Bitfarms Ltd. (Nasdaq/TSX: BITF) (“Bitfarms” or the “Company”), a
global vertically integrated Bitcoin data center company, today
announced that, in connection with the Securities and Exchange
Commission’s (“SEC”) review of its annual report for the fiscal
year ended December 31, 2023 (the “SEC Review”), and in
consultation with its Audit Committee of the Board of Directors and
management, the Company has determined that its previously issued
consolidated financial statements for the fiscal years ended
December 31, 2023 and 2022 and the related management’s discussion
and analysis for the year ended December 31, 2023, as well as the
unaudited interim condensed consolidated financial statements for
the three and nine months ended September 30, 2024 and 2023 (such
interim periods together with the fiscal years ended December 31,
2023 and 2022, the “Restatement Periods”) and the related
management’s discussion and analysis for the three and nine months
ended September 30, 2024, should be restated to correct a material
error in the classification of proceeds derived from the sale of
digital assets.
Shareholders and users of Bitfarms’ financial
statements should note that the restatements are not a result of
any change to its operations, business or financial operating
performance for the periods being restated. For any and all of the
Restatement Periods, there is no impact on the Company’s overall
cash position or net cash flows.
Bitfarms previously categorized proceeds derived
from the sale of digital assets as a cash flow from operating
activities. In conjunction with the SEC review, it was determined
that proceeds from the sale of digital assets should be classified
as cash flow from investing activities. Due to the materiality of
the error in classification, the Company is restating the financial
statements for the Restatement Periods. In addition to the
correction to the consolidated statements of cash flows, the
Company is also restating its financials to adjust for an error in
the accounting for the redemption of warrants in 2023.
A summary of the restatements is described in
further detail in the tables set forth below (expressed in
thousands of U.S. dollars). More details may be found in the
revised financial statements and related revised management’s
discussion and analyses, which are available on the Company’s
profile on SEDAR+ at www.sedarplus.ca and on EDGAR at
www.sec.gov/edgar.
Adjustments to consolidated statements of cash flows for
the year ended December 31, 2022* - Restatement
|
|
Year ended December 31, |
|
|
2022 (as reported) |
|
Cash flowreclassification |
|
2022 (as restated) |
|
|
|
|
|
|
| Cash flows from (used
in) operating activities |
|
|
|
| Net loss |
(175,644 |
) |
— |
|
(175,644 |
) |
| Adjustments for: |
|
|
— |
|
|
Proceeds from sale of digital assets earned |
158,674 |
|
(158,674 |
) |
— |
|
|
Net change in cash related to operating
activities |
36,250 |
|
(158,674 |
) |
(122,424 |
) |
|
|
|
|
|
| Cash flows from (used
in) investing activities |
|
|
|
| Proceeds from sale of digital
assets earned |
— |
|
158,674 |
|
158,674 |
|
|
Net change in cash related to investing
activities |
(155,011 |
) |
158,674 |
|
3,663 |
|
Adjustments to consolidated statements of cash flows for
the year ended December 31, 2023* - Restatement
|
|
Year ended December 31, |
|
|
2023 (as reported) |
|
Cash flowreclassification |
|
2023 warrantsadjustment |
|
2023 (as restated) |
|
|
|
|
|
|
|
| Cash flows from (used
in) operating activities |
|
|
|
|
| Net loss |
(104,036 |
) |
— |
|
(4,886 |
) |
(108,922 |
) |
| Adjustments for: |
|
|
|
|
|
Net financial expenses |
32,308 |
|
— |
|
4,886 |
|
37,194 |
|
|
Proceeds from sale of digital assets earned |
129,309 |
|
(129,309 |
) |
— |
|
— |
|
|
Net change in cash related to operating
activities |
23,598 |
|
(129,309 |
) |
— |
|
(105,711 |
) |
|
|
|
|
|
|
| Cash flows from (used
in) investing activities |
|
|
|
|
| Proceeds from sale of digital
assets earned |
— |
|
129,309 |
|
— |
|
129,309 |
|
|
Net change in cash related to investing
activities |
(58,343 |
) |
129,309 |
|
— |
|
70,966 |
|
Adjustments to consolidated statements of financial
position as of December 31, 2023* - Restatement
|
|
As of December 31, |
|
Adjustment |
|
As of December 31, |
|
|
|
2023 (as reported) |
|
2023 warrantsadjustment |
|
2023 (as restated) |
|
|
Shareholders’ equity |
|
|
|
| Share capital |
530,123 |
|
4,886 |
|
535,009 |
|
| Contributed surplus |
56,622 |
|
— |
|
56,622 |
|
| Revaluation surplus |
2,941 |
|
— |
|
2,941 |
|
|
Accumulated deficit |
(294,924 |
) |
(4,886 |
) |
(299,810 |
) |
|
Total equity |
294,762 |
|
— |
|
294,762 |
|
Adjustments to consolidated statements
of profit or loss and comprehensive profit or loss for the year
ended December 31, 2023* - Restatement
|
|
Year ended December 31, |
|
|
2023 (as reported) |
|
2023 warrantsadjustment |
|
2023 (as restated) |
|
|
|
|
|
|
|
Operating loss |
(72,129 |
) |
— |
|
(72,129 |
) |
|
|
|
|
|
| Net
financial expenses |
(32,308 |
) |
(4,886 |
) |
(37,194 |
) |
|
Net loss before income taxes |
(104,437 |
) |
(4,886 |
) |
(109,323 |
) |
|
|
|
|
|
| Income
tax recovery |
401 |
|
— |
|
401 |
|
|
Net loss and total comprehensive loss |
(104,036 |
) |
(4,886 |
) |
(108,922 |
) |
|
|
|
|
|
| Other comprehensive
income (loss) |
|
|
|
| Item that will not be
reclassified to profit or loss: |
|
|
|
|
Change in revaluation surplus - digital assets, net of tax |
9,242 |
|
— |
|
9,242 |
|
|
Total comprehensive loss, net of tax |
(94,794 |
) |
(4,886 |
) |
(99,680 |
) |
|
Loss per share |
|
|
|
| Basic
and diluted |
(0.40 |
) |
(0.02 |
) |
(0.42 |
) |
|
Weighted average number of common shares
outstanding |
|
|
|
| Basic
and diluted |
262,237,117 |
|
— |
|
262,237,117 |
|
Adjustments to interim consolidated
statements of cash flows for the nine months ended
September 30, 2023 and 2024* - Restatement
|
|
Nine months ended September 30, |
Nine months ended September 30, |
|
|
2024(as reported) |
|
Cash flowreclassification |
|
2024(as restated) |
|
2023(as reported) |
|
Cash flowreclassification |
|
2023(as restated) |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| Cash flows from (used
in) operating activities |
|
|
|
|
|
|
| Net loss |
(69,228 |
) |
— |
|
(69,228 |
) |
(46,877 |
) |
— |
|
(46,877 |
) |
| Adjustments for: |
|
|
|
|
|
|
| Proceeds from sale of digital
assets |
111,264 |
|
(111,264 |
) |
— |
|
87,724 |
|
(87,724 |
) |
— |
|
|
Net change in cash related to operating
activities |
14,104 |
|
(111,264 |
) |
(97,160 |
) |
10,028 |
|
(87,724 |
) |
(77,696 |
) |
|
|
|
|
|
|
|
|
| Cash flows from (used
in) investing activities |
|
|
|
|
|
|
| Proceeds from sale of digital
assets |
— |
|
111,264 |
|
111,264 |
|
— |
|
87,724 |
|
87,724 |
|
|
Net change in cash related to investing
activities |
(268,862 |
) |
111,264 |
|
(157,598 |
) |
(35,373 |
) |
87,724 |
|
52,351 |
|
Adjustments to consolidated statements of financial
position as of September 30, 2024* - Restatement
|
|
As of September 30, |
|
Adjustment |
|
As of September 30, |
|
|
|
2024 (as reported) |
|
2023 warrantsadjustment |
|
2024 (as restated) |
|
|
Shareholders’ equity |
|
|
|
| Share capital |
796,751 |
|
4,886 |
|
801,637 |
|
| Contributed surplus |
63,785 |
|
— |
|
63,785 |
|
| Accumulated deficit |
(351,823 |
) |
(4,886 |
) |
(356,709 |
) |
|
Revaluation surplus |
3,311 |
|
— |
|
3,311 |
|
|
Total equity |
512,024 |
|
— |
|
512,024 |
|
*U.S. $ in thousands
The Company’s management has previously
concluded that the Company had a material weakness in its internal
control over financial reporting during the Restatement Periods.
Management is in the process of implementing remediation measures
to address the material weakness in respect of the errors described
above.
About Bitfarms Ltd.Founded in
2017, Bitfarms is a global Bitcoin data center 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 operating Bitcoin data
centers and two under development, and two under Hosting
agreements, 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.comhttps://www.facebook.com/bitfarms/https://twitter.com/Bitfarms_iohttps://www.instagram.com/bitfarms/https://www.linkedin.com/company/bitfarms/
Forward-Looking Statements
This news release contains certain
“forward-looking information” and “forward-looking statements”
(collectively, “forward-looking information”) that are based on
expectations, estimates and projections as at the date of this news
release and are covered by safe harbors under Canadian and United
States securities laws. The statements and information in this
release regarding the impact of the Restatement, the filing of the
Restated Financials and Restated MD&A, the Company’s plans to
remediate the material weakness in its internal control over
financial reporting 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.
This forward-looking information is based on
assumptions and estimates of management of Bitfarms 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 Bitfarms to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking information. Such factors, risks and
uncertainties include, among others: the pending SEC Review; the
potential that additional restatements of the financial statements
will be required; the potential that the Company identifies
additional material weaknesses in its control over financial
reporting; the ability of the Company to remediate known material
weaknesses; the acquisition, construction and operation of new
facilities may not occur as currently planned, or at all; expansion
of existing facilities may not materialize as currently
anticipated, or at all; new miners may not perform up to
expectations; revenue may not increase as currently anticipated, or
at all; the ongoing ability to successfully mine Bitcoin is not
assured; failure of the equipment upgrades to be installed and
operated as planned; the availability of additional power 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; For further information concerning these and other risks
and uncertainties, refer to Bitfarms’ filings on www.sedarplus.ca
(which are also available on the website of the U.S. Securities and
Exchange Commission (the “SEC") at www.sec.gov), including the
restated MD&A for the year-ended December 31, 2023, filed on
December 9, 2024 and the restated MD&A for the three and nine
months ended September 30, 2024 filed on December 9, 2024. Although
Bitfarms 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
Bitfarms. 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. Bitfarms undertakes no obligation to revise or update
any forward-looking information other than as required by law.
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, nor any other securities exchange or regulatory authority
accepts responsibility for the adequacy or accuracy of this
release.
Investor Relations
Contacts:
BitfarmsTracy KrummeSVP, Head of IR & Corp. Comms.+1
786-671-5638tkrumme@bitfarms.com
Media Contacts:
Québec: TactLouis-Martin Leclerc+1
418-693-2425lmleclerc@tactconseil.ca
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