Mr. Geoff Morphy reports

BITFARMS REPORTS FIRST QUARTER 2023 RESULTS WITH ADJUSTED EBITDA OF $6 MILLION

Bitfarms Ltd. has released its financial results for the first quarter ended March 31, 2023. All financial references are in United States dollars.

During the first quarter of 2023, Bitfarms mined 1,297 BTC (bitcoins). "Focused on maintaining financial and operating discipline, we have built strength and flexibility to drive growth, and accelerated our six EH/s [exahash per second] target from the end of Q4 2023 to the end of Q3 2023," said Geoff Morphy, president and chief executive officer of Bitfarms. "With our foundation and momentum, we expect to seize opportunities both today and around the next bitcoin halving which is approaching in April, 2024."

Mr. Morphy noted: "In Q1 2023, as BTC prices improved, our low-operating-cost model drove adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] to over $6-million, up from $1-million in Q4 2022. Averaging 14.4 BTC mined per day in Q1 2023, we reached 1,297 BTC for the quarter and exceeded 21,000 BTC mined by hydropower since inception through May 7, 2023. Continuing to position ourselves for opportunistic growth, we increased financial liquidity and flexibility by paying down indebtedness and retaining a portion of BTC from production. We are confident our Q1 2023 direct cost of production per BTC of $12,500 remains among the lowest in the industry, and our total average cash cost of production of $17,600 was well below our average BTC sales price of $22,500 in Q1 2023. During the quarter, we increased our hashrate by 7 per cent to 4.8 EH/s as of March 31, 2023, and then hit five EH/s as of April 27, 2023.

"In April, 2023, we began energizing additional miners in Rio Cuarto, Argentina, as our private power provider received its operating permit to power up to 100 MW [megawatts]. Initially, we expanded from eight to 18 operating MW at our built 50 MW warehouse at this location, and additional miners are on order to ramp production to its full capacity. Using a combination of cash and vendor credits to purchase new miners at an average price of $14.10/TH [terahash], we anticipate this will be a highly accretive expansion requiring little incremental capital," added Mr. Morphy.

Financial highlights for the quarter ended March 31, 2023:

• Total revenue was $30-million, compared with $27-million in Q4 2022, reflecting higher average BTC prices partially offset by a decrease in total BTC produced.
• Gross mining profit and gross mining margin were $12-million and 42 per cent, respectively, compared with $8-million and 33 per cent in Q4 2022, respectively.
• General and administrative expenses, excluding non-cash share-based compensation, were $6-million, down 29 per cent from Q4 2022.
• Operating loss was $15-million, including a $1-million realized gain on disposition of digital assets and a $3-million reversal of revaluation loss on digital assets, compared with $20-million in Q4 2022, which included a $9-million non-cash impairment reversal, a $29-million realized loss on disposition of digital assets, and a $23-million reversal of revaluation loss on digital assets.
• Net loss was $2-million, or a loss of one cent per basic and diluted share, compared with a loss of $17-million, or a loss of eight cents per basic and diluted share, in Q4 2022.
• Non-IFRS (International Financial Reporting Standards) adjusted EBITDA was $6-million, or 21 per cent of revenue, compared with $1-million, or 4 per cent of revenue, in Q4 2022.
• The company mined 1,297 BTC at an average direct cost of production per BTC of $12,500, compared with $11,100 in Q4 2022.
• Total cash costs of production per BTC was $17,600 in Q1 2023, up from $16,800 in Q4 2022.

Liquidity as of March 31, 2023

The company held $29-million in cash and 435 BTC valued at approximately $12-million, based upon a BTC price of approximately $28,500 as of March 31, 2023.

Q1 2023 financing activities:

• Sold 1,267 BTC at an average price of $22,500 per BTC for total proceeds of $28-million, a portion of which was used to repay equipment-related indebtedness.
• Negotiated the termination of the equipment financing with BlockFi Lending LLC, which had an outstanding balance of $20-million as at Dec. 31, 2022, to align with market conditions, with a settlement of the loan for $8-million, resulting in a gain on extinguishment of long-term debt of $13-million.
• Reduced equipment-related indebtedness by $25-million, which includes the BlockFi settlement.
• Raised $16-million in net proceeds through the company's at-the-market equity offering program.

Financing activities subsequent to Q1 2023:

• Sold daily production, totalling 379 BTC, during April, 2023, generating proceeds of $10-million.
• Added 30 BTC to treasury in April, increasing BTC in custody to 465, representing a total value of approximately $14-million based on a BTC price of $29,300 on April 30, 2023.

Q1 2023 and recent operating highlights:

• Reached five EH/s total company hashrate as of April 27, 2023.
• Surpassed 21,000 BTC mined with renewable hydropower since 2017 founding, which is 1/1,000 (or 0.1 per cent) of the entire BTC pool.
• Averaged 14.4 BTC per day in daily production in Q1 2023, frequently exceeding 15 BTC per day in daily production.
• Mined 379 BTC in April, 2023.
• Received and installed approximately 3,000 miners in Q1 2023, adding 300 PH/s (petahashes per second) to Bitfarms' on-line hashrate.
• Added new automated hardware diagnostics tool that improves repair times.
• Deployed real-time energy tracking across all sites, allowing for individual machine optimization.

Expansion update:

• On April 10, 2023, the company entered into agreements to acquire 22 MW of hydro-power capacity in Baie-Comeau, Que., and lease a site to build the acquired capacity, subject to closing.
• On April 24, 2023, the company confirmed receipt of the necessary power permits to expand production up to 100 MW at its Rio Cuarto, Argentina, facility. This more than doubled the active mining capacity at that site to 18 MW in the company's completed 50 MW warehouse as of April 30, 2023. Over 6,200 new Bitmain and MicroBT miners were placed on order to install an additional 22 MW in the first warehouse.

Conference call

Management will host a conference call and live webcast with an accompanying presentation today, Monday, May 15, 2023, at 11 a.m. ET to review the company's financial results and quarterly activity. Following management's formal remarks there will be a live question-and-answer session, which may include presubmitted questions. Participants are asked to preregister for the call on-line.

Please note that registered participants will receive their dial-in number upon registration and will dial directly into the call without delay. Those without internet access or who are unable to preregister may dial in by calling: 1-866-777-2509 (domestic) or 1-412-317-5413 (international). All callers should dial in approximately 10 minutes prior to the scheduled start time and ask to be joined into the Bitfarms call.

The conference call will also be available through a live webcast found on-line.

A webcast replay of the call will be available approximately one hour after the end of the call and will be available for one year. A telephonic replay of the call will be available through May 22, 2023, and may be accessed by calling 1-877-344-7529 (domestic), 1-412-317-0088 (international) or Canada (toll-free) at 855-669-9658, and using access code 6903864. A presentation of the Q1 2023 results will be accessible on Monday, May 15, 2023, under the investors section of Bitfarms' website.

About Bitfarms Ltd.

Founded in 2017, Bitfarms is a global, publicly traded bitcoin mining company. Bitfarms develops, owns and operates vertically integrated mining farms with in-house management, and company-owned electrical engineering, installation service and multiple on-site technical repair centres. The company's proprietary data analytics system delivers best-in-class operational performance and uptime. Bitfarms currently has 10 farms, which are located in four countries: Canada, the United States, Paraguay and Argentina. Powered by predominantly environmentally friendly hydroelectric and long-term power contracts, Bitfarms is committed to using sustainable, locally based and often underutilized energy infrastructure.

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