Bitfarms Ltd. (NASDAQ/TSX: BITF), a global leader in vertically
integrated Bitcoin data center operations, today issued the
following statement in response to the amended requisition proposal
and associated misleading claims made by Riot Platforms, Inc.
(“Riot”).
“The upcoming special
meeting is not about corporate governance, as Riot has repeatedly
positioned it to be, but rather about Riot attempting to acquire
Bitfarms at a discounted price for the benefit of Riot
shareholders, not Bitfarms shareholders. Riot has declined to
engage with us constructively – including by refusing to enter into
a standard non-disclosure agreement with Bitfarms or put forth a
revised proposal for our consideration – and has instead taken to
public attacks and actions to harm the interests of other Bitfarms
shareholders.
The recent Board and
leadership changes that Bitfarms has implemented were made
independently of Riot, on behalf of all of our shareholders, to
ensure the right team is in place to enhance shareholder value at
Bitfarms, not for Riot’s benefit and approval. The Bitfarms team is
best-in-class, comprising the right mix of skills and experience to
effectively oversee the Company’s strategic plan. On the contrary,
it is not clear how Riot’s nominees could enhance the Board.
Our recent proposed
acquisition of Stronghold is consistent with our strategy to
diversify our access to power and also rebalances our energy
portfolio towards the U.S. Through this transaction, we will
leverage our operational expertise and proprietary data analytics
system to build on Stronghold’s capabilities and further optimize
its sites to advance the combined company’s position in the
marketplace. The transaction could add up to 307 MW of power
capacity and is expected to put Bitfarms on track to increase its
energy portfolio to over 950 MW, with nearly 50% in the U.S., by
year-end 2025.
The Board and
management team are focused on the tremendous value-enhancing
opportunity this transaction presents for Bitfarms and our
shareholders. We remain steadfast in our commitment to delivering
exceptional value in the near- and long-term.”
The Board will consider and respond to Riot’s
amended requisition proposal in due course. No shareholder action
is required at this time.
About Bitfarms Ltd.
Founded in 2017, Bitfarms is a global vertically
integrated 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 facilities 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 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/
Glossary of Terms
- Y/Y or M/M = year over year or
month over month
- BTC or BTC/day = Bitcoin or Bitcoin
per day
- HPC = High-performance
computing
- AI = Artificial intelligence
- EH or EH/s = Exahash or exahash per
second
- MW or MWh = Megawatts or megawatt
hour
- GW or GWh – Gigawatts or gigawatt
hour
- PH or PH/s = Petahash or petahash
per second
- TH or TH/s = Terahash or terahash
per second
- w/TH = Watts/Terahash efficiency
(includes cost of powering supplementary equipment)
- Synthetic HODL™ = the use of
instruments that create BTC 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 the benefits of recent leadership changes made by
the Company and the qualities of those candidates, the merits off
the Stronghold acquisition including the Sharon mega-site with
access to up to 120 MW and in respect of the letter of intent for a
lease to an additional 10 MW site in Sharon (collectively, the
“Sharon Acquisitions”), 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 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 Stronghold
acquisition as well as other applicable regulatory approvals; that
the Stronghold acquisition 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 Stronghold acquisition; the letter
of intent on the 10 MW is subject to entering into a definitive
lease agreement and TSX approval, none of which is assured; the
power purchase agreements and economics thereof may not be as
advantageous as expected; the inability of Bitfarms to operate the
plants as anticipated following consummation of the Sharon
Acquisitions; the 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 digital currency 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; 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.
Additional Information about the Merger
and Where to Find It
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 investors@bitfarms.com and from Stronghold by
contacting Stronghold's Investor Relations Department at
SDIG@gateway-grp.com.
No Offer or Solicitation
This communication is not intended to and does
not constitute an offer to sell or the solicitation of an offer to
buy, sell or solicit any securities or any proxy, vote or approval,
nor shall there be any sale of securities in any jurisdiction in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. No offer of securities shall be deemed to be made
except by means of a prospectus meeting the requirements of Section
10 of the Securities Act of 1933, as amended.
Participants in Solicitation Relating to
the Merger
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.
Investor Relations
Contacts:
BitfarmsTracy KrummeSVP, Head
of IR & Corp. Comms.+1 786-671-5638tkrumme@bitfarms.com
Innisfree M&A
IncorporatedGabrielle Wolf / Scott Winter+1
212-750-5833
Laurel Hill Advisory
Group1-877-452-7184416-304-0211assistance@laurelhill.com
Media Contacts:
U.S.: Joele Frank, Wilkinson Brimmer KatcherDan
Katcher or Joseph Sala+1 212-355-4449
Québec: TactLouis-Martin
Leclerc+1 418-693-2425lmleclerc@tactconseil.ca
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