Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16]

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 May 2024

Commission File Number: 001-40370

BITFARMS LTD.

(Exact Name of Registrant as Specified in Its Charter)

110 Yonge Street, Suite 1601, Toronto, Ontario, Canada M5C 1T4

(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 ☒

DOCUMENTS INCLUDED AS PART OF THIS FORM 6-K

This report on Form 6-K, including the interim condensed consolidated financial statements for the three months ended March 31, 2024 and management’s discussion and analysis for the three months ended March 31, 2024, shall be deemed to be incorporated by reference as exhibits to the Registration Statement of Bitfarms Ltd. on Form F-10 (File No. 333-272989) and the Registration Statement of Bitfarms Ltd. on Form S-8 (File No. 333-278868) and to be a part thereof from the date on which this report was furnished, to the extent not superseded by documents or reports subsequently filed or furnished.

See the Exhibits listed below.

Exhibits

Exhibit No.		Description

99.1		Interim Condensed Consolidated Financial Statements for the three months ended March 31, 2024
99.2		Management’s Discussion & Analysis for the three months ended March 31, 2024
99.3		CEO Certification of Interim Filings - Interim Certificate dated May 15, 2024
99.4		CFO Certification of Interim Filings - Interim Certificate dated May 15, 2024
99.5		Material Change Report dated May 15, 2024

1

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.

BITFARMS LTD.

By:	/s/ Nicolas Bonta
	Name:	Nicolas Bonta
	Title:	Chairman and Interim Chief Executive Officer

Date: May 15, 2024

2

Exhibit 99.1

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023

(Expressed in thousands of U.S. dollars - unaudited)

BITFARMS LTD.

TABLE OF CONTENTS

		Page
	Financial Statements (unaudited)
	Interim Consolidated Statements of Financial Position	3
	Interim Consolidated Statements of Profit or Loss and Comprehensive Profit or Loss	4
	Interim Consolidated Statements of Changes in Equity	5
	Interim Consolidated Statements of Cash Flows	6

	Notes to the Interim Condensed Consolidated Financial Statements
1.	Nature of Operations	7
2.	Liquidity	8
3.	Basis of Presentation and Material Accounting Policy Information	9
4.	Significant Accounting Judgments and Estimates	13
5.	Other Assets	14
6.	Digital Assets	14
7.	Derivative Assets and Liabilities	15
8.	Assets Held for Sale	18
9.	Property, Plant and Equipment	19
10.	Intangible Assets	22
11.	Long-term Deposits, Equipment Prepayments, Commitments and Other	23
12.	Trade Payables and Accrued Liabilities	25
13.	Long-term Debt	25
14.	Leases	27
15.	Income Taxes	28
16.	Share Capital	29
17.	Financial Instruments	30
18.	Transactions and Balances with Related Parties	31
19.	Net Loss Per Share	31
20.	Share-based Payments	32
21.	Additional Details to the Statement of Profit or Loss and Comprehensive Profit or Loss	33
22.	Geographical Information	34
23.	Additional Details to the Statements of Cash Flows	35
24.	Subsequent Events	35

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BITFARMS LTD.

INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Expressed in thousands of U.S. dollars - unaudited)

		As of March 31,			As of December 31,
	Notes	2024			2023
Assets
Current
Cash			65,961			84,038
Trade receivables			729			714
Other assets	5		3,592			2,199
Short-term prepaid deposits			4,507			6,393
Digital assets	6		57,542			31,870
Digital assets - pledged as collateral	6, 13		—			2,101
Derivative assets	7		3,016			1,281
Assets held for sale	8		1,972			1,388
			137,319			129,984
Non-current
Property, plant and equipment	9, 22		177,767			186,012
Right-of-use assets	14		13,225			14,315
Long-term deposits, equipment prepayments and other	11		93,616			44,714
Intangible assets	10		4,546			3,700
Total assets			426,473			378,725
Liabilities
Current
Trade payables and accrued liabilities	12		23,888			20,739
Current portion of long-term debt	13		151			4,022
Current portion of lease liabilities	14		2,126			2,857
Taxes payable			777			1,110
Warrant liabilities	7, 16		18,576			40,426
			45,518			69,154
Non-current
Long-term debt	13		1,491			—
Lease liabilities	14		12,183			12,993
Asset retirement provision			1,867			1,816
Total liabilities			61,059			83,963
Shareholders’ equity
Share capital			586,255			530,123
Contributed surplus			59,689			56,622
Revaluation surplus			12,876			2,941
Accumulated deficit			(293,406	)		(294,924	)
Total equity			365,414			294,762
Total liabilities and equity			426,473			378,725

Should be read in conjunction with the notes to the interim condensed consolidated financial statements

May 14, 2024		/s/ Nicolas Bonta			/s/ Jeffrey Lucas
Date of approval of the financial statements		Chairman of the Board of Directors & Interim Chief Executive Officer			Chief Financial Officer

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BITFARMS LTD.

INTERIM CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND COMPREHENSIVE PROFIT OR LOSS

(Expressed in thousands of U.S. dollars, except per share amounts - unaudited)

	Three months ended March 31,
	Notes		2024			2023 (restated - Note 3d)

Revenues		6, 22		50,317			30,050
Cost of revenues		21		(60,999	)		(38,403	)
Gross loss				(10,682	)		(8,353	)

Operating expenses
General and administrative expenses		21		(13,196	)		(8,360	)
Realized gain on disposition of digital assets		6		—			587
Reversal of revaluation loss on digital assets		6		—			2,695
Gain (loss) on disposition of property, plant and equipment				170			(1,566	)
Operating loss				(23,708	)		(14,997	)

Net financial income		21		11,443			10,967
Net loss before income taxes				(12,265	)		(4,030	)

Income tax recovery		15		6,285			330
Net loss				(5,980	)		(3,700	)

Other comprehensive income (loss)
Item that will not be reclassified to profit or loss:
Change in revaluation surplus - digital assets, net of tax		6		17,433			1,225
Total comprehensive income (loss), net of tax				11,453			(2,475	)

Loss per share		19
Basic and diluted				(0.02	)		(0.02	)
Weighted average number of common shares outstanding		19
Basic and diluted				338,745,000			232,541,000

Should be read in conjunction with the notes to the interim condensed consolidated financial statements

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BITFARMS LTD.

INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Expressed in thousands of U.S. dollars, except number of shares - unaudited)

	Notes		Number of shares		Share capital		Contributed surplus			Accumulated deficit			Revaluation surplus			Total equity
Balance as of January 1, 2024				334,153,000		530,123		56,622			(294,924	)		2,941			294,762
Net loss				—		—		—			(5,980	)		—			(5,980	)
Change in revaluation surplus - digital assets, net of tax				—		—		—			—			17,433			17,433
Total comprehensive income (loss), net of tax				—		—		—			(5,980	)		17,433			11,453

Transfer of revaluation surplus on disposal of digital assets to accumulated deficit, net of tax				—		—		—			7,498			(7,498	)		—
Share-based payment		20		—		—		3,094			—			—			3,094
Issuance of common shares		16		16,997,000		37,268		—			—			—			37,268
Exercise of stock options and warrants		16, 20		5,142,000		18,864		(27	)		—			—			18,837
Balance as of March 31, 2024				356,292,000		586,255		59,689			(293,406	)		12,876			365,414

Balance as of January 1, 2023 (restated - Note 3d)				224,200,000		404,934		47,653			(197,189	)		—			255,398
Net loss				—		—		—			(3,700	)		—			(3,700	)
Change in revaluation surplus - digital assets, net of tax				—		—		—			—			1,225			1,225
Total comprehensive income (loss), net of tax				—		—		—			(3,700	)		1,225			(2,475	)

Share-based payment		20		—		—		2,536			—			—			2,536
Issuance of common shares		16		15,940,000		15,764		—			—			—			15,764
Exercise of stock options		16, 20		122,000		76		(29	)		—			—			47
Balance as of March 31, 2023 (restated - Note 3d)				240,262,000		420,774		50,160			(200,889	)		1,225			271,270

Should be read in conjunction with the notes to the interim condensed consolidated financial statements

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BITFARMS LTD.

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of U.S. dollars - unaudited)

			Three months ended March 31,
	Notes		2024			2023 (restated - Note 3d)

Cash flows from operating activities
Net loss				(5,980	)		(3,700	)
Adjustments for:
Depreciation and amortization		21		38,977			20,700
Net financial income		21		(11,443	)		(10,967	)
Digital assets earned		6		(49,423	)		(29,208	)
Proceeds from sale of digital assets earned		6		49,570			28,483
Realized gain on disposition of digital assets		6		—			(587	)
Reversal of revaluation loss on digital assets		6		—			(2,695	)
Share-based payment		20		3,094			2,536
Income tax recovery		15		(6,285	)		(330	)
Loss (gain) on disposition of property, plant and equipment				(170	)		1,566
Interest and financial income received (expenses paid)				524			(2,099	)
Income taxes paid				(260	)		—
Changes in non-cash working capital components		23		(323	)		(2,670	)
Net change in cash related to operating activities				18,281			1,029

Cash flows used in investing activities
Purchase of property, plant and equipment				(3,920	)		(8,104	)
Proceeds from sale of property, plant and equipment				1,043			2,405
Purchase of marketable securities		21		(2,284	)		(7,163	)
Proceeds from disposition of marketable securities		21		2,622			9,334
Equipment and construction prepayments				(74,015	)		—
Net change in cash related to investing activities				(76,554	)		(3,528	)

Cash flows from financing activities
Issuance of common shares		16		37,268			15,764
Repayment of long-term debt		13		(4,075	)		(13,474	)
Proceeds from long-term debt		13		1,695			—
Repayment of lease liabilities		14		(779	)		(1,394	)
Exercise of stock options and warrants		16, 20		6,027			47
Net change in cash related to financing activities				40,136			943

Net decrease in cash				(18,137	)		(1,556	)
Cash, beginning of the period				84,038			30,887
Exchange rate differences on currency translation				60			47
Cash, end of the period				65,961			29,378

Should be read in conjunction with the notes to the interim condensed consolidated financial statements

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 1: NATURE OF OPERATIONS

Bitfarms Ltd. was incorporated under the Canada Business Corporations Act on October 11, 2018 and continued under the Business Corporations Act (Ontario) on August 27, 2021. The consolidated financial statements of the corporation comprise the accounts of Bitfarms Ltd. and its wholly-owned subsidiaries (together referred to as the “Company” or “Bitfarms”). The common shares of the Company are listed on the Nasdaq Stock Market and the Toronto Stock Exchange (NASDAQ/TSX: BITF). Its registered office is located at 110 Yonge Street, Suite 1601, Toronto, Ontario, Canada, M5C 1T4.

The activities of the Company are mainly comprised of selling its computational power used for hashing calculations for the purpose of cryptocurrency mining in multiple jurisdictions as described in Note 22 “Geographical Information”. The Company’s operations are currently located in Canada, the United States, Argentina and Paraguay. Volta, a wholly-owned subsidiary of the Company, assists the Company in building and maintaining its server farms and provides electrician services to both commercial and residential customers in Quebec.

Bitfarms owns and operates server farms comprised of computers (referred to as “Miners”) designed for the purpose of validating transactions on the Bitcoin Blockchain (referred to as “Mining”). Bitfarms generally operates its Miners 24 hours a day to produce computational power used for hashing calculations (measured by hashrate) that Bitfarms sells to a Mining Pool under a formula-driven rate commonly known in the industry as Full Pay Per Share (“FPPS”). Under FPPS, Mining Pools compensate Mining companies for their computational power used for hashing calculations, measured through hashrate, based on what the Mining Pool would expect to generate in revenue for a given time period if there was no randomness involved. The fee paid by a Mining Pool to Bitfarms for its computational power used for hashing calculations may be in cryptocurrency, U.S. dollars, or another currency. However, the fees are generally paid to the Company on a daily basis in BTC. Bitfarms accumulates the cryptocurrency fees it receives or exchanges them for U.S. dollars through reputable and established cryptocurrency trading platforms.

Terms and definitions

In these financial statements, the terms below have the following definitions:

	Term	Definition
1	Backbone	Backbone Hosting Solutions Inc.
2	Volta	9159-9290 Quebec Inc.
3	Backbone Argentina	Backbone Hosting Solutions SAU
4	Backbone Paraguay	Backbone Hosting Solutions Paraguay SA
5	Backbone Mining	Backbone Mining Solutions LLC
6	BTC	Bitcoin
7	BVVE	Blockchain Verification and Validation Equipment (primarily Miners)
8	CAD	Canadian Dollars
9	USD	U.S. Dollars
10	ARS	Argentine Pesos

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 2: LIQUIDITY

Bitfarms is primarily engaged in the cryptocurrency Mining industry, a highly volatile industry subject to significant inherent risk. Declines in the market prices of cryptocurrencies, an increase in the difficulty of BTC mining, delays in the delivery of Mining equipment, changes in the regulatory environment and adverse changes in other inherent risks can significantly and negatively impact the Company’s operations and cash flows and its ability to maintain sufficient liquidity to meet its financial obligations. Adverse changes to the factors mentioned above have impacted the recoverability of the Company’s digital assets and property, plant and equipment, resulting in impairment losses being recorded.

The Company’s current operating budget and future estimated cash flows indicate that the Company will generate positive cash flow in excess of the Company’s cash commitments within the twelve-month period. These analyses are based on BTC market factors including price, difficulty and network hashrate for the twelve-month period following the date these interim condensed consolidated financial statements were authorized for issuance.

A BTC Halving is scheduled to occur once every 210,000 blocks, or roughly every four years, until the total amount of BTC rewards issued reaches 21 million, which is expected to occur around 2140. The most recent BTC Halving occurred on April 19, 2024, at which time BTC block rewards decreased from 6.25 BTC per block to 3.125 BTC per block. Once 21 million BTC are generated on or about the year 2140, the network will stop producing more BTC, and the industry will then need to rely on transaction fees and/or other sources of revenue. While BTC prices have had a history of significant fluctuations around BTC Halving events, there is no guarantee that the price change will be favorable or would compensate for the reduction in Mining rewards and the compensation from Mining Pools.

At current BTC prices, the Company’s existing cash resources and the proceeds from sales of its BTC treasury and BTC earned may not be sufficient to fund capital investments to support its growth objectives. If the proceeds from the sale of BTC are not sufficient, the Company would be required to raise additional funds from external sources to meet these requirements. There is no assurance that the Company will be able to raise such additional funds on acceptable terms, if at all.

If the Company raises additional funds by issuing securities, existing shareholders’ ownership in the Company may be diluted. If the Company is unable to obtain financing, including by issuing securities, or if funds from operations and proceeds from sales of the Company’s BTC holdings are negatively impacted by the BTC price, the Company may have difficulty meeting its payment obligations.

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 3: BASIS OF PRESENTATION AND MATERIAL ACCOUNTING POLICY INFORMATION

a.

Basis of preparation and measurement

The interim condensed consolidated financial statements (“Financial Statements”) of the Company comprise the accounts of Bitfarms Ltd. and its wholly-owned subsidiaries. These Financial Statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS Accounting Standards”) applicable to the preparation of interim financial statements, including International Accounting Standard 34, Interim Financial Reporting. These Financial Statements were approved by the Board of Directors on May 14, 2024.

These Financial Statements do not include all the information required for full annual financial statements and should be read in conjunction with the audited annual consolidated financial statements of the Company and the notes thereto for the year ended December 31, 2023.

These Financial Statements have been prepared under the same accounting policies used in the audited annual consolidated financial statements for the year ended December 31, 2023, except for new accounting standards issued and adopted by the Company which are described below. The accounting policies have been applied consistently by the Company’s entities and to all periods presented in these Financial Statements, unless otherwise indicated.

The Financial Statements have been prepared on the historical cost basis, except for the revaluation of certain financial instruments and digital assets recorded at fair value, and assets held for sale measured at the lower of their carrying amount and fair value less costs to sell.

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 3: BASIS OF PRESENTATION AND MATERIAL ACCOUNTING POLICY INFORMATION (Continued)

b.

New accounting amendments issued and adopted by the Company

The following amendments to existing standards were adopted by the Company as of January 1, 2024:

Amendments to IFRS 16, Leases (“IFRS 16”)

Amendments to IFRS 16 require a seller-lessee to subsequently measure lease liabilities arising from a leaseback in a manner that does not recognize any amount of the gain or loss that relates to the right-of-use retained. The new requirements do not prevent a seller-lessee from recognizing in profit or loss any gain or loss relating to the partial or full termination of a lease.

Amendments to IAS 1, Presentation of the Financial Statements (“IAS 1”)

Amendments to IAS 1 clarify how to classify debt and other liabilities as current or non-current. The amendments help to determine whether, in the interim consolidated statements of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current. The amendments also include clarifying the classification requirements for debt that an entity might settle by converting into equity.

Amendments to IAS 1 specify that covenants to be complied with after the reporting date do not affect the classification of debt as current or non-current at the reporting date. Instead, the amendments require information about these covenants be disclosed in the notes to the financial statements.

Amendments to IAS 7, Statement of Cash Flows (“IAS 7”) and IFRS 7, Financial Instruments: Disclosures (“IFRS 7”)

Amendments to IAS 7 and IFRS 7 introduce disclosure requirements to enhance the transparency of supplier finance arrangements and their effects on an entity’s liabilities, cash flows and exposure to liquidity risk.

The adoption by the Company of the amendments listed above did not have a significant impact on the Company’s Financial Statements.

c.

New accounting amendments and standard issued to be adopted at a later date

The following amendments to existing standards have been issued and are applicable to the Company for its annual period beginning on January 1, 2025, with an earlier application permitted:

Amendments to IAS 21, The Effects of Changes in Foreign Exchange Rates (“IAS 21”)

Amendments to IAS 21 require an entity to apply a consistent approach in assessing whether a currency can be exchanged into another currency and, when it cannot, in determining the exchange rate to use and the disclosures to provide.

The Company is currently evaluating the impact of adopting the amendments on the Company’s Financial Statements.

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 3: BASIS OF PRESENTATION AND MATERIAL ACCOUNTING POLICY INFORMATION (Continued)

c.

New accounting amendments and standard issued to be adopted at a later date (Continued)

The following new standard has been issued and is applicable to the Company for its annual period beginning on January 1, 2027, with an earlier application permitted:

IFRS 18, Presentation and Disclosure in Financial Statements (“IFRS 18”)

On April 9, 2024, the International Accounting Standards Board issued IFRS 18, the new standard on presentation and disclosure in financial statements, which will replace IAS 1, with a focus on updates to the statement of profit or loss. The key new concepts introduced in IFRS 18 relate to:

●

the structure of the statement of profit or loss, including specified totals and subtotals;

●

required disclosures in the financial statements for certain profit or loss performance measures that are reported outside an entity’s financial statements (i.e., management-defined performance measures); and

●

enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes in general.

The Company is currently evaluating the impact of adopting the new standard on the Company’s Financial Statements.

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 3: BASIS OF PRESENTATION AND MATERIAL ACCOUNTING POLICY INFORMATION (Continued)

d.

Restatement

During the year ended December 31, 2023, the Company identified errors in its accounting for warrants issued in connection with certain private placement financings in 2021. The warrants and broker warrants are convertible for a fixed number of common shares of the Company but have a contingent cashless exercise clause which results in a classification of the warrants and broker warrants as a financial liability and measurement of such warrants at fair value through profit or loss, not equity.

The effects of the restatement on the affected financial statement line items for the prior period are as follows:

Interim consolidated statements of profit or loss and comprehensive profit or loss extract for the three months ended March 31, 2023 - Restatement

	Three months ended March 31,
	2023 (as reported)			Warrant adjustments			2023 (as restated)

Operating loss		(14,997	)		—			(14,997	)
Net financial income (expenses)		12,188			(1,221	)		10,967
Net loss before income taxes		(2,809	)		(1,221	)		(4,030	)
Income tax recovery		330			—			330
Net loss		(2,479	)		(1,221	)		(3,700	)
Other comprehensive income (loss)
Item that will not be reclassified to profit or loss:
Change in revaluation surplus - digital assets, net of tax		1,225			—			1,225
Total comprehensive loss, net of tax		(1,254	)		(1,221	)		(2,475	)

Loss per share
Basic and diluted		(0.01	)		(0.01	)		(0.02	)

Interim consolidated statements of cash flows extract for the three months ended March 31, 2023 - Restatement

	Three months ended March 31,
	2023 (as reported)			Warrant adjustments			2023 (as restated)
Cash flows from operating activities
Net loss		(2,479	)		(1,221	)		(3,700	)
Adjustments for:
Net financial income		(12,188	)		1,221			(10,967	)
Net change in cash related to operating activities		1,029			—			1,029

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 4: SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES

The preparation of the Financial Statements requires Management to undertake judgments, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. These estimates and judgments are based on Management’s best knowledge of the events or circumstances and actions the Company may take in the future. The actual results may differ from these assumptions and estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to assumptions and estimates are recognized in the period in which the assumption or estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

The significant judgements made by Management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those described in the audited annual consolidated financial statements for year ended December 31, 2023, except for the following:

Property, plant and equipment

Estimates of useful lives, residual values and methods of depreciation are reviewed annually. Any changes based on additional available information are accounted for prospectively as a change in accounting estimate.

During the three months ended March 31, 2024, in connection with the replacement of older Miners following the Company’s transformative fleet upgrade as described in Note 9 - Property, Plant and Equipment, the Company reviewed and adjusted the useful lives, residual values and method of depreciation of older Miners that will be replaced by the new fleet in 2024.

For these Miners, the depreciation was accelerated to bring the book value to the estimated recoverable value at the time they are expected to be replaced. The residual values were adjusted to reflect the expected proceeds from the eventual sale and the depreciation method was modified from sum-of-years to straight-line method.

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 5: OTHER ASSETS

	As of March 31,		As of December 31,
	2024		2023
Sales taxes receivable*		1,138		805
Electrical component inventory		1,017		705
Other receivables		1,437		689
		3,592		2,199

* Refer to Note 21b for more details about the provision applied to the Argentine value-added tax (VAT) receivable included in sales taxes receivable.

NOTE 6: DIGITAL ASSETS

BTC transactions and the corresponding values for the three months ended March 31, 2024 and 2023 were as follows:

	Three months ended March 31,
	2024						2023
	Quantity			Value			Quantity			Value
Balance of digital assets including digital assets pledged as collateral as of January 1,		804			33,971			405			6,705
BTC earned*		943			49,423			1,297			29,208
BTC exchanged for cash and services		(941	)		(49,570	)		(1,267	)		(28,483	)
Realized gain on disposition of digital assets**		—			11,063			—			587
Change in unrealized gain on revaluation of digital assets**		—			12,655			—			4,362
Balance of digital assets including digital assets pledged as collateral as of March 31,		806			57,542			435			12,379
Less digital assets pledged as collateral as of March 31,***		—			—			(74	)		(2,122	)
Balance of digital assets excluding digital assets pledged as collateral as of March 31,		806			57,542			361			10,257

* Management estimates the fair value of BTC earned on a daily basis as the quantity of cryptocurrency received multiplied by the price quoted on Coinbase on the day it was received. Management considers the prices quoted on Coinbase to be a level 2 input under IFRS 13, Fair Value Measurement.

** A portion of the realized gain on disposition of digital assets and the change in unrealized gain on revaluation of digital assets is presented in other comprehensive income after reversing previously recorded revaluation loss on digital assets in the statement of profit or loss. For the three months ended March 31, 2024, a gain of $17,433, net of $6,285 of deferred income tax expense, was presented in other comprehensive income (three months ended March 31, 2023: $1,225 and $442, respectively).

*** Refer to Note 13 for details of the Company’s long-term debt and BTC pledged as collateral. During the three months ended March 31, 2024, the NYDIG Loan balance was fully repaid and the BTC previously pledged as collateral thereunder became unencumbered.

14

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 7: DERIVATIVE ASSETS AND LIABILITIES

BTC option contracts

Starting in the first quarter of 2023, the Company purchased BTC option contracts that gave it the right, but not the obligation, to sell digital assets at a fixed price. Option contracts are used to reduce the risk of BTC price volatility and reduce the variability of cash flows resulting from future sales of digital assets. The Company did not apply hedge accounting on these contracts.

Reconciliation of the fair value measurement of derivatives (Level 2):

	As of March 31,					As of December 31,
	2024					2023
	Derivative Assets			Derivative Liabilities		Derivative Assets		Derivative Liabilities
	three-month period					twelve-month period
Balance as of January 1,		1,281			—		—		—
Remeasurement recognized in statement of profit or loss during the period		2,490			—		28		20
Purchases		631			—		1,253		366
Sales		(1,386	)		—		—		(386	)
Balance as of period end		3,016			—		1,281		—

The following gain or loss on derivatives are recognized in Net financial income in the interim consolidated statements of profit or loss and comprehensive profit or loss:

	Three months ended March 31,
	2024		2023
Unrealized change in fair value of outstanding contracts		2,128		(35	)
Realized gain on settled contracts		362		70
		2,490		35

15

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 7: DERIVATIVE ASSETS AND LIABILITIES (Continued)

Warrant liabilities

The fair value of warrant liabilities is as follows:

	As of March 31,		As of December 31,
	2024		2023
2023 private placement		16,586		34,276
2021 private placements		1,990		6,150
		18,576		40,426

In November 2023, the Company completed a private placement that included 22,222,000 warrants and 3,000,000 broker warrants to purchase common shares. The warrants and broker warrants are convertible for a fixed number of common shares of the Company but have a contingent cashless exercise clause which results in a classification of the warrants and broker warrants as a financial liability and measurement of such warrants at fair value through profit or loss recognized in Net financial income.

Details of the outstanding warrants are as follows:

	Three months ended March 31,
	2024					2023
	Number of warrants			Weighted average exercise price (USD)		Number of warrants		Weighted average exercise price (USD)
Outstanding, January 1,		35,105,000			2.83		19,153,000		4.21
Exercised		(5,111,000	)		1.17		—		—
Expired		(121,000	)		2.47		—		—
Outstanding, March 31,		29,873,000			3.12		19,153,000		4.21

The weighted average contractual life of the warrants as of March 31, 2024, was 1.1 years (March 31, 2023: 1.2 years).

On January 7, 2024, 96,000 broker warrants from the January 7, 2021 private placement expired and were derecognized, which resulted in a non-cash gain on revaluation of warrants of $61 included in Net financial income.

In February 2024, 5,000,000 warrants and 111,000 broker warrants related to the 2023 private placement were exercised resulting in the issuance of 5,111,000 common shares for proceeds of approximately $5,986.

On March 11, 2024, 25,000 warrants relating to the acquisition of the Garlock building in Quebec issued during the first quarter of 2022 expired. These warrants were recorded as equity instruments.

16

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 7: DERIVATIVE ASSETS AND LIABILITIES (Continued)

Warrant liabilities (Continued)

The Black-Scholes model and inputs below were used in determining the weighted average values of the warrants and broker warrants prior to their derecognition as described in Note 16 and at period end.

2023 warrants and broker warrants

	Remeasurement on settlement of warrants			Remeasurement at period end
Measurement date	February 12 to 28, 2024			March 31, 2024			December 31, 2023
Dividend yield (%)		—			—			—
Expected share price volatility (%)		87	%		86	%		91	%
Risk-free interest rate (%)		4.67	%		4.59	%		4.23	%
Expected life of warrants (years)		2.74			2.65			2.90
Share price (CAD)		4.42			3.01			3.85
Exercise price (USD)		1.17			1.17			1.17
Fair value of warrants (USD)		2.51			1.53			2.15
Number of warrants outstanding (exercised)		(5,111,000	)		10,841,000			15,952,000

2021 warrants and broker warrants

	Remeasurement at period end
Measurement date	March 31, 2024			December 31, 2023
Dividend yield (%)		—			—
Expected share price volatility (%)		95	%		82	%
Risk-free interest rate (%)		4.59	%		4.23	%
Expected life of warrants (years)		0.21			0.46
Share price (CAD)		3.01			3.85
Exercise price (USD)		4.21			4.20
Fair value of warrants (USD)		0.10			0.32
Number of warrants outstanding		19,032,000			19,128,000

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 8: ASSETS HELD FOR SALE

As of March 31, 2024 and December 31, 2023, assets held for sale consisted of the following:

		As of March 31,		As of December 31,
	Notes	2024		2023
Miners	i.		1,571		521
Mining electrical components			401		867
			1,972		1,388

i.

Miners held of sale

The following table summarizes the movement of Miners held for sale:

	MicroBT WhatsMiner M30 & M31 Miners				Innosilicon T2T & T3, Canaan Avalon A10 and Antminer T15 & S15 Miners						MicroBT WhatsMiner M20S Miners						Bitmain S19j Pro Miners						TOTAL
	Qty		Value		Qty			Value			Qty			Value			Qty			Value			Qty			Value
Balance as of January 1, 2023	—		—		1,272			190			2,512			1,030			—			—			3,784			1,220
Additions		—		—		1,848			198			—			—			300			205			2,148			403
Dispositions		—		—		—			—			(1,781	)		(714	)		—			—			(1,781	)		(714	)
Impairment		—		—		(3,120	)		(388	)		—			—			—			—			(3,120	)		(388	)
Balance as of December 31, 2023		—		—		—			—			731			316			300			205			1,031			521
Additions		7,696		1,363		—			—			—			—			—			—			7,696			1,363
Dispositions		—		—		—			—			(258	)		(108	)		(300	)		(205	)		(558	)		(313	)
Balance as of March 31, 2024		7,696		1,363		—			—			473			208			—			—			8,169			1,571

a.

S19j Pro Bitmain Miners

During the three months ended March 31, 2024, the Company sold 300 Bitmain S19j Pro Miners with a carrying amount of $205 and disposed of them for net proceeds of $205 resulting in no gain or loss.

b.

MicroBT WhatsMiner M30 and M31 Miners

During the three months ended March 31, 2024, the Company ceased using 2,775 MicroBT WhatsMiner M30 Miners and 4,921 MicroBT WhatsMiner M31 Miners and planned to dispose of them within the next 12 months.

c.

MicroBT WhatsMiner M20S Miners

During the three months ended March 31, 2024, the Company sold 258 MicroBT WhatsMiner M20S Miners with a carrying amount of $108 and disposed of them for net proceeds of $34 resulting in a loss of $74. Management determined that the remaining MicroBT WhatsMiner M20S Miners continue to meet the criteria to be classified as held for sale as of March 31, 2024.

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 9: PROPERTY, PLANT AND EQUIPMENT

As of March 31, 2024 and December 31, 2023, property, plant and equipment (“PPE”) consisted of the following:

	Notes	BVVE and electrical components			Mineral assets		Land and buildings		Leasehold improvements			Vehicles			Total
Cost
Balance as of January 1, 2024			354,803			—		5,740		50,728			1,262			412,533
Additions			28,480			—		3,247		305			14			32,046
Dispositions			(4	)		—		—		(560	)		(27	)		(591	)
Transfer to assets held for sale	8		(24,875	)		—		—		—			—			(24,875	)
Balance as of March 31, 2024			358,404			—		8,987		50,473			1,249			419,113

Accumulated Depreciation
Balance as of January 1, 2024			199,794			—		424		25,656			647			226,521
Depreciation			37,028			—		38		1,012			39			38,117
Dispositions			(3	)		—		—		(423	)		(16	)		(442	)
Transfer to assets held for sale	8		(23,403	)		—		—		—			—			(23,403	)
Impairment on deposits transferred to PPE			553			—		—		—			—			553
Balance as of March 31, 2024			213,969			—		462		26,245			670			241,346

Net book value as of March 31, 2024			144,435			—		8,525		24,228			579			177,767

		BVVE and electrical components			Mineral assets			Land and buildings		Leasehold improvements			Vehicles			Total
Cost
Balance as of January 1, 2023			308,205			9,000			4,392		45,278			1,082			367,957
Additions			63,598			—			1,348		5,924			272			71,142
Additions related to asset acquisitions			13			—			—		30			—			43
Dispositions			(7,325	)		(9,000	)		—		(5	)		(92	)		(16,422	)
Transfer to assets held for sale	8		(9,688	)		—			—		—			—			(9,688	)
Effect of change in discount rate			—			—			—		(499	)		—			(499	)
Balance as of December 31, 2023			354,803			—			5,740		50,728			1,262			412,533

Accumulated Depreciation
Balance as of January 1, 2023			120,097			6,000			270		21,636			526			148,529
Depreciation			77,551			—			154		3,556			194			81,455
Dispositions			(5,756	)		(9,000	)		—		(5	)		(73	)		(14,834	)
Transfer to assets held for sale	8		(8,418	)		—			—		—			—			(8,418	)
Impairment			1,882			3,000			—		—			—			4,882
Impairment on deposits transferred to PPE			14,438			—			—		469			—			14,907
Balance as of December 31, 2023			199,794			—			424		25,656			647			226,521

Net book value as of December 31, 2023			155,009			—			5,316		25,072			615			186,012

19

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 9: PROPERTY, PLANT AND EQUIPMENT (Continued)

BVVE

Further details of the quantity and models of BTC BVVE held by the Company as of March 31, 2024 and December 31, 2023 are as follows :

	Notes		MicroBT WhatsMiner*			Bitmain S19j Pro			Bitmain T21		Total
Quantity as of January 1, 2024				51,738			16,361			—		68,099
Additions				100			—			2,982		3,082
Dispositions				(258	)		(300	)		—		(558	)
Quantity as of March 31, 2024				51,580			16,061			2,982		70,623
Classified as assets held for sale		8		(8,169	)		—			—		(8,169	)
Presented as property, plant and equipment				43,411			16,061			2,982		62,454

* Includes 473 M20S classified as assets held for sale, 36,018 M30 of which 2,775 M30 are classified as assets held for sale, 12,517 M31 of which 4,921 M31 are classified as assets held for sale and 2,572 M50 Miners.

Refer to Note 8 for more details on assets held for sale.

	Notes		MicroBT WhatsMiner*			Bitmain S19j Pro			Innosilicon T3 & T2T			Bitmain S19XP			Total
Quantity as of January 1, 2023				45,375			7,172			5,711			—			58,258
Additions				8,281			9,289			—			409			17,979
Dispositions				(1,918	)		(100	)		(5,711	)		(409	)		(8,138	)
Quantity as of December 31, 2023				51,738			16,361			—			—			68,099
Classified as assets held for sale		8		(731	)		(300	)		—			—			(1,031	)
Presented as property, plant and equipment				51,007			16,061			—			—			67,068

* Includes 731 M20S classified as assets held for sale, 36,018 M30S, 12,517 M31S and 2,473 M50 Miners.

Refer to Note 8 for more details on assets held for sale.

20

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 9: PROPERTY, PLANT AND EQUIPMENT (Continued)

Changes in the useful life, residual value and depreciation method of certain BVVE

i.

Background

During the three months ended March 31, 2024, the Company exercised its purchase option for 28,000 Bitmain T21 Miners and entered into purchase agreements to acquire 19,280 Bitmain T21 Miners, 3,888 Bitmain S21 Miners and 740 Bitmain S21 hydro Miners. Refer to Note 11 for more details. The Company intends to liquidate its older Miners that are expected to be replaced with the Bitmain T21 Miners, Bitmain S21 Miners, Bitmain S21 hydro Miners and other hydro Miners.

ii.

Accelerated depreciation

The older Miners will remain in service until the new Miners are installed to replace them. The Company has changed the usage and the retention strategy of the older Miners and, accordingly, revised their specific useful life, residual value and depreciation method.

The changes are summarized as follows:

●

decreasing the specific useful life of the older Miners from 5 years to 2 years to reflect their eventual disposal in 2024;

●

decreasing the residual values to reflect the expected proceeds from the eventual disposals; and

●

accelerating the depreciation method from sum-of-years over 5 years to straight-line method over 2 years to represent the change in pattern in which their future economic benefits are expected to be consumed by the Company.

During the three months ended March 31, 2024, the Company recorded accelerated depreciation of $18,503 on its older Miners. These assets are expected to be depreciated to their residual values by the end of 2024.

The decision to replace the older Miners, as well as a review of the useful life, residual value and depreciation method were indicators for impairment testing. As a result, the Company performed evaluations of the recoverable amount of the assets for operating the cryptocurrency mining facilities in Quebec, Washington State, Argentina and Paraguay separately. Based on its calculations, which were based on discounted cash flow models, the Company determined that no impairment loss should be recorded during the three months ended March 31, 2024.

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 10: INTANGIBLE ASSETS

	Systems software		Access rights to electricity		Total
Cost
Balance as of January 1, 2024		5,150		3,801		8,951
Additions		—		912		912
Balance as of March 31, 2024		5,150		4,713		9,863

Accumulated amortization
Balance as of January 1, 2024		5,138		113		5,251
Amortization		4		62		66
Balance as of March 31, 2024		5,142		175		5,317

Net book value as of March 31, 2024		8		4,538		4,546

	Systems software		Access rights to electricity		Total
Cost
Balance as of January 1, 2023		5,150		—		5,150
Additions related to asset acquisitions		—		3,801		3,801
Balance as of December 31, 2023		5,150		3,801		8,951

Accumulated amortization
Balance as of January 1, 2023		5,117		—		5,117
Amortization		21		113		134
Balance as of December 31, 2023		5,138		113		5,251

Net book value as of December 31, 2023		12		3,688		3,700

Additions related to access rights to electricity

In April 2023, the Company received approval from the power supplier in Washington State for a 6 MW expansion. During the second quarter of 2023, the Company began constructing an additional production facility on Company-owned land and paid $912 to the power supplier for establishing the connection, which was capitalized as long-term deposits, equipment, prepayments and other. During the three months ended March 31, 2024, the power supplier established the electricity connection, allowing the Company to access the 6 MW of hydro power capacity. As a result, the balance of $912 was reclassified from long-term deposits, equipment, prepayments and other to intangible assets.

22

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 10: INTANGIBLE ASSETS (continued)

The following table summarizes the access rights to electricity:

Year

Location

Additions to intangibles ($)

Additional capacity

Term of contractual access rights

Amortization method and period

2024

Washington State, USA

912

6 MW

No termination date

Declining balance 4%

912

6 MW

2023

Baie-Comeau, Quebec

2,315

22 MW

No termination date

Straight-line over the lease term of the facility

2023

Paso Pe, Paraguay

1,065

50 MW

*

Ending in December 31, 2027

Straight-line over the access rights period

2023

Yguazu, Paraguay

421

100 MW

Ending in December 31, 2027

Straight-line over the access rights period

3,801

172 MW

178 MW

* In November 2023, the Company finalized an amendment to the existing contract for an additional 20 MW of energy capacity for a total capacity of 70 MW.

NOTE 11: LONG-TERM DEPOSITS, EQUIPMENT PREPAYMENTS, COMMITMENTS AND OTHER

		As of March 31,		As of December 31,
		2024		2023
Security deposits for energy, insurance and rent			5,331		4,901
Equipment and construction prepayments	a		88,285		39,813
			93,616		44,714

a.

Equipment and construction prepayments

The following table details the equipment and construction prepayments:

		As of March 31,		As of December 31,
		2024		2023
Miner credits	i.		—		11,330
Bitmain T21 Miners Purchase Order and Purchase Option	ii.		66,333		16,912
March 2024 Purchase Order	iii.		8,718		—
Other BVVE and electrical components	iv.		4,963		4,400
Construction work and materials	v.		8,271		7,171
			88,285		39,813

i.

Miner credits

In December 2022, the Company renegotiated its previous purchase agreements for 48,000 Miners by extinguishing the outstanding commitments of $45,350 without penalty and establishing a $22,376 credit for deposits previously made. The Company received $3,279 of Miners, reducing the outstanding credit balance to $19,097 of as December 31, 2022, which was fully utilized during 2023 for the acquisition of hydro Miners and hydro containers. These items were received or in transit during the three months ended March 31, 2024 and the long-term deposit balance was reduced to nil upon the transfer to property, plant and equipment.

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 11: LONG-TERM DEPOSITS, EQUIPMENT PREPAYMENTS, COMMITMENTS AND OTHER (Continued)

a.

Equipment and construction prepayments (Continued)

ii.

Bitmain T21 Miners Purchase Order and Purchase Option

During the fourth quarter of 2023, the Company placed a firm purchase order for 35,888 Bitmain T21 Miners (the “Purchase Order’’) totaling $95,462 with deliveries scheduled from March 2024 to May 2024 and made a non-refundable deposit of $9,464. In addition, the Company secured a purchase option for an additional 28,000 Bitmain T21 Miners (the “Purchase Option’’) totaling $74,480 and made a non-refundable deposit of $7,448. This Purchase Option gives the Company the right, exercisable until December 31, 2024, but not the obligation, to purchase, up to 28,000 additional Bitmain T21 Miners.

During the three months ended March 31, 2024, the Company made additional deposits of $57,356 towards the Purchase Order, of which approximately 3,000 Bitmain T21 Miners with a book value of $7,935 were received or in transit. During the same period, the Company also fully exercised the Purchase Option with deliveries scheduled from September 2024 to October 2024. As of March 31, 2024, the deposit balance for the Purchase Order and the Purchase Option was $66,333.

iii.

March 2024 Purchase Order

During the three months ended March 31, 2024, the Company purchased an additional 19,280 Bitmain T21 Miners, 3,888 Bitmain S21 Miners and 740 Bitmain S21 Hydro Miners (collectively defined as the “March 2024 Purchase Order’’) for $51,285, $13,608 and $4,338, respectively, with deliveries scheduled from April 2024 to November 2024. The Company made a deposit of $8,718 for the March 2024 Purchase Order during the three months ended March 31, 2024.

iv.

Other BVVE and electrical components

As of March 31, 2024, the Company had deposits for other BVVE and electrical components in the amount of $4,963.

v.

Construction work and materials

As of March 31, 2024, the Company had deposits for construction work and materials in the amount of $8,271, mainly for the Paraguay expansions.

b.

Commitments

The Company’s remaining payment obligations in connection with the Purchase Order, the Purchase Option and the March 2024 Purchase Order are outlined below:

	As of March 31,
	2024
Three months ending June 30, 2024		39,528
Three months ending September 30, 2024		85,889
Three months ending December 31, 2024		30,772
		156,189

If the Company is unable to meet its payment obligations, it could result in the loss of equipment prepayments and deposits paid by the Company under the Purchase Order and remedial legal measures being taken against the Company, which may result in damages payable by the Company and forced continuance of the contractual arrangement. Under such circumstances, the Company’s growth plans and ongoing operations could be adversely impacted.

24

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 11: LONG-TERM DEPOSITS, EQUIPMENT PREPAYMENTS, COMMITMENTS AND OTHER (Continued)

c.

Contingent liability

In 2021, the Company imported Miners into Washington State that the vendor located in China claimed originated in Malaysia. In early 2022, U.S. Customs and Border Protection challenged the origination of the Miners, asserting their manufacture in China, and notified the Company of a potential assessment of a U.S. importation duty of 25%.

During the third quarter of 2023, the Company submitted the supporting documentation to U.S. Customs and Border Protection in defense of its position that the Miners were manufactured outside China and the associated custom duties in the amount of $9,424 do not apply. While the final outcome of this matter is uncertain at this time, Management has determined it is not probable that it will result in a future cash outflow for the Company, and, as such, no provision was recorded as of March 31, 2024.

NOTE 12: TRADE PAYABLES AND ACCRUED LIABILITIES

	As of March 31,		As of December 31,
	2024		2023
Trade accounts payable and accrued liabilities		10,669		9,077
Government remittances		13,219		11,662
		23,888		20,739

NOTE 13: LONG-TERM DEBT

	As of March 31,			As of December 31,
	2024			2023
Building financing		1,642			—
Equipment financing		—			4,022
Total long-term debt		1,642			4,022
Less current portion of long-term debt		(151	)		(4,022	)
Non-current portion of long-term debt		1,491			—

Movement in long-term debt is as follows:

	As of March 31,			As of December 31
	2024			2023
	three-month period			twelve-month period
Balance as of January 1,		4,022			47,147
Issuance of long-term debt		1,695			—
Payments		(4,147	)		(33,233	)
Gain on extinguishment of long-term debt		—			(12,580	)
Interest on long-term debt		72			2,688
Balance as of period end		1,642			4,022

25

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 13: LONG-TERM DEBT (Continued)

a.

Building financing

During three months ended March 31, 2024, the Company sold its Garlock building in Sherbrooke, Quebec for $1,695 and immediately leased it back for 10 years. Since the lease agreement included a substantive repurchase option of the building in a form of a call option, the Company has not transferred the control of the asset to the buyer, and the transaction does not qualify as a sale. Accordingly, it is accounted for as a financing arrangement for the proceeds received from the buyer, and the building continues to be recognized as property, plant and equipment of the Company.

b.

Equipment financing activity

Repayment of NYDIG Loan

In June 2022, Backbone entered into an equipment financing agreement, referred to as the “NYDIG Loan”, for gross proceeds of $36,860 collateralized by 10,395 WhatsMiner M30S Miners. The net proceeds received by the Company were $36,123, net of origination and closing fees of $737. As part of the agreement, the Company was required to maintain in a segregated wallet an approximate quantity of BTC whose value equates to at least one month of interest and principal payments on the outstanding loan. The pledged BTC was held in a segregated Coinbase Custody account and owned by the Company unless there was an event of default under the NYDIG Loan.

During three months ended March 31, 2024, the NYDIG Loan balance was fully repaid, and the Company’s Miners collateralizing the loan and BTC pledged as collateral became unencumbered.

Repayment of Foundry Loans #2, #3 and #4

In April and May 2021, the Company entered into four loan agreements for the acquisition of 2,465 WhatsMiner Miners referred to as “Foundry Loans #1, #2, #3 and #4.” During 2022, Foundry Loan #1 matured and was fully repaid. In January 2023, the principal amounts of the remaining Foundry Loans #2, #3 and #4 were fully repaid before their maturity date with forgiveness of prepayment penalties totaling $829.

Settlement of the loan with BlockFi Lending LLC (“BlockFi”)

In February 2022, Backbone Mining entered into an equipment financing agreement for gross proceeds of $32,000 collateralized by 6,100 Bitmain S19j Pro Miners referred to as the “BlockFi Loan”. The net proceeds received by the Company were $30,994 after capitalizing origination, closing and other transaction fees of $1,006.

In December 2022, Backbone Mining ceased making installment payments, which constituted a default under the loan agreement, and the BlockFi Loan was classified as current.

On February 8, 2023, BlockFi and the Company negotiated a settlement of the loan in its entirety with a then- outstanding debt balance of $20,330 for cash consideration of $7,750, discharging Backbone Mining of all further obligations and resulting in a gain on extinguishment of long-term debt of $12,580 recognized in Net financial expenses (income) in the consolidated statements of profit or loss and comprehensive profit or loss during the three months ended March 31, 2023. Upon settlement, all of Backbone Mining’s assets, including the 6,100 Miners collateralizing the loan, were unencumbered.

26

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 14: LEASES

Set out below are the carrying amounts of the Company’s right-of-use (“ROU”) assets and lease liabilities and their activity during the three months ended March 31, 2024 and the year ended December 31, 2023:

	Leased premises			Vehicles			Other equipment			Total ROU assets			Lease liabilities
As of January 1, 2024		13,762			544			9			14,315			15,850
Additions and extensions to ROU assets		—			91			—			91			91
Depreciation		(742	)		(61	)		(5	)		(808	)		—
Lease termination		(373	)		—			—			(373	)		(518	)
Payments		—			—			—			—			(1,085	)
Interest		—			—			—			—			306
Foreign exchange		—			—			—			—			(335	)
As of March 31, 2024		12,647			574			4			13,225			14,309
Less current portion of lease liabilities														(2,126	)
Non-current portion of lease liabilities														12,183

	Leased premises			Vehicles			Other equipment			Total ROU assets			Lease liabilities
As of January 1, 2023		15,694			265			405			16,364			17,864
Additions and extensions to ROU assets		1,020			534			—			1,554			1,553
Reclass to property, plant and equipment		—			—			(364	)		(364	)		—
Depreciation		(2,952	)		(213	)		(32	)		(3,197	)		—
Lease termination		—			(42	)		—			(42	)		(23	)
Payments		—			—			—			—			(5,025	)
Gain on extinguishment of lease liabilities		—			—			—			—			(255	)
Interest		—			—			—			—			1,391
Foreign exchange		—			—			—			—			345
As of December 31, 2023		13,762			544			9			14,315			15,850
Less current portion of lease liabilities														(2,857	)
Non-current portion of lease liabilities														12,993

27

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 15: INCOME TAXES

Deferred taxes

Deferred taxes are computed at a tax rate of 26.5% based on tax rates expected to apply at the time of realization. Deferred taxes relate primarily to the timing differences on recognition of expenses relating to the depreciation of fixed assets, loss carryforwards and professional fees relating to the Company’s equity activity that are recorded as a reduction of equity.

As at March 31, 2024, the Company has analyzed the recoverability of its deferred tax assets and has concluded that it is not more likely than not that sufficient taxable profit is expected to utilize these deferred tax assets.

Current and deferred income tax (expense) recovery

	Three months ended March 31,
	2024		2023
Current tax expense:
Current year		—		(112	)
Prior year		—		—
		—		(112	)

Deferred tax recovery:
Current year		6,285		442
Prior year		—		—
		6,285		442
		6,285		330

28

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 16: SHARE CAPITAL

Common shares

The Company’s authorized share capital consists of an unlimited number of common shares without par value. As of March 31, 2024, the Company had 356,292,000 issued and outstanding common shares (December 31, 2023: 334,153,000).

i.

At-The-Market Equity Offering Program (“ATM Program”)

Bitfarms commenced an at-the-market equity offering program on March 11, 2024 (the “2024 ATM Program”), pursuant to which the Company may, at its discretion and from time-to-time, sell common shares of the Company, resulting in the Company receiving aggregate gross proceeds of up to $375,000.

During the three months ended March 31, 2024, the Company issued 16,997,000 common shares in the 2024 ATM Program in exchange for gross proceeds of $39,341 at an average share price of approximately $2.31. The Company received net proceeds of $38,107 after paying commissions of $1,180 to the sales agent for the 2024 ATM Program and $54 in other transaction costs. The Company capitalized $839 of professional fees and registration expenses to initiate the 2024 ATM Program.

During the three months ended March 31, 2023, the Company issued 15,940,000 common shares in the 2021 ATM Program in exchange for gross proceeds of $16,360 at an average share price of approximately $1.03. The Company received net proceeds of $15,764 after paying commissions of $548 to the sales agent for the 2021 ATM Program and $47 in other transaction costs.

ii.

Stock Options

During the three months ended March 31, 2024, option holders exercised stock options to acquire 31,000 common shares (three months ended March 31, 2023: 122,000) resulting in proceeds of approximately $41 (three months ended March 31, 2023: $47) being paid to the Company.

iii.

Warrants

In February 2024, 5,000,000 warrants and 111,000 broker warrants related to the 2023 private placement were exercised resulting in the issuance of 5,111,000 common shares for proceeds of approximately $5,986.

The Black Scholes model and the inputs described in Note 7 were used in determining the values of the warrants and broker warrants prior to their derecognition, which resulted in a non-cash loss on revaluation of warrants of $1,836 included in Net financial income.

29

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 17: FINANCIAL INSTRUMENTS

Measurement categories and fair value

Financial assets and financial liabilities have been classified into categories that determine their basis of measurement. The following tables show the carrying values and the fair value of assets and liabilities for each of the applicable categories:

		As of March 31,		As of December 31,
Measurement		2024		2023
Financial assets at amortized cost
Cash	Level 1		65,961		84,038
Trade receivables	Level 3		729		714
Other receivables	Level 3		1,437		689

Financial assets at fair value through profit and loss
Derivative assets	Level 2		3,016		1,281
Total carrying amount and fair value			71,143		86,722

Financial liabilities at amortized cost
Trade accounts payable and accrued liabilities	Level 3		10,669		9,077
Long-term debt	Level 2		1,642		4,022

Financial liabilities at fair value through profit and loss
Warrant liabilities	Level 2		18,576		40,426
Total carrying amount and fair value			30,887		53,525

Net carrying amount and fair value			40,256		33,197

The carrying amounts of trade receivables, other receivables, trade payables and accrued liabilities and long-term debt presented in the table above are a reasonable approximation of their fair value.

BTC option contracts

The fair value of option contracts is categorized as Level 2 in the fair value hierarchy and is presented under derivative assets and liabilities in the consolidated statements of financial position when there is an outstanding contract at period end. Their fair values are a recurring measurement. Fair value of derivative financial instruments generally reflects the estimated amounts that the Company would receive or pay, taking into consideration the counterparty credit risk or the Company’s credit risk at each reporting date. The Company uses market data such as BTC option futures to estimate the fair value of option contracts at each reporting date.

Warrant liabilities

Warrant liabilities related to the 2021 and 2023 private placements are classified as financial liabilities at fair value through profit or loss with the change in fair value recorded to Net financial income. The fair value measurement is categorized as Level 2 in the fair value hierarchy, is a recurring measurement and is calculated using a Black-Scholes pricing model at each reporting date.

Refer to Note 7 for more details.

30

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 18: TRANSACTIONS AND BALANCES WITH RELATED PARTIES

The following table details balances payable to related parties:

	As of March 31,		As of December 31,
	2024		2023
Trade payables and accrued liabilities
Directors’ remuneration		116		112
Senior management remuneration		1,614		—
Director and senior management incentive plan		46		1,567
		1,776		1,679

Amounts due to related parties are unsecured, non-interest bearing and payable on demand.

Transactions with related parties

In March 2024, the Board of Directors elected to terminate the employment agreement of the Company’s Chief Executive Officer (the “CEO”). It was planned that the CEO would depart upon completion of an executive search and would lead the Company during the interim. A termination payment under the CEO’s employment agreement totaling $1,614 is expected to be paid after the CEO’s departure. However, the final amount of the termination payment has not yet been agreed to by the Company and the CEO and may be subject to change. During the three months ended March 31, 2024, $1,614 was accrued and included in Trade payables and accrued liabilities (as of December 31, 2023: nil).

The transaction described above occurred in the normal course of operations and recognized in profit or loss under General and administrative expenses.

NOTE 19: NET LOSS PER SHARE

For the three months ended March 31, 2024 and 2023, potentially dilutive securities have not been included in the calculation of diluted loss per share because their effect is anti-dilutive. The additional potentially dilutive securities that would have been included in the calculation of diluted earnings per share, had their effect not been anti-dilutive for the three months ended March 31, 2024, would have totaled approximately 16,035,000 (three months ended March 31, 2023: 3,577,000).

31

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 20: SHARE-BASED PAYMENTS

The share-based payment expense related to stock options and restricted stock units (“RSU”) for employees, directors, consultants and former employees received was as follows:

	Three months ended March 31,
	2024		2023
Equity-settled share-based payment plans		3,094		2,536

Options

Details of the outstanding stock options are as follows:

	Three months ended March 31,
	2024					2023
	Number of Options			Weighted Average Exercise Price ($CAD)		Number of Options			Weighted Average Exercise Price ($CAD)
Outstanding, January 1,		20,939,000			2.41		21,804,000			3.47
Exercised		(31,000	)		1.85		(122,000	)		0.52
Forfeited		(105,000	)		2.95		—			—
Cancelled		—			—		(10,535,000	)		5.40
Expired		—			—		(15,000	)		2.45
Outstanding, March 31,		20,803,000			2.41		11,132,000			1.68
Exercisable, March 31,		9,911,000			1.79		2,286,000			0.48

The weighted average contractual life of the stock options as of March 31, 2024 was 3.8 years (March 31, 2023: 3.9 years).

Restricted Share Units (“RSU’’)

Details of the RSUs are as follows:

	Three months ended March 31,
	2024				2023
	Number of RSUs		Weighted Average Grant Price ($CAD)		Number of RSUs		Weighted Average Grant Price ($CAD)
Outstanding, January 1,		625,000		4.05		400,000		2.98
Granted		175,000		2.95		—		—
Outstanding, March 31,		800,000		3.81		400,000		2.98

On March 28, 2024, the Board of Directors approved the grant of 175,000 RSUs (three months ended March 31, 2023: nil) to certain members of senior management, which vest 50% after approximately one month from the grant date and an additional 25% every 6 months. The value of the RSUs on the grant date was $2.17 per RSU.

32

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 21: ADDITIONAL DETAILS TO THE STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE PROFIT OR LOSS

Cost of revenues

	Three months ended March 31,
	2024			2023
Energy and infrastructure		(21,314	)		(17,027	)
Depreciation and amortization		(38,977	)		(20,700	)
Purchases of electrical components		(387	)		(320	)
Electrician salaries and payroll taxes		(321	)		(356	)
		(60,999	)		(38,403	)

General and administrative expenses

	Three months ended March 31,
	2024			2023
Salaries and share-based payments		(9,141	)		(5,157	)
Professional services		(1,658	)		(1,878	)
Insurance, duties and other		(1,957	)		(974	)
Travel, motor vehicle and meals		(246	)		(178	)
Hosting and telecommunications		(78	)		(92	)
Advertising and promotion		(116	)		(81	)
		(13,196	)		(8,360	)

Net financial income

		Three months ended March 31,
	Notes	2024			2023 (restated - Note 3d)
Gain (loss) on revaluation of warrants			9,040			(1,221	)
Gain on derivative assets and liabilities			2,490			35
Gain on disposition of marketable securities	a		338			2,171
Gain on extinguishment of long-term debt and lease liabilities			—			12,835
Interest income			680			266
Loss on foreign exchange			(61	)		(270	)
Interest on long-term debt			(72	)		(1,251	)
Provision expense on VAT receivable	b		(65	)		(1,009	)
Interest on lease liabilities			(306	)		(369	)
Other financial expenses			(601	)		(220	)
			11,443			10,967

33

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 21: ADDITIONAL DETAILS TO THE STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE PROFIT OR LOSS (Continued)

Net financial income (Continued)

a.

Gain on disposition of marketable securities

During the three months ended March 31, 2024 and 2023, the Company funded its expansion in Argentina through the acquisition of marketable securities and the in-kind contribution of those securities to the Company’s subsidiary in Argentina. The subsequent disposition of those marketable securities in exchange for Argentine Pesos gave rise to a gain as the amount received in ARS exceeds the amount of ARS the Company would have received from a direct foreign currency exchange.

b.

Provision expense on VAT receivable

Due to the political and economic uncertainties in Argentina, the Company is uncertain when, or if at all, the Argentine VAT receivable will be settled. As a result, the Company has recorded a provision to reduce the Argentine VAT receivable to nil. The provision is classified within Net financial income during the three months ended March 31, 2024. Prior to October 1, 2023, the Argentine VAT not expected to be settled within the next 12 months was classified as a long-term receivable in Note 11 with the short-term portion included in sales tax receivable in Note 5.

NOTE 22: GEOGRAPHICAL INFORMATION

Reportable segment

The reporting segments are identified on the basis of information that is reviewed by the chief operating decision maker (“CODM”) to make decisions about resources to be allocated and to assess performance. Accordingly, for Management purposes, the Company is organized into operating segments based on the products and services of its business units and has one material reportable segment, cryptocurrency Mining, which is the operation of server farms that support the validation and verification of transactions on the BTC blockchain, earning cryptocurrency for providing these services, as described in Note 1.

Revenues

Revenues* by country are as follows:

	Three months ended March 31,
	2024		2023
Canada		32,138		23,489
Argentina		11,576		1,296
USA		4,887		3,891
Paraguay		1,716		1,374
		50,317		30,050

*Revenues are presented based on the geographical contribution of computational power used for hashing calculations (measured by hashrate) or sales to external customers. During the three months ended March 31, 2024 and 2023, the Company earned 98% and 97% of its revenues, respectively, from one Mining pool. The Company has the ability to switch Mining Pools or to mine independently at any time.

34

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BITFARMS LTD.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - unaudited)

NOTE 22: GEOGRAPHICAL INFORMATION (Continued)

Property, Plant and Equipment

The net book value of property, plant and equipment by country is as follows:

	As of March 31,		As of December 31,
	2024		2023
Canada		78,618		101,454
Argentina		50,598		54,657
USA		15,902		18,154
Paraguay		32,649		11,747
		177,767		186,012

NOTE 23: ADDITIONAL DETAILS TO THE STATEMENTS OF CASH FLOWS

	Three months ended March 31,
	2024			2023
Changes in working capital components:
(Increase) decrease in trade receivables, net		(15	)		327
Decrease (increase) in other current assets		885			(1,161	)
Increase in deposits		(1,670	)		(1,821	)
Increase in trade payables and accrued liabilities		550			97
Decrease in taxes payable		(73	)		(112	)
		(323	)		(2,670	)
Significant non-cash transactions:
Addition of ROU assets, property, plant and equipment and related lease liabilities		91			215
Purchase of property, plant and equipment financed by short-term credit		3,142			1,416
Equipment prepayments realized as additions to property, plant and equipment		26,717			4,714

NOTE 24: SUBSEQUENT EVENTS

2024 ATM Program

During the period from April 1, 2024 to May 14, 2024, the Company issued 42,155,000 common shares through the 2024 ATM Program in exchange for gross proceeds of $85,167 at an average share price of approximately $2.02. The Company received net proceeds of $82,477 after paying commissions of $2,690 to the sales agent. Refer to Note 16 for further details of the Company’s 2024 ATM program.

Canadian Sales Tax Refund

In April 2024, the Company received a positive ruling from the tax authorities that Canadian sales taxes paid by the Company will once again be refunded. Between February 5, 2022, the date on which the new tax legislation was enacted, and April 2024, the Company filed monthly sales tax claims totaling approximately $23,703 (CAD$32,000) that were not paid to the Company. The refund of sales taxes relates to sales taxes charged on various expenditures including, but not limited to electricity costs, cost of property, plant and equipment, professional services, etc.

Contingent Liability

As described in Note 18, in March 2024, as a result of the Company’s decision to terminate the CEO’s employment, a termination payment of $1,614 was accrued during the three months ended March 31, 2024 based on the terms of the CEO’s employment agreement, and classified in trade payables and accrued liabilities. On May 10, 2024, the CEO filed a Statement of Claim in the Superior Court of Ontario against the Company claiming damages for breach of contract, wrongful dismissal and aggravated and punitive damages for a total amount of $26,676. The Company believes the claims are without merit and intends to defend itself vigorously against the claims. Such matters are inherently uncertain, and there can be no guarantee that the outcome of any such matter will be decided favorably to the Company. The loss, if any, is not estimable at this time and Management does not believe the outcome of this matter will have a material adverse impact on its results of operations, cash flows and financial condition.

Yguazu Power Purchase Agreement Amendment

On May 13, 2024, the Company amended its power purchase agreement (“PPA”) for its future Yguazu facility in Paraguay to increase the contracted power from 100 MW to 200 MW beginning on January 1, 2025. The Company is required to pay security deposits totaling $16,245 between June 2024 and January 2025 for future electricity consumption. The security deposits paid to the energy supplier are refundable at the end of the contract term in December 2027 assuming the Company draws power based on the agreed upon schedule and is not in breach of other clauses in the PPA.

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Exhibit 99.2

Management’s Discussion & Analysis

For the three months ended March 31, 2024

Q1

2024

BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

TABLE OF CONTENTS

1.	Introduction	3
2.	Company Overview	4
3.	Financial Highlights	5
4.	First Quarter 2024 Financial Results and Operational Highlights	6
5.	Production and Mining Operations	7
6.	Expansion Projects	8
7.	Financial Performance	13
8.	Selected Quarterly Information	19
9.	Non-IFRS and Other Financial Measures and Ratios	20
10.	Liquidity and Capital Resources	27
11.	Financial Position	35
12.	Financial Instruments	37
13.	Related Party Transactions	37
14.	Restatement	37
15.	Internal Controls Over Financial Reporting	38
16.	Recent and Subsequent Events	39
17.	Share Capital	40
18.	Regulatory Compliance	41
19.	Risk Factors	43
20.	Significant Accounting Estimates	43
21.	Material Accounting Policy Information and New Accounting Policies	43
22.	Cautionary Note Regarding Forward-Looking Statements	43
23.	Cautionary Note Regarding Non-IFRS and Other Financial Measures and Ratios	45
24.	Additional Information	45
25.	Glossary of Terms	46

2

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BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

1. INTRODUCTION

The following Management’s Discussion and Analysis (the “MD&A”) for Bitfarms Ltd. (together with its subsidiaries, the “Company” or “Bitfarms”) has been prepared as of May 14, 2024. This MD&A should be read in conjunction with the Company’s first quarter 2024 unaudited interim condensed consolidated financial statements and its accompanying notes (the “Financial Statements”), the Company’s 2023 audited annual consolidated financial statements and its accompanying notes (the “2023 Annual Financial Statements”) and the Company’s Annual Information Form dated March 6, 2024 (the “2023 AIF”), which are available on SEDAR+ at www.sedarplus.ca and EDGAR at www.sec.gov/edgar.

The Company’s Financial Statements have been prepared in accordance with International Financial Reporting Standards (“IFRS Accounting Standards”) as issued by the International Accounting Standards Board (“IASB”), including IAS 34, Interim Financial Reporting. The Company’s Financial Statements and this MD&A are reported in thousands of US dollars and US dollars, respectively, except where otherwise noted.

Bitfarms’ management team (“Management”) is responsible for the preparation and integrity of the Financial Statements including the maintenance of appropriate information systems, procedures and internal controls. Management is also responsible for ensuring that information disclosed externally, including the Financial Statements and MD&A, is complete and reliable.

The Company utilizes a number of non-IFRS financial measures and ratios in assessing operating performance. Non-IFRS financial measures and ratios may exclude the impact of certain items and are used internally when analyzing operating performance. Refer to Section 9 - Non-IFRS and Other Financial Measures and Ratios and Section 23 - Cautionary Note Regarding Non-IFRS and Other Financial Measures and Ratios of this MD&A for more information.

This MD&A contains forward-looking statements. Refer to the risk factors described in Section 19 - Risk Factors of this MD&A and in Section 19 - Risk Factors of the Company’s MD&A for the year ended December 31, 2023, dated March 6, 2024 and to Section 22 - Cautionary Note Regarding Forward-Looking Statements of this MD&A for more information. This MD&A contains various terms related to the Company’s business and industry which are defined in Section 25 - Glossary of Terms of this MD&A.

In this MD&A, the following terms shall have the following definitions:

Term	Definition
Q1 2024	Three months ended March 31, 2024
Q1 2023	Three months ended March 31, 2023
H1 2024	Six months ended June 30, 2024
H2 2024	Six months ended December 31, 2024

3

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BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

2. COMPANY OVERVIEW

Founded in 2017, Bitfarms (Nasdaq/TSX: BITF) is a global, publicly traded Bitcoin mining company. Bitfarms runs vertically integrated mining operations with an in-house management system 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 owns and operates server farms comprised of computers (referred to as “Miners”) designed for the purpose of validating transactions on the Bitcoin Blockchain (referred to as “Mining”). Bitfarms generally operates its Miners 24 hours a day to produce computational power used for hashing calculations (measured by hashrate) that Bitfarms sells to a Mining Pool under a formula-driven rate commonly known in the industry as Full Pay Per Share (“FPPS”). Under FPPS, Mining Pools compensate Mining companies for their computational power used for hashing calculations, measured through hashrate, based on what the Mining Pool would expect to generate in revenue for a given time period if there was no randomness involved. The fee paid by a Mining Pool to Bitfarms for its computational power used for hashing calculations may be in cryptocurrency, U.S. dollars, or another currency. However, the fees are generally paid to the Company on a daily basis in bitcoin (“BTC”). Bitfarms accumulates the cryptocurrency fees it receives or exchanges them for U.S. dollars through reputable and established cryptocurrency trading platforms.

Bitfarms currently has 12 Bitcoin Mining facilities and one under development situated in four countries: Canada, the United States, Paraguay and Argentina. Powered predominately by environmentally friendly hydro-electric and long-term power contracts, Bitfarms is committed to using sustainable and often underutilized energy infrastructure.

The Company’s ability to operate and secure power through its production sites is summarized as follows:

Country	Operating power as of May 14, 2024	Contracted power as of May 14, 2024
Canada	159 MW	180 MW	^{1, 2}
United States	17 MW	21 MW	²
Paraguay	10 MW	280 MW	²
Argentina	54 MW	210 MW	²
	240 MW	691 MW

¹	The Company has secured the rights for 10 MW of hydro-electricity in the province of Quebec but does not currently have an expansion plan for those 10 MW of power. Bitfarms is continuing its efforts to search for economically viable properties for the available 10 MW of hydro-electricity.
²	Refer to section 6 - Expansion Projects for details on the timing of the remaining MW not yet operational.

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BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

3. FINANCIAL HIGHLIGHTS

	Three months ended March 31,
(U.S.$ in thousands except where indicated)	2024			2023 ⁽³⁾
Revenues		50,317			30,050
Gross loss		(10,682	)		(8,353	)
Gross margin ⁽¹⁾		(21	)%		(28	)%
Operating loss		(23,708	)		(14,997	)
Operating margin ⁽¹⁾		(47	)%		(50	)%
Net loss		(5,980	)		(3,700	)
Basic and diluted loss per share		(0.02	)		(0.02	)
Gross Mining profit ⁽²⁾		29,312			12,026
Gross Mining margin ⁽²⁾		59	%		41	%
Adjusted EBITDA ⁽²⁾		21,007			6,364
Adjusted EBITDA margin ⁽²⁾		42	%		21	%

	As of March 31,	As of December 31,
	2024	2023
Total assets	426,473	378,725
Current financial liabilities	29,396	53,525
Non-current financial liabilities	1,491	—
Long-term debt included in financial liabilities	1,642	4,022

There have not been any distributions or cash dividends declared per share for the periods disclosed above.

¹	Gross margin and Operating margin are supplemental financial ratios; refer to section 9 - Non-IFRS and Other Financial Measures and Ratios.
²	Gross Mining profit, Gross Mining margin, Adjusted EBITDA and Adjusted EBITDA margin are non-IFRS measures or ratios; refer to section 9 - Non-IFRS and Other Financial Measures and Ratios.
³	Prior year figures are derived from restated financial statements. Refer to Section 14 - Restatement.

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BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

4. FIRST QUARTER 2024 FINANCIAL RESULTS AND OPERATIONAL HIGHLIGHTS

Financial

●	Revenues of $50.3 million, gross loss of $10.7 million (gross margin¹ of negative 21%) including non-cash depreciation and amortization expense of $39.0 million, operating loss of $23.7 million (operating margin¹ of negative 47%), and net loss of $6.0 million;

●	Gross Mining profit² of $29.3 million (59% Gross Mining margin²); and

●	Adjusted EBITDA² of $21.0 million (42% Adjusted EBITDA margin²).

Operations

●	Earned 943 BTC at an average direct cost of $20,500 per BTC² or an average total cash cost of $30,300 per BTC²and held 806 BTC valued at approximately $57.5 million as of March 31, 2024; and

●	Sold 941 BTC at an average price of $52,700 per BTC for total proceeds of $49.6 million, a portion of which was used to fully repay equipment-related indebtedness and pay capital expenditures.

Expansions

●	Exercised an option to purchase for 28,000 Bitmain T21 Miners; and

●	Purchased an additional 19,280 Bitmain T21 Miners along with 3,888 Bitmain S21 Miners and 740 Bitmain S21 hydro Miners with expected deliveries in 2024.

Paraguay

●	Received and installed the main transformer of 80 MW at the Paso Pe facility;

●	Purchased land for development of the planned 100 MW Yguazu facility;

●	Signed engineering procurement and construction contract for the high-voltage interconnection to the Administración Nacional de Electricidad (“ANDE”) substation and to the transmission line for the Yguazu facility; and

●	Signed purchase agreements for long lead-time equipment for the Yguazu facility.

Canada

●	Installed the first 1,400 Bitmain T21 Miners at the Farnham, Quebec facility.

Financing

●	Commenced an at-the-market equity offering program on March 11, 2024 (“2024 ATM Program”);

●	Raised $38.1 million in net proceeds through the Company’s 2024 ATM Program;

●	Paid off in full the remaining $4.0 million of equipment-related indebtedness; and

●	Entered into a sale and leaseback agreement to monetize the value of the Garlock facility and received net proceeds of $1.7 million to be allocated towards the Company’s expansion plans.

¹	Gross margin and Operating margin are supplemental financial ratios; refer to section 9 - Non-IFRS and Other Financial Measures and Ratios.
²	Gross Mining profit, Gross Mining margin, Adjusted EBITDA, Adjusted EBITDA margin, Direct Cost per BTC and Total Cash Cost per BTC are non-IFRS measures or ratios; refer to section 9 - Non-IFRS and Other Financial Measures and Ratios.

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BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

5. PRODUCTION AND MINING OPERATIONS

Key Performance Indicators

	Three months ended March 31,
	2024		2023		% Change
Total BTC earned		943		1,297		(27	)%
Average Watts/Average TH efficiency*		35		38		(8	)%
BTC sold		941		1,267		(26	)%

*	Average Watts represents the average energy consumption of deployed Miners

Q1 2024 v. Q1 2023

●

943 BTC earned in Q1 2024, compared to 1,297 BTC earned in Q1 2023, representing a decrease of 27% as a result of an 93% increase in average network difficulty, partially offset by an increase in hashrate from the Company’s expansions and certain upgrades to its Miner fleet;

●

35 average Watts/average TH efficiency in Q1 2024, compared to 38 average Watts/average TH efficiency in Q1 2023, representing an improvement of 8% due to the Company upgrading its fleet with more efficient Miners; and

●

941 BTC sold in Q1 2024, compared to 1,267 BTC in Q1 2023. The proceeds were used in part to fund operations and repay equipment financing indebtedness.

	As of March 31,
	2024			2023			% Change
Period-end operating EH/s		6.5			4.8			35	%
Period-end operating capacity (MW)		240			188			28	%
Hydro power (MW)		186			178			4	%
Hydro power proportion of period-end operating capacity		78	%		95	%		(17	)%

As of March 31, 2024 v. as of March 31, 2023

●

6.5 EH/s online as of March 31, 2024, compared to 4.8 EH/s online as of March 31, 2023, an increase of 35%, as a result of the Company’s expansions in Rio Cuarto (Argentina) and Baie-Comeau (Quebec), as well as the upgrade of its Miner fleet;

●

240 MW operating capacity as of March 31, 2024, compared to 188 MW operating capacity as of March 31, 2023, an increase of 28%, as a result of the installation of approximately 13,400 Miners in Rio Cuarto from Q2 2023 to Q1 2024 (resulting in an additional 44 MW) and the expansion in Baie-Comeau (resulting in an additional 11 MW); and

●

186 MW hydro power as of March 31, 2024, compared to 178 MW hydro power as of March 31, 2023, an increase of 4% as a result of the Company’s expansion in Baie-Comeau and representing 78% of the Company’s total operating energy capacity at March 31, 2024.

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BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

6. EXPANSION PROJECTS

The Company has described its expansion plans below under the sections entitled “Paraguay Expansion”, “Canada Expansion”, “Washington Expansion” and “Argentina Expansion”. These expansion projects only include updates for 2024. For background or historical information on these expansions, refer to the Company’s MD&A for the year ended December 31, 2023, dated March 6, 2024 and the 2023 AIF.

As of March 31, 2024, the Company operated 6.5 EH/s, an increase of 1.7 EH/s compared to Q1 2023, with the installation of additional Miners in Baie-Comeau, Québec, and Rio Cuarto, Argentina. On April 12, 2024, the Company achieved 7.0 EH/s. Through its expansion projects and the investment in its transformative fleet upgrade, the Company is executing towards its targets of 12 EH/s and 25 w/TH by end of the second quarter of 2024 and 21 EH/s and 21w/TH by the end of 2024.

The following table summarizes the operating and targeted operating EH/s:

(Period-end operating hashrate in EH/s)	As of March 31,		As of April 30,		Target		Target
Countries	2024		2024		H1 2024		H2 2024
Canada		4.0		4.5		6.6		8.1
Argentina		1.6		1.6		1.6		2.5
Paraguay		0.3		0.3		3.1		9.5
USA		0.6		0.6		0.7		0.9
		6.5		7.0		12.0		21.0

The most recent BTC halving event occurred on April 19, 2024, and the Company continues to prudently explore further opportunities to expand its infrastructure and improve its Mining hardware to increase the Company’s hashrate and Miner efficiency.

Cautionary statements

The estimated costs and timelines to achieve these expansion plans may change based on, among other factors, the supply and cost of Bitcoin Mining equipment, the ability to import equipment into countries where it operates in a cost-effective manner, the supply of electrical and other supporting infrastructure equipment, the availability of construction materials, currency exchange rates, the impact of geopolitical events or global health related issues such as pandemics on the supply chains described above, and the Company’s ability to fund its initiatives. Adding reliable, environmentally-friendly hydro power is part of the Company’s strategy to expand cost-effectively its operating footprint. The Company’s expansion plans rely on a consistent supply of electricity at cost-effective rates; refer to Section 18 - Risk Factors (Section Economic Dependence on Regulated Terms of Service and Electricity Rates Risks) of the Company’s MD&A for the year ended December 31, 2023, dated March 6, 2024 for further details, including a description of these and other factors.

8

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BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

6. EXPANSION PROJECTS (Continued)

Transformative Fleet Upgrade

The transformative fleet upgrade solidifies the Company’s 2024 expansion strategy. Securing additional Miners is a key part of the Company’s strategy to capitalize on increasing Bitcoin prices and to drive rapid and meaningful improvements across three key operating metrics: hashrate, energy efficiency and operating costs per TH.

On November 27, 2023, the Company placed a firm purchase order for 35,888 Bitmain T21 Miners (the “Purchase Order”) totaling $95.5 million, or $14/TH, with deliveries scheduled from March 2024 to May 2024. In addition, the Company secured a purchase option for an additional 28,000 Bitmain T21 Miners (the “Purchase Option”) for an aggregate purchase price of $74.5 million, or $14/TH.

On March 11, 2024, the Company exercised the Purchase Option. The Company also purchased an additional 19,280 Bitmain T21 Miners for $14/TH, 3,888 Bitmain S21 Miners and 740 Bitmain S21 hydro Miners for $17.50/TH for an aggregate purchase price of $69.2 million (collectively defined as the “March 2024 Purchase Order”). The March 2024 Purchase Order, combined with the recent investment in Miners and expansion plan for 2024, is expected to enable the Company to reach 21 EH/s and 21w/TH in 2024 without redeploying its older Miners, which the Company intends to liquidate to help offset the cost of new Miners.

As of March 31, 2024, the Company paid $83.0 million towards these new orders with remaining payments of $156.2 million to be made in 2024. The Company commenced the 2024 ATM Program on March 11, 2024, enabling the Company to access liquidity of up to $375.0 million, with the intention to use the proceeds primarily on capital expenditures to support the Company’s growth and development. Refer to Section 10A - Liquidity and Capital Resources - Cash Flows from Financing Activities.

The following table details the status of the new Miner orders as of April 30, 2024:

Date	Order	Quantity		Type of Miners	Miners Energized		Hashrate (EH/s)¹		Remaining Miners
Q4 2023	Purchase Order		35,888	Bitmain T21		4,900		0.9		30,988
Q1 2024	Purchase Option		28,000	Bitmain T21		—		—		28,000
Q1 2024	March 2024 Purchase Order		19,280	Bitmain T21		—		—		19,280
			3,888	Bitmain S21		—		—		3,888
			740	Bitmain S21 hydro		—		—		740
			87,796			4,900		0.9		82,896

1	The hashrate is based on the Miner specifications stated in the purchase agreements and the Company’s actual realized hashrate may differ.

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BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

6. EXPANSION PROJECTS (Continued)

A.	Paraguay Expansion

Paso Pe 2024 update

In March 2024, construction of the facility progressed as planned with the reception and installation of the primary 80 MW capacity transformer and the finalization of underground cable connections.

In April 2024, approximately 600 WhatsMiner M53S Miners were installed and housed within a portion of the eight Hydro Containers. The Company also received and installed approximately 2,900 Bitmain T21 air-cooled Miners.

In May 2024, the substation was commissioned, and the Company anticipates having 70 MW operational by June 30, 2024.

The cost of developing the expanded 50 MW of air-cooled warehouse, constructing the substation capable of accommodating the total energy requirement, and the installation of the high voltage lines is estimated to range from $25.0 million to $28.0 million, excluding the cost of the power purchase agreement guarantees required by ANDE, the operator of Paraguay national electricity grid, for securing monthly electricity purchase payment obligations.

Upon completion, the Company expects Paso Pe to contribute approximately 3.2 EH/s with an expected efficiency of 24 w/TH.

Yguazu 2024 update

In January 2024, the Company purchased the land for the 100 MW Yguazu facility to provide sufficient infrastructure to achieve the 21.0 EH/s target by the end of 2024.

In February and March 2024, the Company signed purchase agreements for major long-lead equipment and significant contracts including the engineering procurement and construction contract for the high-voltage interconnection to the ANDE substation and to the transmission line to energize the new 100 MW hydro-powered project.

In April 2024, the Company started construction of the Yguazu facility and expects to complete the facility during the fourth quarter of 2024. The cost of developing the 100 MW facility and the installation of the high voltage lines is estimated to range from $34.0 million to $37.0 million, excluding the cost of the power purchase agreement guarantees required by ANDE.

On May 13, 2024, the Company amended its power purchase agreement for the Yguazu facility to increase the contracted power from 100 MW to 200 MW beginning on January 1, 2025. The Company expects to complete the build out of the infrastructure for the additional 100 MW before June 30, 2025. The cost of developing the additional 100 MW is estimated to range from $23.0 million to $25.0 million, excluding the cost of the power purchase agreement guarantees required by ANDE.

Position as of March 31, 2024

As of March 31, 2024, the Company had placed deposits of $2.7 million and $3.5 million with suppliers for construction costs and for electrical components, respectively. As of March 31, 2024, property, plant and equipment included $24.8 million related to the Paso Pe facility, including warehouse and infrastructure equipment costs.

2024 plan

The Company expects to complete construction of its Paso Pe and Yguazu facilities and install its new T21 Miners and WhatsMiner M53S Miners during 2024, which will increase the Paraguay online hashrate from 0.3 EH/s to 3.1 EH/s by June 30, 2024, and 9.5 EH/s by December 31, 2024.

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BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

6. EXPANSION PROJECTS (Continued)

B.

Canada Expansion

Canada 2024 plan

As part of the Miner upgrade and expansion initiatives, the Company expects to install new Miners at its facilities in Canada during 2024 with new T21 Miners and WhatsMiner M53S Miners, which is expected to increase the online hashrate from 4.0 EH/s to 6.6 EH/s by June 30, 2024 and 8.1 EH/s by December 31, 2024.

Canada 2024 update

In March and April 2024, the Company installed approximately 1,700 Bitmain T21 Miners and 100 WhatsMiner M53S Miners in the Farnham facility. The installation of Miners added a net 0.2 EH/s after removing older Miners.

In March 2024, the Company entered into a sale leaseback agreement for the Garlock facility and received net proceeds of $1.7 million.

In April 2024, approximately 3,200 Bitmain T21 Miners were installed in the Garlock facility, adding a net 0.3 EH/s after removing older Miners, and approximately 2,200 Bitmain T21 Miners were installed in the Bunker facility.

Baie-Comeau 2024 plan

The Company plans to commission the second 11 MW during the second half of 2024 after local grid infrastructure improvements have been completed by the third quarter of 2024. The Company expects the total cost to be approximately $9.2 million, including $3.9 million for the leasehold improvements, which will include construction of a new building and $2.5 million for the electrical infrastructure.

Baie-Comeau position as of March 31, 2024

The Company has $4.5 million of property, plant and equipment at the Baie-Comeau facility, including infrastructure equipment that was repurposed from other facilities.

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BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

6. EXPANSION PROJECTS (Continued)

C.

Washington Expansion

2024 plan

The Company expects to complete the upgrade of a portion of its current fleet of miners in Washington during Q2 2024 and Q4 2024 with new T21 Miners, which will increase the online hashrate from 0.6 EH/s to 0.7 EH/s by September 30, 2024 and 0.9 EH/s by December 31, 2024.

2024 update

In January 2024, in connection with the construction of the new 6 MW facility, the Company elected to cancel the lease of a 5 MW facility in Washington State in order to transfer Miners from the leased facility to the newly constructed facility on Company owned property. In April 2024, the cancellation of the lease was effective.

In February 2024, the power supplier established the electricity connection allowing the Company, subject to the completion of the civil work, to access the 6 MW of hydro power capacity.

The Company anticipates completing construction of the 6 MW facility by the end of the third quarter of 2024. The total cost of construction is estimated to be approximately $2.1 million, including the $0.9 million paid in 2023 to the power supplier for establishing the connection.

In March 2024, approximately 300 Bitmain T21 Miners were received at the current operating facility and installed in April 2024.

D.

Argentina Expansion

2024 plan

The Company expects to upgrade its current fleet of miners in Rio Cuarto during Q4 2024 with new T21 Miners, which is expected to increase the online hashrate from 1.6 EH/s to 2.5 EH/s by December 31, 2024.

The Company retains the option, subject to the receipt of additional government approvals, to expand the Rio Cuarto operation to the full contracted amount of 210 MW. Due to the ongoing political and economic uncertainty, the Company is not yet in a position to determine when or if construction of additional infrastructure in Argentina will commence. The Company will monitor general macroeconomic conditions and the evolution of the new government administration’s economic program in assessing its expansion plans in the country.

Position as of March 31, 2024

As of March 31, 2024, the Company had placed deposits of $3.9 million with suppliers for existing and additional construction work. Overall, in Argentina, the Company has acquired $63.6 million of property, plant and equipment, incurred $0.3 million of expenditures relating to design and feasibility studies and recorded cumulative gains on the disposition of marketable securities of $70.4 million associated with the mechanism to convert funds into Argentine Pesos for disbursements.

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BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

7. FINANCIAL PERFORMANCE

Consolidated Financial & Operational Results

	Three months ended March 31,
(U.S.$ in thousands except where indicated)	2024			2023 ⁽³⁾			$ Change			% Change
Revenues		50,317			30,050			20,267			67	%
Cost of revenues		(60,999	)		(38,403	)		(22,596	)		59	%
Gross loss		(10,682	)		(8,353	)		(2,329	)		28	%
Gross margin ⁽¹⁾		(21	)%		(28	)%		—			—

Operating expenses
General and administrative expenses		(13,196	)		(8,360	)		(4,836	)		58	%
Realized gain on disposition of digital assets		—			587			(587	)		(100	)%
Reversal of revaluation loss on digital assets		—			2,695			(2,695	)		(100	)%
Gain (loss) on disposition of property, plant and equipment		170			(1,566	)		1,736			111	%
Operating loss		(23,708	)		(14,997	)		(8,711	)		58	%
Operating margin ⁽¹⁾		(47	)%		(50	)%		—			—

Net financial income		11,443			10,967			476			4	%
Net loss before income taxes		(12,265	)		(4,030	)		(8,235	)		204	%

Income tax recovery		6,285			330			5,955			nm
Net loss		(5,980	)		(3,700	)		(2,280	)		62	%

Basic and diluted loss per share (in U.S. dollars)		(0.02	)		(0.02	)		—			—
Change in revaluation surplus - digital assets, net of tax		17,433			1,225			16,208			nm
Total comprehensive income (loss), net of tax		11,453			(2,475	)		13,928			563	%

Gross Mining profit ⁽²⁾		29,312			12,026			17,286			144	%
Gross Mining margin ⁽²⁾		59	%		41	%		—			—
EBITDA ⁽²⁾		26,410			18,024			8,386			47	%
EBITDA margin ⁽²⁾		52	%		60	%		—			—
Adjusted EBITDA ⁽²⁾		21,007			6,364			14,643			230	%
Adjusted EBITDA margin ⁽²⁾		42	%		21	%		—			—

nm: not meaningful

¹	Gross margin and Operating margin are supplemental financial ratios; refer to section 9 - Non-IFRS and Other Financial Measures and Ratios.

²	Gross Mining profit, Gross Mining margin, EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA margin are non-IFRS measures or ratios; refer to section 9 - Non-IFRS and Other Financial Measures and Ratios.

³	Prior year figures are derived from restated financial statements. Refer to Section 14 - Restatement.

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BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

7. FINANCIAL PERFORMANCE (Continued)

A.

Revenues

Q1 2024 v. Q1 2023

Revenues were $50.3 million in Q1 2024, compared to $30.1 million in Q1 2023, an increase of $20.3 million, or 67%.

The most significant factors impacting the increase in Bitfarms’ revenues in Q1 2024, compared to Q1 2023, are presented in the table below. Revenues increased mostly due to the increase in average Bitfarms’ BTC hashrate and average BTC price, partially offset by lower BTC earned as a result of the increase in network difficulty.

(U.S. $ in thousands except where indicated)	Note		BTC			$			% Change
BTC and revenues, including Volta, for the three months ended March 31, 2023				1,297			30,050			—
Impact of increase in network difficulty during Q1 2024 as compared to Q1 2023		1		(794	)		(41,651	)		(139	)%
Impact of increase in average Bitfarms’ BTC hashrate during Q1 2024 as compared to Q1 2023		2		440			23,083			77	%
Impact of difference in average BTC price in Q1 2024 as compared to Q1 2023		3					38,783			129	%
Other Mining variance and change in Volta							52			—%
BTC and revenues for the three months ended March 31, 2024				943			50,317			67	%

Notes
1	Calculated as the difference in BTC earned in Q1 2024 compared to Q1 2023, based on the change in network difficulty, multiplied by Q1 2024 average BTC price
2	Calculated as the difference in BTC earned in Q1 2024 compared to Q1 2023, based on the change in Bitfarms’ average BTC hashrate, multiplied by Q1 2024 average BTC price
3	Calculated as the difference in average BTC price in Q1 2024 compared to Q1 2023 multiplied by BTC earned in Q1 2023

The following tables summarize the Company’s revenues and average hashrate by country:

	Three months ended March 31,
(U.S.$ in thousands except where indicated)	2024		2023		$ Change		% Change
Canada		32,138		23,489		8,649		37	%
Argentina		11,576		1,296		10,280		793	%
USA		4,887		3,891		996		26	%
Paraguay		1,716		1,374		342		25	%
		50,317		30,050		20,267		67	%

	Three months ended March 31,
(Average hashrate in EH/s except where indicated)	2024		2023		Change		% Change
Canada		3.7		3.5		0.2		6	%
Argentina		1.4		0.2		1.2		600	%
USA		0.6		0.6		—		—	%
Paraguay		0.2		0.2		—		—	%
		5.9		4.5		1.4		31	%

14

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BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

7. FINANCIAL PERFORMANCE (Continued)

A.

Revenues (Continued)

Q1 2024 v. Q1 2023 (Continued)

Bitfarms earned the majority of its revenues from its Canadian operations in Q1 2024, which accounted for 64% of total revenues, compared to 78% in Q1 2023. The Company’s operations in Argentina, USA and Paraguay accounted for 23%, 10% and 3% of total revenues in Q1 2024, respectively, compared to 4%, 13% and 5% in Q1 2023, respectively.

In Q1 2024, revenues from the Company’s operations in Canada, Argentina and Paraguay increased by $8.6 million, $10.3 million and $0.3 million, respectively, compared to Q1 2023. The increases are due to the average hashrate increase of the Canada and Argentina operations of 0.2 EH/s or 6% and 1.2 EH/s or 600%, respectively and the increase in average BTC price, partially offset by the increase in network difficulty. Revenues from the USA operations increased by $1.0 million in Q1 2024 as compared to Q1 2023 due to the increase in average BTC price, partially offset by the impact of the increase in network difficulty.

B.

Cost of Revenues

	Three months ended March 31,
(U.S.$ in thousands except where indicated)	2024			2023			$ Change			% Change
Energy and infrastructure		(21,314	)		(17,027	)		(4,287	)		25	%
Depreciation and amortization		(38,977	)		(20,700	)		(18,277	)		88	%
Purchases of electrical components		(387	)		(320	)		(67	)		21	%
Electrician salaries and payroll taxes		(321	)		(356	)		35			(10	)%
		(60,999	)		(38,403	)		(22,596	)		59	%

Q1 2024 v. Q1 2023

Bitfarms’ cost of revenues for Q1 2024 was $61.0 million, compared to $38.4 million for Q1 2023. The increase in cost of revenues was mainly attributable to:

●

A $18.3 million increase in non-cash depreciation and amortization expense mainly due to accelerated depreciation of the older Miners that are expected to be replaced through the transformative fleet upgrade as the Company will progressively install new Miners in 2024. Refer to Note 9 - Property, Plant and Equipment to the Financial Statements.

●

A $4.3 million, or 25%, increase in energy and infrastructure expenses, mainly due to the Company adding new Miners, which increased energy utilization to an average of 214 MW during Q1 2024 versus 170 MW for the same period in 2023, partially offset by lower average energy rates in Q1 2024, resulting in an increase in total electricity costs of $3.2 million. The availability and pricing of energy may be negatively affected by governmental or regulatory changes in energy policies in the countries, provinces and states where the Company operates.

●

A $1.3 million assessment on Washington State Business & Occupancy tax on gross receipts covering the periods between the fourth quarter of 2021 and Q1 2024, included in energy and infrastructure expenses, during Q1 2024 compared to nil in Q1 2023.

15

Page

BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

7. FINANCIAL PERFORMANCE (Continued)

C.

General & Administrative Expenses

	Three months ended March 31,
(U.S.$ in thousands except where indicated)	2024			2023			$ Change			% Change
Salaries and share-based payments		(9,141	)		(5,157	)		(3,984	)		77	%
Professional services		(1,658	)		(1,878	)		220			(12	)%
Insurance, duties and other		(1,957	)		(974	)		(983	)		101	%
Travel, motor vehicle and meals		(246	)		(178	)		(68	)		38	%
Hosting and telecommunications		(78	)		(92	)		14			(15	)%
Advertising and promotion		(116	)		(81	)		(35	)		43	%
		(13,196	)		(8,360	)		(4,836	)		58	%

Q1 2024 v. Q1 2023

Bitfarms’ general and administrative (“G&A”) expenses were $13.2 million in Q1 2024, compared to $8.4 million for Q1 2023. The increase of $4.8 million, or 58%, in G&A expense was largely due to:

●

A $3.3 million increase in salaries and wages due to the increase in the Company’s headcount in Q1 2024 compared to Q1 2023 to support global expansion as well as merit, market-based adjustments and cost of living salary increases, and the expected Chief Executive Officer’s (“CEO”) termination payment. A termination payment under the CEO’s employment agreement totaling $1.6 million is expected to be paid after the CEO’s departure. However, the final amount of the termination payment has not yet been agreed to by the Company and the CEO and may be subject to change.

●

A $1.0 million increase in insurance, duties and other due to increases of property and liability insurance as a result of expanded infrastructure and larger number of Miners deployed as well as increases in property taxes, taxes and permits and software and licenses to support the global expansion.

16

Page

BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

7. FINANCIAL PERFORMANCE (Continued)

D.

Net financial income

	Three months ended March 31,
(U.S.$ in thousands except where indicated)	2024			2023 ⁽¹⁾			$ Change			% Change
Gain (loss) on revaluation of warrants		9,040			(1,221	)		10,261			840	%
Gain on derivative assets and liabilities		2,490			35			2,455			nm
Gain on disposition of marketable securities		338			2,171			(1,833	)		(84	)%
Gain on extinguishment of long-term debt and lease liabilities		—			12,835			(12,835	)		(100	)%
Interest income		680			266			414			156	%
Loss on foreign exchange		(61	)		(270	)		209			(77	)%
Interest on long-term debt		(72	)		(1,251	)		1,179			(94	)%
Provision expense on VAT receivable		(65	)		(1,009	)		944			(94	)%
Interest on lease liabilities		(306	)		(369	)		63			(17	)%
Other financial expenses		(601	)		(220	)		(381	)		173	%
		11,443			10,967			476			4	%

nm: not meaningful

Q1 2024 v. Q1 2023

Bitfarms’ net financial income was $11.4 million for Q1 2024, compared to $11.0 million for Q1 2023. The $0.5 million increase was primarily related to:

●

A $10.3 million change in gain (loss) on revaluation of warrants due to the decrease in the fair value of the warrant liabilities for the 2021 and 2023 private placements in Q1 2024 compared to the increase in the fair value of the warrant liabilities for the 2021 private placements in Q1 2023.

●

A $2.5 million increase in gain on derivative assets and liabilities mainly due to the unrealized change in fair value of outstanding BTC option contracts under the Synthetic HODL program of digital assets which began in October 2023. The related gain is attributable to the increase in the BTC price during Q1 2024. Refer to Section 10B - Liquidity and Capital Resources (Synthetic HODL program of digital assets) for more details.

●

A $1.2 million decrease in interest expense due to (i) the extinguishment in February 2023 of the BlockFi Loan that commenced on February 18, 2022 as described below and (ii) the NYDIG Loan that commenced on June 15, 2022 and was fully repaid in February 2024.

●

A $0.9 million decrease in provision expense on VAT receivable due to the Company writing off the Argentine VAT receivable balance to nil as a result of the political and economic uncertainties in Argentina during the fourth quarter of 2023. During Q1 2024, the Argentine VAT receivable continued to be written off to nil for the same reasons but to a lesser extent as the carrying amount of VAT receivable was already minimal in Q1 2024.

¹	Prior year figures are derived from restated financial statements. Refer to Section 14 - Restatement.

17

Page

BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

7. FINANCIAL PERFORMANCE (Continued)

D.

Net financial income (Continued)

Q1 2024 v. Q1 2023 (Continued)

The increase was partially offset by:

●

A $12.8 million gain on extinguishment of long-term debt and lease liabilities during Q1 2023. In February 2023:

◦

BlockFi and the Company negotiated a settlement of the loan in its entirety for cash consideration of $7.8 million, resulting in a gain on extinguishment of long-term debt of $12.6 million; and

◦

The Company negotiated a modification to its lease agreement with Reliz Ltd. (where BlockFi was the lender to Reliz Ltd.) in order to settle its outstanding lease liability of $0.4 million for a payment of $0.1 million. As a result, a gain on extinguishment of lease liabilities was recognized in the amount of $0.3 million.

●

A $1.8 million decrease in the gain on disposition of marketable securities due to less funds being sent to Argentina in Q1 2024 compared to Q1 2023 as the capital expenditures related to the first facility were mostly paid in 2022 and 2023. The Company has been utilizing a mechanism since Q3 2021 to fund its Argentina expansion through the acquisition of marketable securities and in-kind contribution of those securities to its wholly-owned Argentinian subsidiary that it controls. The subsequent disposition of those marketable securities in exchange for Argentine Pesos gave rise to a gain as the equivalent amount received in Argentine Pesos exceeded the amount of Argentine Pesos the Company would have received from a direct foreign currency exchange.

18

Page

BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

8. SELECTED QUARTERLY INFORMATION

Comparative figures have been restated and will be corrected in subsequently filed quarterly financial statements, refer to Section 14 - Restatement.

(U.S. $ in thousands except earnings per share)	Q1 2024			Q4 2023			Q3 2023			Q2 2023			Q1 2023			Q4 2022			Q3 2022			Q2 2022
Revenues		50,317			46,241			34,596			35,479			30,050			27,037			33,247			41,815
Net loss		(5,980	)		(57,159	)		(16,507	)		(26,670	)		(3,700	)		(13,084	)		(82,728	)		(106,395	)
Basic net loss per share		(0.02	)		(0.19	)		(0.06	)		(0.11	)		(0.02	)		(0.06	)		(0.39	)		(0.52	)
Net loss before income taxes		(12,265	)		(57,537	)		(16,106	)		(26,764	)		(4,030	)		(12,893	)		(87,453	)		(125,711	)
Interest expense and (income)		(302	)		91			368			846			1,354			3,071			3,221			4,492
Depreciation and amortization		38,977			21,790			21,767			20,528			20,700			20,777			20,720			17,857
EBITDA ⁽¹⁾		26,410			(35,656	)		6,029			(5,390	)		18,024			10,955			(63,512	)		(103,362	)
EBITDA margin ⁽¹⁾		52	%		(77	)%		17	%		(15	)%		60	%		41	%		(191	)%		(247	)%
Share-based payment		3,094			3,906			2,011			2,462			2,536			3,795			3,961			7,927
Realized (gain) loss on disposition of digital assets		—			—			—			587			(587	)		28,567			44,329			77,880
(Reversal of) revaluation loss on digital assets		—			(1,183	)		1,183			—			(2,695	)		(23,284	)		(45,655	)		70,475
Gain on extinguishment of long-term debt and lease liabilities		—			—			—			—			(12,835	)		—			—			—
Impairment (reversal) on short-term prepaid deposits, equipment and construction prepayments, property, plant and equipment and right-of-use assets		—			2,270			—			9,982			—			(8,903	)		84,116			—
Impairment on goodwill		—			—			—			—			—			—			—			17,900
(Gain) loss on revaluation of warrants		(9,040	)		37,874			(2,196	)		1,189			1,221			(3,759	)		(2,080	)		(35,523	)
Gain on disposition of marketable securities		(338	)		(999	)		(4,120	)		(4,955	)		(2,171	)		(7,317	)		(13,690	)		(19,705	)
Net financial expenses and other		881			7,722			3,696			3,846			2,871			1,761			2,809			4,134
Adjusted EBITDA ⁽¹⁾		21,007			13,934			6,603			7,721			6,364			1,815			10,278			19,726
Adjusted EBITDA margin ⁽¹⁾		42	%		30	%		19	%		22	%		21	%		7	%		31	%		47	%

Although the BTC Mining industry experiences volatility, it is not generally subject to seasonality or seasonal effects. Seasonal fluctuations in energy supply, however, may impact the Company’s operations. The majority of the Company’s operations during the above periods were in Quebec, where power was sourced directly from Hydro-Quebec, Hydro-Magog, Hydro-Sherbrooke and the City of Baie-Comeau. The Company also had operations in Washington State that were powered by the Grant County Power Utility District as well as operations in Paraguay that were powered by Compañía de Luz y Fuerza S.A (“CLYFSA”). In Q3 2022, the Company began operations in Argentina. The production facility in Argentina was temporarily connected to the power grid until the private power producer obtained the requisite permits to provide power directly to the Company in April 2023. Energy rates in Argentina increase during winter months of May through September, after which they return to their regular rates. Among other phenomena, changing weather in Quebec, Washington State, Paraguay or Argentina may impact seasonal electricity needs, and periods of extreme cold or extreme hot weather may contribute to service interruptions in cryptocurrency Mining operations. Changes to supply and/or demand of electricity may result in curtailment of electricity to the Company’s cryptocurrency Mining operations. The Company’s geographical diversification reduces the risk and extent of extreme weather and other external factors unduly affecting the Company’s overall performance.

For Q1 2024 details, refer to Section 7A - Financial Performance (Revenues); Section 10A - Liquidity and Capital Resources (Cash Flows); and Section 6 - Expansion Projects (Washington Expansion, Paraguay Expansion, Argentina Expansion and Canada Expansion) of this MD&A.

¹	EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA margin are non-IFRS measures or ratios; refer to section 9 - Non-IFRS and Other Financial Measures and Ratios.

19

Page

BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

9. NON-IFRS AND OTHER FINANCIAL MEASURES AND RATIOS

Non-IFRS financial measures

The Company utilizes a number of non-IFRS financial measures and ratios in assessing operating performance. Non-IFRS financial measures and ratios may exclude the impact of certain items and are used internally when analyzing operating performance. Refer to Section 23 - Cautionary Note Regarding Non-IFRS and Other Financial Measures and Ratios of this MD&A.

Measures	Definition	Purpose
Gross Mining profit	Gross Profit adjusted to exclude: (i) non-Mining revenues; (ii) depreciation and amortization; (iii) purchase of electrical components and other expenses; and (iv) electrician salaries and payroll taxes.	● To assess profitability after power costs in cryptocurrency production and other infrastructure costs. Power costs are the largest variable expense in Mining. ● To provide the users of the MD&A the ability to assess the gross profitability of the Company’s core digital asset Mining operations.
EBITDA	Net income (loss) adjusted to exclude: (i) interest expense; (ii) income tax expense; and (iii) depreciation and amortization.	● To assess profitability before the impact of different financing methods, income taxes, depreciation of capital assets and amortization of intangible assets. ● To provide the users of the MD&A with additional information to assist them in understanding components of its financial results, including a more complete understanding of factors and trends affecting the Company’s performance. ● Used by Management to facilitate comparisons of operating performance from period to period and to prepare annual operating budgets and forecasts.
Adjusted EBITDA	EBITDA adjusted to exclude: (i) share-based payment; (ii) non-cash finance expenses; (iii) asset impairment charges; (iv) realized gains or losses on disposition of digital assets and (reversal of) revaluation loss on digital assets; (v) gain on disposition of marketable securities, gains or losses on derivative assets and liabilities and discount expense on VAT receivable; (vi) loss (gain) on revaluation of warrants and warrant issuance costs; (vii) loss on currency exchange; and (viii) other non-recurring items that do not reflect the core performance of the Company.	● To assess profitability before the impact of all of the items in calculating EBITDA in addition to certain other non-cash expenses. ● To provide the users of the MD&A a consistent comparable metric for profitability of the Company’s core performance across time periods. ● Used by Management to facilitate comparisons of operating performance from period to period and to prepare annual operating budgets and forecasts.

20

Page

BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

9. NON-IFRS AND OTHER FINANCIAL MEASURES AND RATIOS (Continued)

Non-IFRS financial measures (Continued)

Measures

Definition

Purpose

Direct Cost

Cost of revenues adjusted to exclude: (i) depreciation and amortization; (ii) purchases of electrical components; (iii) electrician salaries and payroll taxes; (iv) infrastructure; and (v) other direct expenses.

● To assess the Company’s power costs, the largest variable expense in Mining.

● To provide the users of the MD&A a metric to evaluate the Company’s direct variable cost for its core digital asset Mining operations across time periods.

● Used by Management to assess the operating performance from period to period and to prepare annual operating budgets and forecasts.

Total Cash Cost

The sum of cost of revenues and general and administrative expenses before: (i) depreciation and amortization; (ii) purchases of electrical components; (iii) electrician salaries and payroll taxes; (iv) share-based payment; (v) other direct expenses; and (vi) other non-recurring items that do not reflect the core performance of the Company.

● To assess the total cash cost of the Company’s core digital asset Mining operations.

● To provide the users of the MD&A a consistent comparable metric for the liquidity impact of the Company’s mining activities across time periods.

● Used by Management to assess the operating performance from period to period and to prepare annual operating budgets and forecasts.

21

Page

BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

9. NON-IFRS AND OTHER FINANCIAL MEASURES AND RATIOS (Continued)

Non-IFRS financial ratios

Ratios	Definition	Purpose
Gross Mining margin	The percentage obtained when dividing Gross Mining profit by Mining related revenues.	● To assess profitability after power costs in cryptocurrency production, the largest variable expense in Mining. ● To provide the users of the MD&A the ability to assess the profitability of the Company’s core digital asset Mining operations, exclusive of depreciation and amortization and certain general and administrative expenses.
EBITDA margin	The percentage obtained when dividing EBITDA by Revenues.	● To assess profitability before the impact of different financing methods, income taxes, depreciation of capital assets and amortization of intangible assets. ● Used by Management to facilitate comparisons of operating performance from period to period and to prepare annual operating budgets and forecasts. ● Useful for providing users of the MD&A with additional information to assist them in understanding components of its financial results, including a more complete understanding of factors and trends affecting the Company’s performance.
Adjusted EBITDA margin	The percentage obtained when dividing Adjusted EBITDA by Revenues.	● To assess profitability before the impact of all of the items in calculating EBITDA in addition to certain other non-cash expenses. ● To provide a consistent comparable metric for profitability of the Company’s core performance across time periods. ● Used by Management to facilitate comparisons of operating performance from period to period and to prepare annual operating budgets and forecasts.

22

Page

BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

9. NON-IFRS AND OTHER FINANCIAL MEASURES AND RATIOS (Continued)

Non-IFRS financial ratios (Continued)

Ratios

Definition

Purpose

Direct Cost per BTC

The amount obtained when dividing Direct Cost by the quantity of BTC earned.

● To assess the Company’s power costs, the largest variable expense in Mining.

● To provide the users of the MD&A a metric to evaluate the Company’s direct variable cost for its core digital asset Mining operations across time periods.

● Used by Management to assess the operating performance from period to period and to prepare annual operating budgets and forecasts.

Total Cash Cost per BTC

The amount obtained when dividing Total Cash cost by the quantity of BTC earned.

● To assess the total cash cost of the Company’s core digital asset Mining operations.

● To provide the users of the MD&A a consistent comparable metric for the liquidity impact of the Company’s mining activities across time periods.

● Used by Management to assess the operating performance from period to period and to prepare annual operating budgets and forecasts.

Supplemental financial ratios

The Company utilizes the following supplemental financial ratios in assessing operating performance.

Ratios	Definition	Purpose
Gross margin	The percentage obtained when dividing Gross profit by Revenues.	● To assess profitability of the Company across time periods.
Operating margin	The percentage obtained when dividing Operating income (loss) by Revenues.	● To assess operational profitability of the Company across time periods.

23

Page

BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

9. NON-IFRS AND OTHER FINANCIAL MEASURES AND RATIOS (Continued)

A.

Reconciliation of Consolidated Net Income (loss) to EBITDA and Adjusted EBITDA

	Three months ended March 31,
(U.S.$ in thousands except where indicated)	2024			2023 ⁽¹⁾			$ Change			% Change
Revenues		50,317			30,050			20,267			67	%

Net loss before income taxes		(12,265	)		(4,030	)		(8,235	)		204	%
Interest expense and (income)		(302	)		1,354			(1,656	)		(122	)%
Depreciation and amortization		38,977			20,700			18,277			88	%
EBITDA		26,410			18,024			8,386			47	%
EBITDA margin		52	%		60	%		—			—
Share-based payment		3,094			2,536			558			22	%
Realized gain on disposition of digital assets		—			(587	)		587			100	%
Reversal of revaluation loss on digital assets		—			(2,695	)		2,695			100	%
Gain on extinguishment of long-term debt and lease liabilities		—			(12,835	)		12,835			100	%
(Gain) loss on revaluation of warrants		(9,040	)		1,221			(10,261	)		(840	)%
Gain on disposition of marketable securities		(338	)		(2,171	)		1,833			(84	)%
Net financial expenses and other		881			2,871			(1,990	)		(69	)%
Adjusted EBITDA		21,007			6,364			14,643			230	%
Adjusted EBITDA margin		42	%		21	%		—			—

¹	Prior year figures are derived from restated financial statements. Refer to Section 14 - Restatement.

24

Page

BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

9. NON-IFRS AND OTHER FINANCIAL MEASURES AND RATIOS (Continued)

B.	Calculation of Gross Mining Profit and Gross Mining Margin

	Three months ended March 31,
(U.S.$ in thousands except where indicated)	2024			2023			$ Change			% Change
Gross loss		(10,682	)		(8,353	)		(2,329	)		28	%
Non-Mining revenues (1)		(894	)		(842	)		(52	)		6	%
Depreciation and amortization		38,977			20,700			18,277			88	%
Purchases of electrical components		387			320			67			21	%
Electrician salaries and payroll taxes		321			356			(35	)		(10	)%
Other		1,203			(155	)		1,358			876	%
Gross Mining profit		29,312			12,026			17,286			144	%
Gross Mining margin		59	%		41	%		—			—

(1)	Non-Mining revenues reconciliation:

	Three months ended March 31,
(U.S.$ in thousands except where indicated)	2024			2023			$ Change			% Change
Revenues		50,317			30,050			20,267			67	%
Less Mining related revenues for the purpose of calculating gross Mining margin:
Mining revenues		(49,423	)		(29,208	)		(20,215	)		69	%
Non-Mining revenues		894			842			52			6	%

25

Page

BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

9. NON-IFRS AND OTHER FINANCIAL MEASURES AND RATIOS (Continued)

C.

Calculation of Direct Cost and Direct Cost per BTC

	Three months ended March 31,
(U.S.$ in thousands except where indicated)	2024			2023			$ Change			% Change
Cost of revenues		60,999			38,403			22,596			59	%
Depreciation and amortization		(38,977	)		(20,700	)		(18,277	)		88	%
Purchases of electrical components		(387	)		(320	)		(67	)		21	%
Electrician salaries and payroll taxes		(321	)		(356	)		35			(10	)%
Infrastructure		(1,974	)		(942	)		(1,032	)		110	%
Other		—			82			(82	)		(100	)%
Direct Cost		19,340			16,167			3,173			20	%
Quantity of BTC earned		943			1,297			(354	)		(27	)%
Direct Cost per BTC (in U.S. dollars)		20,500			12,500			8,000			64	%

D.

Calculation of Total Cash Cost and Total Cash Cost per BTC

	Three months ended March 31,
(U.S.$ in thousands except where indicated)	2024			2023			$ Change			% Change
Cost of revenues		60,999			38,403			22,596			59	%
General and administrative expenses		13,196			8,360			4,836			58	%
		74,195			46,763			27,432			59	%
Depreciation and amortization		(38,977	)		(20,700	)		(18,277	)		88	%
Purchases of electrical components		(387	)		(320	)		(67	)		21	%
Electrician salaries and payroll taxes		(321	)		(356	)		35			(10	)%
Share-based payment		(3,094	)		(2,536	)		(558	)		22	%
Other		(2,814	)		62			(2,876	)		nm
Total Cash Cost		28,602			22,913			5,689			25	%
Quantity of BTC earned		943			1,297			(354	)		(27	)%
Total Cash Cost per BTC (in U.S. dollars)		30,300			17,700			12,600			71	%

26

Page

BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

10. LIQUIDITY AND CAPITAL RESOURCES

As discussed below, the Company’s current financing strategy involves (a) strategically selling the BTC it earns and the BTC it holds in treasury and (b) utilizing short-term debt, long-term debt and equity instruments to fund its expansion activities, operating expenses and debt service requirements. The Company anticipates requiring additional funds to complete its growth plans discussed in Section 6 - Expansion Projects of this MD&A.

Although the Company operates through its subsidiaries, there are no material legal restrictions and generally no practical restrictions on the ability of the subsidiaries to transfer funds to the Company, except that the Company may be subject to practical limitations on transferring funds from its Argentinian subsidiary. Beginning in the second half of 2019, the Argentine government instituted certain foreign currency exchange controls that could restrict the Company’s Argentinian subsidiary’s access to foreign currency, including the US dollar, for making payments abroad or transferring funds to its parent without prior authorization from the Argentine Central Bank. These regulations have continued to evolve and may become more stringent depending on the Argentine government´s perception of the availability of sufficient national foreign currency reserves. Further, recent changes, as well as any future changes, in national and provincial leadership may result in changing governmental perceptions and actions surrounding importation policies and the availability of foreign currency reserves for commerce. In late 2023, Argentina held a presidential election, resulting in the election of a new president, for which the implications for economic and monetary policy, and its impact on Bitfarms, cannot be ascertained as of the issuance date of this MD&A.

The Company sends funds periodically to its Argentinian subsidiary to fund its expansion based on supplier invoices that are paid by the Argentinian subsidiary. The Argentinian subsidiary provides hashrate services for a market-based fee to its Canadian parent, which, in turn, purchases that hashrate to consolidate and sell to a third-party mining pool, for which the Canadian parent is compensated in BTC. Accordingly, the Argentinian subsidiary is not structured or contemplated to generate substantial cash flows above its internal requirements.

A.

Cash Flows

	Three months ended March 31,
(U.S. $ in thousands except where indicated)	2024			2023			$ Change			% Change
Cash, beginning of the period		84,038			30,887			53,151			172	%
Cash flows from (used in):
Operating activities		18,281			1,029			17,252			nm
Investing activities		(76,554	)		(3,528	)		(73,026	)		nm
Financing activities		40,136			943			39,193			nm
Exchange rate differences on currency translation		60			47			13			28	%
Cash, end of the period		65,961			29,378			36,583			125	%

nm: not meaningful

27

Page

BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

10. LIQUIDITY AND CAPITAL RESOURCES (Continued)

A.	Cash Flows (Continued)

Cash Flows from Operating Activities

Cash flows from operating activities amounted to $18.3 million during Q1 2024 compared to cash flows from operating activities of $1.0 million in Q1 2023, primarily driven by:

●

An increase in proceeds from sale of digital assets earned of $21.1 million as a result of selling BTC in Q1 2024 with significantly higher prices compared to Q1 2023; and

●

Lower interest and financial expenses paid of $2.6 million as a result of eliminating the remaining NYDIG debt balance.

The increase was partially offset by:

●

Higher cash G&A expenses of $4.2 million; and

●

Higher energy and infrastructure costs of $4.3 million as explained in Section 7B - Financial Performance - Cost of Revenues of this MD&A.

Cash Flows used in Investing Activities

Cash flows used in investing activities increased by $73.0 million during Q1 2024 compared to Q1 2023.

The increase in cash flow used in investing activities is driven primarily by:

●

$74.0 million in advance payments mainly for the transformative fleet upgrade during Q1 2024, compared to nil in advanced payments during Q1 2023; and

●

$2.9 million of net additions of property, plant and equipment (“PPE”) during Q1 2024, compared to $5.7 million for the same period in 2023, primarily due to the acquisition of Miners and infrastructure build-out.

The increase was partially offset by:

●

$0.3 million of net proceeds received in Q1 2024 from the purchase and disposition of marketable securities to fund the Argentina expansion activities, compared to $2.2 million of net proceeds for the same period in 2023, as described in Note 21 - Additional Details to the Statement of Profit or Loss and Comprehensive Profit or Loss to the Financial Statements.

28

Page

BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

10. LIQUIDITY AND CAPITAL RESOURCES (Continued)

A.	Cash Flows (Continued)

Cash Flows from Financing Activities

Cash flows from financing activities increased by $39.2 million from $0.9 million for Q1 2023 to $40.1 million for Q1 2024.

Q1 2024

●

The Company raised:

◦

$38.1 million of net proceeds from its 2024 ATM Program as discussed below, partially offset by $0.9 million of capitalized professional fees and registration expenses to initiate the 2024 ATM Program;

◦

$6.0 million of net proceeds from the exercise of stock options and warrants; and

◦

$1.7 million from the sale and leaseback of its Garlock (Quebec) facility.

●

The amounts raised were partially offset by scheduled and one-time payments relating to:

◦

Principal repayments of $4.0 million to fully repay the NYDIG loan, which matured and expired in February 2024; and

◦

Lease liabilities of approximately $0.8 million.

Q1 2023

●

The Company raised $15.8 million of net proceeds from an at-the-market equity offering program, initiated on August 16, 2021 and expired on September 12, 2023 (“2021 ATM program”), which were partially offset by repayments towards the long-term debt and lease liabilities of $13.5 million and $1.4 million, respectively.

●

The long-term debt repayments included:

◦

The settlement of the BlockFi Loan on February 8, 2023 for cash consideration of $7.8 million, as discussed below;

◦

Principal repayments of $5.3 million towards the NYDIG loan; and

◦

The full repayment of the principal amount of the remaining equipment financing (the “Foundry Loans”) before maturity and without prepayment penalty for $0.8 million.

BlockFi Loan

On February 18, 2022, Bitfarms’ subsidiary, Backbone Mining Solutions Inc. (“Backbone Mining”), entered into a $32.0 million equipment financing facility with BlockFi. On February 8, 2023, BlockFi and the Company negotiated a settlement of the loan in its entirety for cash consideration of $7.8 million, discharging Backbone Mining of all further obligations and resulting in a gain on extinguishment of long-term debt of $12.6 million. Upon settlement, all of Backbone Mining’s assets, including 6,100 Miners collateralizing the loan, became unencumbered.

29

Page

BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

10. LIQUIDITY AND CAPITAL RESOURCES (Continued)

A.	Cash Flows (Continued)

Cash Flows from Financing Activities (Continued)

At-The-Market Equity Offering Program

Bitfarms commenced the 2024 ATM Program on March 11, 2024, by means of a prospectus supplement dated March 8, 2024, to the Company’s short form base shelf prospectus dated November 10, 2023, and U.S. registration statement on Form F-10, which included a prospectus supplement related to the ATM. The Company may, at its discretion and from time-to-time, sell common shares of the Company in the ATM as would result in the Company receiving gross proceeds of up to $375.0 million.

Q1 2024 v. Q1 2023

During the three months ended March 31, 2024, the Company issued 16,997,000 common shares through the 2024 ATM Program in exchange for gross proceeds of $39.3 million at an average share price of approximately $2.31. The Company received net proceeds of $38.1 million after paying commissions of $1.2 million to the sales agent.

During the three months ended March 31, 2023, the Company issued 15,940,000 common shares through the 2021 ATM program in exchange for gross proceeds of $16.4 million at an average share price of approximately $1.03. The Company received net proceeds of $15.8 million after paying commissions of $0.5 million to the sales agent.

Use of Proceeds

The Company has used and intends to continue to use the proceeds from the 2024 ATM Program prudently to support the growth and development of the Company’s Mining operations, as described in Section 6 - Expansion Projects of this MD&A, as well as for working capital and general corporate purposes. The Company used the $38.1 million raised from the 2024 ATM Program from March 11, 2024 through March 31, 2024 for the transformative fleet upgrade.

Private placements

Q1 2024 v. Q1 2023

During the three months ended March 31, 2024, 5,000,000 warrants and 111,000 broker warrants related to the 2023 private placement were exercised, resulting in the issuance of 5,111,000 common shares for proceeds of approximately $6.0 million. During the three months ended March 31, 2023, no warrants were exercised.

30

Page

BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

10. LIQUIDITY AND CAPITAL RESOURCES (Continued)

B.

Capital Resources

Bitfarms’ capital management objective is to provide the financial resources that will enable the Company to maximize the return to its shareholders while optimizing its cost of capital and still ensuring the Company has sufficient liquidity to fund its normal operating activities. In order to achieve this objective, the Company monitors its capital structure and makes adjustments as required in light of the Company’s funding requirements, changes in economic conditions, the cost of providing financing, and the risks to which the Company is exposed. The Company’s financing strategy is to maintain a flexible capital structure that optimizes the cost of capital at an acceptable level of risk, to preserve its ability to meet financial obligations as they come due, and to ensure the Company has sufficient financial resources to fund its organic and acquisitive growth.

Based on the current capital budget and BTC prices, the Company currently anticipates that additional financing will be required to fund expansion activities in Canada and Paraguay to achieve its published hashrate targets and to complete construction of additional facilities in Argentina, if the Company elects to do so. In order to achieve its business objectives, the Company may sell or borrow against the BTC that are held in treasury as of the date hereof as well as BTC received from its ongoing operations, which may or may not be possible on commercially attractive terms. Bitfarms intends to continue to manage its capital structure by striving to reduce operating expenses and unnecessary capital spending, disposing of inefficient or underutilized assets, obtaining short-term and long-term debt financing and issuing equity.

A BTC Halving is scheduled to occur once every 210,000 blocks, or roughly every four years, until the total amount of BTC rewards issued reaches 21 million, which is expected to occur around 2140. The most recent BTC Halving occurred on April 19, 2024, at which time BTC block rewards decreased from 6.25 BTC per block to 3.125 BTC per block. Once 21 million BTC are generated on or about the year 2140, the network will stop producing more BTC, and the industry will then need to rely on transaction fees and/or other sources of revenue. While BTC prices have had a history of significant fluctuations around BTC Halving events, there is no guarantee that the price change will be favorable or would compensate for the reduction in Mining rewards and the compensation from Mining Pools.

31

Page

BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

10. LIQUIDITY AND CAPITAL RESOURCES (Continued)

B.

Capital Resources (Continued)

Digital Asset Management Program

In early January 2021, the Company implemented a digital asset management program under which it holds BTC for its intrinsic value and as a source of liquidity. The Company has internal controls over the management of its digital assets, which it evaluates and, as appropriate, enhances on a quarterly basis. On August 1 2022, Management received approval from the Board of Directors (the “BOD”) to sell daily production, in addition to any sale of up to 1,000 BTC from treasury, should market conditions justify such sales in Management’s discretion. Since January 2022, the Company has not purchased any BTC.

Presented below are the total BTC sold and proceeds in Q1 2024, a portion of which was used to fully repay equipment-related indebtedness, with the remaining portion used to fund operations and expansion plans:

	Three months ended
(U.S. $ in thousands except where indicated)	March 31, 2024
Quantity of BTC sold		941
Total proceeds		49,570

The sale of BTC as described above, while the Company continued to earn BTC, resulted in total holdings of 806 BTC as of March 31, 2024, valued at approximately $57.5 million based on a BTC price of approximately $71,300, as of March 31, 2024.

Custody of digital assets

The Company’s BTC received from the Mining Pool for its computational power used for hashing calculations is delivered to multi-signature wallets that the Company controls or directs to external third-party custodians. On a regular basis, the Company transfers BTC from its multi-signature wallets to external third-party custodians, Coinbase Custody Trust Company, LLC (“Coinbase Custody”), a subsidiary of Coinbase Global, Inc. (“Coinbase”) and Anchorage Digital Bank National Association (“Anchorage Digital”). Coinbase Custody provides custody and related services for clients’ digital assets as a fiduciary pursuant to the New York State Department of Financial Services under Section 100 of the New York Banking Law. Anchorage Digital is the only federally chartered crypto bank in the U.S., serves as a custodian for digital assets, and is licensed and regulated by the Office of the Comptroller of the Currency. Currently, Coinbase Custody and Anchorage Digital provide only custodial services to the Company and do not use a sub-custodian. Coinbase Custody and Anchorage Digital are not related parties to the Company.

The Company has internal controls in place to evaluate its custodians on a quarterly basis. The Company can transfer digital assets between custodians and has its own multi-signature wallets as a contingency plan that would have a minimal impact on the Company’s operations.

As of May 14, 2024, the Company has 844 BTC, valued at $51.9 million on its balance sheet. As of the date of this MD&A, 100% of the Company’s BTC are held in custody with Coinbase Custody and Anchorage Digital.

32

Page

BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

10. LIQUIDITY AND CAPITAL RESOURCES (Continued)

B.

Capital Resources (Continued)

Custody of digital assets (Continued)

Coinbase Custody maintains an insurance policy of $320 million for its cold storage and Anchorage Digital maintains an insurance policy of $50 million for its cold and hot storage; however, the Company cannot ensure that the full limits of those policies would be available to the Company or, if available, would be sufficient to make the Company whole for any BTC that are lost or stolen. The Company is unaware of: (i) any security breaches involving Coinbase Custody or Anchorage Digital which have resulted in the Company’s crypto assets being lost or stolen, or (ii) anything with regards to Coinbase Custody’s or Anchorage Digital’s operations that would adversely affect the Company’s ability to obtain an unqualified audit opinion on its audited financial statements. The Company’s crypto assets held in custody with Coinbase or Anchorage Digital may not be recoverable in the event of bankruptcy by Coinbase, Anchorage Digital or their affiliates. In Coinbase’s quarterly report, on Form 10-Q, filed with the U.S. Securities Exchange Commission on May 2, 2024, Coinbase disclosed that, in the event of a bankruptcy, custodially held crypto assets could be considered to be the property of the bankruptcy estate and that the crypto assets held in custody could be subject to bankruptcy proceedings with Coinbase Custody’s customers being treated as general unsecured creditors. Further, regardless of efforts made by the Company to securely store and safeguard assets, there can be no assurance that the Company’s cryptocurrency assets will not be defalcated through hacking or other forms of theft.

Hedging program of digital assets

The Company’s hedging strategy aims to reduce the risk associated with the variability of cash flows resulting from future disposals of digital assets and in consideration of the volatility and adverse price movements of the digital assets in the prior months. In March 2023, the BOD approved a hedging program and authorized Management, through a risk management committee specifically created for this purpose, to implement hedges using BTC option contracts for up to 20% of the Company’s BTC compensation per month and up to three months of future BTC compensation. In April 2023, the BOD authorized Management to increase the BTC option contracts to up to 50% of the Company’s BTC compensation per month and up to six months of expected future BTC compensation. As of May 14, 2024, the risk management committee has not engaged in hedging to the full extent approved by the BOD. The Company has a hedge in place of 100 BTC of expected future BTC compensation.

During the three months ended March 31, 2024, the Company had BTC option contracts to sell digital assets that expired which resulted in a realized loss and an unrealized gain of $0.7 million and $0.1 million, respectively, mainly related to premiums for the option contracts hedging the risk of the BTC price decreasing and protecting the Company’s margins. Refer to Note 17 to the Financial Statements for more details.

Synthetic HODL program of digital assets

Alongside the hedging program, and with the intent to manage a more capital-efficient portfolio, in June 2023, the BOD approved a HODL strategy, referred to as a Synthetic HODL strategy, which allows up to 20% of the Company’s BTC exposure to be replicated using BTC call options. In October 2023, the Company initiated its Synthetic HODL strategy with the purchase of long-dated BTC call options. The primary objective of the Synthetic HODL is to allow the Company to accumulate BTC in treasury and increase BTC exposure in a manner that is risk-managed and capital efficient. As of May 14, 2024, the Company has active call option contracts providing the right to buy up to 170 BTC. It remains within the risk management committee’s discretion to dynamically adjust Bitfarms’ hedge and Synthetic HODL ratios within the risk limits approved by the BOD to more adequately respond to market factors that are beyond the Company’s operational control. During the three months ended March 31, 2024, the Company purchased long-dated BTC call options which resulted in a realized gain and an unrealized gain of $1.1 million and $2.0 million, respectively, attributable to the increase in the BTC price during the period.

33

Page

BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

10. LIQUIDITY AND CAPITAL RESOURCES (Continued)

C.

Contractual obligations

The following are the contractual maturities of financial liabilities and gross lease liabilities (non-financial liabilities) with estimated future interest payments, as applicable, as of March 31, 2024:

(U.S. $ in thousands)	2024		2025		2026		2027		2028 and thereafter		Total
Trade accounts payable and accrued liabilities		10,669		—		—		—		—		10,669
Long-term debt		164		224		231		238		1,573		2,430
Lease liabilities		2,301		2,948		2,792		2,516		7,894		18,451
		13,134		3,172		3,023		2,754		9,467		31,550

D.

Commitments

As of March 31, 2024, the Company’s remaining payment obligations in connection with the Purchase Order, the Purchase Option and the March 2024 Purchase Order are outlined below:

	As of March 31,
(U.S. $ in thousands)	2024
Three months ending June 30, 2024		39,528
Three months ending September 30, 2024		85,889
Three months ending December 31, 2024		30,772
		156,189

If the Company is unable to meet its payment obligations, it could result in the loss of equipment prepayments and deposits paid by the Company under the Purchase Order and remedial legal measures being taken against the Company, which may result in damages payable by the Company and forced continuance of the contractual arrangement. Under such circumstances, the Company’s growth plans and ongoing operations could be adversely impacted.

E.

Contingent liability

In 2021, the Company imported Miners into Washington State that the vendor located in China claimed originated in Malaysia. In early 2022, U.S. Customs and Border Protection challenged the origination of the Miners, asserting their manufacture in China, and notified the Company of a potential assessment of a U.S. importation duty of 25%. Since the request for information by U.S. Customs and Border Protection, the Company has been working with the vendor to validate their origination outside of China by visiting contract manufacturer sites and by examining and documenting the manufacture and assembly of the Miners by the vendor and its third-party contractors.

During the third quarter of 2023, the Company submitted the supporting documentation to U.S. Customs and Border Protection in defense of its position that the Miners were manufactured outside China and the associated custom duties in the amount of $9.4 million do not apply. While the final outcome of this matter is uncertain at this time, Management has determined it is not probable that it will result in a future cash outflow for the Company, and, as such, no provision was recorded as of March 31, 2024.

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Page

BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

11. FINANCIAL POSITION

A.

Working Capital

	As of March 31,		As of December 31,
(U.S. $ in thousands)	2024		2023 ⁽¹⁾		$ Change			% Change
Total Current Assets		137,319		129,984		7,335			6	%
Total Current Liabilities		45,518		69,154		(23,636	)		(34	)%
Working Capital		91,801		60,830		30,971			51	%

With the BTC halving event that occurred on April 19, 2024, the Company continues to place importance on maintaining sufficient liquidity to manage the uncertainty and capitalize upon suitable opportunities the halving event may present. As of March 31, 2024, Bitfarms had working capital of $91.8 million, compared to $60.8 million as of December 31, 2023. The increase in working capital was mostly due to:

●

A $23.6 million increase in total digital assets resulting from the appreciation of the BTC price during Q1 2024.

●

A $21.9 million decrease in warrant liabilities due to the subsequent fair value revaluation of the warrants from the 2021 and the 2023 private placements, and the exercise of 2023 private placements warrants.

●

Scheduled capital repayments of $4.0 million to fully pay off the NYDIG loan. The effect on working capital is nil as the repayments decreased the cash balance and the loan balance by corresponding amounts.

The increases in working capital was partially offset by:

●

A $18.1 million decrease in cash, mainly used for expansion projects during Q1 2024, with the remainder intended for future payments of Miners as part of the transformative fleet upgrade and general working capital purposes.

¹

Prior year figures are derived from restated financial statements. Refer to Section 14 - Restatement.

35

Page

BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

11. FINANCIAL POSITION (Continued)

B.

Property, plant and equipment

The net book value of PPE by country is as follows:

	As of March 31,		As of December 31,
(U.S. $ in thousands)	2024		2023		$ Change			% Change
Canada		78,618		101,454		(22,836	)		(23	)%
Argentina		50,598		54,657		(4,059	)		(7	)%
USA		15,902		18,154		(2,252	)		(12	)%
Paraguay		32,649		11,747		20,902			178	%
		177,767		186,012		(8,245	)		(4	)%

As of March 31, 2024, Bitfarms had PPE of $177.8 million, compared to $186.0 million as of December 31, 2023.

●

The decrease of $8.2 million, or 4%, was primarily due to the $22.8 million decrease of PPE in Canada, mainly related to regular depreciation expense in addition to accelerated depreciation of older Miners and the classification to assets held for sale. Refer to Note 9 - Property, Plant and Equipment to the Financial statements for more details about the accelerated depreciation.

●

PPE in Argentina and the USA decreased by $4.1 million and $2.3 million, respectively, mostly due to regular depreciation expense and the accelerated depreciation of older Miners. Refer to Note 9 - Property, Plant and Equipment to the Financial Statements.

●

These decreases were partially offset by the $20.9 million increase in Paraguay PPE primarily due to approximately 600 WhatsMiner M53S and 2,900 Bitmain T21 Miners in transit and the construction of the Paso Pe warehouse and substation during Q1 2024.

C.

Intangible assets

As of March 31, 2024, Bitfarms had intangible assets of $4.5 million, compared to $3.7 million as of December 31, 2023. The $0.8 million increase is mainly due to the Washington State access right to electricity being available for use and reclassified from long-term deposits, equipment, prepayments and other to intangible assets. The increase was partially offset by the amortization of the Company’s access rights to electricity in Washington State and access rights to electricity already held in Quebec and Paraguay since 2023. The following table summarizes those access rights to electricity:

Year

Location

Additions to
intangibles ($)

Additional
capacity

Term of contractual access
rights

Amortization method and period

2024

Washington State, USA

912

6 MW

No termination date

Declining balance 4%

912

6 MW

2023

Baie-Comeau, Quebec

2,315

22 MW

No termination date

Straight-line over the lease term of the facility

2023

Paso Pe, Paraguay

1,065

50 MW

*

Ending in December 31, 2027

Straight-line over the access rights period

2023

Yguazu, Paraguay

421

100 MW

Ending in December 31, 2027

Straight-line over the access rights period

3,801

172 MW

178 MW

*

In November 2023, the Company finalized an amendment to the existing contract for an additional 20 MW of energy capacity for a total capacity of 70 MW.

Refer to Notes 5 and 14 to the 2023 Annual Financial Statements and Note 10 to the Financial Statements for more details.

36

Page

BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

12. FINANCIAL INSTRUMENTS

The Company discloses information on the classification and fair value of its financial instruments, as well as on the nature and extent of risks arising from financial instruments, and related risk management in Note 17 to the Financial Statements and Note 22 to the 2023 Annual Financial Statements. Risks are related to foreign currency, credit, counterparty, liquidity, and concentration.

13. RELATED PARTY TRANSACTIONS

The Company discloses information on its related party transactions, as defined in IAS 24, Related Party Disclosures, in Note 18 to the Financial Statements.

14. RESTATEMENT

In the Financial Statements, the Company has restated its consolidated statements of profit or loss and comprehensive profit or loss for the three months March 31, 2023 and its consolidated statements of cash flows for the three months March 31, 2023, which were previously filed on SEDAR+ and EDGAR. Subsequent to the original issuance of those financial statements, Management, with the assistance of outside counsel, conducted a review of the private placement financings which closed in 2021 (“2021 private placements”) to determine if the warrants issued should be recognized as financial liabilities and accounted for at fair value through profit and loss rather than as equity instruments.

The 2021 private placement financings were comprised of common shares and warrants. The warrants are convertible into a fixed number of common shares of the Company but have a contingent cashless exercise clause (i.e., there was a contingent variability provision). In accordance with IAS 32, Financial Instruments: Presentation, variability in the number of its own shares delivered upon exercise of the warrants would result in a financial liability.

In 2023, the Company concluded that the proper accounting classification of the warrants was as financial liabilities and accounted for at fair value through profit and loss. Although the conditional settlement provisions attached to the warrants are unlikely to occur, they are deemed to be genuine, and, accordingly, the warrants should be recognized as financial liabilities.

The Company has made adjustments to the figures reported in the previously mentioned financial statements periods and present the warrants issued in connection with the private placement financings as financial liabilities as shown in the Financial Statements.

For additional information on the financial statements restatement, please refer to Note 3d of the Financial Statements.

37

Page

BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

15. INTERNAL CONTROLS OVER FINANCIAL REPORTING

A.

Disclosure Controls and Procedures

Management, under the supervision of the Interim CEO and Chief Financial Officer (“CFO”) of the Company, has designed or caused to be designed under their supervision, disclosure controls and procedures (“DC&P”) to provide reasonable assurance that:

i) material information relating to the Company is made known to them by others, particularly during the period in which the annual filings are being prepared; and

ii) information required to be disclosed by the Company in its annual filings, interim filings or other reports filed or submitted by the Company under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation.

B.

Management’s quarterly report on internal control over financial reporting

Management, under the supervision of the Interim CEO and CFO, is also responsible for establishing and maintaining adequate internal controls over financial reporting (“ICFR”). Management, under the supervision of the Interim CEO and CFO, has designed ICFR, or caused them to be designed under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS Accounting Standards.

Identified material weaknesses

A material weakness is a deficiency, or a combination of deficiencies, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

In conjunction with the preparation of the Company’s financial statements for the year ended December 31, 2023 and specifically, in connection with the accounting for private placement warrants that were issued in the fourth quarter of 2023, Management identified an error in its accounting for previously issued warrants that were issued in connection with certain private placement financings in 2021. Management has determined that the control over accounting for complex financing transactions did not operate effectively in 2021 as the warrants issued in 2021 should have been classified as a financial liability and accounted for at fair value through profit and loss, and not as equity instruments. The restatement to correct the classification and subsequent accounting for those warrants impacted the consolidated financial statements of the company for the year ended December 31, 2022 and for the three months ended March 31, 2023, which has been reflected in the restated comparative periods (including an opening balance sheet as of January 1, 2022 and December 31, 2022, respectively) presented in the consolidated financial statements for the year ended December 31, 2023 and for the three months ended March 31, 2024, respectively.

Refer to Section 14 for more details about the material errors and related restatements. Management considers these restatements to constitute a material weakness that requires remediation, and Management is in the process of implementing remediation measures to address the material weakness.

38

Page

BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

15. INTERNAL CONTROLS OVER FINANCIAL REPORTING (Continued)

B.

Management’s quarterly report on internal control over financial reporting (Continued)

Status of remediation plan

Remediation efforts to date comprise expanding the finance team to include more Chartered Professional Accountants (CPAs) with technical expertise and experience in evaluating more complex areas of IFRS Accounting Standards, involving the Company’s legal counsel on evaluating complex agreements involving financial instruments and engaging third-party consultants to assist with assessing the accounting for complex financial instruments and review of financial statements. Management’s efforts are ongoing, and its remediation plan is expected to be completed during 2024.

If these remedial measures are insufficient to address the material weakness described above, or are not implemented timely, or additional deficiencies arise in the future, material misstatements in our interim or annual financial statements may occur in the future and could have the effects described in the “Risk Factors” section of the MD&A for the year ended December 31, 2023.

C.

Changes in internal control over financial reporting

There have been no changes in the Company’s ICFR that have materially affected, or are reasonably likely to materially affect, the Company’s ICFR during the period beginning on January 1, 2024 and ended March 31, 2024.

D.

Limitation of DC&P and ICFR

All control systems contain inherent limitations, regardless of how well designed. As a result, Management acknowledges that its internal control over financial reporting will not prevent or detect all misstatements due to error or fraud. In addition, Management’s evaluation of controls can provide only reasonable, not absolute, assurance that all control issues that may result in material misstatements, if any, have been detected.

16. RECENT AND SUBSEQUENT EVENTS

A.

2024 ATM Program

During the period from April 1, 2024 to May 14, 2024, the Company issued 42,155,000 common shares through the 2024 ATM Program in exchange for gross proceeds of $85.2 million at an average share price of approximately $2.02. The Company received net proceeds of $82.5 million after paying commissions of $2.7 million to the sales agent.

39

Page

BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

16. RECENT AND SUBSEQUENT EVENTS (Continued)

B.

Canadian Sales Tax Refund

In April 2024, the Company received a positive ruling from the tax authorities that Canadian sales taxes paid by the Company will once again be refunded. Between February 5, 2022, the date on which the new tax legislation was enacted, and April 2024, the Company filed monthly sales tax claims totaling approximately $23.7 million (CAD$32.0 million) that were not paid to the Company. The refund of sales taxes relates to sales taxes charged on various expenditures including, but not limited to electricity costs, cost of property, plant and equipment, professional services, etc.

C.

Contingent Liability

As described in Note 18 to the Financial Statements, in March 2024, as a result of the Company’s decision to terminate the CEO’s employment, a termination payment of $1.6 million was accrued during the three months ended March 31, 2024 based on the terms of the CEO’s employment agreement, and classified in trade payables and accrued liabilities. On May 10, 2024, the CEO filed a Statement of Claim in the Superior Court of Ontario against the Company claiming damages for breach of contract, wrongful dismissal and aggravated and punitive damages for a total amount of $26.7 million. The Company believes the claims are without merit and intends to defend itself vigorously against the claims. Such matters are inherently uncertain, and there can be no guarantee that the outcome of any such matter will be decided favorably to the Company. The loss, if any, is not estimable at this time and Management does not believe the outcome of this matter will have a material adverse impact on its results of operations, cash flows and financial condition.

D.

Yguazu Power Purchase Agreement Amendment

On May 13, 2024, the Company amended its power purchase agreement (“PPA”) for its future Yguazu facility in Paraguay to increase the contracted power from 100 MW to 200 MW beginning on January 1, 2025. The Company is required to pay security deposits totaling $16.2 million between June 2024 and January 2025 for future electricity consumption. The security deposits paid to the energy supplier are refundable at the end of the contract term in December 2027 assuming the Company draws power based on the agreed upon schedule and is not in breach of other clauses in the PPA.

17. SHARE CAPITAL

As of the date of this MD&A, the Company has 398,587,000 common shares outstanding, 11,992,000 vested and 8,645,000 unvested stock options, 29,873,000 warrants outstanding and 800,000 restricted stock units. There are no preferred shares or any other classes of shares outstanding.

40

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BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

18. REGULATORY COMPLIANCE

The Company has engaged legal counsel in each jurisdiction in which it maintains operations to monitor changes to the laws and regulations of such jurisdiction and to advise how it can maintain compliance with such laws and regulations. Legal counsel reports directly to the Interim CEO. The following is a discussion of regulatory compliance considerations specific to each such jurisdiction:

Argentina

The Company operates one 54 MW server farm located in Cordoba, Argentina (with an electrical infrastructure capacity of 55 MW). Refer to Section 6 - Expansion Projects - A. Argentina Expansion of this MD&A and the 2023 AIF under Section 5.2 - FUTURE GROWTH PLANS - ARGENTINA EXPANSION.

There are no material restrictions in Argentina on the business of operating a server farm or conducting the business of the Company as described herein and in the 2023 AIF, and, as of the date of this MD&A, the Company has not received any material notices or statements from regulatory authorities in Argentina that would negatively impact its operations in Argentina. The Company is not relying on any registrations, exemptions, or “no action” letters to conduct its business in Argentina.

Paraguay

The Company operates one 10 MW server farm located in Villarrica, Paraguay. Refer to Section 6 - Expansion Projects - B. Paraguay Expansion of this MD&A and the 2023 AIF under Section 5.3 - FUTURE GROWTH PLANS - PARAGUAY EXPANSION.

There are no material restrictions in Paraguay on the business of operating a server farm or conducting the business of the Company as described herein and in the 2023 AIF, and as of the date of this MD&A, the Company has not received any material notices or statements from regulatory authorities in Paraguay that would negatively impact its operations in Paraguay. The Company is not relying on any registrations, exemptions, or “no action” letters to conduct its business in Paraguay.

41

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BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

18. REGULATORY COMPLIANCE (Continued)

On April 4, 2024, Paraguay’s Senate initially proposed a 180-day blanket ban on cryptocurrency mining due to concerns over power theft and disruptions to the electricity supply. However, the Senate is reevaluating its position regarding the proposed ban. Senators are now exploring the possibility of leveraging Paraguay’s excess energy from the Itaipu hydropower plant to power Bitcoin mining operations, arguing that selling excess energy to Bitcoin miners could unlock substantial revenue streams and bolster Paraguay’s economy. The Paraguayan Senate held a public hearing on April 23, 2024 to debate the merits and drawbacks of Bitcoin mining in the country. Lawmakers acknowledged the issues caused by illegal mining operations disrupting the power supply, but also recognized the potential economic benefits of embracing licensed mining. The public hearing appears to have shifted Paraguay’s stance towards exploring ways to regulate and monetize the industry through the use of the country’s abundant hydroelectric resources.

Washington State

The Company operates one 17 MW server farm located in the State of Washington in the United States. Refer to Section 6 - Expansion Projects - C. Washington Expansion of this MD&A and the 2023 AIF under the Section 5.4 - FUTURE GROWTH PLANS - WASHINGTON EXPANSION.

There are no material restrictions in Washington on the business of operating a server farm or conducting the business of the Company as described herein and in the 2023 AIF, and as of the date of this MD&A, the Company has not received any material notices or statements from regulatory authorities in Washington that would negatively impact its operations in Washington. The Company is not relying on any registrations, exemptions, or “no action” letters to conduct its business in Washington.

Québec

The Company operates a total of eight server farms with an aggregate power capacity of 159 MW located in the Province of Québec, Canada. Refer to Section 6 - Expansion Projects - D. Canada Expansion of this MD&A and the 2023 AIF under the Section 5.5 - FUTURE GROWTH PLANS - CANADA EXPANSION.

There are no material restrictions in Québec or Canada on the business of operating a server farm or conducting the business of the Company as described herein and in the 2023 AIF, and as of the date of this MD&A, the Company has not received any material notices or statements from regulatory authorities in the Québec or Canada that would negatively impact its operations in Québec or Canada. The Company is not relying on any registrations, exemptions, or “no action” letters to conduct its business in Québec or Canada.

42

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BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

19. RISK FACTORS

The Company is subject to a number of risks and uncertainties and is affected by several factors that could have a material adverse effect on the Company’s business, financial condition, operating results, and/or future prospects. These risks should be considered when evaluating an investment in the Company and may, among other things, cause a decline in the price of the Corporation’s shares.

The risks and uncertainties that Management considers as the most material to the Company’s business are described in the section entitled Risk Factors of the Company’s MD&A for the year ended December 31, 2023, dated March 6, 2024. These risks and uncertainties have not materially changed during the three months ended March 31, 2024.

20. SIGNIFICANT ACCOUNTING ESTIMATES

The Company’s significant accounting judgments, estimates and assumptions are summarized in Note 4 to the 2023 Annual Financial Statements.

21. MATERIAL ACCOUNTING POLICY INFORMATION AND NEW ACCOUNTING POLICIES

Refer to Note 3 to the 2023 Annual Financial Statements and Note 3 to the Financial Statements for more information regarding the Company’s material accounting policy information and new accounting policies.

22. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This MD&A contains forward-looking statements about the Company’s objectives, plans, goals, aspirations, strategies, financial condition, results of operations, cash flows, performance, prospects, opportunities and legal and regulatory matters. Specific forward-looking statements in this MD&A include, but are not limited to, statements with respect to the Company’s anticipated future results, events and plans, strategic initiatives, future liquidity, and planned capital investments. Forward-looking statements are typically identified by words such as “expect”, “anticipate”, “believe”, “foresee”, “could”, “estimate”, “goal”, “intend”, “plan”, “seek”, “strive”, “will”, “may”, “maintain”, “achieve”, “grow”, “should” and similar expressions, as they relate to the Company and its Management.

Forward-looking statements reflect the Company’s current estimates, beliefs and assumptions, which are based on management’s perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. The Company’s expectation of operating and financial performance is based on certain assumptions including assumptions about operational growth, anticipated cost savings, operating efficiencies, anticipated benefits from strategic initiatives, future liquidity, and planned capital investments. The Company’s estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and as such, are subject to change. The Company can give no assurance that such estimates, beliefs and assumptions will prove to be correct.

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BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

22. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS (Continued)

Numerous risks and uncertainties could cause the Company’s actual results to differ materially from those expressed, implied or projected in the forward-looking statements. Such risks and uncertainties include:

●

Bitcoin Halving event;

●

insolvency, bankruptcy, or cessation of operations of mining pool operator;

●

reliance on foreign mining pool operator;

●

counterparty risk;

●

emerging markets operating risks;

●

reliance on manufacturing in foreign countries and the importation of equipment to the jurisdictions in which the company operates;

●

dependency on continued growth in blockchain and cryptocurrency usage;

●

the availability of financing opportunities and risks associated with economic conditions, including BTC price, Bitcoin network difficulty and share price fluctuations;

●

global financial conditions;

●

employee retention and growth;

●

cybersecurity threats and hacking;

●

limited operating history and limited history of de-centralized financial system;

●

risk related to technological obsolescence and difficulty in obtaining hardware;

●

economic dependence on regulated terms of service and electricity rates;

●

costs and demands upon Management and accounting and finance resources as a result of complying with the laws and regulations affecting public companies;

●

expense and impact of restatement of the Company’s historical financial statements;

●

lack of comprehensive accounting guidance for cryptocurrencies under IFRS Accounting Standards;

●

internal control material weakness;

●

increases in commodity prices or reductions in the availability of such commodities could adversely impact the Company’s results of operations;

●

permits and licenses;

●

server or internet failures;

●

tax consequences;

●

environmental regulations and liability;

●

adoption of environmental, social, and governance practices and the impacts of climate change;

●

erroneous transactions and human error;

●

facility developments;

●

non-availability of insurance;

●

competition;

●

hazards associated with high-voltage electricity transmission and industrial operations;

●

corruption, political and regulatory risk;

●

potential being classified as a passive foreign investment company;

●

lawsuits and other legal proceedings and challenges;

●

conflict of interests with directors and management; and

●

other factors beyond the Company’s control.

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BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

22. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS (Continued)

The above is not an exhaustive list of the factors that may affect the Company’s forward-looking statements. For a more comprehensive discussion of factors that could affect the Company, refer to the risk factors discussed above and those contained in the “Risk Factors” of the 2023 AIF. Other risks and uncertainties not presently known to the Company or that the Company presently believes are not material could also cause actual results or events to differ materially from those expressed, implied or projected in its forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect the Company’s expectations only as of the date of this MD&A. Except as required by law, the Company does not undertake to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

23. CAUTIONARY NOTE REGARDING NON-IFRS AND OTHER FINANCIAL MEASURES AND RATIOS

This MD&A makes reference to certain measures that are not recognized under IFRS and do not have a standardized meaning prescribed by IFRS. They are therefore unlikely to be comparable to similar measures presented by other companies. The Company uses non-IFRS and other financial measures and ratios including “EBITDA,” “EBITDA margin,” “Adjusted EBITDA,” “Adjusted EBITDA margin,” “Gross Mining profit,” “Gross Mining margin,” “Gross margin”, “Operating margin”, “Direct Cost”, “Direct Cost per BTC”, “Total Cash Cost” and “Total Cash Cost per BTC” as additional information to complement IFRS measures by providing further understanding of the Company’s results of operations from Management’s perspective. Refer to Section 9 - Non-IFRS and Other Financial Measures and Ratios of the MD&A for more details.

These measures are provided as additional information to complement IFRS measures by providing further understanding of the Company’s results of operations from Management’s perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS. Reconciliations from IFRS measures to non-IFRS measures are included throughout this MD&A.

24. ADDITIONAL INFORMATION

Additional information and other publicly filed documents relating to the Company, including the Company’s 2023 AIF, are available through the internet on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov/edgar.

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BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

25. GLOSSARY OF TERMS

Terms	Definition
ASIC	ASIC stands for Application Specific Integrated Circuit and refers primarily to specific computer devices designed to solve the SHA-256 algorithm.
Bitcoin (BTC)	BTC is a decentralized digital currency that is not controlled by any centralized authority (e.g., a government, financial institution or regulatory organization) that can be sent from user to user on the Bitcoin network without the need for intermediaries to clear transactions. Transactions are verified through the process of Mining and recorded in a public ledger known as the Blockchain. BTC is created when the Bitcoin network issues Block Rewards through the Mining process.
Block Reward	A Bitcoin block reward refers to the new BTC that are awarded by the Blockchain network to eligible cryptocurrency Miners for each block they successfully mine. The current block reward is 3.125 BTC per block.
Blockchain	A Blockchain is a cloud-based public ledger that exists on computers that participate on the network globally. The Blockchain grows as new sets of data, or ‘blocks’, are added to it through Mining. Each block contains a timestamp and a link to the previous block, such that the series of blocks form a continuous chain. Given that each block has a separate hash and each hash requires information from the previous block, altering information an established block would require recalculating all the hashes on the Blockchain which would require an enormous and impracticable amount of computing power. As a result, once a block is added to the Blockchain it is very difficult to edit and impossible to delete.
Exahash or EH/s	One quintillion (1,000,000,000,000,000,000) hashes or one million Terahash per second.
Hash	A hash is a function that converts or maps an input of letters and numbers into an encrypted output of a fixed length, which outputs are often referred to as hashes. A hash is created using an algorithm. The algorithm used in the validation of Bitcoin transactions is the SHA-256 algorithm.
Hashrate	Hashrate refers to the number of hash operations performed per second and is a measure of computing power in Mining cryptocurrency.
Megawatt	A megawatt is 1,000 kilowatts of electricity and, in the industry of cryptocurrency Mining, is typically a reference to the number of megawatts of electricity per hour that is available for use.
Miners	ASICs used by the Company to perform Mining.
Mining	Mining refers to the process of using specialized computer hardware, and in the case of the Company, ASICs, to perform mathematical calculations to confirm transactions and increase security for the BTC Blockchain. As a reward for their services, Bitcoin Miners collect transaction fees for the transactions they confirm, along with newly created BTC as Block Rewards.
Mining Pool	A Mining pool is a group of cryptocurrency Miners who pool their computational resources, or hashrate, in order to increase the probability of finding a block on the BTC Blockchain. Mining pools administer regular payouts to mitigate the risk of Miners operating for a prolonged period of time without finding a block.

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BITFARMS LTD.

Management’s Discussion & Analysis

(In U.S. dollars, except where otherwise indicated)

25. GLOSSARY OF TERMS (Continued)

Terms	Definition
Network Difficulty	Network difficulty is a unitless measure of how difficult it is to find a hash below a given target. The Bitcoin network protocol automatically adjusts Network Difficulty by changing the target every 2,016 blocks hashed based on the time it took for the total computing power used in Bitcoin Mining to solve the previous 2,016 blocks such that the average time to solve each block is ten minutes.
Network Hashrate	Network hashrate refers to the total global hashrate (and related computing power) used in Mining for a given cryptocurrency.
Petahash or PH/s	One quadrillion (1,000,000,000,000,000) hashes or one thousand Terahash per second.
SHA-256	SHA stands for Secure Hash Algorithm. The SHA-256 algorithm was designed by the US National Security Agency and is the cryptographic hash function used within the Bitcoin network to validate transactions on the Bitcoin Blockchain.
Synthetic HODL	Synthetic HODL is the Company’s use of financial instruments to create BTC-equivalent exposure.
Terahash or TH/s	One trillion (1,000,000,000,000) hashes or one Terahash per second.

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Exhibit 99.3

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, Nicolas Bonta, Interim Chief Executive Officer of Bitfarms Ltd., certify the following

1.

Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Bitfarms Ltd. (the “issuer”) for the interim period ended March 31, 2024.

2.

No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a 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 was made, with respect to the period covered by the interim filings.

3.

Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4.

Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5.

Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings:

(a)

designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that:

(i)

material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii)

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

(b)

designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1

Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

5.2

ICFR - material weakness relating to design: The issuer has disclosed in its interim MD&A for each material weakness relating to design existing at the end of the interim period:

(a)

a description of the material weakness;

(b)

the impact of the material weakness on the issuer’s financial reporting and its ICFR; and

(c)

the issuer’s current plans, if any, or any actions already undertaken, for remediating the material weakness.

5.3

Limitation on scope of design: N/A

6.

Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1, 2024 and ended on March 31, 2024 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: May 15, 2024

(signed) “Nicolas Bonta”
Nicolas Bonta
Interim Chief Executive Officer

Exhibit 99.4

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, Jeffrey Lucas, Chief Financial Officer of Bitfarms Ltd., certify the following:

1.

Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Bitfarms Ltd. (the “issuer”) for the interim period ended March 31, 2024.

2.

No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a 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 was made, with respect to the period covered by the interim filings.

3.

Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4.

Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5.

Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings:

(a)

designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that:

(i)

material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii)

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

(b)

designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1

Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

5.2

ICFR - material weakness relating to design: The issuer has disclosed in its interim MD&A for each material weakness relating to design existing at the end of the interim period:

(a)

a description of the material weakness;

(b)

the impact of the material weakness on the issuer’s financial reporting and its ICFR; and

(c)

the issuer’s current plans, if any, or any actions already undertaken, for remediating the material weakness.

5.3

Limitation on scope of design: N/A

6.

Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1, 2024 and ended on March 31, 2024 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: May 15, 2024

(signed) “Jeffrey Lucas”
Jeffrey Lucas
Chief Financial Officer

Exhibit 99.5

FORM 51-102F3
MATERIAL CHANGE REPORT

Item 1 Name and Address of Company

Bitfarms Ltd. (“Bitfarms” or the “Company”) 110 Yonge

Street, Suite 1601

Toronto, Ontario M5C 1T4

Item 2 Date of Material Change

May 15, 2024.

Item 3 News Release

The press release attached as Schedule “A” was released on May 15, 2024 by a newswire company in Canada.

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

Nicolas Bonta

Chairman

Bitfarms Ltd.

nbonta@bitfarms.com

Item 9 Date of Report

May 15, 2024.

1

Bitfarms Reports First Quarter 2024 Results

- Revenue of $50 million, up 9% Q/Q and 67% Y/Y -

- Gross mining margin of 59%, up from 52% in Q4 2023 & 41% in Q1 2023 -

- Secured additional 24,000 miners in March, increasing total delivery to 88,000 in 2024 -

- Current hashrate of 7.0 EH/s, up from 6.5 EH/s at year end -

- On track to achieve guidance of 21 EH/s and 21 w/TH in 2024 -

This news release constitutes a “designated news release” for the purposes of the Company’s prospectus supplement dated March 8, 2024, to its short form base shelf prospectus dated November 10, 2023.

Toronto, Ontario and Brossard, Québec (May 15, 2024) - Bitfarms Ltd. (Nasdaq/TSX: BITF), a global Bitcoin vertically integrated company, reported its financial results for the first quarter ended March 31, 2024. All financial references are in U.S. dollars.

Executing the expansion and transformative fleet upgrade, Bitfarms has realized notable efficiency gains and is progressing toward 2024 guidance of 21 EH/s and 21 w/TH, representing a 223% hashrate increase and 40% efficiency improvement. This would be the strongest growth and efficiency gains in both the Company’s history and among publicly-traded Bitcoin mining peers this year.

In addition, the Company recently doubled its contracted power capacity at its Yguazu site, in Paraguay, from 100 MW to 200 MW of stable, low-cost, sustainable hydropower. This will increase Bitfarms total megawatts under management by 23%, from 428 MW at year-end 2024 to 528 MW in 2025, and will provide significant capacity for growth.

“These strategic actions position us well to drive significant organic growth and capture a greater share of the global demand for Bitcoin,” said Ben Gagnon, Bitfarms Chief Mining Officer. “Our growth is gaining momentum. We are currently at 7 EH/s and on track to achieve 12 EH/s and 25 w/TH in Q2 2024. Our miner upgrades have improved overall fleet efficiency from 35 w/TH to 31 w/TH, including the 51% combined efficiency improvement at our Garlock and Farnham facilities in Quebec. Ongoing miner installations are expected to contribute to progressively lower corporate w/TH and dramatically lower production costs, which would make Bitfarms one of the most efficient Bitcoin miners by year-end 2024.”

In April, Bitfarms received confirmation from the Canadian tax authorities that $24 million in previously paid value added taxes (VAT) will be refunded as will future payments. With the recoverability of the VAT, the average direct cost of production per BTC would have been reduced by $2,100 in Q1 2024.

Jeff Lucas, Bitfarms CFO, said, “This cash infusion further enhances our financial flexibility. Combined with our robust balance sheet and our capital efficient strategy, we are well positioned to fund our 2024 growth initiatives. Most notably, we have sufficient liquidity to pay for all of the miners needed to reach 21 EH/s.”

Q1 2024 & Recent Operating Highlights

●

Operations

●

Current hashrate of 7.0 EH/s, up from 6.5 EH/s in Q1 2024.

●

Averaged 10.4 BTC per day in daily production for Q1 2024.

2

●

Fleet Upgrade & Farm Expansions

	●	Exercised purchase option for 28,000 Bitmain T21 miners and secured an additional 19,280 Bitmain T21 miners, 3,888 Bitmain S21 miners and 740 Bitmain S21 hydro miners in March, all of which are slated for delivery and deployment in H2 2024.
	●	Energized the first tranche of Bitmain T21 miners at two farms in Québec and began installations at Paso Pe, Paraguay in April.
	●	Upgraded Farnham and Garlock miners in April, resulting in a combined 51% improvement in energy efficiency at these locations and a 9% corporate efficiency improvement.
	●	Purchased land in Yguazu in January and began construction on the 100MW facility site.

Q1 2024 Financial Highlights

	●	Total revenue of $50 million, up 9% compared to $46 million in Q4 2023.
	●	Gross mining profit* and gross mining margin* of $29 million and 59%, respectively, up from $23 million and 52% in Q4 2023, respectively.
	●	General and administrative expenses of $13 million, down 2% from Q4 2023.
	●	Operating loss of $24 million, which included a $19 million accelerated depreciation on older miners, compared to an operating loss of $13 million in Q4 2023, which included a $1 million non-cash reversal of revaluation loss on digital assets and $2 million in non-cash impairment charges.
	●	Net loss of $6 million, or $(0.02) per basic and diluted share which included a $9 million non-cash gain for revaluation of warrant liability in connection with 2021 and 2023 financing activities. This compares to a net loss of $57 million, or $(0.19) per basic and diluted share in Q4 2023, which included a $38 million non-cash expense for revaluation of warrant liability.
	●	Adjusted EBITDA* of $21 million, or 42% of revenue, up from $14 million, or 30% of revenue, in Q4 2023, with the increase driven largely by higher average BTC price.
	●	The Company earned 943 BTC at an average direct cost of production per BTC* of $20,500, compared to $16,200 in Q4 2023.
	●	Total cash cost of production per BTC* was $30,300 in Q1 2024, up from $25,200 in Q4 2023 due to less quantity of BTC earned.

Liquidity**

As of March 31, 2024, the Company had total liquidity** of $124 million, comprised of $66 million in cash and 806 BTC valued at $58 million based on a BTC price of $71,400 at March 31, 2024.

Q1 2024 and Recent Financing Activities

●

Sold 941 BTC at an average price of $52,700 for total proceeds of $50 million in Q1 2024 and sold 245 of the 269 BTC earned during April 2024, generating total proceeds of $16 million. A portion of the funds was used to fully repay equipment-related indebtedness and pay capital expenditures.

3

	●	Added 24 BTC to treasury in April 2024 for a total of 830 BTC held in treasury, representing a total value of $51 million based on a $61,300 BTC price on April 30, 2024.
	●	Commenced a new at-the-market (ATM) equity offering program on March 11, 2024, raising net proceeds of $38 million during Q1 2024 and $121 million through May 14, 2024.
	●	Paid off remaining equipment-related indebtedness in February.
	●	Entered into sale & leaseback agreement to monetize the value of the Garlock facility and received net proceeds of $2 million to be allocated towards expansion plans.
	●	Received confirmation from the Canadian tax authorities, in April 2024, that $24 million in previously paid VAT will be refunded.

Quarterly Operating Performance

	Q1 2024	Q4 2023	Q1 2023
Total BTC earned	943	1,236	1,297
Average Watts/Average TH efficiency***	35	35	38
BTC sold	941	1,135	1,267

	As of March 31,	As of December 31,	As of March 31,
	2024	2023	2023
Operating EH/s	6.5	6.5	4.8
Operating capacity (MW)	240	240	188
Hydropower (MW)	186	186	178

Quarterly Average Revenue**** and Cost of Production per BTC*

	Q1 2024	Q4 2023	Q3 2023	Q2 2023	Q1 2023
Avg. Rev****/BTC	$52,400	$36,400	$28,100	$28,000	$22,500
Direct Cost*/BTC	$20,500	$16,200	$16,900	$15,700	$12,500
Total Cash Cost*/BTC	$30,300	$25,200	$22,700	$21,800	$17,700

*	Gross mining profit, gross mining margin, EBITDA, EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin, Direct Cost per BTC and Total Cash Cost per BTC are non-IFRS financial measures or ratios and should be read in conjunction with, and should not be viewed as alternatives to or replacements of measures of operating results and liquidity presented in accordance with IFRS. Readers are referred to the reconciliations of non-IFRS measures included in the Company’s MD&A and at the end of this press release.
**	Liquidity represents cash and balance of digital assets.
***	Average watts represents the energy consumption of miners.
****	Average revenue per BTC is for mining operations only and excludes Volta revenue.

4

Conference Call

Management will host a conference call today at 8:00 am EST. A presentation of the Q1 2024 results will be accessible before the call on the Investor website and can be accessed here.

Participants may join by calling: 1-877-545-0523 (domestic), or 1-973-528-0016 (international), and should do so 10 minutes prior to the start time. Participants will be greeted by an operator and asked for the access code, which is 878603. If you do not have the code, then you may reference the Bitfarms’ Q1 2024 results conference call.

The conference call will also be available through a live webcast found here.

A webcast replay will be available and can be accessed in the Events section of our Investor website. An audio replay will be available through June 3, 2024, and can be accessed at 1-877-481-4010 (domestic), or 1-919-882-2331 (international), using access code 50495.

Upcoming Conferences & Events

●

May 15: Digital Blockchain Summit, Washington DC

●

May 22-23: B Riley Securities 24th Annual Institutional Investor Conference, Beverly Hills, CA

●

June 25: Northland Capital Markets Growth Conference, Virtual

Non-IFRS Measures*

As a Canadian company, Bitfarms follows International Financial Reporting Standards (IFRS) which are issued by the International Accounting Standard Board (IASB). Under IFRS rules, the Company does not reflect the revaluation gains on the mark-to-market of its Bitcoin holdings in its income statement. It also does not include the revaluation losses on the mark-to-market of its Bitcoin holdings in Adjusted EBITDA, which is a measure of the cash profitability of its operations and does not reflect the change in value of its assets and liabilities.

The Company uses Adjusted EBITDA to measure its operating activities' financial performance and cash generating capability.

2023 Restatement

During the preparation of the Company's financial statements for the year ended December 31, 2023, the Company reassessed the application of IFRS Accounting Standards on the accounting for warrants issued in connection with private placement financings conducted in 2021 and, as such, restated (the “Restatement”) its consolidated statements of financial position as of December 31, 2022 and January 1, 2022, its consolidated statements of profit or loss and comprehensive profit or loss for the year ended December 31, 2022 and the three months ended March 31, 2023 and its consolidated statements of cash flows for the year ended December 31, 2022 and the three months ended March 31, 2023, which were previously filed on SEDAR+ and EDGAR. For further details, consult Note 3e of the audited consolidated financial statements for the year ended December 31, 2023, and Note 3d of the interim condensed consolidated financial statements for the three months ended March 31, 2024, available on SEDAR+ and EDGAR. As described in the interim MD&A for three months ended March 31, 2024, available on SEDAR+ and EDGAR, the Company is undertaking remediation efforts in light of the Restatement and in order to improve the overall effectiveness of its internal control over financial reporting for the accounting of complex financial instruments.

5

About Bitfarms Ltd.

Founded in 2017, Bitfarms is a global Bitcoin mining company that contributes its computational power to one or more mining pools from which it receives payment in Bitcoin. Bitfarms develops, owns, and operates vertically integrated mining farms with in-house management and company-owned electrical engineering, installation service, and multiple onsite technical repair centers. The Company’s proprietary data analytics system delivers best-in-class operational performance and uptime.

Bitfarms currently has 12 Bitcoin mining facilities and one under development situated in four countries: Canada, the United States, Paraguay, and Argentina. Powered predominantly by environmentally friendly hydro-electric and long-term power contracts, Bitfarms is committed to using sustainable and often underutilized energy infrastructure.

To learn more about Bitfarms’ events, developments, and online communities:

www.bitfarms.com

https://www.facebook.com/bitfarms/
https://twitter.com/Bitfarms_io
https://www.instagram.com/bitfarms/
https://www.linkedin.com/company/bitfarms/

Glossary of Terms

	●	BTC BTC/day = Bitcoin or Bitcoin per day
	●	EH or EH/s = Exahash or exahash per second
	●	MW or MWh = Megawatts or megawatt hour
	●	w/TH = Watts/Terahash efficiency (includes cost of powering supplementary equipment)
	●	Synthetic HODL™ = the use of instruments that create Bitcoin equivalent exposure

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 projected growth, target hashrate, opportunities relating to the Company’s geographical diversification and expansion, upgrading and deployment of miners as well as the timing therefor, improved financial performance and balance sheet liquidity, other growth opportunities and prospects, and other statements regarding future growth, plans and objectives of the Company are forward-looking information. 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”, “prospects”, “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.

6

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: the construction and operation of the Company’s facilities may not occur as currently planned, or at all; expansion may not materialize as currently anticipated, or at all; the power purchase agreements and economics thereof may not be as advantageous as expected; 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 potential adverse impact on the Company’s profitability; the ability to complete current and future financings; the impact of the Restatement on the price of the Company’s common shares, financial condition and results of operations; the risk that a material weakness in internal control over financial reporting could result in a misstatement of the Company’s financial position that may lead to a material misstatement of the annual or interim consolidated financial statements if not prevented or detected on a timely basis; historical prices of digital currencies and the ability to mine digital currencies that will be consistent with historical prices; 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.sedarplus.ca (which are also available on the website of the U.S. Securities and Exchange Commission at www.sec.gov), including the MD&A for the year-ended December 31, 2023, filed on March 7, 2024 and the MD&A for three-month period ended March 31, 2024 filed on May 15, 2024. 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, including factors that are currently unknown to or deemed immaterial by the Company. 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.

Investor Relations Contact:

Tracy Krumme

SVP, Investor Relations

+1 786-671-5638

tkrumme@bitfarms.com

Media Contacts:

Actual Agency

Khushboo Chaudhary

+1 646-373-9946

mediarelations@bitfarms.com

Québec Media: Tact

Louis-Martin Leclerc

+1 418-693-2425

lmleclerc@tactconseil.ca

7

Bitfarms Ltd. Consolidated Financial & Operational Results

	Three months ended March 31,
(U.S.$ in thousands except where indicated)	2024	2023 ⁽³⁾	$ Change	% Change
Revenues	50,317	30,050	20,267	67%
Cost of revenues	(60,999)	(38,403)	(22,596)	59%
Gross loss	(10,682)	(8,353)	(2,329)	28%
Gross margin ⁽¹⁾	(21)%	(28)%	—	—
Operating expenses
General and administrative expenses	(13,196)	(8,360)	(4,836)	58%
Realized gain on disposition of digital assets	—	587	(587)	(100)%
Reversal of revaluation loss on digital assets	—	2,695	(2,695)	(100)%
Gain (loss) on disposition of property, plant and equipment	170	(1,566)	1,736	111%
Operating loss	(23,708)	(14,997)	(8,711)	58%
Operating margin ⁽¹⁾	(47)%	(50)%	—	—
Net financial income	11,443	10,967	476	4%
Net loss before income taxes	(12,265)	(4,030)	(8,235)	204%
Income tax recovery	6,285	330	5,955	nm
Net loss	(5,980)	(3,700)	(2,280)	62%
Basic and diluted loss per share (in U.S. dollars)	(0.02)	(0.02)	—	—
Change in revaluation surplus - digital assets, net of tax	17,433	1,225	16,208	nm
Total comprehensive income (loss), net of tax	11,453	(2,475)	13,928	563%
Gross Mining profit ⁽²⁾	29,312	12,026	17,286	144%
Gross Mining margin ⁽²⁾	59%	41%	—	—
EBITDA ⁽²⁾	26,410	18,024	8,386	47%
EBITDA margin ⁽²⁾	52%	60%	—	—
Adjusted EBITDA ⁽²⁾	21,007	6,364	14,643	230%
Adjusted EBITDA margin ⁽²⁾	42%	21%	—	—

nm: not meaningful

¹	Gross margin and Operating margin are supplemental financial ratios; refer to section 9 - Non-IFRS and Other Financial Measures and Ratios of the Company's MD&A.
²	Gross Mining profit, Gross Mining margin, EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA margin are non-IFRS measures or ratios; refer to section 9 - Non-IFRS and Other Financial Measures and Ratios of the Company's MD&A.
³	Prior year figures are derived from restated financial statements. Refer to the Q1 2024 interim financial statements Note 3d - Basis of Presentation and Material Accounting Policy Information - Restatement.

8

Bitfarms Ltd. Reconciliation of Consolidated Net Income (loss) to EBITDA and Adjusted EBITDA

	Three months ended March 31,
(U.S.$ in thousands except where indicated)	2024	2023 ⁽¹⁾	$ Change	% Change
Revenues	50,317	30,050	20,267	67%
Net loss before income taxes	(12,265)	(4,030)	(8,235)	204%
Interest expense and (income)	(302)	1,354	(1,656)	(122)%
Depreciation and amortization	38,977	20,700	18,277	88%
EBITDA	26,410	18,024	8,386	47%
EBITDA margin	52%	60%	—	—
Share-based payment	3,094	2,536	558	22%
Realized gain on disposition of digital assets	—	(587)	587	100%
Reversal of revaluation loss on digital assets	—	(2,695)	2,695	100%
Gain on extinguishment of long-term debt and lease liabilities	—	(12,835)	12,835	100%
(Gain) loss on revaluation of warrants	(9,040)	1,221	(10,261)	(840)%
Gain on disposition of marketable securities	(338)	(2,171)	1,833	(84)%
Net financial expenses and other	881	2,871	(1,990)	(69)%
Adjusted EBITDA	21,007	6,364	14,643	230%
Adjusted EBITDA margin	42%	21%	—	—

1	Prior year figures are derived from restated financial statements. Refer to the Q1 2024 interim financial statements Note 3d - Basis of Presentation and Material Accounting Policy Information - Restatement.

9

Bitfarms Ltd. Calculation of Gross Mining Profit and Gross Mining Margin

	Three months ended March 31,
(U.S.$ in thousands except where indicated)	2024	2023	$ Change	% Change
Gross loss	(10,682)	(8,353)	(2,329)	28%
Non-Mining revenues ⁽¹⁾	(894)	(842)	(52)	6%
Depreciation and amortization	38,977	20,700	18,277	88%
Purchases of electrical components	387	320	67	21%
Electrician salaries and payroll taxes	321	356	(35)	(10)%
Other	1,203	(155)	1,358	876%
Gross Mining profit	29,312	12,026	17,286	144%
Gross Mining margin	59%	41%	—	—

(1)	Non-Mining revenues reconciliation:

	Three months ended March 31,
(U.S.$ in thousands except where indicated)	2024	2023	$ Change	% Change
Revenues	50,317	30,050	20,267	67%
Less Mining related revenues for the purpose of calculating gross Mining margin:
Mining revenues	(49,423)	(29,208)	(20,215)	69%
Non-Mining revenues	894	842	52	6%

10

Bitfarms Ltd. Calculation of Direct Cost and Direct Cost per BTC

	Three months ended March 31,
(U.S.$ in thousands except where indicated)	2024	2023	$ Change	% Change
Cost of revenues	60,999	38,403	22,596	59%
Depreciation and amortization	(38,977)	(20,700)	(18,277)	88%
Purchases of electrical components	(387)	(320)	(67)	21%
Electrician salaries and payroll taxes	(321)	(356)	35	(10)%
Infrastructure	(1,974)	(942)	(1,032)	110%
Other	—	82	(82)	(100)%
Direct Cost	19,340	16,167	3,173	20%
Quantity of BTC earned	943	1,297	(354)	(27)%
Direct Cost per BTC (in U.S. dollars)	20,500	12,500	8,000	64%

Bitfarms Ltd. of Total Cash Cost and Total Cost per BTC

	Three months ended March 31,
(U.S.$ in thousands except where indicated)	2024	2023	$ Change	% Change
Cost of revenues	60,999	38,403	22,596	59%
General and administrative expenses	13,196	8,360	4,836	58%
	74,195	46,763	27,432	59%
Depreciation and amortization	(38,977)	(20,700)	(18,277)	88%
Purchases of electrical components	(387)	(320)	(67)	21%
Electrician salaries and payroll taxes	(321)	(356)	35	(10)%
Share-based payment	(3,094)	(2,536)	(558)	22%
Other	(2,814)	62	(2,876)	nm
Total Cash Cost	28,602	22,913	5,689	25%
Quantity of BTC earned	943	1,297	(354)	(27)%
Total Cash Cost per BTC (in U.S. dollars)	30,300	17,700	12,600	71%