity. Bitfarms will make regular monthly principal and interest payments equivalent to a minimum of 10% of aggregate cryptocurrency production. As part of the Loan Financing, Dominion will receive approximately 6.7M Bitfarms Ltd. (Canada) equity purchase warrants (the “Warrants”) if the full US$20,000,000 is drawn. The Warrants can be exercised to acquire common shares of Bitfarms Ltd. (Canada) with a term of five years from the date of issuance at an exercise price of US$0.40 per share. 1.67M Warrants have been granted to Dominion concurrent with the first US$5,000,000 funding tranche which has been completed. In the event that the Arrangement is not completed, the Warrants shall become an obligation of the Company.

“The Loan Financing will enable us to pursue Bitfarms’ expansion strategy, underpinned by our large and economical 162.5-megawatt portfolio of green energy within the province of Québec. Current hardware pricing presents a compelling opportunity to invest in our operational build-out. We plan to purchase new generation, higher efficiency mining hardware for our expansion and will begin immediate construction of Phase 1 and Phase 2 of our new modern computing centre within the municipality of Sherbrooke, Québec. Proceeds from the Loan Financing are expected to increase our installed operational capacity by approximately 30 megawatts, in addition to utilizing the full capacity of our current (4) operational facilities,” commented Wes Fulford, Chief Executive Officer of the Company.

“Despite challenging public market financing conditions, we have successfully funded Bitfarms’ expansion plans with minimal dilution to shareholders. Our strategy remains focused on delivering superior returns to investors through prudent capital deployment. Given our efforts to vertically integrate our business model, we have 100% control of the Sherbrooke expansion and full operational control following completion. We are confident that we can continue to increase Bitfarms’ hash power and market share in a timely manner and at significantly lower costs than our closest peers. The Loan Financing is a testament to the strength of our team, our strategic plans and our operational excellence.”

Bitfarms is committed to building innovative and efficient infrastructure to support the decentralized financial economy. With clean energy at a competitive price, innovative universities and electricity surplus, Québec has the potential to become a global hub for blockchain technology.

Special General Meeting

On Thursday March 28, 2019 a Special General Meeting will be held for shareholders to vote on the proposed Arrangement of Bitfarms Ltd. (Israel) and Bitfarms Ltd. (Canada) in support of the Company’s Canadian listing strategy. In response to shareholder inquiries, and in the event the Arrangement is approved by shareholders, the Company confirms that it will not proceed to close the Arrangement until conditional approval for listing of Bitfarms Ltd. (Canada) common shares on the Canadian TSX Venture Exchange is obtained.

Shareholders of record at the end of trading day on February 7, 2019 are eligible to vote in person or electronically through an electronic voting system. Details regarding the voting process as well as the proposed transaction can be found in the Company reports published on the Maya.

About Bitfarms Ltd. (formerly Bitfarms Technologies Ltd. and Blockchain Mining Ltd.)

Through its ownership of Bitfarms, the Company owns and operates blockchain farms that power the global decentralized financial economy. Bitfarms provides computing power to cryptocurrency networks such as Bitcoin, earning fees from each network for securing and processing transactions. Powered by clean and competitively priced hydroelectricity, Bitfarms operates 4 blockchain farms in Québec, Canada with 36MW of built-out infrastructure and approximately 220 Ph/s of installed hash-power. Bitfarms’ strong and experienced management team is comprised of veteran industrial-scale data centre operators and capital markets professionals, focused on building infrastructure for the future by developing and hosting the ecosystem growing around blockchain-based technologies.

Keep up-to-date on Bitfarms’ events, developments and online communities:

Website: www.bitfarms.io



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