Bitfarms Ltd. (“
Bitfarms” or the
“
Company”) (NASDAQ: BITF // TSX: BITF), a
global Bitcoin self-mining company, is working to modify and reduce
indebtedness at one of its wholly-owned corporate subsidiaries.
Jeff Lucas, Chief Financial Officer of Bitfarms,
stated, “During 2022, Bitfarms began taking proactive actions to
increase financial flexibility and to reduce indebtedness and
capital expenditure obligations. Considering today’s challenging
market conditions, we are seeking to modify our Washington state
debt facility to achieve terms that are better aligned with the
market outlook and our business strategy.”
On February 18, 2022, Bitfarms’ Backbone Mining
Solutions, Inc. (“BMS”) entered into a $32 million
equipment financing facility with BlockFi Lending LLC
(“BlockFi”). BMS owns and operates the assets of
Bitfarms’ 20-megawatt active crypto mining facility in the State of
Washington. The loan is secured by certain assets of BMS, including
its miners and certain Bitcoin produced by those miners and is
recourse only against BMS. The current market value of the assets
securing the loan is estimated by BMS to be approximately $5
million, while the outstanding principal and interest is
approximately $20 million. As a result, the Company determined that
it would be advisable to seek more favorable terms from BlockFi and
potentially take other steps to reduce the BMS obligations. The
Company has taken certain actions, and may in the future take other
actions, including not making installment payments, that constitute
defaults under the loan agreement and entitle BlockFi to exercise
various rights and remedies against BMS and in respect of the
collateral. Neither a restructuring on more beneficial loan terms
nor a reduction in BMS’s indebtedness is assured. BlockFi’s
exercise of its rights and remedies against BMS and its collateral
could result in additional charges to the Company and potentially
even the cessation of operations at the State of Washington
facilities.
As of December 31, 2022, Bitfarms and its
subsidiaries had cash and unencumbered crypto assets with a value
of approximately $36 million, which the Company believes provides
sufficient liquidity to support ongoing operations for the
foreseeable future and to make future payments under its various
other loan agreements. Bitfarms and its subsidiaries have
approximately $47 million of outstanding indebtedness, including
approximately $20 million indebtedness under the BlockFi
loan.
About Bitfarms Ltd.
Founded in 2017, Bitfarms is a global, publicly
traded (NASDAQ/TSX: BITF) Bitcoin self-mining company. Bitfarms
runs vertically integrated mining operations with in-house
management and company-owned electrical engineering, installation
service, and onsite technical repair. The Company’s proprietary
data analytics system delivers best-in-class operational
performance and uptime.
Bitfarms has 10 mining facilities around the
world, which are housed in four countries: Canada, the United
States, Paraguay, and Argentina. Powered by predominantly
environmentally friendly hydro-electric and long-term power
contracts, Bitfarms is committed to using renewable, locally based,
and often underutilized energy infrastructure.
To learn more about Bitfarms’ events, developments, and online
communities:
Website: www.bitfarms.com
https://www.facebook.com/bitfarms/https://twitter.com/Bitfarms_iohttps://www.instagram.com/bitfarms/https://www.linkedin.com/company/bitfarms/
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 Toronto
Stock Exchange, Nasdaq, or any other securities exchange or
regulatory authority accepts responsibility for the adequacy or
accuracy of this release.
Forward-Looking Statements
This news release contains certain
“forward-looking information” and “forward-looking statements”
(collectively, “forward-looking information”) that are based on
expectations, estimates and projections as at the date of this news
release and are covered by safe harbors under Canadian and United
States securities laws. The statements and information in this
release regarding the strategy taken in respect of the BlockFi
loan, the benefits of the restructuring of the terms of the BlockFi
loan, the ability to service the outstanding indebtedness of the
Company, and other future plans and objectives of the Company are
forward-looking information. Other forward-looking information
includes, but is not limited to, information concerning: the
intentions, plans and future actions of the Company, as well as
Bitfarms’ ability to successfully mine digital currency, revenue
increasing as currently anticipated, the ability to profitably
liquidate current and future digital currency inventory, volatility
of network difficulty and digital currency prices and the potential
resulting significant negative impact on the Company’s operations,
the construction and operation of expanded blockchain
infrastructure as currently planned, and the regulatory environment
for cryptocurrency in the applicable jurisdictions.
Any statements that involve discussions with
respect to predictions, expectations, beliefs, plans, projections,
objectives, assumptions, future events or performance (often but
not always using phrases such as “expects”, or “does not expect”,
“is expected”, “anticipates” or “does not anticipate”, “plans”,
“budget”, “scheduled”, “forecasts”, “estimates”, “believes” or
“intends” or variations of such words and phrases or stating that
certain actions, events or results “may” or “could”, “would”,
“might” or “will” be taken to occur or be achieved) are not
statements of historical fact and may be forward-looking
information and are intended to identify forward-looking
information.
This forward-looking information is based on
assumptions and estimates of management of the Company at the time
they were made, and involves known and unknown risks, uncertainties
and other factors which may cause the actual results, performance,
or achievements of the Company to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking information. Such factors include, among
others, risks relating to: BlockFi’s potential exercise of rights
and remedies against BMS as a result of defaults under the loan
agreement and applicable law, including remedies in respect of its
collateral, which could result in additional charges to the Company
and the cessation of operations at the State of Washington
facilities; potential cross-defaults under other indebtedness of
the Company as a result of events of default under the BlockFi
loan; the Company’s liquidity generally; the global economic
climate; dilution; the Company’s limited operating history; future
capital needs and uncertainty of additional financing, including
the Company’s ability to utilize the Company’s at-the-market
offering (the “ATM Program”) and the prices at which the Company
may sell Common Shares in the ATM Program, as well as capital
market conditions in general; risks relating to the strategy of
maintaining and increasing Bitcoin holdings and the impact of
depreciating Bitcoin prices on working capital; the competitive
nature of the industry; currency exchange risks; the need for the
Company to manage its planned growth and expansion; the effects of
product development and need for continued technology change; the
ability to maintain reliable and economical sources of power to run
its cryptocurrency mining assets; the impact of energy curtailment
or regulatory changes in the energy regimes in the jurisdictions in
which the Company operates; protection of proprietary rights; the
effect of government regulation and compliance on the Company and
the industry; network security risks; the ability of the Company to
maintain properly working systems; reliance on key personnel;
global economic and financial market deterioration impeding access
to capital or increasing the cost of capital; share dilution
resulting from the ATM Program and from other equity issuances; and
volatile securities markets impacting security pricing unrelated to
operating performance. In addition, particular factors that could
impact future results of the business of Bitfarms include, but are
not limited to: the construction and operation of facilities may
not occur as currently planned, or at all; expansion may not
materialize as currently anticipated, or at all; the digital
currency market; the ability to successfully mine digital currency;
revenue may not increase as currently anticipated, or at all; it
may not be possible to profitably liquidate the current digital
currency inventory, or at all; a decline in digital currency prices
may have a significant negative impact on operations; an increase
in network difficulty may have a significant negative impact on
operations; the volatility of digital currency prices; the
anticipated growth and sustainability of hydroelectricity for the
purposes of cryptocurrency mining in the applicable jurisdictions;
the inability to maintain reliable and economical sources of power
for the Company to operate cryptocurrency mining assets; the risks
of an increase in the Company’s electricity costs, cost of natural
gas, changes in currency exchange rates, energy curtailment or
regulatory changes in the energy regimes in the jurisdictions in
which the Company operates and the adverse impact on the Company’s
profitability; the ability to complete current and future
financings, any regulations or laws that will prevent Bitfarms from
operating its business; historical prices of digital currencies and
the ability to mine digital currencies that will be consistent with
historical prices; an inability to predict and counteract the
effects of COVID-19 on the business of the Company, including but
not limited to the effects of COVID-19 on the price of digital
currencies, capital market conditions, restriction on labour and
international travel and supply chains; and, the adoption or
expansion of any regulation or law that will prevent Bitfarms from
operating its business, or make it more costly to do so. For
further information concerning these and other risks and
uncertainties, refer to the Company’s filings on www.SEDAR.com
(which are also available on the website of the U.S. Securities and
Exchange Commission at www.sec.gov), including the annual
information form for the year-ended December 31, 2021, filed on
March 28, 2022. The Company has also assumed that no significant
events occur outside of Bitfarms’ normal course of business.
Although the Company has attempted to identify important factors
that could cause actual results to differ materially from those
expressed in forward-looking statements, there may be other factors
that cause results not to be as anticipated, estimated or intended.
There can be no assurance that such statements will prove to be
accurate as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on any forward-looking
information. The Company undertakes no obligation to revise or
update any forward-looking information other than as required by
law.
Contacts:
LHA Investor RelationsDavid Barnard+1
415-433-3777Investors@bitfarms.com
Actual Agency Matt Weaver+1
339-234-3332mediarelations@bitfarms.com
Québec Media: TactLouis-Martin Leclerc+1
418-693-2425lmleclerc@tactconseil.ca
Bitfarms (NASDAQ:BITF)
Historical Stock Chart
From Feb 2024 to Mar 2024
Bitfarms (NASDAQ:BITF)
Historical Stock Chart
From Mar 2023 to Mar 2024