Bitfarms Announces Lease Finance for 1,000 Next Generation Miners Adding 82 Petahash of Computing Power, Agreement to Modify Existing Loans, and Provides Second Quarter 2020 Financial Results Release Notice

TORONTO & BROSSARD, Quebec – () – Bitfarms Ltd. (“Bitfarmsor the “Company”) (TSXV: BITF) is pleased to announce that it has entered into an equipment rental agreement with BlockFills for 1,000 WhatsMiner M31S + miners which will be delivered and installed in approximately two weeks. BlockFills is the leading electronic provider of over-the-counter digital liquidity, operating an electronic communications network model. Bitfarms is also pleased to announce that it has entered into a tentative agreement with Dominion Capital LLC (“Domination”) modify certain terms and conditions of two of its US $ 5,000,000 loan tranches. The maturity date of the US $ 5,000,000 loan tranche initially due on April 17, 2021 will be extended to November 1, 2021. In addition, the Company’s loan tranche due June 20, 2021 will add a conversion which will allow Dominion to convert debt into at the rate of US $ 0.59 per common share, a premium of approximately 70% over the current market price of the Company’s shares. The above changes are subject to the approval of the TSX Venture Exchange and the finalization of legal documentation.

Lease of 1,000 new generation miners

The Company has entered into an equipment lease with BlockFills for 1,000 WhatsMiner M31S + miners for a period of 24 months and bears an implied annual interest rate of 12%. The lease also includes a discounted purchase option which, when exercised, will transfer ownership of the equipment to Bitfarms at the end of the lease term for a nominal amount. Bitfarms will make weekly rental payments that will fully reduce the capitalized cost of miners over the term of the lease.

Each WhatsMiner M31S + miner produces an average of 82 terahash per second of computing power while consuming approximately 3.44 kWh of energy, or 42 joules per terahash. The mining equipment is expected to be fully operational within two weeks and will add approximately 82 petahash per second to the Company’s installed computing power and consume approximately 3.4 megawatts (“MW”) of electricity. The new equipment will improve the company’s IT efficiency to around 17 PH per MW, thereby expanding Bitfarms’ position as the most efficient publicly traded cryptocurrency miner in Canada in terms of computing power relative to the market. electricity consumption.

Restructuring of existing tickets

The Company has entered into an agreement with Dominion to modify the second tranche of the US $ 5,000,000 loan to extend the maturity date of the original maturity date from April 17, 2021 to November 1, 2021. The interest rate for the period April 17 to November 1, 2021 will remain unchanged at 10% per annum. In return, Bitfarms will issue 1 million restricted shares to Dominion.

The Company has also entered into an agreement with Dominion to modify its third loan tranche of US $ 5,000,000 due June 20, 2021 to make it convertible, at Dominion’s option, into common shares of Bitfarms at a fixed conversion of 0. US $ 59 per share, a premium of approximately 70% of the current market price of the Company’s shares.

“The restructuring of our second and third loan tranches with Dominion will provide valuable flexibility and additional time to generate cash from operations to enhance Bitfarms’ ability to meet future commitments and obligations as it continues to operate. continues to grow and develop its activities. Dominion has been great partners and supporters of Bitfarms as we continue to grow, ”commented John Rim, COO and CFO of Bitfarms.

“We are also excited to partner with BlockFills to lease 1,000 next generation miners, especially during this time of low inventory of available mining equipment. Bitfarms is working with BlockFills to complete new lease financing in the coming weeks, which will allow the company to add even more operational capacity. Given the recent increase in Bitcoin prices, Bitfarms is well positioned as the mining economy continues to improve following Bitcoin’s halving last May and we are delighted to be able to continue executing our strategy of growth, ”said Emi Grodzki, Interim CEO. by Bitfarms.

Publication of financial results for the second quarter of 2020

Bitfarms is also announcing that it will release its second quarter 2020 results on Friday, August 28, 2020 before the market opens. Senior management of the company will host a webcast at 10:00 a.m. Eastern Time on August 28, 2020, to discuss Bitfarms’ financial and operational results. The webcast presentation and registration link will be available on the Company’s website at www.bitfarms.com.

About Bitfarms Ltd.

The Company owns and operates data centers that power the global decentralized financial economy. Bitfarms provides computing power to cryptocurrency networks such as Bitcoin, earning fees from each network for securing and processing transactions. Powered by clean and competitively priced hydropower, Bitfarms operates 5 data centers in Quebec, Canada. Bitfarms’ experienced leadership team includes industrial scale data center operators and capital markets professionals, focused on building infrastructure for the future by growing and hosting the growing ecosystem. around blockchain-based technologies.

To find out more about Bitfarms events, developments and online communities:

Website: www.bitfarms.com

https://www.facebook.com/bitfarms/

https://twitter.com/Bitfarms_io

https://www.instagram.com/bitfarms/

https://www.linkedin.com/company/bitfarms/

Caution

Trading in the securities of the Company should be regarded as highly speculative. No stock exchange, securities commission or other regulatory authority has approved or disapproved of the information contained in this document. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-looking statements

This press release contains certain “forward-looking information” within the meaning of applicable Canadian securities laws that are based on expectations, estimates and projections as of the date of this press release. The information contained in this press release concerning the future plans and objectives of the Company is forward-looking information. Other forward-looking information includes, without limitation, information regarding: the intentions, plans and future actions of the Company, as well as the ability of Bitfarms to successfully mine digital currency, with revenues increasing as currently expected, the ability to profitably liquidate future digital currency inventories, the volatility of network difficulties and digital currency prices and the resulting significant negative impact on the Company’s operations, construction and operation of an extensive blockchain infrastructure as currently planned, and the regulatory environment for cryptocurrency in the provinces of Canada.

Any statement that involves discussions regarding predictions, expectations, beliefs, plans, projections, goals, assumptions, future events or performance, “plans” or “does not plan”, “plans”, ” budget “,” planned “,” forecast “,” estimate “,” believe “or” intention “or variations of these words and expressions or indicating that certain actions, events or results” may “or” could “, “Would”, “could” or “would” will be considered to have taken place or be achieved) are not statements of historical fact and may be forward-looking information and are intended to identify – find information.

This forward-looking information is based on reasonable assumptions and estimates made by the management of the Company at the time they were made, and involves known and unknown risks, uncertainties and other factors which may cause the results to be actual performance or achievements of the Company are significantly different from the future results, performance or achievements expressed or implied by this forward-looking information. These factors include, among others, risks associated with the global economic climate; dilution; the limited operating history of the Company; future capital requirements and the uncertainty of additional funding; the competitive nature of the industry; currency risks; the need for the Company to manage its planned growth and expansion; the effects of product development and the need for continuous technological change; protection of property rights; the effect of government regulations and compliance on the Company and the industry; network security risks; the Company’s ability to maintain properly functioning systems; dependence on key personnel; deterioration of global economic and financial markets preventing access to capital or increasing the cost of capital; and volatile stock markets affecting the price of securities unrelated to operational performance. In addition, particular factors that could affect the future results of Bitfarms’ business include, but are not limited to: construction and operation of blockchain infrastructure may not occur as currently planned , or not at all ; the expansion may not materialize as currently planned, or not at all; the digital currency market; the ability to successfully mine digital currency; income may not increase as currently expected, or not at all; it may not be possible to profitably liquidate the current digital currency inventory, if at all; a drop in digital currency prices can have a significant negative impact on operations; an increase in the difficulty of the network can have a significant negative impact on operations; the price volatility of digital currencies; the expected growth and sustainability of hydropower for cryptocurrency mining in the province of Quebec, the ability to secure current and future financings, any regulations or laws that will prevent Bitfarms from operating its business; historical prices of digital currencies and the ability to mine digital currencies that will be consistent with historical prices; and there will be no regulations or laws that will prevent Bitfarms from doing business. The Company also assumed that no material events were occurring outside of Bitfarms’ normal course of business. Although the Company has attempted to identify important factors that could cause actual results to differ materially, other factors may cause results not to be as anticipated, estimated or forecast. 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. Therefore, readers should not place undue reliance on forward-looking information. The Company assumes no obligation to revise or update any forward-looking information other than that required by law.


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