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 August 2024

 

 

Commission File Number: 001-40370

 

 

BITFARMS LTÉE

(Translation of registrant’s name into English)

 

 

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

 

On August 21, 2024, the Registrant filed with the Canadian Securities Regulatory Authorities on the System for Electronic Data Analysis and Retrieval + (SEDAR +) a material change report, a copy of which is attached hereto as Exhibit 99.1, and a press release, a copy of which is attached hereto as Exhibit 99.2, which are incorporated by reference into the Registration Statements of Bitfarms Ltd. on Form F-10 (File No. 333-272989) and Form S-8 (File No. 333-278868).

 

See the Exhibits listed below.

 

Exhibits

 

Exhibit No.		Description
99.1		Material Change Report dated August 21, 2024
99.2		Press release dated August 21, 2024

 

 

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 LTÉE
	Par :	/s/ Ben Gagnon
		Name:	Ben Gagnon
		Title:	Directeur général

 

Date: August 22, 2024

 

 

2

 

Exhibit 99.1

 

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

 

August 21, 2024.

 

Item 3

News Release

 

A news release was issued by the Company on August 21, 2024 and disseminated through a newswire company in Canada and filed under the Company’s profile on SEDAR+.

 

Item 4

Summary of Material Change

 

On August 21, 2024, the Company entered into an agreement and plan of merger (the “Merger Agreement”) with Backbone Mining Solutions LLC, a Delaware limited liability company and wholly owned, indirect subsidiary of the Company (“BMS”), HPC & AI Megacorp, Inc., a Delaware corporation and a wholly-owned, direct subsidiary of BMS (“Merger Sub”), and Stronghold Digital Mining, Inc. (NASDAQ: SDIG) (“Stronghold”) to acquire 100% of the Class A common stock of Stronghold (“Stronghold Class A Common Stock”) in consideration for the issuance of common shares in the capital of the Company (“Bitfarms Common Shares”) in a transaction valued at approximately US$125 million (the “Acquisition”) plus the assumption of debt valued at approximately US$50 million.

 

Item 5

Full Description of Material Change

 

Aperçu

 

On August 21, 2024, the Company entered into the Merger Agreement with Stronghold, BMS and Merger Sub to acquire 100% of the Stronghold Class A Common Stock, as a result of which stockholders of Stronghold will be entitled to receive 2.520 (the “Exchange Ratio”) Bitfarms Common Shares for each share of Stronghold Class A Common Stock. The Acquisition will result in the issuance of 58,298,400 Bitfarms Common Shares (based on the number of Stronghold Class A Common Stock and securities which are convertible into Stronghold Class A Common Stock currently outstanding) (or approximately 12.9% of the currently issued and outstanding Bitfarms Common Shares).

 

 

On August 20, 2024, the special committee (the “Special Committee”) of the board of directors of Bitfarms (the “Board”), comprised solely of independent directors of the Company, after receiving outside legal and financial advice and an opinion from Houlihan Lokey Capital, Inc., to the effect that, as of August 20, 2024, subject to the assumptions, limitations and qualifications contained therein, the Exchange Ratio provided for in the Acquisition pursuant to the Merger Agreement is fair to the Company from a financial point of view, unanimously recommended to the Board the approval of the Acquisition and the Merger Agreement. The Board, after careful consideration of the Special Committee’s recommendation, unanimously approved the Acquisition and the Merger Agreement.

 

Merger Consideration and Treatment of Equity Awards

 

The Merger Agreement provides that, among other things and subject to the terms and conditions of the Merger Agreement, (i) Merger Sub will be merged with and into Stronghold in accordance with the provisions of the General Corporation Law of the State of Delaware (the “Merger”), with Stronghold surviving and continuing as the surviving corporation in the Merger and (ii) at the effective time of the Merger (the “Effective Time”), after giving effect to the Conversion and Exchanges (each as defined below), (1) each share of Stronghold Class A Common Stock, par value $0.0001 per share, issued and outstanding immediately prior to the Effective Time (other than Stronghold Class A Common Stock held by Stronghold as treasury shares or by the Company, Merger Sub or any wholly owned subsidiary thereof) will be converted into 2.520 Bitfarms Common Shares, (2) each issued and outstanding share of Class V common stock, par value $0.0001 per share, of Stronghold (“Stronghold Class V Common Stock” and, together with the Stronghold Class A Common Stock, the “Stronghold Common Stock”) shall be automatically cancelled and shall cease to exist and no payment shall be made with respect thereto, and (3) each issued and outstanding Class A common unit (each, a “Stronghold Holdco Unit”) of Stronghold Digital Mining Holdings LLC (“Stronghold Holdco”) shall be unaffected by the Merger and shall remain outstanding, and no payment shall be made with respect thereto.

 

Any holder of Stronghold Class A Common Stock who would otherwise be entitled to receive a fraction of a Bitfarms Common Share pursuant to the Merger (after taking into account all Stronghold Class A Common Stock held immediately prior to the Effective Time by such holder) shall receive, in lieu thereof, an amount of cash, without interest, equal to such fraction of a Bitfarms Common Share multiplied by the closing price per Bitfarms Common Share on the business day immediately prior to the Effective Time.

 

 

Immediately prior to and conditioned upon the Effective Time, (i) pursuant to the terms of a Conversion Agreement, dated August 21, 2024, entered into by the Company, Stronghold and the holders of the issued and outstanding shares of Stronghold’s Series C Convertible Preferred Stock, par value $0.0001 per share (the “Stronghold Series C Preferred Stock”), concurrently with the execution and delivery of the Merger Agreement (the “Conversion Agreement”), each share of Stronghold Series C Preferred Stock issued and outstanding as of such time shall be converted into 250 shares of Stronghold Class A Common Stock in accordance with the Certificate of Designations of the Stronghold Series C Preferred Stock, filed with the Secretary of State of the State of Delaware, effective February 20, 2023, and thereafter all shares of Stronghold Series C Preferred Stock shall no longer be outstanding and shall cease to exist (the “Conversion”), and (2) pursuant to Section 3.6(q) of the Fifth Amended and Restated Limited Liability Company Agreement of Stronghold Holdco, Stronghold shall require each member of Stronghold Holdco (other than Stronghold and its wholly owned subsidiaries) to effect an exchange of all of outstanding Stronghold Holdco Units held by such member, together with the surrender for cancellation of a corresponding number of shares of Stronghold Class V Common Stock, for a corresponding number of shares of Stronghold Class A Common Stock (the “Exchanges”).

 

Except as set forth below, the Merger Agreement provides that, at the Effective Time, each outstanding vested or unvested restricted stock unit of Stronghold (each, a “Stronghold RSU”) that is outstanding immediately prior to the Effective Time will immediately vest in full, and each Stronghold RSU shall be treated as a share of Stronghold Class A Common Stock for all purposes of the Merger Agreement, including the right to receive Bitfarms Common Shares. Additionally, at the Effective Time, to the extent that Stronghold granted any Stronghold RSUs during the Interim Period (as defined in the Merger Agreement), the Company shall assume such Stronghold RSUs, whereby each such Stronghold RSU that is granted during the Interim Period and outstanding immediately prior to the Effective Time shall be converted into a number of the Company’s restricted share units granted under the Company’s equity plan subject to the same terms and conditions applicable to such Stronghold RSU immediately prior to the Effective Time.

 

Further, the Merger Agreement provides that, at the Effective Time, (1) each outstanding vested or unvested option to purchase shares of Stronghold Class A Common Stock (each, a “Stronghold Option”), other than any Stronghold Option that is held by a former employee or former non-employee director of, or former other service provider to, Stronghold or its subsidiaries (each, a “Former Employee Option”), shall be automatically assumed by the Company and converted into an option to acquire Bitfarms Common Shares (each, a “Bitfarms Option”) on substantially the same terms and conditions as were applicable to such Stronghold Option as of immediately prior to the Effective Time, except that (a) the number of shares of Bitfarms Common Shares issuable pursuant to each Bitfarms Option will be equal to the number of shares of Stronghold Class A Common Stock issuable pursuant to the Stronghold Option multiplied by the Exchange Ratio, and (b) the exercise price of each Bitfarms Common Share issuable upon the exercise of the Bitfarms Option will be equal to the exercise price per share of Stronghold Class A Common Stock under such Stronghold Option divided by the Exchange Ratio, and (2) each Former Employee Option shall be automatically cancelled and converted into the right to receive a number of Bitfarms Common Shares equal to the product of (x) the number of shares of Stronghold Class A Common Stock subject to such Former Employee Option as of immediately prior to the Effective Time and (y) (i) the excess, if any, of the Merger Consideration Value (as defined below) over the exercise price per share of Stronghold Class A Common Stock applicable to such Former Employee Option, divided by (ii) the product obtained by multiplying the Exchange Ratio by the volume-weighted average price of Bitfarms Common Shares reported by The Nasdaq Stock Market LLC for the five consecutive trading day period ending on the trading day immediately prior to the Effective Time (the “Merger Consideration Value”).

 

 

The Merger Agreement further provides that, at the Effective Time, in accordance with the terms of each outstanding and unexercised warrant to purchase Stronghold Class A Common Stock (each, a “Stronghold Warrant”), unless otherwise mutually agreed by the holder of any Stronghold Warrant and the Company, each Stronghold Warrant shall cease to represent a right to acquire Stronghold Class A Common Stock and shall be replaced with a warrant to acquire Bitfarms Common Shares (each, a “Bitfarms Warrant”), with (1) the number of such Bitfarms Common Shares equal to the product obtained by multiplying the number of shares of Stronghold Class A Common Stock subject to such Stronghold Warrant immediately prior to the Effective Time by the Exchange Ratio, and (2) an exercise price for each such Bitfarms Common Share equal to the quotient obtained by dividing the exercise price per share of Stronghold Class A Common Stock under such Stronghold Warrant by the Exchange Ratio.

 

Treatment of Stronghold Indebtedness

 

The Merger Agreement provides that, to the extent requested by the Company, Stronghold will, at the Company’s expense, use reasonable best efforts to promptly obtain any consents or amendments necessary to permit the consummation of the Merger under Stronghold’s credit agreement (the “COC Amendment”), provided that the obtaining of the COC Amendment is not a condition to closing of the Merger. If the COC Amendment is not obtained five business days prior to closing of the Merger, the Company will satisfy all outstanding obligations under such credit agreement and certain other debt instruments of Stronghold prior to or substantially concurrently with the consummation of the Merger.

 

Closing Conditions; Representations and Warranties

 

The completion of the Merger is subject to satisfaction or waiver of certain customary mutual closing conditions, including (1) the receipt of the required approvals from the holders of Stronghold Class A Common Stock, (2) the absence of any governmental order or law that makes consummation of the Merger illegal or otherwise prohibited, (3) receipt of certain approvals and consents from specified governmental entities, including, if applicable, the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (4) the effectiveness of the registration statement on Form F-4 to be filed by Bitfarms pursuant to which the Bitfarms Common Shares to be issued in connection with the Merger are registered with the U.S. Securities and Exchange Commission, and (5) the authorization for listing of the Bitfarms Common Shares to be issued in connection with the Merger on the Toronto Stock Exchange and Nasdaq, subject to customary conditions and official notice of issuance. The obligation of each party to consummate the Merger is also conditioned upon, among other things, (1) the other party’s representations and warranties being true and correct (subject to certain materiality and de minimis exceptions), (2) the other party having performed in all material respects its obligations required to be performed by it under the Merger Agreement at or prior to the Effective Time, (3) the absence of a material adverse effect on the other party and (4) with respect to Bitfarms’ obligation to consummate the Merger, certain conditions regarding Stronghold’s Bitcoin mining facilities and their ability to import power from the grid.

 

 

The Merger Agreement contains customary representations and warranties of Bitfarms and Stronghold relating to their respective businesses, financial statements and public filings, in each case generally subject to customary materiality qualifiers. Additionally, the Merger Agreement provides for customary pre-closing covenants for each party including, subject to certain exceptions, covenants to conduct their respective businesses in the ordinary course consistent with past practice and to refrain from taking certain actions without the other party’s consent. Bitfarms and Stronghold also agreed to use their respective reasonable best efforts to cause the Merger to be consummated, subject to certain limitations set forth in the Merger Agreement. Bitfarms and Stronghold have agreed to file the registration statement on Form F-4 and the proxy statement for a special meeting of holders of Stronghold Common Stock to approve the Merger Agreement (the “Stronghold Special Meeting”) promptly after the signing date of the Merger Agreement. 

 

No Solicitation

 

The Merger Agreement provides that, during the period from the date of the Merger Agreement until the Effective Time, Stronghold will be subject to certain restrictions on its ability to solicit alternative competing proposals from third parties, to provide non-public information to third parties, and to engage in discussions with third parties regarding alternative competing proposals, subject to customary exceptions. Stronghold is required to call the Stronghold Special Meeting and, subject to certain exceptions, to recommend that the holders of Stronghold Common Stock approve the Merger Agreement.

 

 

Termination and Fees

 

The Merger Agreement contains termination rights for each of the Company and Stronghold, including, but not limited to, termination by mutual written consent of the Company and Stronghold, and by either the Company or Stronghold if (1) there is a final and nonappealable order, decree, ruling or injunction permanently restraining, enjoining or otherwise prohibiting the consummation of the Merger, or adoption of a law permanently making consummation of the Merger illegal or otherwise permanently prohibited, (2) the Merger has not been consummated on or before 5:00 p.m. New York, New York time, on May 21, 2025, which may be automatically extended to August 21, 2025 in certain circumstances (the “End Date”), provided that such right will not be available to any party whose failure to fulfill any material covenant or agreement under the Merger Agreement has been the primary cause of or resulted in the failure of the Merger to occur on or before such date, (3) the other party has breached any of its representations or warranties, or failed to perform any of its covenants or agreements, under the Merger Agreement such that any of the applicable closing conditions for the benefit of the non-breaching party would not be satisfied and the breach or failure to perform is not cured within the requisite period (if applicable), and (4) the holders of Stronghold Common Stock do not approve the Merger at the Stronghold Special Meeting, or at any adjournment or postponement thereof (“Failure to Obtain Stockholder Approval”).

 

Additionally, the Merger Agreement permits Stronghold, subject to compliance with certain requirements and payment of a termination fee (described below), to terminate the Merger Agreement to enter into a definitive agreement for a superior alternative competing proposal that would result in a transaction more favourable to Stronghold’s stockholders than the Acquisition. The Merger Agreement also permits the Company to terminate the Merger Agreement before the Stronghold Special Meeting if Stronghold’s board of directors (or any committee thereof) (i) withdraws, qualifies or modifies, or publicly proposes to withdraw, qualify or modify, in a manner adverse to the Company, or fails to affirm without qualification, its recommendation of the Acquisition to the holders of Stronghold Common Stock, or (ii) approves, endorses or recommends, or publicly proposes or announces any intention to approve, endorse or recommend, an alternative competing transaction to the Acquisition.

 

Pursuant to the Merger Agreement, Stronghold or the Company, as applicable, will be required to pay the other party a termination fee in specified circumstances, including, (1) (i) the termination by Stronghold in order to enter into a definitive agreement for a superior alternative competing proposal, (ii) the termination by the Company in the event of a change of recommendation by Stronghold’s board of directors, or (iii) if the Company or Stronghold terminate the Merger Agreement in the event of a Failure to Obtain Stockholder Approval and, on or before the date of any such termination, a competing alternative proposal has been publicly announced or publicly disclosed and not been withdrawn prior to the Stronghold Special Meeting, and Stronghold enters into a definitive agreement with respect to, or consummates, a competing alternative transaction within twelve months after termination of the Merger Agreement (each, a “Stronghold Termination Fee Event”), and (2) the termination by Stronghold upon the Company’s failure to close the Merger in accordance with the terms of the Merger Agreement following notice by Stronghold that all closing conditions are satisfied or waived (a “Bitfarms Termination Fee Event”). The Merger Agreement provides that (1) if a Stronghold Termination Fee Event occurs, a termination fee of US$5.0 million (payable in cash and/or Bitcoin, as elected by Stronghold) will be payable by Stronghold to the Company; and (2) if a Bitfarms Termination Fee Event occurs, a termination fee of US$12.5 million (payable in cash and/or Bitcoin, as elected by the Company) will be payable by the Company to Stronghold. In no event will the Company or Stronghold be entitled to receive more than one termination fee.

 

 

Voting Agreement

 

On August 21, 2024, concurrently with the execution and delivery of the Merger Agreement, the Company entered into a Voting Agreement (the “Voting Agreement”) with each of Q Power LLC, a Delaware limited liability company (“Q Power”), and Gregory A. Beard (together with Q Power, the “Voting Agreement Holders”), pursuant to which and on the terms and subject to the conditions thereof, among other things, the Voting Agreement Holders have agreed to vote their shares of Stronghold Common Stock in favor of the matters to be submitted to holders of Stronghold Common Stock at the Stronghold Special Meeting, subject to the terms and conditions set forth in the Voting Agreement.

 

The Voting Agreement will terminate upon the earliest to occur of (i) the Effective Time of the Acquisition, (ii) the date and time the Merger Agreement is validly terminated pursuant to its terms or modified or amended in a manner that adversely affects the Voting Agreement Holders in any material respect, and (iii) the termination of the Voting Agreement by mutual consent of the parties thereto.

 

As of the date of execution of the Merger Agreement, the shares of Stronghold Common Stock owned by the Voting Agreement Holders represent approximately 16.4% of the outstanding shares of Stronghold Common Stock on a partially diluted basis.

 

TRA Waiver and Termination Agreement

 

On August 21, 2024, concurrently with the execution and delivery of the Merger Agreement, the Company, Stronghold, and each of Q Power and William Spence (together with Q Power, the “TRA Holders”), entered into a TRA Waiver and Termination Agreement (the “TRA Waiver”), pursuant to which the parties agreed, among other things, subject to and effective upon the consummation of the transactions contemplated by the Merger Agreement, to (i) terminate the Tax Receivable Agreement, dated April 1, 2021, as amended November 9, 2022, by and among Stronghold and the TRA Holders (the “Tax Receivable Agreement”) and (ii) waive the Early Termination Payment (as defined in the Tax Receivable Agreement) pursuant to the Tax Receivable Agreement, which would have otherwise become payable to the TRA Holders in connection with the consummation of the Acquisition, and any other amounts to which the TRA Holders would have otherwise been entitled under the Tax Receivable Agreement.

 

 

Other Terms

 

Subject to the satisfaction of all conditions to closing set out in the Merger Agreement, it is anticipated that the Acquisition will be completed in the first calendar quarter of 2025.

 

The foregoing description in this Material Change Report of the Merger Agreement, Voting Agreement, Conversion Agreement and TRA Waiver, and the transactions contemplated thereby, is only a summary and does not purport to be complete and is qualified in its entirety by reference to the full text of each such document. Copies of the Merger Agreement, Voting Agreement, and TRA Waiver shall be filed on SEDAR+ at www.sedarplus.ca and/or on the U.S. Securities and Exchange Commission’s EDGAR website at www.sec.gov/EDGAR.

 

Item 6

Reliance on subsection 7.1(2) of National Instrument 51-102

 

Subsection 7.1(2) of National Instrument 51-102 has not been relied upon.

 

Item 7

Omitted Information

 

No information has been omitted on the basis that it is confidential information.

 

Item 8

Executive Officer

 

Ben Gagnon

Directeur général

Bitfarms ltée

+1 (647) 259-1790

 

Item 9

Date of Report

 

21 Août 2024

 

 

Énoncés prévisionnels

 

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 Material Change Report and are covered by safe harbors under Canadian and United States securities laws. The statements and information in this release regarding, the completion of the Acquisition or on the terms described herein, the number of Bitfarms Common Shares to be issued pursuant to the Acquisition, the proposed timing and various steps contemplated in respect of the Acquisition, the holding of the special meeting of Stronghold’s stockholders, and the anticipated completion date of the Acquisition, 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 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 possibility that the Acquisition will not be completed on the terms and conditions, or on the timing, currently contemplated, and that it may not be completed at all, due to a failure to obtain or satisfy, in a timely manner or otherwise, required stockholder, court and regulatory approvals and other conditions of closing necessary to complete the Acquisition or for other reasons; the possibility of adverse reactions or changes in business relationships resulting from the announcement or completion of the Acquisition; risks relating to Company’s ability to retain and attract key personnel during and following the interim period; the possibility of litigation relating to the Acquisition; the digital currency market; the ability to successfully mine digital currency; revenue may not increase as currently anticipated, 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 Bitfarms 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 the three and six month periods ended June 30, 2024 filed on August 8, 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.

 

 

9

Exhibit 99.2

 

 

Bitfarms fera l'acquisition de « Stronghold Digital Mining »

 

- Expands and Rebalances Bitfarms Energy Portfolio to Approximately 50% in the U.S. by YE 2025,

Consistent with Strategic Plan -

- Une voie claire vers une capacité de production d'énergie active de 950 MW

- Ajoute 4,0 EH/s au taux de hachage (Hashrate) de Bitfarms avec une capacité d'expansion de potentiellement plus de 10 EH/s avec rafraîchissement de la flotte -

- Intégration verticale dans la production d'électricité avec 165 MW de capacité nominale -

- Ajout de 142 MW de capacité d'importation PJM avec un potentiel d'expansion à long terme allant jusqu'à 790 MW -

-Conference Call at 8:30 AM ET to Discuss Transaction -

 

Ce communiqué de presse constitue un « communiqué de presse désigné » aux fins du supplément de prospectus de Bitfarms daté du 8 mars 2024, à son prospectus préalable de base simplifié datant du 10 novembre 2023.

 

TORONTO, Ontario and BROSSARD, Québec, and NEW YORK, New York -- August 21, 2024 -- Bitfarms Ltd. (Nasdaq/TSX: BITF) (“Bitfarms”), a global vertically integrated Bitcoin data center company, and Stronghold Digital Mining, Inc. (Nasdaq: SDIG) (“Stronghold”) have entered into a definitive merger agreement (the “Merger Agreement”) under which Bitfarms will acquire Stronghold in a stock-for-stock merger transaction (the “Transaction”). The Transaction is valued at approximately US$125 million equity value plus the assumption of debt valued at approximately US$50 million.

 

Stronghold est une société de minage d'actifs crypto intégrée verticalement qui se concentre sur l'exploitation du minage de bitcoins et sur les services d'assainissement et de remise en état de l'environnement. Au 30 juin 2024, Stronghold a un taux de hachage (hashrate) de 4,0 EH/s et 165 MW de capacité de production d'énergie nominale actuelle, avec la possibilité de porter son taux de hachage (hashrate) à environ 10 EH/s en 2025 grâce à la modernisation de la flotte. De plus, Stronghold dispose d'une capacité d'importation de 142 MW de capacité d'importation actuelle de l'Interconnexion Pennsylvanie-New Jersey-Maryland (PJM) et permet d'importer jusqu'à 790 MW d'énergie potentielle supplémentaire au-delà de 2025.

 

Stronghold possède plus de 750 acres (environ 303 hectares) de terrain avec des options sur plus de 1,100 acres (environ 445 hectares) supplémentaires ainsi que deux centrales électriques marchandes : les installations de Scrubgrass et de Panther Creek en Pennsylvanie. Ces deux centrales sont reconnues par la Pennsylvanie comme une source d'énergie alternative de niveau 2 (la même catégorie que l'hydroélectricité à grande échelle) pour leurs avantages environnementaux prouvés et significatifs. L'empreinte de Stronghold a également accès au réseau stratégiquement précieux de PJM, le plus grand marché de gros de l'électricité aux États-Unis, et, sous réserve des approbations réglementaires, la capacité d'importer 142 MW d'électricité à partir de cette source. Cet emplacement stratégique dans la région PJM offre à l'entreprise combinée des possibilités considérables de produire et d'utiliser de l'énergie de réseau flexible à des prix concurrentiels, qui peut être utilisée pour le minage de bitcoins, le commerce de l'énergie et le HPC/AI. Ensemble, en coordination avec le Département de la protection de l'environnement de Pennsylvanie, ces installations éliminent des centaines de milliers de tonnes de déchets de minage et les convertissent en énergie grâce à un processus hautement spécialisé.

 

La transaction pourrait ajouter jusqu'à 307 MW de capacité électrique et devrait permettre à Bitfarms d'augmenter son portefeuille énergétique à plus de 950 MW d'ici la fin de 2025. De nombreuses études sont en cours pour augmenter potentiellement la capacité d'importation totale avec 648 MW supplémentaires au-delà de 2025, ainsi que de nombreuses occasions de profiter de l'expertise éprouvée de Bitfarms pour améliorer avec succès l'efficacité énergétique et le taux de hachage (hashrate) et fusionner l'HPC/IA avec les opérations d'exploitation de minage de bitcoins.

 

 

Ben Gagnon, directeur général de Bitfarms, a déclaré : « Après trois ans de discussions, je suis fier d'annoncer cette acquisition transformatrice, qui constitue une étape décisive pour assurer un avenir solide à Bitfarms. Avec cette transaction, nous prévoyons d'étendre et de rééquilibrer notre portefeuille énergétique à 950 MW avec près de 50 % aux États-Unis d'ici la fin de 2025 et nous avons une visibilité sur la capacité d'expansion sur plusieurs années jusqu'à 1,6 GW avec environ 66 % aux États-Unis, contre environ 6 % aujourd'hui. En intégrant verticalement la production d'électricité, en développant nos capacités de négociations d'énergie et en obtenant deux sites à fort potentiel pour l'HPC/IA avec un important potentiel d'expansion sur plusieurs années, nous mettons en œuvre notre stratégie de diversification au-delà du minage de bitcoins afin de créer une plus grande valeur actionnariale à long terme ».

 

« Ayant obtenu plus de 25 000 bitcoins à l'aide d'énergies renouvelables, Bitfarms étend également son leadership environnemental avec l'acquisition de ces installations de récupération. Stronghold a remis en état des milliers d'hectares de déchets toxiques, réduisant ainsi l'empreinte écologique des activités de minage historiques et éliminant le drainage du minage acide qui contamine les cours d'eau américains depuis les années 1800. De plus, les projets de capture de carbone de Stronghold ont le potentiel de capturer plus de 60 000 tonnes de dioxyde de carbone par an, ce qui procure à Bitfarms des revenus supplémentaires et en fait l'un des plus grands projets potentiels de capture de carbone au niveau mondial », a déclaré Arnold Lee, directeur du développement durable chez Bitfarms.

 

Gregory Beard, directeur général, président et président du conseil d'administration de Stronghold, a déclaré : « Nous sommes en conversation avec Bitfarms depuis longtemps. Après avoir reçu et révisé de nombreuses offres dans le cadre de notre processus d'examen des alternatives stratégiques, nous pensons avoir trouvé le partenaire idéal. Bitfarms a la vision et la force financière nécessaires pour libérer la valeur des actifs de Stronghold et, compte tenu de l'accroissement et de la croissance future de l'entreprise combinée, nous sommes heureux que nos actionnaires aient l'occasion de participer au potentiel d'augmentation significatif. Nous sommes impatients de tirer parti de l'expertise opérationnelle de Bitfarms et de son système exclusif d'analyse de données pour optimiser davantage nos sites et restituer aux communautés locales des terres qui étaient autrefois polluées. Je suis convaincu que ce rapprochement est une occasion unique de maximiser la valeur pour les actionnaires des deux entreprises.

 

Détails de la transaction

 

La transaction a été approuvée à l'unanimité par les conseils d'administration des deux sociétés et devrait être finalisée au cours du premier trimestre de 2025, sous réserve de l'approbation des actionnaires de Stronghold, des approbations réglementaires applicables, de certains consentements de tiers et d'autres conditions de clôture habituelles. À la clôture de la transaction, M. Beard contribuera à l'entreprise combinée en tant que conseiller.

 

Selon les termes de l'accord de fusion, les actionnaires de Stronghold recevront 2,52 actions de Bitfarms pour chaque action de Stronghold qu'ils détiennent, ce qui représente une contrepartie par action de 6,02 dollars américains et une prime de 71 % par rapport au prix moyen pondéré en fonction du volume de Stronghold sur 90 jours au Nasdaq au 16 août 2024. À la clôture, les actionnaires de Stronghold devraient détenir un peu moins de 10 % de la société combinée, sur la base des actions actuellement émises et en circulation de chaque société.

 

L'opération présente des avantages économiques indéniables tout en permettant de réaliser des synergies de coûts annuelles estimées à 10 million de dollars.

 

 

Téléconférence investisseurs

 

Bitfarms and Stronghold will conduct a conference call with investors to discuss the Transaction today, August 21, 2024, at 8:30am ET. An accompanying presentation will be accessible before the call on the Investor website and can be accessed here.

 

Les participants peuvent s'abonner en appelant le 888-506-0062 (national) : -- (national), ou 973-528-0011 (international), et doivent le faire 10 minutes avant l'heure de début. Un opérateur accueillera les participants et leur demandera le code d'accès, qui est 570343. Si vous n'avez pas le code, vous pouvez vous référer à la conférence téléphonique sur l'acquisition de Bitfarms et Stronghold.

 

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

 

Une retransmission sera disponible et pourra être consultée dans la section Événements de notre site Web pour les investisseurs. Une rediffusion audio sera disponible jusqu'au 4 septembre 2024, et sera accessible au 877-481-4010 (national), ou 919-882-2331 (international), en utilisant le code d'accès 51102.

 

Conseillers

 

Moelis & Company LLC agit en tant que conseiller financier du comité spécial du conseil d'administration de Bitfarms, et Skadden, Arp, Slate, Meagher & Flom LLP, McMillan LLP, Peterson McVicar LLP, Fasken Martineau DuMoulin LLP et Firm 21m PLLC agissent en tant que conseillers juridiques. Houlihan Lokey Capital, Inc. a remis au comité spécial du conseil d'administration de Bitfarms un avis selon lequel, au 20 août 2024, sous réserve des hypothèses, limitations et réserves qu'il contient, le rapport d'échange prévu dans le cadre de l'acquisition conformément à l'accord de fusion est équitable pour Bitfarms d'un point de vue financier. Cohen & Company Capital Markets, une division de J.V.B. Financial Group, LLC, a fourni un avis d'équité et agit en tant que conseiller financier exclusif de Stronghold. Vinson & Elkins LLP agit en tant que conseiller juridique principal avec Blake, Cassels & Graydon LLP.

 

À propos de Bitfarms ltée

 

Fondée en 2017, Bitfarms est une société de minage mondiale de bitcoins qui apporte sa puissance de calcul à un ou plusieurs pools de minage à partir desquels elle reçoit un paiement en bitcoins. Bitfarms développe, possède et exploite des fermes de minage verticalement intégrées avec une gestion interne et des services de génie électrique et d'installation appartenant à la Société, ainsi que de nombreux centres de réparation technique sur site. Le système d'analyse de données exclusif de Bitfarms offre des performances opérationnelles et un temps de fonctionnement inégalés.

 

Bitfarms a actuellement 12 l’exploitation de centres de données bitcoins et deux en cours de développement situés dans quatre pays : le Canada, les États-Unis, le Paraguay et l’Argentine. Alimenté principalement par des contrats hydroélectriques et d’électricité à long terme respectueux de l’environnement, Bitfarms s’engage à utiliser une infrastructure énergétique durable et souvent sous-utilisée.

 

Pour en savoir plus sur les événements, les développements et les communautés en ligne de Bitfarms :

www.bitfarms.com

https://www.facebook.com/BitfarmsFR/

https://twitter.com/bitfarms_fr

https://www.instagram.com/bitfarms_fr/

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

 

 

À propos de « Stronghold Digital Mining, Inc. »

 

Stronghold est une société de minage de bitcoins intégrée verticalement qui met l'accent sur des opérations respectueuses de l'environnement. Stronghold loge ses mineurs dans les usines Scrubgrass et Panther Creek qu'elle possède et exploite à 100 %. Il s'agit d'installations de production d'électricité à partir de déchets de charbon, peu coûteuses et respectueuses de l'environnement, situées en Pennsylvanie.

 

Glossaire des termes

 

●

HPC = Calcul haute performance

●

IA = Intelligence artificielle

●

EH ou EH/s = Exahash ou exahash par seconde

●

MW ou MWh = Mégawatts ou mégawattheure

●

GW ou GWh = Gigawatts ou gigawattheure

 

Énoncés prévisionnels

 

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 receipt of the approval of the shareholders of Stronghold for the Transaction as well as all other applicable regulatory approvals, closing of the Transaction on a timely basis and on the terms as announced, the benefits of the Transaction, the ability to gain access to additional electrical power and grow the hashrate of the Stronghold business, performance of the plants and equipment upgrades and the impact on operating capacity including the target hashrate to take the Stronghold business to 10 EH/s in 2025, to increase the Bitfarms energy portfolio to 950 MW by year-end 2025 and multi-year expansion capacity up to 1.6 GW, the opportunities to leverage Bitfarms’ proven expertise to successfully enhance energy efficiency and hashrate, reclamation and environmental benefits in general, the synergies of the combined business, carbon capture potential, hashrate growth in general, energy efficiency and cost savings in general, and the benefits of the growth strategy including to merge HPC / AI with Bitcoin mining operations and other statements regarding future plans and objectives of each of Bitfarms, Stronghold and the combined 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 each of Bitfarms and Stronghold 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 each of Bitfarms and Stronghold 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: receipt of the approval of the shareholders of Stronghold and the Toronto Stock Exchange for the Transaction as well as other applicable regulatory approvals; that the Transaction may not close within the timeframe anticipated or at all or may not close on the terms and conditions currently anticipated by the parties for a number of reasons including, without limitation, as a result of a failure to satisfy the conditions to closing of the Transaction; the inability of Bitfarms to operate the plants as anticipated following consummation of the Transaction; 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; potential environmental cost and regulatory penalties due to the operation of the Stronghold plants which entail environmental risk and certain additional risk factors particular to the business of Stronghold including, land reclamation requirements may be burdensome and expensive, changes in tax credits related to coal refuse power generation could have a material adverse effect on the business, financial condition, results of operations and future development efforts, competition in power markets may have a material adverse effect on the results of operations, cash flows and the market value of the assets, the business is subject to substantial energy regulation and may be adversely affected by legislative or regulatory changes, as well as liability under, or any future inability to comply with, existing or future energy regulations or requirements, the operations are subject to a number of risks arising out of the threat of climate change, and environmental laws, energy transitions policies and initiatives and regulations relating to emissions and coal residue management, which could result in increased operating and capital costs and reduce the extent of business activities, operation of power generation facilities involves significant risks and hazards customary to the power industry that could have a material adverse effect on our revenues and results of operations, and there may not have adequate insurance to cover these risks and hazards, employees, contractors, customers and the general public may be exposed to a risk of injury due to the nature of the operations, limited experience with carbon capture programs and initiatives and dependence on third-parties, including consultants, contractors and suppliers to develop and advance carbon capture programs and initiatives, and failure to properly manage these relationships, or the failure of these consultants, contractors and suppliers to perform as expected, could have a material adverse effect on the business, prospects or operations; 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 to operate cryptocurrency mining assets; the risks of an increase in 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 Bitfarms and Stronghold operate and the potential adverse impact on profitability; future capital needs and the ability to complete current and future financings, including each of Bitfarms’, Stronghold’s or the combined company’s ability to utilize an at-the-market offering program (each, an “ATM Program”) and the prices at which securities may be sold in each such ATM Program, as well as capital market conditions in general; share dilution resulting from an ATM Program and from other equity issuances; volatile securities markets impacting security pricing unrelated to operating performance; the risk that a material weakness in internal control over financial reporting could result in a misstatement of 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 any of Bitfarms, Stronghold or the combined company from operating its business, or make it more costly to do so. 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 MD&A for the year-ended December 31, 2023, filed on March 7, 2024 and the MD&A for the three and six months ended June 30, 2024 filed on August 8, 2024 and Stronghold’s filings on www.sec.gov, including the Annual Report on Form 10-K for the fiscal year ended 2023, filed on March 8, 2024, the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024, filed on May 8, 2024, the Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2024, filed on August 14, 2024, and subsequent reports on Forms 10-Q and 8-K. Although each of Bitfarms and Stronghold 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 or Stronghold, as applicable. 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. Neither Bitfarms nor Stronghold undertakes any obligation to revise or update any forward-looking information other than as required by law.

 

Information complémentaire sur la fusion et où les trouver

 

This communication relates to a proposed merger between Stronghold and Bitfarms. In connection with the proposed merger, Bitfarms intends to file with the SEC a registration statement on Form F-4, which will include a proxy statement of Stronghold that also constitutes a prospectus of Bitfarms. After the registration statement is declared effective, Stronghold will mail the proxy statement/prospectus to its shareholders. This communication is not a substitute for the registration statement, the proxy statement/prospectus or any other relevant documents Bitfarms and Stronghold has filed or will file with the SEC. Investors are urged to read the proxy statement/prospectus (including all amendments and supplements thereto) and other relevant documents filed with the SEC carefully and in their entirety if and when they become available because they will contain important information about the proposed merger and related matters.

 

Investors may obtain free copies of the registration statement, the proxy statement/prospectus and other relevant documents filed by Bitfarms and Stronghold with the SEC, when they become available, through the website maintained by the SEC at www sec.gov. Copies of the documents may also be obtained for free from Bitfarms by contacting Bitfarms’ Investor Relations Department at investisseurs@bitfarms.com and from Stronghold by contacting Stronghold’s Investor Relations Department at SDIG@gateway-grp.com.

 

 

Pas d'offre ni de sollicitation

 

Cette communication n'est pas destinée à constituer et ne constitue pas une offre de vente ou la sollicitation d'une offre d'achat, de vente ou de sollicitation de titres ou d'une procuration, d'un vote ou d'une approbation, et il n'y aura pas de vente de titres dans une juridiction où une telle offre, sollicitation ou vente serait illégale avant l'inscription ou la qualification en vertu des lois sur les valeurs mobilières d'une telle juridiction. Aucune offre de valeurs mobilières n'est réputée être faite si ce n'est au moyen d'un prospectus répondant aux exigences de la section 10 de la loi sur les valeurs mobilières de 1933, telle qu'elle a été modifiée.

 

Participants à la sollicitation relative à la fusion

 

Bitfarms, Stronghold, their respective directors and certain of their respective executive officers may be deemed to be participants in the solicitation of proxies from Stronghold’s shareholders in respect of the proposed merger. Information regarding Bitfarms’ directors and executive officers can be found in Bitfarms’ annual information form for the year ended December 31, 2023, filed on March 7, 2024, as well as its other filings with the SEC. Information regarding Stronghold’s directors and executive officers can be found in Stronghold’s proxy statement for its 2024 annual meeting of stockholders, filed with the SEC on April 29, 2024, and supplemented on June 7, 2024, and in its Form 10-K for the year ended December 31, 2023, filed with the SEC on March 8, 2024. This communication may be deemed to be solicitation material in respect of the proposed merger. Additional information regarding the interests of such potential participants, including their respective interests by security holdings or otherwise, will be set forth in the proxy statement/prospectus and other relevant documents filed with the SEC in connection with the proposed merger if and when they become available. These documents are available free of charge on the SEC’s website and from Bitfarms and Stronghold using the sources indicated above.

 

Bitfarms

Contact pour les investisseurs :

 

Tracy Krumme

SVP, Head of IR & Corp. Comms.

+1 786-671-5638

tkrumme@bitfarms.com

 

Innisfree M&A Incorporated

Gabrielle Wolf / Scott Winter

+1 212-750-5833

 

Groupe consultatif Laurel Hill

1-877-452-7184

416-304-0211

assistance@laurelhill.com

 

Contacts pour les médias :

 

États-Unis : Joele Frank, Wilkinson Brimmer Katcher

Dan Katcher / Joseph Sala

+1 212-355-4449

 

Québec : Tact

Louis-Martin Leclerc

+1 418-693-2425

lmleclerc@tactconseil.ca

 

Stronghold

Contact pour les investisseurs :

 

Matt Glover

Gateway Group, Inc.

SDIG@gateway-grp.com

1-949-574-3860

 

Contact médias :

contact@strongholddigitalmining.com