Bitfarms Announces US$20 Million Loan Financing and Special General Meeting Clarification

Bitfarms Ltd. (the “Company”) (TASE: BLLCF) (OTCQX: BLLCF), one of the largest blockchain technology companies in the world through its ownership of Backbone Hosting Solutions Inc. (operating under the name, “Bitfarms”), today announced that Bitfarms has secured US$20,000,000 in strategic debt financing (the “Loan Financing”) to fund the Company’s ongoing operational expansion. In addition, the Company would like to remind shareholders of the upcoming Special General Meeting to be held on March 28, 2019 related to the proposed share exchange of Bitfarms Ltd. (Israel) and Bitfarms Ltd. (Canada) (the “Arrangement”) in support of the Company’s Canadian listing strategy.

US$20,000,000 Loan Financing

The secured Loan Financing is being provided by New York-based Dominion Capital LLC (“Dominion”) and will be made available in four (4) US$5,000,000 tranches tied to the ongoing satisfaction of customary covenants and various milestones including Bitfarms’ infrastructure build-out and associated mining hardware purchases. Amounts drawn under the facility will bear a 10% interest rate with each tranche carrying a 24-month term and balloon repayment on outstanding balances at maturity. Bitfarms will make regular monthly principal and interest payments equivalent to a minimum of 10% of aggregate cryptocurrency production. As part of the Loan Financing, Dominion will receive approximately 6.7M Bitfarms Ltd. (Canada) equity purchase warrants (the “Warrants”) if the full US$20,000,000 is drawn. The Warrants can be exercised to acquire common shares of Bitfarms Ltd. (Canada) with a term of five years from the date of issuance at an exercise price of US$0.40 per share. 1.67M Warrants have been granted to Dominion concurrent with the first US$5,000,000 funding tranche which has been completed. In the event that the Arrangement is not completed, the Warrants shall become an obligation of the Company.

“The Loan Financing will enable us to pursue Bitfarms’ expansion strategy, underpinned by our large and economical 162.5-megawatt portfolio of green energy within the province of Québec. Current hardware pricing presents a compelling opportunity to invest in our operational build-out. We plan to purchase new generation, higher efficiency mining hardware for our expansion and will begin immediate construction of Phase 1 and Phase 2 of our new modern computing centre within the municipality of Sherbrooke, Québec. Proceeds from the Loan Financing are expected to increase our installed operational capacity by approximately 30 megawatts, in addition to utilizing the full capacity of our current (4) operational facilities,” commented Wes Fulford, Chief Executive Officer of the Company.