Bitfarms Ltd. Aktie

Good day, and welcome to the Bitfarms Fiscal 2025 Conference Call. [Operator Instructions] Please note, this call is being recorded.

I would like to turn the call over to Jennifer Drew-Bear from Bitfarms Investor Relations. Please go ahead.

Thank you, and welcome to Bitfarms Fiscal Year 2025 Conference Call. With me on the call today are Ben Gagnon, Chief Executive Officer and Director; and Jonathan Mir, Chief Financial Officer.

Before we begin, please note this call is being webcast with an accompanying slide presentation. Today's press release and our presentation can be accessed on our website under the Investors section.

Turning to Slide 2. I'd like to remind everyone that certain forward-looking statements will be made during the call, and that future results could differ from those implied in this statement. The forward-looking information is based on certain assumptions and is subject to risks and uncertainties. And I invite you to consult Bitfarms 10-K for a complete list.

Also, please note that references will be made to certain non-GAAP financial measures, and therefore, may not be comparable to similar measures presented by other companies. We invite listeners to refer to today's press release and our 10-K for definitions of the aforementioned non-GAAP measures and their reconciliations to GAAP measures. Please note that all financial references are denominated in U.S. dollars, unless always noted.

And now turning to Slide 3. It is my pleasure to turn over the call to Ben Gagnon, Director and Chief Executive Officer. Ben, the floor is yours.

Good morning, everyone, and welcome to our fiscal year 2025 earnings call. In 2025, we made a bold decision to walk away from our legacy business, Bitcoin, and build the infrastructure in North America for what comes next, HPC and AI. It was a year of deliberate and consequential transformation with a clear mandate. Secure North American pipeline, strengthen our balance sheet, accelerate site development, and position ourselves to engage customers from a place of operational momentum at the peak of the energy bottleneck constraining the growth of AI.

I can say with confidence and pride that we accomplished exactly what we set out to do. The foundation you see today, the capital structure, the sites, the team, the strategy was engineered through deliberate choices, developed with discipline and built to propel us forward. We made foundational changes to reposition the business and made 100% of our focus on North American HPC infrastructure development. No half measures, no compromises and in time, no Bitcoin.

We built a new company. And while we are presenting as Bitfarms today, tomorrow marks our beginning as Keel infrastructure. The name says it all. A Keel is the bottom of structural component of a vessel. It's what keeps it stable and moving forward in the right direction regardless of the condition above the water line. It is structural, it is essential, and it is exactly how we see our role in the HPC and infrastructure landscape. We are not here to compete with hyperscalers or neoclouds. We are here to enable them. Our focus is providing the critical and largely invisible foundation that will allow the world's most advanced AI platform to deploy on time and scale without interruption.

We expect to close the re-domiciliation and finalize our rebranding efforts tomorrow, April 1, and we'll begin trading under the ticker KEEL, 2 business days after completion of the transaction on the Nasdaq and the TSX. We are entering this new phase from a position of strength. With over 2 gigawatts in our pipeline, Keel is a regional leader with some of the largest power land portfolios in some of the highest demand markets in North America and with robust financial strength to execute against our plan.

Our current liquidity is far in excess of the CapEx budgeted to get us through permitting and ultimately to start signing leases, giving the company significant financial flexibility to execute on our strategy.

And our strategy is equally as clear. We are designing all of our site and campus developments as either powered shell or co-location facilities. We believe this is where we can deliver the most value to shareholders and serve our potential customers at the speed and to the specifications they need. We were originally exploring in parallel to co-location the potential benefits of pursuing a small amount of GPU as a service at our Washington site, Moses Lake, where due to the lowest cost power for data centers in the country and a relatively smaller footprint, we believe it could be an avenue to drive additional shareholder value.

Since our last quarterly call, we have spoken with an increased volume of potential customers. And it's clear from those conversations, the most accretive business model for the site is one of co-location. This is not specific to Moses Lake and applies to all of our other sites as well, where demand is even higher. So we will focus on what we do best, being an infrastructure developer and owner. This plays directly to our core competencies. We are a team of developers united by disciplined action, building cost-effective institutional-grade infrastructure at the pace our customers require.

The same capabilities have built our energy platform, speed to market, capital discipline, operational rigor precisely what HPC and AI deployments demand today. This is just the natural extension of what we do best. So with all the pieces in place and with the overwhelming support of our shareholders who voted over 99% in favor of the HPC and AI pivot, the U.S. redomicile and the rebrand. Starting tomorrow, we are Keel infrastructure.

Turning to Slide 4. When we sat on our pivot, we developed a 3-year transformation plan, one that as of today, we are nearly halfway through completing. In 2025, we did the intensive foundational work for our transformation, including the Stronghold acquisition, securing more power in Pennsylvania, rebalancing the portfolio to North America, a $588 million raise fully institutional and oversubscribed, our U.S. GAAP transition, New York headquarters and establishing a new executive team. This work is done.

With power and land secured in some of the power markets that matter most, a team of internal experts and strategic partners that have built data centers for the largest companies in the world and a balance sheet engineered to see us through 2026, we are well positioned to continue our site development and deliver against the time lines, our prospective hyperscalers and neocloud customers need. 2026 is all about execution. Effective tomorrow, we will have completed our redomiciliation to the United States and officially rebranded as Keel infrastructure. Two major milestones that position the company for the next phase of growth.

With that complete, we expect the next significant milestones to come from executing against our development at Panther Creek, Sharon and Moses Lake, where we are moving full steam ahead and working diligently across three simultaneous and active work streams. One, finalizing permits, which we expect to be done in the coming months. Two, continued work on architecture and engineering in line with ongoing customer conversations and requirements. And of course, three, our go-to-market to secure highly financeable leases with investment-grade tenants. Commercialization is well underway. The upcoming milestones investors can expect are completion of preconstruction activities like permitting, progress in customer engagement and ultimately lease execution, which we are confident we can achieve this year and will be major catalysts.

2026 is also the year where we expect to leave Bitcoin and Bitcoin mining behind. While we were probably one of the first miners to commence wind down of our Bitcoin mining exposure to reinvest that capital into infrastructure for HPC and AI, we will be accelerating those efforts in 2026 as site developments progress. 2027 is all about delivery. This is the year when we anticipate that sites would come online, we'd begin delivering megawatts to customers, HPC and AI revenue really begins and we complete our transition to a premier North American HPC and AI infrastructure company.

By the end of 2027, we expect Keel will be a proven infrastructure developer and a regional leader across Pennsylvania, Washington and Quebec, and we will just continue to grow and scale from there in 2028 and beyond to over 2 gigawatts as we execute against our expansion capacity.

Turning to Slide 5. In HPC infrastructure, power, location and time lines are everything. We hold something scarce and valuable secured power, land and expansion capacity in Pennsylvania, Washington State and Quebec. Some of the most in-demand markets with some of the biggest barriers to entry. We know it and so do our potential tenants. Our campuses offer solutions to hyperscalers and neocloud's greatest scaling problems, location, proximity and fiber connectivity to major metro areas and data center clusters solving for latency issues and giving our tenants proximity to their own customers and other data centers.

Time lines. Our robust secured power for '26, '27 and with expansion capacity in 2028 is highly coveted in an environment where energy capacity is hard to find and multiyear waitlists are the norms. We create value for tenants by enabling them to deploy years earlier by leasing from us rather than to invest in growing organically. An energy-efficient cool climate, the lower the PUE, the more critical megawatts. Panther Creek is a great example of seeing the hyperscaler and neocloud's appetite at play. While there is a lot of interest in the site last year, inbound customer activity surged after we secured zoning in February. This is not a coincidence. It is the proof point and one that we've been making for the last year, but may still be confusing to some investors. So we'd like to be clear that investment-grade tenants value derisk sites where they can move from lease to revenue fast. The more we advance, the better our leverage. The better our leverage, the better the leases, and the more long-term value we create for shareholders.

Turning to Slide 6. It is indisputable that power is the binding constraint for AI infrastructure deployment and will remain so for the coming years. Leading investment banks, Goldman Sachs, JPMorgan, Wells Fargo, Guggenheim, Moelis, they've all published extensively on this. And the consensus is clear. New power generation cannot come online fast enough to meet AI demand today, tomorrow or in the next 5 years. This bottleneck is structural, not cyclical. Hyperscalers and neoclouds that used to plan on 12-month horizons are now locking in 24- to 36-month supply chain commitments. Not tied to specific projects, but as platform level agreements and are now actively competing for the power and land to deploy it. While you are probably familiar with this information, here you can see a summary of the five development sites. The power we have secured and in some cases, the incremental power opportunities that make up our 2.2 gigawatt pipeline.

Turning to Slide 7. I want to take a moment to put our current valuation context because there is a meaningful disconnect between where we trade today and the value we are positioned to capture as a company. When we analyze our current valuation against our peers, the picture becomes clear, at approximately $1.9 million per available megawatt of secure 2027 capacity, we're trading in the middle of a Bitcoin miner Group, valued at roughly $1.7 million to $2.1 million for 2027 megawatt meaning we are being valued based on having power but not what we are doing with it.

For shareholders and bondholders, we see three distinct catalysts, each capable of driving meaningful reratings. The first is obviously lease execution. Across our sector, companies that have signed leases trade at $4 million to $6 million per 27 megawatts, a 2 to 3x premium to where we are today. This is the market's consistent signal driven entirely by lease execution, not facility delivery, not revenue generation, just signed leases. A signed lease secures revenue and financing derisking the developments. The market pays for that with nearly 500 megawatts actively being commercialized today and visibility on permitting across Panther Creek, Sharon and Moses lake, this catalyst is well within reach.

The second catalyst and arguably the most powerful for long-term holders is securing our expansion capacity. 2/3 of our 2.2 gigawatt portfolio or approximately 1.5 gigawatts is expansion capacity, which we believe the market is assigning little to no value. While securing these megawatts is a process that will take more time, we believe additional megawatts can be secured in the second half of 2026 requiring very little CapEx while representing significant embedded value as powered land even before a lease is signed or there is a shovel in the ground.

The third catalyst is delivering in 2027. Once facilities are derisked through commissioning and begin generating revenue under long-term contracts, the development risk should drop dramatically and the operator valuation numbers become transformational yet again. We are not taking a leap of faith on technology, our ability to see our power or market demand. The tech is here. The power is secured, the sites are advancing, the inbound demand is real, but the market has not yet priced in is the transformation that happens when a developer becomes a counterparty when we move from site advancing to lease executing. This is the main opportunity ahead of us to accelerate permitting, execute leases, secure our expansion capacity and ultimately deliver to our customers. This is how we will create value for our shareholders and bondholders.

Turning to Slide 8. Our execution plan is defined by six areas, each supporting our ability to deliver at the pace and scale our future customers require. First, we've secured our deep bench of talent by adding over 60 years of infrastructure and development in over 50 years of data center construction experience combined in just the past few months. People have delivered at scale for the most demanding customers in the world. Jonathan Mir joined as CFO, bringing 25 years of energy infrastructure strategy and project finance expertise. We have also added an SVP of construction and of power, a VP of HPC Operations and Head of permitting to oversee the execution of these critical functions. We've assembled the right team to execute on our vision.

Second, we are engaging the right industry leaders as partners, T5, Turner Construction, Corgan, [ WWT ], Vertiv. These firms have built data centers for the world's largest hyperscalers not once but hundreds of times. When customers look at our project partners, which will be available on the new website when it launches tomorrow, they will see that we have also assembled the right partners to ensure better outcomes.

Third, we have the capital required to bring our sites to market. As of March 27, 2026, our liquidity stands at $520 million in cash and Bitcoin, which we expect is much more than the CapEx budgeted to get us to a lease at Panther Creek, Sharon and Washington. Jonathan will go into more detail on our capital position and financing strategy shortly, but the headline is simple. We're well funded and can move fast.

Fourth, a disciplined Bitcoin exit. It is clear we are no longer a Bitcoin miner. However, with strong, robust liquidity, we can have a disciplined approach to our exit strategy. We will continue to operate up until the time sites need to be prepared for construction maximizing free cash flow before selling the miners. We will also opportunistically sell Bitcoin into strength to capture and reinvest every dollar we can into HPC and AI infrastructure.

Fifth, power assets that cannot be replicated. Our megawatts sit in regions with large barriers to entry, Pennsylvania, Washington State and Quebec, all have multiple year waitlists. No one is cutting the line. Our 350 megawatts at Panther Creek, 110 megawatts at Sharon and 18 megawatts in Washington were secured before the AI demand wave made these markets highly coveted. This isn't power others can easily replicate giving us competitive edge with high-quality tenants to understand these markets and are hungry for assets like ours, which leads us to our sixth point.

In this market, speed to power is what drives value. For our customers, the opportunity cost of delayed deployment is huge. So the priority is getting capacity online as quickly as possible. Every day of delay is lost revenue. As a result, power availability and certainty of delivery are the primary drivers of lease economics. This dynamic has pushed lease rates higher since our Q3 call, exactly as we said it would. The opportunity in front of Keel infrastructure is real. We now have the assets and the team is ready. I'm so proud of what we built in 2025, and I'm confident in what we'll deliver in 2026 and 2027. With that, I'll turn the call over to Jonathan.

Thanks, Ben. Turning to Slide 9. I joined the team 5 months ago. My focus has been on sharpening our approach to capital allocation, strengthening our balance sheet and capital structure and ensuring the financing actions support long-term shareholder value creation. I've had a front row of the depth of talent, the operational discipline and the strategic momentum across Bitfarms.

I work closely with our operations and development teams both to understand the current trajectory of our assets and to ensure our capital plans are aligned with the opportunities ahead. What stood out to me is the extraordinary potential we have driven by the quality and potential of our sites, a strong balance sheet, the best liquidity position in the company's history and a broad team that's both deeply engaged and committed to excellence. We're moving quickly and with purpose.

I'm pleased to be here with you today and discuss the progress we're making. I'll use this time to walk through our performance for fiscal year 2025 and outline our current capital strategy that we believe supports the accretive growth we're targeting for 2026 and beyond.

Turning to Slide 10. Before discussing our financials for the quarter, I want to briefly frame the results are presented this quarter. As of Q3 2025, the Paso Pe facility in Paraguay has been classified as held for sale. As a result, all revenues, operating costs and asset balances associated with Paso Pe are treated as discontinued operations in our fiscal year 2025 financials. So when I refer to continuing operations, I am speaking exclusively about our North American platform, the foundation of our transition into HPC and AI infrastructure.

With that, revenue for fiscal year 2025 was $229 million, up 72% year-over-year. Operating loss for fiscal year 2025 was $150 million including noncash depreciation of $98 million and $28 million of impairment charges. This compares to an operating loss of $28 million in 2024, which included $102 million of noncash depreciation and $4 million of impairment charges. Net loss for 2025 was $209 million or a $0.38 loss per basic and diluted share compared to a 2024 net loss of $7 million or $0.02 loss per basic and diluted share. The differences between 2024 and 2025 were driven by a number of factors, including change in fair market value of digital assets, primarily due to the decline of Bitcoin prices and realization of gains on disposal of Bitcoin during the year.

Two additional items also impacted year-over-year comparability. First, we saw a loss of $68 million, reflecting changes in our derivative assets and liabilities. Second, 2025 impairment charges were $25 million higher than in 2024. For the year, our adjusted EBITDA was $29 million compared to $31 million in 2024.

Turning to Slide 11. 2025 was a deliberate year of balance sheet optimization and improvement, providing the foundation for our next phase of growth. We successfully issued an oversubscribed $588 million convertible offering, significantly expanding our liquidity. And in February, we repaid the Macquarie debt facility eliminating legacy debt, simplifying our capital structure and freeing the company from covenants. Each of these supports the pursuit of our HPC infrastructure strategy. The Macquarie facility had been originally used to accelerate development at Panther Creek, funding critical project activities, including long lead time item procurement and substation work.

Retiring the facility was a strategic decision, strengthens the balance sheet and gives us the flexibility to secure a more cost-effective financing at either the parent or project level. Our current cash position of $520 million provides the runway to advance Panther Creek, Sharon and Moses Lake through lease execution without accessing capital markets. Though we may do so if attractive opportunities arise that improve our ability to deliver the best possible long-term risk-adjusted shareholder returns. Macquarie was an excellent partner, and we appreciate their support so early in our pivot to HPC AI infrastructure.

Turning to Slide 12. As we pivot to commercialization of our development sites, we have a clear financial strategy based on three principles. Capital allocation, capital formation and capital structure. Taken together, they are designed to deliver the best possible long-term risk-adjusted shareholder returns. First, capital allocation. We deploy capital into projects where the earnings potential exceeds their weighted average cost of capital. We rotate capital from businesses that are noncore or earning less than optimal returns and deploy the capital into higher return investments.

Second, capital formation. Our financing strategy is designed to fund our very large growth opportunities while maintaining the liquidity needed for a stable base of operations. We will be opportunistic in our financing execution. We will fund construction of our data center projects using project or parent level bet and project or parent level equity or equity-linked offerings. We're taking a disciplined approach and at this time, are well capitalized to actively commercialize and execute leases across Panther Creek, Sharon and Washington.

Third, capital structure. Our capital structure is designed to capture the best possible long-term risk-adjusted shareholder returns while also retaining overall corporate flexibility and support growth. Our objective is to operate with a deliberate liquidity strategy in order to enable clear-headed commercial decisions and capital allocation decisions rather than having liquidity drive time lines. Stepping back, our road map is clear. We are building a regionally focused high-growth HPC AI infrastructure platform, grounded in disciplined capital allocation, a strengthened balance sheet and a development cadence that maximizes returns and minimizes risk.

We're funded through the key derisking stages, permitting and leasing across Moses Lake, Sharon and Panther Creek and we're entering 2026 with momentum, optionality and a balance sheet engineered for growth. We have the right people, assets, liquidity and strategy and we're well positioned to capture for our shareholders the long-term value potential we have today.

With that, I'd like to return the call to Ben for closing remarks.

Thanks, Jonathan. A little over a year ago, as our team began actively integrating AI into both our business and our daily lives, we came to a realization. This isn't just another technology cycle. It's a paradigm shift. More comparable to the industrial revolution than the Internet revolution. The fundamental measure, productivity capacity is no longer calories or joules, but tokens. This became strikingly clear 2 weeks ago at NVIDIA GTC, where I witnessed hundreds of companies applying AI to everything from straightforward tasks by cleaning and image generation to extraordinary complex applications, including protein folding, cystic simulations and even brain surgery.

Walking the conference floor, speaking to the attendees, one thing was unmistakable. We've only begun to scratch the surface of AI's potential. Yet even in these early days, AI is already empowering individuals, communities and companies to accomplish exponentially more. We're witnessing Jevons Paradox unfold simultaneously across every industry, thanks to AI, where improved efficiency can paradoxically drive higher, not lower demand. It is literally never cost less to transform an idea into an action, a product, an image, a refined concept, a service or countless other outlets.

The possibilities are truly limitless, and while no one can predict exactly how AI will reshape our future, uncertainty remains. It will require enormous amounts of power. Our 2.2 gigawatts of capacity and strategically position land across Pennsylvania, Washington and Quebec sit directly in the path of this transformation, and we intend to capitalize on that opportunity for our shareholders. We look forward to the opportunities ahead.

With that, I would like to open the call to Q&A. Operator, please go ahead.

[Operator Instructions] And our first question comes from Mike Grondahl with Northland.

First question, Ben, you talked about your decision not to go the GPU rental route at Moses Creek. And just the colocation route, could you talk a little about what a couple of the major drivers were that got you to that decision?

Yes, it's a great question, Mike. When we first started talking about in Q3, we were always evaluating this alongside with the colocation. We're trying to maximize the value for shareholders. So we're always going to evaluate multiple different business models at our sites. And because they have the lowest cost energy and all these other benefits, we thought it would make a lot of sense. But as we've continued to have increasing amounts of customer conversations for Washington and other sites. It was just really clear to us that the best opportunity for us is to just remain a pure-play infrastructure developer and owner and let these customers who really want these megawatts lease these megawatts.

Got it. Got it. And then maybe secondly, you articulated, I'll say, a philosophy a quarter or 2 ago about waiting and waiting on signing a lease as terms were continuing to improve kind of implying you're going to be really patient and wait on a lease. Could you kind of update how you're thinking about that lease execution strategy and the potential timing around it?

Yes. Our strategy on lease execution has been consistent. It remains consistent today. Our view is that the best way to maximize value for shareholders is to get the best terms in a lease because that's going to be what is going to be driving our NOI and our multiple. And so when we're looking to sign 10- to 15-year agreements, it's really important for us to take the -- maybe a little bit more time than investors may want us to in order to get better terms for longer.

When it looks at what is really driving the value in these lease economics, one of the biggest elements is risk, and we've spoken to this multiple times over the last couple of months. And the biggest risk for most of the people -- to go out there and have conversations and get a lot of interest. And in some cases, you could even sign a lease prior to getting permits. But all of that risk is going to be priced into the agreement, you're going to be locked into it for 10 to 15 years, and that's going to negatively impact the long-term value that we're creating for shareholders.

So our strategy has been incredibly consistent. And the benefit for us is that we are operating in high demand markets with high barrier to entry. So it takes a little bit longer to get permits going in Pennsylvania or in Washington than it does in Texas, which is the easiest market in the United States for that. But we believe that drives a lot of extra value because it's way more scarce, it's way harder to acquire and there's just not as much optionality.

Our next question comes from Brett Knoblauch with Cantor Fitzgerald.

Maybe to start, could you maybe just go into detail on what permits at what sites you guys are waiting to receive?

So permits is a complicated process, and we are develop -- we're getting permits across multiple sites in multiple jurisdictions. So they all have different rules, different regulations, different time lines, different reviews, different authorities. So it's far too much detail to get into exactly what permits are remaining on all the different sites. But we are continuing to make good progress and kind of -- we're looking at the visibility over the next couple of months. And with what we've had so far with the community engagement success that we've had so far, we think that in the coming months, sometime around the mid- to late summer time. we should be achieving the full permitted status across at least one, if not all of the sites.

And then maybe just on the leasing environment across the different sites that you guys have. I guess we were under the impression that maybe Sharon would be first to go given it's relatively further along. Is that still how you guys are thinking about it? And then in the presentation when you guys kind of list the power pipeline and road map. How much of that is from generation on site that you guys are looking into? And do you have any update on where you guys are with respect to sourcing that generation?

Yes, sure. So the -- to answer the second part of your question first, all the power that we're talking about developing for our HPC and AI data centers right now is grid connected. So the two operating power plants that we have at Scrubgrass and Panther Creek. Currently, that math is not in those charts for the secured capacity or the site development plans. But in Scrubgrass particular, we are working to expand the generation capacity there with natural gas. So we've been working to tap into the Tennessee Natural Gas Pipeline. We're achieving pretty good results there with the engineering firms. There's still probably another month or two to go before we're getting a clear path forward on the engineering plans.

But Scrubgrass is our more of our pipeline site. And so those -- that power generation opportunity is more of a 2028 and 2029 time line. Everything else is grid connected, it's secure today or it's currently active. And sorry, Brett, I'm blanking on the first part of your question, would you mind repeating it?

Yes. Just on maybe the cadence of which sites are -- quicker to go?

Yes. So really, that's going to be driven by success on permitting time lines in the customers. So all three of the sites, Moses Lake, Sharon and Panther Creek are all actively in our go-to market right now. Every single one of those has customers engaged under NDA, and they have for quite some time. And so we're continuing to push forward on those conversations and those negotiations.

Really, I think what investors should think about with regards to permits, permits are more of a closing condition to a lease, right? They're really not a starting condition to a negotiation. So we have these conversations and these negotiations simultaneously while we're working towards permitting. As permitting gets closer and closer, the negotiations will also get closer and closer in tandem and the first site to get leased is likely to be the first site to be permitted.

Our next question comes from Stephen Glagola with KBW.

Just on that last point, if you could clarify the sequencing here between like notice to proceed and lease execution. So in other words, like can you pre-sign leases contingent on notice to proceed? Or is like notice to proceed required before any major customer would commit to a lease?

For a customer commit to binding in our view, they're going to want NTP, and that's based on the number of conversations that we are continuing to have and there probably are some customers who would be interested to sign prior to NTP, but those aren't the investment-grade counterparties that we're really seeking to engage with.

Okay. And then just one more. How are you thinking about like Vera Rubin hardware availability in '26 and like early '27? And to what extent could that variability in supply influence the timing of lease discussions at your sites?

Yes. That's a good question, Stephen. We've been talking about Vera Rubin, I think, since Q3 call because all of our sites are basically coming online in 2027. So we're trying to make sure that they are designed for the highest level of equipment that's coming out in '27 and '28, which is the Vera Rubin.

In terms of supply, we haven't seen any impact so far. I understand there's always geopolitical uncertainty in the world that may impact those supply chains. But given that energy is such a huge bottleneck, and it's always been a huge bottleneck on the growth. I don't think that there is going to be a geopolitical situation that's going to make the bottleneck change from energy over to GPUs. So we don't have any expectation right now that, that's going to have any impact on leasing or demand for sites because power is still such an extreme bottleneck. It's hard to imagine what's going to overshadow that geopolitically.

Our next question comes from Michael Donovan with Compass Point.

Congrats on the progress. Can you provide an update on ESA progress, specifically Panther Creek's ISA to ESA conversion?

Yes. So that's a great question, Mike. As investors probably know, we have 350 megawatts secured ESA with PPL. But in addition to that, we also have an ISA that enables us to draw down approximately 60 megawatts from the grid, and that's associated with the existing transmission line and substation for the power plant that we currently have operating.

In order to get that converted over, it's really more of a regulatory matter. And so it's hard to put an exact time line as to when those stamps are going to be received, but there's no infrastructure that needs to be built. There's no CapEx that needs to be spent. Really, it's just a matter of getting the regulatory approval to convert a nonfirm service into a firm service, and that would enable us to increase our capacity beyond 350 megawatts to what we probably expect is going to be maybe 400 megawatts or possibly slightly more. We expect this is going to happen this year, but it's hard to put an exact time line on it, given it's a regulatory matter.

Our next question comes from Brian Kinstlinger with AGP.

Last quarter, Ben, you communicated, you expected the GPU as a service and Moses Lake site would be targeted for, I believe, the first quarter for go-live. How are you shifting to co-location change the timing if at all? And my second question is, can you talk about also how the global memory shortage is impacting your site development or changing your near-term needs or planning for lead times?

Yes. So two parts to that question. In terms of switching from a GPU as a service to co-location just changing the business model doesn't really impact the development time line. So we don't really see any delay there associated with changing from GPU as a service, just to co-location. Really, it's just a matter of how we want to allocate our capital and how we want to focus the business. When it comes to the memory shortage. As a pure-play infrastructure developer and owner that really is not coming into our calculus very much, mostly that's a customer situation for them to resolve with their own supply chain because we're not the ones investing in the GPUs and the compute and the servers.

Our next question comes from Martin Toner with ATB Cormark Capital Markets.

Good morning. Can you guys elaborate or [indiscernible] can you kind of give us some time line thoughts there?

So I'm going to repeat the question because it was a little quiet, just in case nobody else or other people had difficulty hearing. I believe the question was, can you give some time lines as to how we might be able to expand Panther Creek to 500 megawatts and beyond?

So in order for us to move beyond the 350-megawatt ESA that we have secured, there's really two sources for expansion. The first is converting over that ISA from non-firm service to firm service that I just spoke to a minute ago. And that's really a regulatory matter that we expect to be resolved sometime this year. It could be tomorrow, it could be a few months from now.

And then when it comes to expanding beyond that, what we have to do with that is we have to actually have new power applications. The good thing here is that the utilities are actually looking to invest in new generation in the area. So in this particular instance, and we weren't actually applying for new power. We actually have the utility call us and ask us how much more power we could take on site. Given the bottleneck constraint on power, that was obviously a very welcome call over here at Bitfarms to receive.

And it's a pretty unusual one in the industry, but they're looking to scale up generation capacity in the area, specifically to service our site at greater capacity. So this is probably going to be 2 to 3 years time line because there's a lot of process involved with spinning up new generation and building those new transmission lines. But for a lot of our customers, what they really want is the fastest pathway to energization and a clear path to scale over multiple years. And so this really lines up with what the hyperscalers and what the neoclouds are searching for.

That's great. Hopefully, you can hear me better. Can you clarify when you expect to sign your first lease?

So I can't get into a specific time line. But in terms of milestones, as I spoke to earlier, it's really about clearing NTP as kind of the last closing condition or last milestone for us to sign a lease. So I think for the investors and the analysts on the call, the important thing to keep track of, especially over the next coming months is the continued progress that we have towards NTP because once NTP is clear, that's basically the last thing standing between us and a signed agreement.

Got it. Great. And last one from me. Can you talk a little bit about why mining exahash in Q4 was at the level that it was at?

So we continue to scale back our mining exposure as we continue to focus on our U.S. HPC infrastructure investments. So we haven't made any investments into Bitcoin mining. We're not spending any money on upgrades or new miners, and we're actively working to scale down the fleet and actively working to spin off assets like we have in Paraguay that are not suitable for conversion. So investors should continue to expect our hash rate to continue to trickle down over 2026 as we continue to execute on this transition to HPC and AI.

Our next question comes from Mike Colonnese with H.C. Wainwright & Company.

So, Ben, I'm just curious, after securing the remaining permits across the three sites, which sounds like likely to take place in the coming months here, what does the time line look like from a data center construction and delivery standpoint? It sounds like you're pretty optimistic that revenue generation could commence as soon as next year, but any additional color there would be helpful.

Yes. I mean, really, this is the year of execution in 2027 is the year of delivery. And so at all three of our projects that we talked about today, Panther Creek, Sharon and Washington, we all expect them to come online and start delivering megawatts and start generating revenue to customers in 2027. We'll continue to provide updates as we go along. And I think once we have cleared NTP and we have signed leases, there's going to be a lot clear visibility that we can provide to investors for each specific project and their specific time lines.

Got it. And then back to Bitcoin mining operations, it sounds like you're progressively going to be scaling back hash rate as you bring some of the HPC AI data centers online. I guess what's the best way to think about hash coming offline and kind of flowing through your operating results over the near term here?

I'll speak to it at a high level and then maybe I'll pass it off to Jonathan for some further clarity. But right now, the Bitcoin mining remains profitable, but it's not it's not very -- it's marginal. So it's still contributing to the business. But really, it's not the focus of the business. It's not where we're investing our time, it's not where we're investing our efforts.

And given that we have been so successful last year in raising capital and strengthening our balance sheet. It's really not super impactful for the developments that we have this year, the operations or the CapEx. So we'll just continue to scale that down, trying to maximize value in the disciplined exit. If it makes more sense to maybe sell some miners a little bit earlier then we might need to in order to begin instruction, we'll evaluate that as we will always do to maximize value for our shareholders.

But really, we kind of see this as a pretty minor element of our balance sheet and a minor element of the financial plan for this year. Jonathan, do you want to add anything further?

Only that when we think about our liquidity going forward, the strategic objective is to ensure we are well capitalized through the lease process and beyond without the need to raise any new capital in the markets and that takes into account the current state of Bitcoin mining operations. It's not assuming any improvement in the economics there. So our plan is built on conservative assumptions around the status of the Bitcoin market.

Our next question comes from Nick Giles with B. Riley Securities.

Good morning, Keel team. In the interim period where Bitcoin mining operations are wound down, but kind of pre-revenue generation on the HPC side, could the generating assets at Panther Creek and Scrubgrass be utilized in any way such as the PJM capacity auction?

So those power plants do actually participate in PJM capacity auctions. We've done that for quite some time. And so we do benefit from the capacity payments that we received there.

Got it. Okay. And any order of magnitude of what those could be kind of in the 2026 planning year?

So I mean, really, it's -- we've kind of maxed out on the capacity auction payments. They set a ceiling, and that's where the capacity auction payments closed.

Got it. Understood. Maybe one for Jonathan. You've made some progress on the capital structure, but just was hoping for any additional comments you might have on what you're looking for in an initial debt package, how you're seeing term shift and kind of what tools you have at your disposal during construction and kind of post energization.

Good question. Thanks, Nick. So our basic approach is to compare and contrast our financing options down at the asset level and upstairs at the parent level. And certainly, one of the things that we've seen in the market that has caught our attention like everyone else, is the tightening of spreads between folks issuing high-yield debt in the market that would seem like quite attractive levels for strong investment-grade counterparties or credit wraps. And those converging towards the levels seen in bank-originated classic construction of project financing.

So we'll be -- each of those has its own advantages in terms of simplicity of managing the actual capital once it's raised versus negative carry costs. And as we get closer to a funding point, we'll make the decision as to what seems best for our shareholders in terms of how we decide to finance. I'm sorry, Nick, I was just going to say that the markets for our space and for infrastructure generally seem calm right now.

Our next question comes from Brian Dobson with Clear Street.

It's Greg Pendy in for Brian Dobson. Just I guess one final one. Just I guess, one final one. Just on the redomiciling to the U.S., are there any implications to costs or structural implications in terms of ownership that we should be aware of as you enter this over the next couple of days?

One of the benefits and reasons for the redom is that we will now be eligible for inclusion in indices that require -- want to be a U.S. domiciled company. So for example, we'll be eligible for inclusion in the Russell 1000 and the Russell 3000 as well as for ownership in any other fund who was otherwise limited to the purchase of U.S. securities. We view that as being quite helpful in terms of moving our shareholder base to one that is institutional and long term. There are no other -- there are no cost or flexibility implications in our end. We simply see this as a nice path forward with a lot of benefits for our shareholders.

Our next question comes from Bill Papanastasiou with Chardan Capital Markets.

Just wanted to touch on the Washington side and decision to shift towards colo. Can you confirm that this won't have any material impact on the purchase commitment that was entered into November? Or is the team considering the shift in development allocation to other sites?

Thanks, Bill. No impact on the capital commitments and the equipment we've already purchased for the Washington site by changing business models. In fact, actually, it just helps to reduce the CapEx because we're no longer paying for the compute.

Understood. And then how should we generally be thinking about maintenance CapEx on existing Bitcoin mining sites as you gradually shift over to AI HPC here?

We're not making any investments into the Bitcoin mining sites. Basically, we're just continuing to keep them up and running. And so no further investments are being made in the sites into new sites or into new miners.

Thank you. This concludes the question-and-answer session. I'd like to turn the call back over to Ben Gagnon for closing remarks.

Thank you very much, everyone, for joining our call today and really look forward to speaking to you next time as Keel Infrastructure. Have a great day.

Thank you for your participation. This does conclude the program. You may now disconnect.

Welcome to the Special Meeting of Bitfarms Ltd. Please note that this meeting is being recorded.

I would like to introduce Edith Hofmeister, Chair of the Board of Directors of Bitfarms Ltd. Ms. Hofmeister, please go ahead.

Good morning, ladies and gentlemen. My name is Edie Hofmeister, and I'm the Chair of the Board of Directors of Bitfarms. It's my pleasure to welcome you to today's Special Meeting of Shareholders of Bitfarms. At this time, I call to order this special meeting. Joining me today are the other directors of Bitfarms, Brian Howlett, Fanny Philip, Wayne Duso, Amy Freedman and Benjamin Gagnon, who is also our CEO. Our Chief Financial Officer, Jonathan Mir; and our Global General Counsel, Rachel Silverstein, are also in attendance at this meeting. I will act as Chair of this meeting, and I will ask Rachel Silverstein to act as Secretary for this meeting. With the consent of the meeting, I appoint TSX Trust Company represented by Julie Kim to act as scrutineer.

I have received proof of the mailing of the notice calling this special meeting and the accompanying management information circular dated February 17, 2026, which was sent to all holders of common shares in the form of proxy and letter of transmittal, which were sent to all registered holders of common shares in each case as of the close of business on the record date of February 13, 2026. These materials were also filed and are also available on SEDAR. I ask that a copy of each of these materials, including the proof of mailing, be retained by the Secretary with records of this special meeting.

I have received the preliminary scrutineers' report on attendance, indicating that at today's special meeting, we have 374 shareholders represented by proxy and management proxies representing 177,194,069 shares. As of the record date, we had 602,727,574 issued in outstanding shares and, therefore, 29.399% of the outstanding shares are represented by proxy or management proxy at today's special meeting.

I adopt the report of the scrutineer and declare the attendance at this special meeting to be as set out here therein. As a quorum is present and as proper notice of the special meeting has been given, I declare the special meeting to be properly called and constituted for the transaction of business.

Before turning to the formal business of the meeting, I'm going to take a minute to explain the process for this meeting. We're holding this meeting virtually through a live audio webcast. As a result, voting on all matters at the meeting will be conducted by electronic ballot. Registered shareholders and duly appointed proxy holders who have followed the proper procedure of requesting a meeting access number to log in may vote on each item of formal business. If you voted your shares prior to the proxy cutoff time, your vote has been received by the scrutineers, and there's no need to vote those shares again during the meeting unless you wish to revoke your previously submitted proxy.

At any time during the meeting, registered shareholders and duly appointed proxy holders who have not already voted and who have logged in properly with their control number or meeting access number and wish to vote their shares may do so by clicking on the voting icon on your screen, selecting your voting direction from the options shown on the screen and clicking submit. The polls will remain open until just before the conclusion of the formal business of this meeting.

Proxy holders, including beneficial owners who appointed themselves as proxy holders, should have logged into the webcast by entering their control number they received from their registered or beneficial owner who appointed them. If shareholders and proxy holders have logged on properly, when you click the voting icon on your screen, the items of business to vote on will be displayed. To vote, select your voting direction from the options shown on the screen and click submit. You may vote on the items and change your vote at any time until the polls are closed. We've been advised by TSX Trust, the scrutineers for the meeting, that based on proxies already deposited with them, there have been enough votes cast to carry the motion.

Shareholders or proxy holders may ask questions relating to the formal business of the meeting at any time during the meeting by submitting the question in writing in the text box on your screen that says Ask a Question. We will now proceed with the formal business of the meeting.

The purpose of today's meeting is for the shareholders of Bitfarms to, pursuant to an interim order of the Ontario Superior Court of Justice dated February 13, 2026, consider and if determined advisable, pass a special resolution to approve a proposal -- a proposed plan of arrangement pursuant to which each existing common share of Bitfarms will be exchanged for 1 share of common stock of Keel Infrastructure Corp., a newly incorporated entity formed under the laws of the State of Delaware in the United States of America. That will become the ultimate parent company of Bitfarms and its subsidiaries as a result of the arrangement. The full text of this special resolution, also known as the arrangement resolution, is set forth in Appendix A to the management information circular.

The Board of Directors of Bitfarms has unanimously recommended that shareholders vote for the arrangement resolution. Independent proxy advisory firms, including Institutional Shareholder Services Inc., are also supportive and recommend shareholders vote for the arrangement resolution. To be effective, the arrangement resolution will require the affirmative vote of at least 66-2/3% of the votes cast by holders of common shares of Bitfarms present in person or represented by proxy at this special meeting.

Unless otherwise directed, management will vote all shares for which they have been designated proxy in favor of the arrangement resolution. May I have a motion approving the arrangement resolution in the form set out in Appendix A to the management information circular? In order to save time with the consent of the meeting, I propose to dispense with the full reading of the arrangement resolution and have the text be taken as having been read in full.

I'd like to ask Rachel Silverstein, our General Counsel, Global, to move the motion and Jonathan Mir, our Chief Financial Officer, to second the motion.

I move that the arrangement resolution in the form set out in Appendix A to the management information circular be approved.

I second the motion.

Thank you. Is there any discussion on this motion? Seeing there are no comments or questions, it is now -- in order to vote on -- it is now time to vote on the motion. Registered shareholders and duly appointed proxy holders may vote if they haven't already. I declare the polls open for voting.

[Voting]

We will be closing the polls for voting momentarily. Now that registered shareholders and duly appointed proxy holders have had the opportunity to vote, I declare the polls closed. The scrutineers have provided their preliminary report based on management proxies received prior to the meeting. The report indicates that 173,274,022 shares represented by management proxies voted in favor of the arrangement resolution and 1,173,232 shares represented by management proxies voted against the arrangement resolution. As a result, I adopt the scrutineers' preliminary report with respect to the arrangement resolution and declare that the arrangement resolution has been passed and the motion is carried. The final report on voting results will be provided by the scrutineers after the meeting and will be incorporated into the minutes of the meeting. The percentage of votes counted for or against the arrangement resolution will be disclosed in a press release that will be filed on SEDAR.

The formal agenda for this special meeting is now completed. Before I declare the formal business of today's special meeting to be concluded, I will ask Rachel Silverstein whether we have received any questions relating to the formal business of the meeting today.

No, we have not.

As there is no further business to be brought before the meeting, I declare the formal business of today's special meeting to be concluded. On behalf of the Board of Directors and Bitfarms, I would like to thank everyone who attended today, marking this important milestone in the history of our company. We appreciate the support that all of our shareholders have shown over the years and during this transformational process. We look forward to completing the final phase of our pivot to the U.S. and continuing our business from April 1 onwards as Keel Infrastructure.

Thank you for attending today's meeting. You may now disconnect.

[Audio Gap] coming for Bitfarms presentation. Before we begin, I just want to remind everybody that we will be making references to forward-looking statements that might differ with actual results. We also refer to non-IFRS measures. If you're looking for definitions on both of them, please make sure to look at our MD&A on our website. Additionally, all financial figures are in U.S. dollars unless we stated otherwise. And with that, Liam.

Does this work, guys? This work, okay. This clearly does work. Okay. Welcome, everyone. My name is Liam Wilson, I'm the COO of Bitfarms. Today, I'll walk through our investment thesis, value proposition and key developments, including updates on our energy portfolio and site-specific advancements, all of which give Bitfarms a competitive advantage to capitalize on the surging demand for HPC and AI infrastructure. I would like to kick off today's call by outlining our market thesis, one that we believe differentiates us from our peers in our transition to HPC and AI.

And that is that infrastructure is not a bubble. Since the invention of modern compute, the supply of compute has increased exponentially. As compute grows, so too does the data center industry that powers it. This is a trend that has a trajectory of over 20 years of exponential growth and an annualized growth rate of 8.8% behind it. This isn't a bubble. It's a reflection of a new paradigm that showed no signs of slowing down before AI.

Now as AI rewrites the rules of how humans interact with computers, the demand for data center capacity is accelerating, but the demand for compute and infrastructure has reached an impasse. The exponential increase in demand for power can no longer be met at the pace the market demands. As a result, the lease rates for data center infrastructure, which have grown at an average rate of 3% over the last 20 years are now growing at an average rate of 12% since 2022. We expect this trend to continue.

Turning to Slide 4. Infrastructure is a bottleneck. As manufacturers continually introduce more efficient chips and increase production every year, this trend continues to accelerate. Next year, NVIDIA alone is expected to be shipping between 10 and 15 gigawatts of GPUs. That doesn't include AMD, Intel, Qualcomm and others who are also producing their own hardware with over 100 gigawatts of chips expected to be produced by 2030.

While the supply of compute chips continues to increase, the growth in data center infrastructure is happening at a much slower pace. It is not silicon nor capital that will be the real bottleneck for continued growth in HPC and AI, but power and infrastructure. Over the next few years, the gap between the amount of chips that are being produced and the megawatts and the racks available to plug them in and operate them will continue to widen.

We strongly believe that as this dynamic continues to play out, the value and the economics will continue to move in favor of those who own the energy and data center infrastructure. We've watched this play out in the market with the contracts that have been announced in the industry to date. As we've moved further along this curve that's shown on the slide, those rates have continued to trend upward. Most of the contracts over the past few months have been sitting near $150 per kilowatt per month.

As time goes on, this trend is expected to continue with analysts predicting a massive shortfall of nearly 45 gigawatts of power for data centers by 2030. Just recently, the CEO of Microsoft confirmed this shortfall when he publicly stated that they have GPUs they cannot deploy. We believe that over time, the companies who have allocated and will continue to allocate billions of dollars into compute will be increasingly economically incentivized to pay rising prices in order to deploy their compute faster and with greater certainty.

Every day they do not deploy is a day of lost revenue. Their customers will simply move on to a competitor. Our investment thesis is clear and backed by decades of data. Our conviction is high backed by consistent incoming demand. We don't want to cap our upside by signing leases prematurely. Instead, Bitfarms plans to optimize and achieve higher lease rates and margins through the following 3 strategic actions: #1, prioritize infrastructure development first.

By minimizing the time between signing a lease and generating revenue for a customer, we will minimize the discounts that would otherwise be applied to the lease rates and locked into multiyear contracts. #2, take advantage of the widening gap between supply of data center infrastructure and data center demand to lock in higher rates and greater margins under multiyear agreements.

And three, while the industry is focused on NVIDIA GB200 and GB300s, Bitfarms plans to leapfrog NVIDIA's Blackwell architecture and lead the industry in developing infrastructure for NVIDIA's next-generation Vera Rubin GPUs across 99% of our 2026 and 2027 development portfolio.

With Vera Rubin GPUs expected to begin shipping in Q4 of 2026 and the infrastructure requirements to support them largely incompatible with facilities designed for Blackwell GPUs, we believe Vera Rubin infrastructure will be in the greatest demand and shorter supply in 2027 and will command significantly greater economics. Turning to Slide 5. We are able to take this approach because we have a robust balance sheet to fund development and know the value of what we own.

We have the largest portfolio of power in each of the regions in which we operate, none of which are in Texas and all of which are existing or emerging data center hubs. With consistent inbound demand for our sites, we have high conviction in the value of our unique energy portfolio, the demand for our power and our ability to develop next-generation HPC and AI infrastructure. We believe that not all megawatts are created equal.

Our megawatts are strategically located in high-value areas that have multiyear wait lists to secure the power we have secured today. Our campuses are close to major metros and existing data center clusters have ample access to major fiber trunk lines and undersea fiber optic cables and temperate mild climates. While Texas is undisputably a great energy market and arguably the easiest market to grow and develop megawatts in the U.S., there are, of course, trade-offs.

The trade-off to short-term development efficiencies is long-term operating inefficiencies. It is no secret that besides power, the primary challenge with data centers is cooling and cooling is becoming an increasingly more difficult problem to solve as energy density continues to increase with every generation of new hardware. Building and operating data centers in a hot arid climate like Texas as opposed to cooler northern climates like Pennsylvania, Washington and Quebec means more CapEx and OpEx for cooling.

This isn't an opinion. It's just math and engineering. If we built our exact same data center for Panther Creek with the same design, equipment and materials in Texas, it would have a PUE of about 1.4 to 1.5, whereas in Pennsylvania, Quebec or Washington, it would be about 1.2 to 1.3. That means for every megawatt we are converting, more of those electrons are going to compute, which is the revenue-generating activity for customers as opposed to supporting revenue generation through cooling.

Simply put, our megawatts are harder to get in higher demand areas, produce more value for customers and are worth more per megawatt. In Pennsylvania, we have the strategic foresight to acquire our 3 campuses and submit our energy applications in 2024 before the HPC and AI demand really came into play in the state earlier this year. This has positioned us with secured power at Panther Creek and Sharon and at the front of the queue with very well-advanced power applications at Scrubgrass.

In Quebec, new power allocations are near impossible to get with numerous data center applications denied by the province in the last year. Bitfarms has 170 megawatts operating with some of the cheapest power rates for data centers in North America, and they are 100% renewable. 100% of these megawatts are currently being utilized for Bitcoin mining. And in the last month, we confirmed that we will be able to convert our Bitcoin mining megawatts to HPC and AI.

This means our Quebec portfolio represents a unique and strategic opportunity to increase total data center megawatts in the province by 25% from about 700 megawatts today. while also fulfilling 2 strategic national and provincial objectives, the scaling back of Bitcoin mining megawatts while increasing HPC and AI infrastructure and data sovereignty. In Washington, we have 18 megawatts of secured power in the largest data center cluster on the West Coast with the cheapest power in the United States for data centers, which also happens to be 100% renewable.

Because of this, the area has a 10-year waitlist for power. Everybody is looking to grow here, and it is nearly impossible to do so outside of secured megawatts like ours. This means that despite the relatively smaller scale of Washington, sites in the area are in high demand by both enterprise and hyperscalers alike. Turning to Slide 6. Now we'll go through our sites one by one and discuss the key developments at each of them.

As we mentioned, Washington has a 10-year wait time for new power and the cheapest power in the United States for data centers. We are actively pursuing colocation for both hyperscalers and enterprise where we can capitalize on the long wait times as previously discussed. While our focus is on developing next-generation Vera Rubin infrastructure across most of our portfolio, we believe there are some compelling reasons to keep our options open with cloud as a potential monetization strategy at Moses Lake specifically.

#1, GPU as a Service would enable us to capture the benefit of the lowest cost power for data centers in the United States for ourselves and generate what we expect to be above-market margins and returns for cloud. #2, the relatively small scale makes cloud at this site easier to execute and finance. We have more than enough liquidity to consider this site and strategy fully funded today and are in active discussions with leading GPU manufacturers on GPU sourcing and financing, which we believe could be done on very attractive terms.

GPU financing could materially reduce CapEx requirements and enhance expected returns. #3, we expect that by demonstrating our ability to execute across the entire stack, we will also be better able to understand customer needs, provide better quality service and negotiate better leases at our other facilities.

Lastly, but most importantly, despite being less than 1% of our total development portfolio, we believe that the conversion of just our Moses Lake site to GPU as a Service could produce more net operating income per year than we have ever generated with Bitcoin mining, providing the company with a strong cash flow foundation that would fund OpEx, G&A, debt service and contribute to CapEx as we wind down our Bitcoin mining business.

I will now walk through the rest of our sites in a little bit more detail, starting with Panther Creek. Panther Creek is our flagship HPC, AI campus in Eastern Pennsylvania. As we have discussed previously, we have 350 megawatts of secured power with PPL. This power is contractually obligated to be delivered with 50 megawatts at the end of 2026 and 300 megawatts at the end of 2027. The site has sufficient acreage for the development of the entire 350 megawatts with capacity to go beyond that.

Additionally, we have $200 million remaining on our project facility with Macquarie that is intended to finance Phase 1 of the project as well as long lead expenses for Phase 2. There is also the potential for expansion. Recently, there have been a number of developments that have given us line of sight to expand beyond the existing 350 megawatts of secured power capacity.

We have received positive indication on converting our existing 60 megawatts -- our existing ISA of 60 megawatts to a firm ESA of 60 megawatts to expand power to 410 megawatts total and on a recent load study to expand power capacity to over 500 megawatts of gross capacity. Turning to Slide 8, please. Moving on to Sharon, where we have 110 megawatts of power secured by an ESA with FirstEnergy in PJM under development.

We are currently operating 30 megawatts of Bitcoin mining on site but have started development on an additional 80-megawatt substation, bringing the total available for HPC and AI use to 110 megawatts. We expect to have the full 110-megawatt substation online by year-end 2026. Similarly to Panther Creek, we'll be working to develop the campus for Vera Rubin GPUs, targeting site completion and revenue in the first half of 2027 for the full 110 megawatts of gross capacity.

Turning to Slide 9. In Quebec, we have 170 megawatts of low-cost hydropower currently operating across multiple Bitcoin mining sites, almost all of which is within a 90-minute drive of Montreal. This is an incredibly attractive opportunity for hyperscalers who are following what's called a regional campus strategy. This is something that was pioneered by Amazon where smaller sites can be directly connected with a direct fiber infrastructure in order to reduce the latency between sites below 2 milliseconds, enabling many small sites to be connected together to function as one larger site.

As I mentioned, it's almost impossible to grow organically in the province. And in October, we confirmed the ability to convert our Bitcoin mining infrastructure to HPC and AI with regulators and utilities in the region. With that pathway clear, we are accelerating our plans in Quebec. We will focus our development efforts on the city of Sherbrooke, where we have 96 megawatts robust fiber connectivity, a strong and developed local labor force and ample support from the local energy utility and municipality.

We will be applying some of the standardized engineering and design plans completed for our Washington site to Sherbrooke in order to convert these facilities from Bitcoin mining into next-generation HPC and AI infrastructure adapted for Vera Rubin GPUs. Similarly to Washington, Quebec has a cool climate and some of the lowest cost energy in North America for data centers with strong unmet demand for GPU cloud in Montreal.

Sherbrooke also represents a potential opportunity to scale up the cloud business in 2027 with VR200s, a strategy that we will evaluate as we work through the engineering and development plans for Sherbrooke. The remaining 74 megawatts of Bitcoin mining in province are earmarked for potential expansion in 2028, and we look forward to providing more detailed plans for Quebec in 2026. Turning to Slide 10. Last but certainly not least, we have our Scrubgrass campus in Pennsylvania.

This is about 30 minutes away from Sharon, Pennsylvania on the western side of the state. With the exception of the new Panther Creek Phase 3 and Phase 4, which I spoke to a minute ago, this is the only power in our portfolio that is not 100% fully secured today, but this is a very, very exciting development opportunity for Bitfarms. We believe that this is the only campus outside of Texas for public miners converting to HPC and AI that has over 1 gigawatt of potential capacity.

And while we have made great progress on developing the power story for this giga campus, there are still quite a few steps to be taken in order to contractually secure the power, which falls into 2 buckets. First, we have completed 3 conceptual load studies with FirstEnergy, starting with 250 megawatts and 500 megawatts and 750 megawatts. That's moving over to what's called a detailed load study with FirstEnergy, which would eventually be converted over to firm service in an ESA.

Second, we have made substantial progress on evaluating the potential to add additional generating capacity on site. This could be accomplished by building a 3- to 4-mile pipeline from our campus to the second largest natural gas pipeline in the United States, the Tennessee Natural Gas Pipeline, which we have confirmed could supply up to 550 megawatts of natural gas, multiplying our generation capacity on site.

While we're still in the early stages of evaluating how we would expand the generating capacity, and we'll provide more details as we progress. Combined, the 2 buckets could potentially provide 1.3 gigawatts of gross capacity. Additionally, there is very good fiber infrastructure in the area with over 8 fiber infrastructure networks nearby. And it is in close proximity to Pittsburgh and Cleveland as well as the other data centers, which are starting to pop up throughout the state.

The earliest time that we anticipate we could have additional power at this kind of scale implemented at Scrubgrass is around 2028. Though this is a longer lead time campus for us, we believe that the forecast on power and demand for HPC and AI infrastructure, the timing for our giga campus will play in well with this cycle and our investment thesis as well as our continued other development plans. Turning to Slide 11 and sort of sum it up.

We believe that we are incredibly well positioned to execute against our investment thesis in 2026 and 2027 and maximize long-term shareholder value. #1, we have a very unique portfolio of energy assets that we aim to fully convert to HPC and AI infrastructure. #2, we are exploring converting our Washington site to HPC and AI workloads and lead the industry in the development of next-generation data centers for NVIDIA's Vera Rubin GPUs.

#3, we are actively evaluating a potential cloud monetization strategy for our Washington site, which we believe will be a meaningful driver of cash flows and could eclipse any BTC mining cash flows we have ever generated. #4, we are well capitalized to make our currently planned investments with financial flexibility that exceeds $1 billion across cash, Bitcoin in our Panther Creek project facility with Macquarie, all of which are going to fund CapEx as we continue to produce strong free cash flows from our Bitcoin mining operations that fund OpEx, G&A, debt service and contribute to CapEx with no planned minor CapEx.

And lastly, we continue to execute on our U.S. pivot with the recent sale of our Paso Pe facility marking our full Latam exit, our transition to U.S. GAAP for 2024, 2025 results and the establishment of our New York City office and working towards a U.S. redomiciliation in 2026. We believe this would give us significantly greater index inclusion and meaningfully improve the institutional composition of our cap table. I now have the pleasure to hand the presentation over to our CFO, Jonathan Mir.

Can you flip forward one page? So I'll stand. I'm all right. So just by necessity, this is essentially our Q3 presentation. I'm going to finish this really fast, so we can do Q&A, which will be more interesting. But Q3, we did our convert that raised $590 million in proceeds. The pricing was really just terrific. We were the beneficiaries of great execution. We've got $200 million remaining on the project development facility at Panther Creek, and we're generating about $8 million a month from our Bitcoin operations.

So the Bitcoin operations, if you think about Bitcoin as a company, let's say, 200 employees pro forma for being solely North America, about 50 of which are what you could call corporate. So that $8 million a month pays for all of those people. And then it's creating the capital to fund needed investment. The point is, right now, we've got $750 million of unencumbered liquidity and $200 million available on the Macquarie facility.

This is important because if we are good custodians of the capital, it enables us to push Washington, Sharon and Panther Creek through to NTP. Certainly, one of -- whichever one gets done first opens up borrowing capacity to us for construction finance that lets us recycle our equity so that we have that available for whichever one is going to come online last.

So we have a balance sheet right now, and we view having a strong balance sheet as a benefit to customers and shareholders. We know we can finance the development of the first 3 projects right off our balance sheet without external capital, which we have the flicker doing for us. So it's a -- you can flip forward. Flip, I don't want to go through all this with everyone.

I think that's it.

That's it. All right. So let's have a real conversation. So I came to Bitfarms to focus on 3 things. It's capital allocation, capital formation, raising the money and then capital structure, right, ensuring that we've got a capital structure that maximizes return on equity without creating risk around overleverage. And again, one of the strengths of the company beyond its sites is we have a balance sheet right now that lets us continue developing through Notice to Proceed, NTP, right, the day you can turn shovels and all of your approvals and permits are available on the 3 sites.

We'll raise capital before we get NTP in all 3 sites, I'm certain. But that's a very comfortable place to be in as a developer. Generally speaking, we expect to be at NTP for Washington, Sharon and Panther Creek sometime in the second half of 2026. So that will be an important catalyst for us economically. Once we're at NTP, you can then -- you're on the best terms possible to negotiate a lease and then finance against that lease. And those projects would produce revenue late 2027.

But once you have a signed lease, it's basically -- it's an NPV into the stock for the value of that asset. And then we'll continue to develop Scrubgrass and opportunistically other sites, if they are at least as good as our existing site in the same market. So we're not going to enter new markets. We're not going to deal with modest quality sites, we would -- but we will be aggressive if we think we have the opportunity to find a good asset for a modest amount of our liquidity.

In terms of how we plan on financing the business, debt and equity, so to start pretty conventional for energy infrastructure finance, you use basically project finance down at the asset level to get the assets built and borrow maybe 60%, 65% LTV. So that's downstairs, each individual silo, you'd start out borrowing some modest amount of development capital. As you get pretty close to being ready to go, that's available in the bank market. That lets us recycle equity for the next project.

That's great. And then once you are at NTP with a signed lease, you enter into construction capital. So you don't have to do that off your own balance sheet. Every project, let's just say -- I mean we can put some debt maybe upstairs at the public company bank loan or something like that and run at 70% debt to cap-ish. We're going to figure out what the right number is as we go along, but that's fairly conventional for an infrastructure company with contracts that are 15 years long as opposed to having an enduring monopoly or 30-year contracts.

So the next question is, well, where do we get the equity, right? So if I spend -- if we spend $1 billion on a project, it is a mathematical certainty that we need $333 million of equity. So that's either coming off our balance sheet. It's coming from the sale of minority interest equity downstairs at a project, sell 30% of a project to an infrastructure fund or it comes upstairs with common equity at the holdco, use some gentle amount of ATM.

That's completely unattractive to us right now, I can assure you. And we'll probably do some converts over there. I happen to think of converts as just being debt. So there's a limit to how far I'm going to push that. But just to be clear, people need to -- I want to always make sure we're transparent with investors, so they understand how much equity needs to accompany every project. And we're going to look to find ways to reduce that.

The more we can lever as long as we feel comfortable with our ability to repay it, the higher the returns to equity, maybe we decide 70%, could be 75%, or a little bit higher. But fundamentally, creating risk from financial leverage is not what our investors will pay us for. Investors are going to pay us from being good owners and operators of infrastructure assets and delivering infrastructure-like returns.

And then if we are able to continue developing beyond this enormous pipeline, perhaps they'll pay for some growth as well, but we have a lot of growth to finance to start. So that's like the basic financing strategy. I mentioned the equity point, just so no one yells at me when we start selling equity because I told everyone that we're going to do that. But that should be obvious to anyone who is an infrastructure investor.

By the way, it's like that's a good sign if you're in an infrastructure company because it means you're growing. And the 3 risks that we really think of what are the 3 ways to break a developer, one, run out of money during the development process, right, before you get to NTP. So you really got to be careful with your capital and recycling it before the time; two, overlever yourself, right, get to a point where you can't manage through variations or just surprises in the rest of the business affects a lot of developers.

And three is built on spec, building on spec being the greatest sin in the developer space. And that's just not part of our business plan. You -- by definition, you're developing on spec, but you don't start spending real money on spec. And that's fine because once you have a lease, all the financing you need becomes available to you. So that's just a quick financial overview and turn it over to Q&A.

Can you just talk about where you are in the process of commercializing your sites, talking to tenants [indiscernible] potential tenants, whether you've got inbound after your pivot, you clearly done a lot of work on kind of deciding to make this pivot. But [indiscernible] can you just talk through interest levels, whether you're talking to neoclouds or hyperscalers.

We've -- so firstly, thanks for your question. I think the inbound that we've received certainly over the last, call it, 3 months is inbound that we did not foresee coming our way, particularly around the Sharon facility and also Moses Lake. Moses Lake is this 18-megawatt facility that kind of people scoffed at and frankly, we did internally as well when we thought about it. But the reality is that, that 18 megawatt sits in the West Coast version of data center alley and a lot of the hyperscalers up there seem to be quite keen on Washington, our facility in Washington has essentially excess power.

And 18 megawatts, they could pick it up, why wouldn't they? So that's -- we're seeing some inbound there. The same I could probably say for Sharon, too. Sharon was 110 megawatts. Initially, we were told that there was no way that any hyperscaler would look at Sharon. And now Sharon seems to be quite attractive in the market. The facilities outside of Sharon and Washington are not at a point yet where I think we could actively market those facilities.

We need to get closer to what Jonathan refers to as the NTP, Notice to Proceed. Once we do get closer to that NTP date, I think the turnaround will be quite quick. But I would say that at the moment, certainly, Sharon, certainly Washington, Quebec is becoming more and more attractive to some of our Canadian counterparts up there that are looking to power.

PC.

I'm sorry.

PC as it gets closer.

And Panther Creek as it gets closer as well. That's starting to heat up at the moment.

Just to amplify Liam's comments. So we are encouraged by the nature and number of inbounds we received. As a practical matter, one would not want to enter into a lease negotiation until you are ready to proceed with the project at NTP because customers are going to heavily discount you over execution risk of actually being able to start turning shovels.

And so then the question becomes how deep into the actual -- the phase between being ready to go and having -- being ready to energize, do you want to go? What's the optimal time to sign a lease. If capital weren't a concern, you get the highest pricing the closer you were to the date of energization. That's just like because whoever is in the market at that time will pick the project that could deliver tomorrow as opposed to the one that could deliver in 18 months.

So what we need to do is balance maximizing lease value, where our thesis is it will increase over time because of demand and increase by site as you get closer to a tangible completion date. That gets balanced against, one, our balance sheet because you can only build so far off your own balance sheet because the financing isn't available for a full build until one has a lease. And then two, our shareholder expectations.

Shareholders are looking to see us get things moving and developed with good customers. So this is what we spend and will spend a lot of our time on is constantly evaluating where are we on lease pricing versus our balance sheet and shareholder expectations and other factors. We're not going to let the perfect get in the way of the good, but we think we can do -- we think patience will let us do well. And if you look at -- we think patience will let us do well and help us maximize the value of the lease.

And this is one of the reasons we put so much value on the balance sheet is because we are not under pressure to market a lease early. And the general expectation is that Washington, Sharon and Panther Creek should all be at NTP, Notice to Proceed by the end of '26, which means you can start marketing certainly proximate to that date. And then it's a question of how do you see -- where do you see the most value.

You mentioned kind of gearing for Vera Rubin. Is there going to be a big CapEx difference to build site specifically for that versus maybe what some peers are doing and they're kind of benchmarking like $9 million to $11 million per megawatt.

$9 million to $11 million sounds optimistic, I would say. I haven't seen $9 million to $11 million. We're not budgeting $9 million to $11 million. We're not far off there. But if your question is, will it cost more than $9 million to $11 million?

[indiscernible] talking for colo too, not for the GPU...

It's up, but only slightly.

Yes. So we wouldn't underwrite $9 million to $11 million, nor would we guide investors to that. If we can, we will. We just wouldn't do it now. So what's interesting, and I think answers your question is to -- is NVIDIA, right? The reason NVIDIA creates a new chip architecture is because the value of the increased compute is more than the incremental cost versus their prior generation chip. So in the HPC market where $1 of compute, you know, compute is compute, its pure commodity, whoever has the lowest marginal cost will sell all their capacity first and then you'll have the next participant and the next participant.

It looks like a generation stack in an ISO. And so productivity is the sort of the -- it's just the inverse of marginal cost. That is to say with every successive generation of NVIDIA chip, you can produce more revenue at a given site. And the chip by definition, will generate more benefit and increased revenue than the increase in cost from buying a new chip and constructing it. Because if it didn't, NVIDIA wouldn't have any customers.

Maybe last one for me. How do you think about the strategy for GPU as a service versus colo [indiscernible] shape up for that?

Yes. If you -- if one is focused on maintaining a strong balance sheet that gives you great line of sight to getting through development on a portfolio like ours, that's pretty valuable. I think that the bar would have to be very, very high to invest a healthy chunk of our liquidity in chips, which even if you can finance have only so much life in them. And I think with a plan, I'd say, under all circumstances, we're going to be an infrastructure company, full stop.

So the question is, we have the option to do something a little bit different in Washington, but that's 1% of our portfolio. So then we start thinking about how much liquidity that would take, financing available. It feels like -- I'd say it's more likely than not that we -- Washington becomes a standard colo HPC data center. There are a lot of other data centers in the region. They grab up the incremental megawatts quickly. But we're keeping the option open. We might find economic circumstances and say, you know what, it actually makes sense to do this.

But for us, this is all measured by like are we creating shareholder value, right? So if you are in the GPU as a Service, the returns expected on that by definition, your cost of capital has got to be higher, right? It's a riskier business. So like are you actually getting the returns commensurate with the higher risk if you enter into that position. So we like -- we're not going to do things unless they are accretive to shareholders, that is to say the use of our equity, the returns on our equity are always going to be designed to better the cost of our equity, right, create value.

Any other questions?

How have you -- it sounds like you're in the process now [indiscernible] your existing portfolio. Have you started to look at additional sites? And how is that process going? How have you stacked up [indiscernible] potentially provide a continual source of additional power [indiscernible]?

We have, and Jonathan has underneath him an incredibly strong corporate development team, the same corp dev team that I think -- I believe has been at Bitfarms for the last 3 or 4 years. They have not slowed down even through the acquisition of Stronghold, they're looking probably at more sites around that period than they have in their entire careers at Bitfarms, and that hasn't slowed down. We just need to find what's exactly right for us as well. We have a very sweet spot.

We love that our facilities are on the Eastern Seaboard of the United States and Canada. We think that that's incredibly advantageous. And these sites over here don't pop up every now and again. We could go down to Texas and go and grab 2 gigawatts of promised capacity. We could do that tomorrow. But for us to get stuff in Pennsylvania, Ohio, PJM, where we like to see our facilities, it's a little bit more complicated, but the team is [indiscernible] opportunities daily.

Yes. Are you seeing others look at this market -- to your point, it's -- I'm sure others are looking, but it seems like there's a lot of activity right now. So [indiscernible] seem to be somewhere else [indiscernible] that point or am I correctly assessing...

I'll let Jonathan -- you get it.

Yes, I think. So we get -- we're constantly getting inquiries around pieces of land. Here, the circumstance, we want to be aggressive, and we want to earn excellent returns for our shareholders. If someone came to us with a site that was in our desired location, Pennsylvania being the simplest, and whose quality was at least as good as our existing sites, that is to say time from ownership to getting it online was at least as good as, we would allocate some amount, 5%, maybe 10% of our liquidity to that site, because why not?

What we won't do is start spending more than that on sort of real speculative land or other enterprises. And what I always find so interesting about this industry is people, okay, you got the 3 sites, it's $10 billion of CapEx, where are you getting to do next? A $10 billion, you can build an entire LNG export terminal. The largest single project in the United States in 2020, which is not the dark ages, was $5 billion. The amounts of capital that need to get spent in the space are just astonishing.

And so the casual nature of a $10 billion pipeline and well, what are you doing for me today, I find interest -- look, that's market expectations, but I think people should -- and I think this is a risk issue that is not talked enough about by participants in the space. If you take on a $10 billion project or $20 billion project, that's the largest thing that's ever been built in the United States, except for the Vogtle nuclear plant down in Georgia.

You build an entire chip fab for $20 billion, and there are people trying to build those. So there are going to be some painful lesson learned about how to deliver projects on time and on budget at the scale of CapEx. We intend to learn as many as we can and think really hard about risk mitigants at every stage.

Makes sense. Thank you.

No worries. Guys, we actually have to run. We've got another meeting. Does anyone have any last questions? No. Okay. Thanks so much for your time.

Thank you. Really appreciate it.

Thank you for standing by, and welcome to Bitfarms' Third Quarter 2025 Earnings Conference Call. [Operator Instructions]

I would now like to hand the call over to Jennifer Drew-Bear from Bitfarms' Investor Relations. Please go ahead.

Thank you, and welcome to Bitfarms' Third Quarter 2025 Conference Call. With me on the call today are Ben Gagnon, Chief Executive Officer and Director; and Jonathan Mir, Chief Financial Officer.

Before we begin, please note, this call is being webcast with an accompanying slide presentation. Today's press release and our presentation can be accessed on our website, bitfarms.com, under the Investors section.

Turning to Slide 2. I'd like to remind everyone that certain forward-looking statements will be made during the call, and that future results could differ from those implied in this statement. The forward-looking information is based on certain assumptions and is subject to risks and uncertainties, and I invite you to consult Bitfarms' MD&A for a complete list.

Please note that references will be made to certain measures not recognized under IFRS and therefore, may not be comparable to similar measures presented by other companies. We invite listeners to refer to today's press release and our MD&A for definition of the aforementioned non-IFRS measures and their reconciliations to IFRS measures.

Please note that all financial references are denominated in U.S. dollars, unless otherwise noted.

And now turning to Slide 3. It is my pleasure to turn the call over to Ben Gagnon, Chief Executive Officer and Director. Ben, please go ahead.

Good morning, everyone, and welcome to Bitfarms' Third Quarter 2025 Earnings Call. We made strong, steady progress in Q3, building on the momentum from the first half of the year as we advance our transformation into a leading North American HPC and AI infrastructure company. Today, I'll walk you through our investment thesis, value proposition and key developments, including updates on our energy portfolio and site-specific advancements, all of which gives Bitfarms a competitive advantage to capitalize on the surge in demand for HPC and AI infrastructure.

Turning to Slide 4. I would like to kick off today's call by outlining our market thesis, one that we believe differentiates us from our peers and best aligns Bitfarms with long-term investors in our transition to HPC and AI. Infrastructure is not a bubble. Since the invention of modern compute, the supply of compute has increased exponentially. As compute grows, so too does the data center industry that powers it. This is a trend that has a trajectory of over 20 years of exponential growth and an annualized growth rate of 8.8% behind it. This isn't a bubble. It's a reflection of a new paradigm that showed no signs of slowing down before AI and now as AI rewrites the rules of how humans interact with computers, the demand for data center capacity is accelerating. But the demand for compute and infrastructure has reached an impasse.

Data centers that used to be measured in kilowatts are now being measured in megawatts and gigawatts. Racks that used to support 10 kilowatts are now being designed to support 370 kilowatts. The exponential increase in demand for power can no longer be met at the pace of the market demands. And as a result, the lease rates for data center infrastructure, which have grown at an average rate of 3% over the last 20 years, are now growing at an average rate of 12% since 2022, and we expect this trend to continue.

Turning to Slide 5. Infrastructure is a bottleneck. As manufacturers continually introduce newer, more efficient chips and increase production every year, this trend continues to accelerate. Next year, NVIDIA alone is expected to be shipping somewhere between 10 and 15 gigawatts of GPUs. And that doesn't include, of course, AMD, Intel, Qualcomm and others who are also producing their own hardware with over 100 gigawatts of chips expected to be produced by 2030.

While the supply of compute chips continues to increase, the growth in data center infrastructure is happening at a much slower pace. It is not silicon nor capital that will be the real bottleneck for continued growth in HPC and AI, but power and infrastructure. Over the next few years, the gap between the amount of chips that are being produced and the megawatts and the racks available to plug them in and operate them will continue to widen significantly.

We strongly believe that as this dynamic continues to play out, the value and the economics will continue to move in favor of those who own the energy and data center infrastructure. We've watched this play out in the market with the contracts that have been announced in the industry to date. When Core Scientific and CoreWeave announced their landmark transaction in April of last year, the rates were contracted around $120 per kilowatt per month. As we've moved further along this curve that's shown on the slide, those rates have continued to trend upward. Most of the contracts over the past few months have been around $150 per kilowatt per month. As time goes on, this trend is expected to continue with analysts predicting a massive shortfall of nearly 45 gigawatts of power for data centers by 2030.

Just within the last 2 weeks, Satya Nadella, the CEO of Microsoft, confirmed the shortfall when he publicly stated on a recent podcast that they have GPUs they cannot deploy. We believe that over time, the companies who've allocated and will continue to allocate billions of dollars into compute will be increasingly economically incentivized to pay rising prices in order to deploy their compute faster and with greater certainty, because every day they do not deploy is a day of revenue they will never recover and because their customers will simply move on to a competitor.

With direct operating margins for new GPUs typically in the 80s or 90% range, this infrastructure expense is a modest cost driver for those who own the compute, equivalent to a low single-digit percentage of OpEx. If this cost were to double, it would not impact direct OpEx for the customer by more than a low single-digit percentage. These rates, which are largely inconsequential for the customer are very significant for Bitfarms as the developer. With OpEx costs that are largely fixed, every additional dollar earned in a lease goes to the bottom line. This is what Bitfarms is aiming to optimize for, not the fastest contract, but the highest value per megawatt and the greatest margins for the longest period of time with great customers. We believe this will be the primary driver of our multiple expansion and what drives shareholder value creation long term.

Our investment thesis is clear and backed by decades of data. Our conviction is high, backed by consistent incoming demand. We don't want to cap our upside by signing leases prematurely. Instead, Bitfarms plans to optimize and achieve higher lease rates and margins through the following 3 strategic actions: one, prioritize infrastructure development first by minimizing the time between signing a lease and generating revenue for a customer, we will minimize the discount that would otherwise be applied to the lease rates and locked into multiyear contracts; two, take advantage of the increasing gap between supply of data center infrastructure and data center demand to lock in higher rates and greater margins under multiyear agreements; and three, while the industry is focused on NVIDIA GB200 and GB300, Bitfarms plans to leapfrog NVIDIA's Blackwell architecture and lead the industry in developing infrastructure for NVIDIA's next-generation Vera Rubin GPUs across 99% of our 2026 and 2027 development portfolio.

With Vera Rubin GPUs expected to begin shipping in Q4 of 2026, and the infrastructure requirements to support them largely incompatible with facilities designed for Blackwell GPUs, we believe Vera Rubin infrastructure will be in the greatest demand and shortest supply in 2027 and will command significantly greater economics.

Turning to Slide 6. We are able to take this approach because we have a robust balance sheet to fund development and know the value of what we own. While we don't have the largest portfolio of power among the public miners who are transitioning to HPC and AI, we do have the largest portfolios of power in each of the regions in which we operate, none of which are in Texas and all of which are either existing or emerging data center hubs. With consistent inbound demand for our sites, we have high conviction in the value of our unique energy portfolio, the demand for our power and our ability to develop next-generation HPC and AI infrastructure.

We believe that not all megawatts are created equal. Our megawatts are strategically located in high-value areas that have multiyear waitlist to secure the power we have today. Our campuses are close to major metros and existing data center clusters, have ample access to major fiber trunk lines and undersea fiber optic cables and benefit from temperate climate compared to places like Texas.

While Texas is undisputably a great energy market and arguably the easiest market to grow and develop megawatts in the U.S., there are, of course, trade-offs. The trade-off to short-term development efficiencies is long-term operating inefficiencies. It is no secret that besides power, the primary challenge with data centers is cooling and cooling is becoming an increasingly more difficult problem to solve as energy density continues to increase with every generation of new hardware. Building and operating data centers in a hot, arid desert climate like Texas as opposed to cooler northern climates like Pennsylvania, Washington and Quebec means more CapEx and OpEx for cooling. This isn't an opinion. It's math and engineering.

If we built our exact same data center for Panther Creek with the same design, equipment and materials in Texas, it would have a PuE of about 1.4 to about 1.5. Whereas in Pennsylvania, Quebec or Washington, it would be about 1.2 to 1.3. That means for every megawatt we are converting, more of those electrons are going to compute, which is the revenue-generating activity for customers as opposed to supporting revenue generation through cooling. Simply put, our megawatts are harder to get in higher demand areas, produce more value for customers and are worth more per megawatt.

In Pennsylvania, we have the strategic foresight to acquire our 3 campuses and submit our energy applications in 2024 before the HPC and AI demand really came into play in the state earlier this year. This has positioned us with secured power at Panther Creek and Sharon and at the front of the queue with very well-advanced power applications at Scrubgrass.

In Quebec, new power allocations are almost impossible to get with numerous data center applications denied by the province in the past year. Bitfarms has 170 megawatts operating with some of the cheapest power rates for data centers in North America and 100% renewable. 100% of these megawatts are currently being utilized for Bitcoin mining. And just in the last month, we confirmed that we will be able to convert our Bitcoin megawatts for HPC and AI. This means our Quebec portfolio represents a unique and strategic opportunity to increase total data center megawatts in the province by 25% from about 700 megawatts today, while fulfilling 2 strategic national and provincial objectives, the scaling back of Bitcoin mining megawatts while increasing HPC and AI infrastructure and data sovereignty.

In Washington, we have 18 megawatts of secured power in the largest data center cluster on the West Coast with the cheapest power in the U.S. for data centers and 100% renewable. Because of this, the area has a 10-year wait list for power. Everybody is looking to grow here, and it is nearly impossible to do so outside of secured megawatts like ours. This means that despite the relatively smaller scale of Washington, sites in the area are in high demand by both enterprise and hyperscalers alike. I'd now like to spend a few minutes discussing Washington and the news we issued this morning in more detail.

Turning to Slide 7. Earlier this morning, we announced plans for the conversion of our 18-megawatt Washington site to HPC and AI workloads. We signed a fully funded binding agreement for $128 million for all the critical IT infrastructure and building materials to develop the full 18 megawatts of gross capacity with anticipated industry-leading energy efficiency between 1.2 and 1.3 PuE.

The state-of-the-art facility will feature: one, validated reference designs, ensuring compatibility and performance with NVIDIA GB300s; two, modular infrastructure, enabling phased deployment and scalability, reducing the downtime of Bitcoin mining revenues and ramping up our time to HPC and AI revenues; and three, proven thermal and power management systems critical for HPC and AI operations. The construction team is in Washington today with the general contractor and are kicking off the conversion of the Washington site, which is targeted for completion in December 2026.

Turning to Slide 8. I would now like to discuss monetization strategy at Washington. With decade-long wait times for new power and the cheapest power in the U.S. for data centers, we are actively pursuing colocation for both hyperscaler and enterprise, where we can capitalize on the long wait times as previously discussed. This morning, for the first time, we announced we are also pursuing GPU as a service or cloud.

While our focus is on developing next-generation Vera Rubin infrastructure across most of our portfolio, we believe there are some compelling reasons to potentially go with cloud as a monetization strategy at Moses Lake specifically. One, GPU as a service would enable us to capture the benefit of the lowest cost power for data centers in the U.S. for ourselves and generate what we expect to be above-market margins and returns for cloud.

Two, the relatively smaller scale makes cloud at this site easier to execute and finance. We have more than enough liquidity to consider the site and strategy fully funded today and are in active discussions with leading GPU manufacturers on GPU sourcing and financing, which we believe could be done on very attractive terms. GPU financing could materially reduce CapEx requirements and enhance expected returns.

Three, we expect that by demonstrating our ability to execute across the entire stack, we will also be able to better understand customer needs, provide better quality service and negotiate better leases at our other facilities.

Lastly, but most importantly, despite being less than 1% of our total development portfolio, we believe that the conversion of just our Moses Lake site to GPU as a service could produce more net operating income per year than we have ever generated with Bitcoin mining, providing the company with a strong cash flow foundation that would fund OpEx, G&A, debt service and contribute to CapEx as we wind down our Bitcoin mining business. I will now walk through the rest of our sites in a bit more detail, starting with Panther Creek.

Turning to Slide 9. Panther Creek is our flagship HPC and AI campus in Eastern Pennsylvania. As we've discussed previously, we have 350 megawatts of secured power with PPL. This power is contractually obligated to be delivered with 50 megawatts at the end of 2026 and 300 megawatts at the end of 2027. The site has sufficient acreage for the development of the entire 350 megawatts with capacity to go beyond that. Additionally, we have $200 million remaining on our project facility with Macquarie that is intended to finance Phase 1 of the project as well as a few long lead time expenses for Phase 2. We also have some exciting news around potential further capacity expansion at Panther Creek.

Lately, there have been a number of developments, including the recent 403 letter from the Department of Energy and commitments to deploy more natural gas energy generation in Pennsylvania that have given us line of sight to expand beyond the existing 350 megawatts of secured power capacity. We have received positive indication on converting our existing interconnection service agreement, or ISA 60 megawatts to a firm energy service agreement, or ESA, of 60 megawatts to expand power to 410 megawatts and on a recent load study to expand power capacity to over 500 megawatts of growth capacity.

With these positive developments that could meaningfully expand capacity at this campus and in line with our investment thesis, we are modifying our original Phase 1 designed for Blackwell GPUs and planning a new Phase 3 and Phase 4. The entire campus will now be developed for NVIDIA's Vera Rubin GPUs and their greater energy density to accommodate our new expectations on future expanded power capacity.

This is expected to delay the energization of Phase 1 marginally from December 2026 into the first half of 2027, with no anticipated impacts to Phase 2 time lines. We believe this will enable the company to achieve significantly higher economics in line with our long-term thesis and strategy.

Turning to Slide 10. Moving on to Sharon, where we have 110 megawatts of power secured by an ESA with FirstEnergy and PJM under development. We are currently operating 30 megawatts of Bitcoin mining on site, but have started development on an additional 80-megawatt substation, bringing the total available for HPC and AI uses to 110 megawatts. We expect to have the full 110-megawatt substation online by year-end 2026.

We recently closed on the purchase of the land for the site, effectively ending our lease and enabling us to move forward with our planned development of HPC and AI infrastructure. Similarly to Panther Creek, we will be working to develop the campus for Vera Rubin GPUs, targeting site completion and revenue in the first half of 2027 for the full 110 megawatts of gross capacity.

Turning to Slide 11. In Quebec, we have 170 megawatts of low-cost hydropower currently operating across multiple Bitcoin mining sites, almost all of which are within a roughly 90-minute drive from Montreal. This is an incredibly attractive opportunity for hyperscalers who are following what's called a regional campus strategy. This is something that was pioneered by Amazon, where smaller sites can be directly connected with direct fiber infrastructure in order to reduce the latency between sites below 2 milliseconds, enabling many sites to be connected together to function as one larger site.

As I mentioned, it's almost impossible to grow organically in the province. And in October, we confirmed the ability to convert over our Bitcoin mining infrastructure to HPC and AI with regulators and utilities in the region. With that pathway clear, we are accelerating our plans in Quebec. We will focus our development efforts on the city of Sherbrooke, where we have 96 megawatts, robust fiber connectivity, a strong and developed local labor force and ample support from the local energy utility and municipality.

We will be applying some of the standardized engineering and design plans completed for our Washington site to Sherbrooke in order to convert these facilities from Bitcoin mining into next-generation HPC and AI infrastructure adapted for Vera Rubin GPUs.

Similar to Washington, Quebec has a cool climate and some of the lowest cost energy in North America for data centers. With strong unmet demand for GPU cloud in Montreal, Sherbrooke also represents a potential opportunity to scale up a cloud business in 2027 with VR200s, a strategy that we will evaluate as we work through the engineering and development plans for Sherbrooke. The remaining 74 megawatts of Bitcoin mining in the province are earmarked for potential expansion in 2028, and we look forward to providing more detailed plans for Quebec in 2026.

Turning to Slide 12. Last, but certainly not least, we have our Scrubgrass campus in Pennsylvania. This is about 30 minutes away from our Sharon, Pennsylvania campus on the western side of the state. With the exception of the new Panther Creek Phase 3 and Phase 4, which I spoke to a minute ago, this is the only power in our portfolio that is not 100% fully secured today. This is a very, very exciting development opportunity for Bitfarms. We believe this is the only campus outside of Texas for public miners converting to HPC and AI that has over 1 gigawatt of potential capacity.

And while we have made great progress on developing the power story for this giga campus, there are still quite a few steps to be taken in order to contractually secure the power, which falls into 2 buckets. First, we have completed 3 conceptual load studies with FirstEnergy, starting with 250 megawatts, 500 and then 750 megawatts, thus moving over to what's called a detailed load study with FirstEnergy, which would eventually be converted over to firm service in an ESA.

Second, we have made substantial progress on evaluating the potential to add additional generating capacity on site. This could be accomplished by building a 3- to 4-mile pipeline from our campus to the second largest natural gas pipeline in the U.S., the Tennessee Natural Gas Pipeline, which we have confirmed could supply up to 550 megawatts of natural gas, multiplying our generation capacity on site.

We're still in the early stages of evaluating how we would expand the generating capacity, and we'll provide more details as we progress. Combined, the 2 buckets could potentially provide 1.3 gigawatts of gross capacity. And additionally, there is very good fiber infrastructure in the area with our 8 fiber infrastructure networks nearby and is in close proximity to Pittsburgh and Cleveland as well as the other data centers, which are starting to pop up throughout the state. The earliest time that we anticipate we could have additional power at this kind of scale implemented at Scrubgrass is around 2028. Though this is a longer lead time campus for us, we believe that with the forecast on power and demand for HPC and AI infrastructure, the timing for our giga campus will play-in well with the cycle, our investment thesis and our other development plans.

Turning to Slide 13. To sum up, we believe that we are incredibly well positioned to execute against our investment thesis in 2026 and 2027 and maximize long-term shareholder value. One, we have a very unique portfolio of energy assets that we aim to fully convert to HPC and AI infrastructure. Two, we have announced our plans to convert our Washington site to HPC and AI workloads and lead the industry in the development of next-generation data centers for NVIDIA's Vera Rubin GPUs.

Three, we are actively evaluating a potential cloud monetization strategy for our Washington site, which we believe would be a meaningful driver of cash flows and could eclipse any Bitcoin mining cash flows we have ever generated. Four, we are well capitalized to make our currently planned investments with a financial flexibility that exceeds $1 billion across cash, Bitcoin and our Panther Creek project facility with Macquarie, all of which are going to fund CapEx.

As we continue to produce strong free cash flows from our Bitcoin mining operations that fund OpEx, G&A, debt service and contribute to CapEx with no further planned minor CapEx.

And lastly, we continue to execute on our U.S. pivot with the anticipated sale of our Paso Pe facility and our full LATAM exit. Our transition to U.S. GAAP for Q4, the establishment of our New York City office and working towards a U.S. redomicile in 2026. We believe this would give us significantly greater index inclusion and meaningfully improve the institutional composition of our cap table.

I now have the pleasure to hand the call over to our new CFO, Jonathan Mir. Turning to Slide 14. Jonathan, over to you.

Thank you, Ben, for the warm introduction. I'm excited to join Bitfarms at this pivotal moment in the company's transformation. My principal objectives as the new CFO are centered around capital allocation, capital sourcing and capital structure. I'm working hand-in-hand with the operations and development teams on the ground to ensure we implement financing plans that are appropriate for the company and its assets, efficient and support long-term shareholder value creation and that we are also allocating capital to its best possible risk-adjusted returns.

With an extensive background in energy infrastructure strategy and financing, I believe there's an extraordinary opportunity to use our strong balance sheet, unique assets and the talents of our people to create value in the high-growth HPC/AI space. I look forward to working closely with the team to deliver on our strategy and capture the exceptional long-term shareholder value that would accompany our successful execution.

Turning to Slide 15. Today, Bitfarms has the strongest balance sheet and most available capital in the company's history. In Q3, we were able to execute across several initiatives. First and foremost, we recently completed a very successful convertible note offering, where we were able to upsize the offering to $588 million while improving on pricing, preserving upside and minimizing potential equity dilution through a 125% capped call. Bitfarms chose to issue convertible notes because they allow us to access capital at a lower coupon than straight debt and with less dilution than straight equity.

The cash settled capped calls we purchased allow us to offset economic dilution up until $11.88 per share, representing a significant premium to the share price today. It is also important to highlight that investor commitment to Bitfarms is strong. 100% of institutional investors that management met with during the marketing process participated in the transaction and invested their capital in Bitfarms. We're thrilled with the outcome of this raise, and it will allow us to advance our pipeline in tangible ways.

Second, we converted our previously announced $300 million debt facility with Macquarie to a project-specific financing facility dedicated to the development of our Panther Creek data center. Moving the debt facility from a corporate level to the asset level materially enhances financial flexibility for the entire company. In October, we drew an additional $50 million from the facility in order to accelerate development of the site for a total of $100 million drawn to date.

Finally, we maintained steady and efficient mining operations throughout the quarter, achieving approximately $8 million in monthly free cash flow after G&A. We expect to use this cash flow to support our HPC/AI development projects.

Looking ahead, we anticipate continuing to use a mix of both corporate level and project level debt and equity financing as we advance our project milestones. On an ongoing basis, we will evaluate a wide range of opportunities and choose those that we believe support both a strong, stable balance sheet and realize the full potential shareholder value creation that would accompany the successful execution of our plans and fund milestone objectives.

Turning to Slide 16. Let's focus now on our third quarter financial performance. In Q3, we achieved a total revenue of $84 million from continuing and discontinued operations. With the intention to sell the Paso Pe site in order to complete our Latin American exit, all revenue from that asset is classified as discontinuing operations.

From continuing operations, we earned 520 Bitcoin and achieved revenue of $69 million, representing a year-over-year increase of 156% in revenue. For our continuing operations, our gross mining profit was $21 million, representing a gross mining margin of 35% and an average direct cost of $48,200 per Bitcoin mined.

During the third quarter, we introduced a new program for digital asset management, Bitcoin 2.1, which is designed to offset Bitcoin production costs and achieve higher value per Bitcoin sold as a low-cost and low-risk funding mechanism for the energy infrastructure investments that define Bitfarms going forward. It is important to highlight that we are not a Bitcoin treasury company. The goal of this program is not to accumulate Bitcoin, but rather to offset the production cost of Bitcoin and by doing so, contribute to cost effectively funding our HPC/AI initiatives. This is a multi-strategy program that primarily sells both short and long-dated out-of-the-money covered calls on the Bitcoin and treasury as well as for Bitcoin production.

During Q3, we incurred an all-in cost per Bitcoin of $82,400 from continuing operations. When considering our net gain of $13.3 million from derivatives against our all-in production costs, it would bring the effective all-in cost down to $55,200.

Cash G&A for Q3 was $14 million compared to $20 million in Q3 2024. The improvement was largely driven by lower professional services costs. Operating loss from continuing operations was $29 million for the quarter, including impairment charge of $9 million of nonfinancial assets. As a result, net loss from continuing operations for Q3 was $46 million or $0.08 per share.

For the third quarter, our adjusted EBITDA from continuing operations was $20 million or 28% of revenue, up from $2 million or 8% of revenue year-over-year in Q3 2024 and up from $9 million or 15% of revenue in Q2 2025.

Turning to Slide 17. Before we begin Q&A, I'd like to reiterate our strong financial position and review our expected capital investment plans for the next 12 months. We are extremely well capitalized to fund our HPC/AI growth initiatives. We have a war chest of over $1 billion, comprised of roughly $820 million in cash and Bitcoin and the remaining $200 million available to draw from our Macquarie facility. With these funds, we expect to be able to fully finance the build-out of our Washington site and the initial phases of construction at our Sharon, Sherbrooke and Panther Creek sites. As we advance our development, the actual investment in our projects will be dependent on a number of factors.

We are currently focused on executing on the initial phases of our projects, beginning construction and securing long lead time items to ensure our project time lines. We will continuously evaluate a wide range of financing alternatives at both the corporate and project level, maximizing shareholder value with accretive financing will determine our choices as well as the need for a healthy balance sheet.

In closing, I'll underscore that Bitfarms is in the strongest financial position in the company's history, and we have a clear vision of how we are going to best utilize this capital to advance our HPC/AI build-outs in North America. The entire Bitfarms team is incredibly enthusiastic and engaged about the opportunities ahead.

With that, I'll now turn the call over to the operator for Q&A.

[Operator Instructions] Our first question comes from the line of Mike Colonnese of H.C. Wainwright.

Appreciate all the color on the HPC strategy this morning. First for me, Ben, you mentioned that infrastructure for the Vera Rubin GPU should command a premium to the Blackwell infrastructure. Can you share more on how you guys are thinking about economics there and the CapEx differences?

Thanks, Mike. Yes, happy to speak to that a little bit. There's kind of 2 driving forces there with our expectations on Vera Rubin economics. The first is that as the dynamic continues to play out where the infrastructure is going to be an increasingly greater and greater shortage, there's going to be a driver there that will drive the economics. And the second part of this is that the economics around supply and demand imbalance are really specific to GPU models. So if you look at H100s, H200s, the GBs, the 200s and 300s and then what's going to be the next series, the VR, there's a lot more infrastructure available to support those older GPUs, which have less specific requirements.

And when you look at what's going to happen with the VR series, the energy density is going up from 190 kilowatts per rack with the GB300s to upwards of 370 kilowatts per rack with the VR200s. And so a lot of the infrastructure that's being built right now is not going to be compatible with the next generation. And as companies allocate all this money into those Vera Rubin GPUs, they're going to be very economically incentivized to deploy them.

And what I spoke to with regards to our investment thesis earlier today, is that as this dynamic continues to play out, would you rather sit on your GPUs and not deploy them? Or would you rather pay a higher infrastructure expense in order to deploy them and start monetizing the asset. And really, the margins are so high on these GPUs, especially when the GPU is the newest, most cutting-edge state-of-the-art GPUs as the Vera Rubins will be in 2027, that the economic incentive to deploy those faster with very few options available should drive higher economics. We don't have a firm price point of exactly where that's going to lie, but we think the trend is abundantly clear that the economics next year and in 2027, they're just going to continue to get better and better, especially as the shortfall continues to get exacerbated.

Really helpful color there, Ben. And how should we think about the wind down of your mining operations in the coming years, specifically as it relates to the pace and timing of hash rate coming offline as you start to convert and make further progress in converting your data centers over to HPC/AI?

Yes, happy to speak to that. I mean the first area is the LATAM export that we've been working on. We obviously shut down our Argentina facility earlier this year. And I think one of the big areas here is the Paso Pe facility, which is an asset that's being held for sale. That represents around a little bit under 20% of our hash rate. And so that will impact the hash rate for the company rolling forward. But when we look at transactions like this, just like how we looked at the economics around shutting down the Argentina facility, we expect to pull forward a significant amount of expected free cash flow from those operations today so that we can reinvest them more immediately in the U.S., in North American HPC and AI infrastructure to greater effect.

So while it should have an impact on the free cash flow from operations, really the impact is very mitigated by the fact that we're taking 1 to 2 years' worth of free cash flow from operations and bringing it forward for reinvestment now. And then we also have the derisking factor with regards to having less and less Bitcoin exposure or Bitcoin mining exposure, I should say.

So as we move forward through 2026, the next sites that would be coming offline, would be coming offline as we develop the HPC and AI infrastructure and they would get replaced. Washington would probably happen sometime in the -- probably middle of the year, and that would be about 1 exahash and everything else will kind of come off slowly as we convert over the facilities to HPC and AI. So it would be a bit of an orderly transformation, and we'll continue to update the market as we announce those plans.

Our next question comes from the line of Brett Knoblauch of Cantor Fitzgerald.

Thanks for a lot of the color on the different sites throughout the call. I guess when it comes to maybe your PA sites and getting additional power, I feel like that's kind of like the biggest catalyst maybe over the near term. I believe Stronghold was kind of in queue before you guys went out and acquired it, which was probably, I don't know, over a year ago now. Do you have any idea on an update of when you expect to maybe expand the power capacity at both Panther Creek and Scrubgrass. Is that a couple of months thing? Within 6 months thing? How should we think about the timing there?

Thanks, Brett. Yes, it's a pretty exciting development there at Panther Creek because just over the last couple of weeks, we've received positive indications on the conversion of the ISA to an ESA as well as the expansion with an additional load study. It's a little too early to say exactly when that would come on to site. What we're planning here is an additional Phase 3 and Phase 4, which would come likely after Phase 2. But it's possible that the conversion of the ISA to an ESA could happen very quickly because all of the infrastructure is in place.

There is no investments that need to be made. It's really just subject to the regulatory approval and signings and paperwork for all of that to be converted over. So I would think within the Phase 3, it's not really clear exactly when that's going to take place, but it could happen quickly. It could take several months. When it comes to a Phase 4, that's likely going to be a 2028 deal.

Awesome. And then on the GPU cloud as a service, the CapEx figure that you've noted on, I guess, maybe converting that Bitcoin mining to host GPUs, that was not including the GPUs, correct?

Correct. That's not including GPUs and some of the construction costs associated with converting over the facility. So there will be additional expenses at the Washington site. We've had several conversations now with some of the leading GPU manufacturers, and we think that there's very attractive financing options on the GPUs as well that would really keep the CapEx requirement down to basically the infrastructure expense, and we'd be able to fund potentially up to 100% of the compute through these GPU manufacturers, which could be done on what we believe to be really attractive terms. And we also think that it would provide a significantly greater return profile on doing GPU as a service or cloud.

And from a capital allocation, I guess, standpoint, what is your guys' preference? Obviously, the PA sites appear to be leaning more towards colocation, Washington site cloud. Do you guys expect to kind of grow both businesses at the same time? Is there a preference for one to kind of get online sooner than the other?

The expectation is that the Washington site will be the first site that's fully online. The Sharon site will probably be the second site that's fully online because Scrubgrass -- sorry, Panther Creek is split out into those 2 phases in 2027 with additional Phases 3 and Phase 4, which still needing to be confirmed. Our priority is managing the critical path and all the project management time lines that we have across our various facilities.

But when we're looking at capital and how we'd allocate it across, it's managing the critical path, and it's also making sure that when it comes to looking at the opportunities around cloud, we're doing so in a way that makes sense and is affordable. And one of the benefits of doing it at Washington is a relatively smaller scale does make it very cost effective to do it. It's something that we could consider fully funded today. It's something that we could get financing for it at scale, whereas when you're looking at the really large campuses that we have in Pennsylvania, a colocation strategy is going to be a lot easier to finance.

Our next question comes from the line of Stephen Glagola of JonesTrading.

On the $128 million critical IT supply agreement for Washington, can you clarify the counterparty to that agreement? Is that T5? Or is that another firm? And then additionally, just a follow-up to the last one on the GPU cloud model potentially at Washington and Sherbrooke. Can you maybe elaborate on what factors make GPU as a service compelling relative to standard colocation in these markets? And sort of how are you evaluating both potential GPU risk and your, let's say, return on invested capital IRR hurdle for the cloud opportunity?

Yes. Thanks, Stephen. When it comes to the supply agreement that we have for the Washington site, it's not with T5., it is with a large publicly traded American national company who serves and supplies data center equipment and data center services. The facility is really an attractive facility for both colocation and both cloud. But when you look at the opportunities that we have here to go fully up the stack and what that might mean for the company, both in terms of a free cash flow perspective as well as our ability to really demonstrate ourselves not only as a developer, but as an operator, I think there's a lot of tangible benefits there that will pay dividends in the long run.

The conversion of the site according to our modeling and similar transactions that have happened in the market over the last couple of months, indicate that this one site could be worth significantly more than the entire Bitcoin mining business that the company has been operating for multiple years. And so that would provide us with a really strong free cash flow foundation as the Bitcoin mining business winds down.

It will also enable us to better understand and better learn these facilities as we're looking to provide service and work with hyperscale and enterprise customers and neocloud customers on really large campuses. And so the benefit of doing it at the smaller facility is that we should be able to extract a lot of knowledge and value that we can apply to a lot of our other facilities as well.

Our next question comes from the line of Mike Grondahl of Northland.

Ben, just curious, what would you describe as the 2 biggest challenges to maybe meeting your time lines for Washington, Sharon and Panther Creek? Like what's going to be the potential bottlenecks and how are you dealing with them?

Mike, I mean the potential bottlenecks in construction are a little hard to forecast. I mean construction is something that is changing every single day on the ground. I think that the key way that you mitigate potential risk in construction is having great partners with your owners rep, your general contractors, having a great team of project managers internally who are making sure they're on track of everything, every step of the way, and they're trying to think forward on all the potential problems in managing that -- those critical paths.

It's not possible, I think, to identify what would be the key bottleneck or the key risk. But I think with the team that we have in place, the strategic partners that we have in place and the kind of groups that we're working with on the contracting side or on the owner's rep side, we're in a really strong position to execute.

Great. And then any rough guidelines or framework you can give us for sort of like 2026 CapEx?

So when we're looking at 2026 CapEx, we've outlined some of the numbers for Washington. We're still working on clear path forward as we're revising for Vera Rubin. The real challenge with providing full CapEx figures for 2026 is that the Vera Rubin infrastructure is so new that even NVIDIA hasn't completed their validated reference designs to support that equipment and that infrastructure. So that's something that's adjusting in real time and still moving forward. We should expect to have a better indication of what CapEx looks like in 2026 in Q1.

From our conversations that we're having with the various different engineering firms and suppliers and partners of NVIDIA, NVIDIA is going to be producing the first Vera Rubin GPUs and taking them for their own purposes in probably Q2 of next year. And so sometime in Q1, the reference design should be relatively final, and we should be clear in terms of what the CapEx implications are for 2027 and 2026.

Our next question comes from the line of Nick Giles of B.Riley.

Appreciate all the detail here. Ben, you mentioned the higher rack density of the Vera Rubin gen and that it could make the rack density suited for Blackwells obsolete. And it wasn't that long ago that 100 kilowatts per rack was the high end of the rack density. So how are you thinking about future proofing as this trend continues? And are there any contract structures that could protect you from the need to upgrade later down the road?

Thanks, Nick. It's a great question. The evolution of hardware is happening at a rapid pace, right? The GB200s were 150, the GB300s were 190 kilowatts per rack. And now the Vera Rubins are going to be over 370. And what that means is that your cooling needs to provide a lot more capacity in a very small footprint. It also means that your electrical distribution is very different. Most of the networking is more or less the same. But on the cooling and the electrical, it's a really big challenge.

And one of the things that NVIDIA is looking at doing is increasing the voltage and even going to direct DC systems for the Vera Rubin technology. So they're looking at switching over to 800-volt DC. That doesn't mean that you necessarily have to go upwards of 800 volts or switch over to DC, but it does mean that as the increasing energy density continues to accelerate, you need to be rethinking your energy infrastructure and how you're actually building out these facilities.

I think one of the ways that you try and do this is you try and build for the hardware at the time and then you try and lock that in with multiyear agreements, which help you to recover your investment and capitalize those investments over a long period of time. When you're signing an agreement for 5, 10, 15 years, most of the time, those agreements don't anticipate material upgrades to the infrastructure or any upgrades to the infrastructure.

And so you're locking yourself in, the customer is locking themselves in with the infrastructure that they have in hand. And so I think the best way to mitigate those risks is to spread out your facilities, make sure you have a pipeline that exists over multiple years and make sure that you're building to the technology that's coming, not to the technology that already exists today because if you're building for today's technology by the time the facility is done, it's obsolete.

I really appreciate that perspective. That takes me to my next question. You mentioned the pipeline. Obviously, you have a lot of growth in front of you, but how much time are you spending on M&A opportunities? And where does that ultimately rank in terms of capital allocation?

Virtually none, Nick. Our focus as a management team is execution, execution, execution. We don't believe that there is a tremendous value that comes for our shareholders for looking at opportunities that are 2029, 2030 and these kind of long lead time items. We believe the value comes from executing against our existing portfolio. And we continue to get inbounds in terms of new opportunities and growth opportunities, but none of them seem to compare at all with what we already have in hand. And so I think the best opportunity for us is to continue to execute against our existing pipeline. There will be a time in the future where we're going to want to continue to expand that pipeline. But that's probably an easy year or 1.5 years out from today.

Got it. That's good to hear. Maybe one more, if I could, just for Jonathan. Sorry if I missed any commentary around this earlier, but how are you ultimately thinking about the Bitcoin treasury? Would you look to liquidate these holdings around the time that mining operations wind down? Or would those be separate time lines?

So to be -- first, it's nice to meet you. So we are definitely not operating as a Bitcoin treasury company, and we don't want to be one. What we're doing right now through programs like Bitcoin 2.1 is offset Bitcoin production costs and achieve higher value per Bitcoin sold in a low-risk, low-cost funding mechanism for the energy infrastructure investments that define Bitcoin going forward. The program primarily sells short and long-dated out-of-the-money calls on the Bitcoin and the treasury as well as for Bitcoin production. So our efforts are focused around maximizing yield and minimizing costs. And we expect the Bitcoin treasury to wind down into strength as we allocate it to CapEx.

Our next question comes from the line of Martin Toner of ATB Capital Markets.

Congrats on all this progress, guys. My question is around the GPUs. What's your confidence in being able to acquire them on a timely basis? And would you go through a distributor that comes with the financing or who might finance them?

Thanks, Martin. Yes, happy to speak to that. We've had quite a few conversations with leading GPU manufacturers. As you probably know, NVIDIA produces GPUs themselves, but they also sell chips to a lot of OEM manufacturers. When you speak with those manufacturers, they often have finance programs in place, and those finance programs are -- can be pretty attractive, especially if you have the right infrastructure to ensure the quality and the lifespan of those GPUs. So going with an OEM manufacturer has a lot of benefits.

They'll provide a full turnkey solution with regards to the servers themselves, and they can often come with financing. With our time line for end of next year on Washington, we're highly confident in sourcing our GPUs, and we believe that there's a lot of financing options out there that we are evaluating and could really juice up those return profiles.

That's great. Is there a good exahash number to use for Q4?

Our exahash should stay relatively consistent in Q4 when you're looking at our continuing operations. It's not possible right now to really forecast the impact or when the impact from the Paso Pe sale is going to happen. But the site continues to run today. It continues to hash. It continues to generate free cash flow. It's just not classified there under normal revenue according to IFRS standards, we have to hold that under discontinuing operations. But I think if you just look at the hash rate associated with our -- the rest of our portfolio, that will stay relatively constant -- it will stay constant throughout Q4, and then we'll make adjustments to it throughout 2026 as we execute on the HPC and AI development.

Fantastic. Can you give us a sense for initial conversations with customers of the GPU as a service product, reaction and confidence in being able to like contract them on a timely basis?

So conversations on the GPU front are really new for us because we've only started evaluating this in the last month or 2 as we've seen the market dynamic really take hold. I think the inbound demands that we've had across Washington and specifically Panther Creek is a lot. And when we're looking at what's the best way to service those customers, what's the best way to lock in long-term value under those agreements, there's a variety of different customers who are coming to us, and some of them want the GPUs included in there, and there's an associated premium that could be potentially extracted from that.

So it's a little too early to indicate exactly what we would expect with economics, but we do believe the economics from our conversations and from the internal modeling that we've done and from the transactions that a lot of the companies in the space have announced in the last couple of months is very compelling, especially when we can execute it at a smaller site like Washington, which we can consider fully funded today.

Our next question comes from the line of Brian Dobson of Clear Street.

I guess more broadly speaking about Bitcoin mining, as more and more miners transition megawatts to HPC? How do you see the global hash rate evolving over the next few years?

No, interesting question, Brian. Personally, I think the hash rate is going to continue to evolve at the same rate that it has been evolving. But if Bitcoin price is not moving up meaningfully, that would be a major headwind to further growth. I think what you'll see more likely is that Bitcoin miners will continue to rotate out to lower and lower cost jurisdictions. And I think one of the big dynamics that is taking place is that the public miners represented almost 1/3 of the entire network, and they all seem very keen on moving over to the higher economics associated with HPC and AI. So that removes a lot of the available and current existing infrastructure for Bitcoin mining.

So there could be some potential headwinds in exahash growth for the network. But I think what you'll see is it's just going to rotate off to different jurisdictions. We've seen huge growth in the Middle East, in Africa. I think Russia is a very large booming market for Bitcoin mining right now. And I think the best opportunity for most miners in the United States really is this transition to HPC and AI. And the economics are really going to drive that forward because the U.S. is the best market to invest in for HPC and AI, whereas Bitcoin mining is largely location agnostic. And it's happy to go to cheaper locations, higher-risk locations, more remote locations than HPC and AI is.

Yes, excellent. And then just a quick follow-up. So as you're reviewing your portfolio, do you see an opportunity to engage in this type of megawatt redeployment in a broader sense?

When we're looking at whether or not we could redeploy our Bitcoin mining assets somewhere else, I think the opportunities are really few. And really, I don't think that's a great use of management's resources or time. I think the best opportunity is to basically bring forward what should be estimated free cash flow for mining operations today into cash and reinvest those into HPC and AI.

Our next question comes from the line of Michael Donovan of Compass Point.

Ben, you mentioned dollar per kilowatt trends. Can you quantify a premium on dollar per kilowatt that you're seeing for power secured in Pennsylvania or Washington versus Texas?

Yes, it's a good question. There's a few variables that go into dollar per kilowatt on these leases. One is obviously time line, one is location. Another one is risk factors that go into the development time line. And so it's not really possible to pinpoint an exact price per location because there's multiple factors which come into play when you're looking at what the total lease rates can accumulate to.

I think if you look around at the transactions that are here and you look around at kind of what Bitfarms could secure today at Pennsylvania before it's even really broken ground at our Panther Creek site, which we plan to do next month, we could probably lock in $140 to $150 per kilowatt per month. But I think when you look at that rate, that rate takes into consideration the location. It also takes into consideration the shovel has not been put in the ground yet.

And what we don't want to do is we don't want to lock in a lot of discounts that would be associated with the build time line and the uncertainties around the build time line into a 10-, 15-year agreement. What we'd rather do is we'd rather execute against our construction milestones utilizing the substantial war chest that we have today. And the closer we can bring that window down from signing a lease to actually generating revenue from a customer, the more that we should expect to get. It's hard to put an exact price, but I would think that if that window was shorter, we could probably get upwards of $180 per kilowatt per month if we didn't have the risk and uncertainty priced into the time line that would bring it down to $140 to $150 per kilowatt today. That's internal estimates and modeling. So there's a lot of factors that go into that.

And we also think that as you execute against 2026 and as the gap between data center supply and data center demand continues to exacerbate, those numbers could get even better. And when we look at how does the margins work out for these contracts, you're largely looking at pretty fixed OpEx. And so the difference for the company between getting $140 per kilowatt hour, $140 per kilowatt per month versus $150 or $180 is not only a huge increase in terms of the top line revenue, but it's an even larger increase in terms of the profit margin, in terms of what your adjusted EBITDA is going to be.

And then not that all translates out into that multiple expansion that we're targeting with this transformation, right? So if you're getting a significantly higher free cash flow out of that operation, that's what the multiple expansion is going to be based on. So we really want to make sure that -- we're not pricing in those discounts. We're trying to maximize the dollar per kilowatt per month in the lease, and that's going to be the way that we achieve the highest multiple expansion for shareholders in the long term.

That's helpful, Ben. And you talked about connecting data centers to be one campus, and I was hoping you can unpack this a bit more. How can we think about distance between hauls or pods versus theoretical loss and performance for compute?

Yes. There's a strategy that Amazon pioneered. It's called the regional campus strategy, and they've effectively determined that somewhere around 300 miles is the cost-effective range to build direct fiber infrastructure. But the real thing is the latency that you could get between your sites. Now obviously, when you're looking at these facilities, you're even concerned about the latency in rack and in between racks or inside the facility to go from one rack to another rack on the other side of the facility. So that latency is becoming an increasingly bigger bottleneck as you're looking at performance on the high, high end of GPUs.

But what we've seen is that most of our facilities in Montreal, where we'd be looking at this regional campus strategy, they're much closer than 300 miles. They're all within 90 minutes of Montreal. Many of them are 15-, 20-minute drive apart from each other. And so it would be possible to reduce the latency below 2 milliseconds with direct fiber. It would be pretty cost effective to do so. And you'd get a lot of benefits from doing that in terms of the scalability, given it's just so difficult to scale up new megawatts in the province.

I would now like to turn the conference back to Ben Gagnon for closing remarks. Sir?

Thank you very much. I would like to thank everyone for attending our earnings call this morning. The management team is very excited. Our long-term investment strategy, we believe, is fully aligned with long-term investors. And we are really, really excited about the future of this company and what we're building at Bitfarms, and we appreciate your continued support. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Ladies and gentlemen, thank you for standing by. Welcome to Bitfarms' Second Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to turn the conference over to Laine Yonker, Director of Investor Relations. Please go ahead.

Thank you and welcome to Bitfarms' Second Quarter 2025 Conference Call. With me on the call today are Ben Gagnon, Chief Executive Officer and Director; and Jeff Lucas, Chief Financial Officer. Before we begin, please note this call is being webcast with an accompanying slide presentation. Today's press release and our presentation can be accessed on our website bitfarms.com under the Investors section. Turning to Slide 2. I'd like to remind everyone that certain forward-looking statements will be made during the call and that future results could differ from those implied in this statement.

The forward-looking information is based on certain assumptions and is subject to risks and uncertainties and I invite you to consult Bitfarms' MD&A for a complete list. Please note that references will be made to certain measures not recognized under IFRS and therefore, may not be comparable to similar measures presented by other companies. We invite listeners to refer to today's press release and our MD&A for definitions of the aforementioned non-IFRS measures and the reconciliations to IFRS measures. Please note that all financial references are denominated in U.S. dollars unless otherwise noted.

And now turning to Slide 3. It is my pleasure to turn the call over to Ben Gagnon, Chief Executive Officer and Director. Ben, please go ahead.

Good morning, everyone, and welcome to Bitfarms' Second Quarter 2025 Earnings Call. We made strong steady progress in Q2 with several key developments that advanced both our Bitcoin mining and HPC and AI businesses. Today, I'll walk you through these developments and how they position Bitfarms to execute on our HPC and AI growth strategy through which we believe we'll be able to maximize the value and potential of our energy portfolio.

Turning to Slide 4. I would like to start with an update on the low CapEx Bitcoin mining foundation that is underpinning our transition to an HPC and AI infrastructure company. In the second quarter, we installed more than 12,000 miners completing all of our Bitcoin mining growth plans and initiatives across all of our facilities where we mined 718 Bitcoin for a direct cost of $48,200 and achieved revenues of $98,000 per Bitcoin. During the quarter on May 12, we also received notice that our electricity provider in Argentina would be halting service immediately pending negotiations with its creditors.

We spent the last 3 months working through the various options available to profitably resume operations at our Argentina facility. These negotiations are moving slowly with no visible pathway to reenergization. So with rising costs in the country following the Argentina IMF deal in April and no electricity supply, the company has made the difficult decision to shut down our mining operation in Argentina by November 11, 2025. Notably, Argentina had our least efficient mining fleet, rising energy costs and our least reliable electricity supply.

So while our hash rate is down as a result, the impact on free cash flow is partially offset by the improvement of other fleet-wide key performance indicators, which have improved from the shutdown. Energy efficiency is up 1%, average electricity price improved 2%, direct hash costs improved 5% and uptime is up 2%. These improvements helped to offset the impact on free cash flow and further derisks our mining operation through more competitive performance.

In early July, we also completed the Bitcoin miner repair and upgrade program with 1 final transaction upgrading more than 10,000 T21 miners for approximately 8,500 S21+ miners under the same terms and conditions as previous upgrades. This last round of minor upgrades included all of our new T21 miners from Argentina as well as T21 miners from other facilities. All of the new S21+ miners were imported into the U.S. in advance of the August 1 tariff rate hike and are actively being marketed for sale. Our older M50 and S19 miners as well as various mining equipment from Argentina have either already been sold or are actively being marketed for sale.

We expect estimated proceeds from Argentina shutdown of approximately $18 million through the elimination of site remediation liabilities, recovery of prepaid deposits, reduction in lease expenses, a free termination option and equipment sales. This is equivalent to over 2 years of free cash flow from Argentina mining operations with current economics. This plan is expected to reduce risk and our cost to mine Bitcoin through the improvement of operational efficiencies while improving financial liquidity to support our U.S. HPC and AI growth initiatives in the near term.

Turning to Slide 5. With all mining growth initiatives complete and the Argentina shutdown underway, I would like to provide a snapshot of where we are today. We are currently operating 17.7 exahash at 17 watts per terahash across our 14 data centers, which is generating free cash flow from mining operations of approximately $8 million a month. We continue to sell Bitcoin from our mining operations to fund OpEx, overhead and CapEx; but we have also increased Bitcoin holdings to approximately 1,200, up 25% from year-end 2024 representing a value of approximately $145 million with a Bitcoin price of approximately $119,000.

So while exahash has pulled back with the Argentina shutdown, our Bitcoin mining business remains a low-risk cash flow foundation with minimal CapEx needs for the foreseeable future and considerable upside to rising Bitcoin prices enabling us to invest all our time and capital into developing our HPC and AI business.

Turning to Slide 6. I would now like to provide an update of our North American energy portfolio and its HPC and AI potential. Bitfarms stands out from other public mining companies with a unique energy portfolio built over many years of operation. In North America; we believe we're the largest public miner in Quebec and Canada, have the biggest footprint in Pennsylvania and PJM and have the largest footprint in Central Washington. The geographic diversification across data center hotspots gives us a serious advantage in the HPC and AI race, which is still in the early innings.

Here's the portfolio. With over 1 gigawatt in the pipeline, our Pennsylvania portfolio is comprised of 3 sites: Panther Creek, Scrubgrass and Sharon and is where the bulk of our U.S. portfolio lives. Amazon has recently committed to investing over $20 billion in their data center campuses less than 40 miles to the Northeast and Southeast of Panther Creek and CoreWeave has recently committed to investing over $6 billion in their campus 30 miles to the southwest of Panther Creek leaving Panther Creek in the center of it all.

With robust energy, fiber infrastructure and recent strong political tailwinds for data centers, which I will speak more to in a second; Pennsylvania is well positioned for massive strategic wins with large hyperscale clients. On the opposite side of the U.S., our Washington portfolio is much smaller at 18 megawatts, but is strategically located in the largest data center cluster on the West Coast. With approximately 1 gigawatt of data centers in the region, including Microsoft and CyrusOne within a 30-mile radius, and some of the lowest cost energy for data centers in the U.S.; Washington is well positioned to service prospective HPC and AI enterprise clients and generate attractive margins.

North of the border in Quebec, our 170 megawatts of reliable and cost effective hydropower makes us the largest Bitcoin miner in Quebec and in Canada overall. The province's robust supply of cost effective renewable electricity and extensive fiber infrastructure to Toronto, the East Coast of the U.S. and Europe has attracted the development of approximately 700 megawatts of traditional data centers in Quebec representing over 50% of all data centers in Canada. Major players including Microsoft, Google, Amazon and Vantage are all present and looking to expand in the area.

With recent pushes by federal and provincial governments on data sovereignty and privacy, the development of data centers in Canada has emerged as a rare nonpartisan objective that has strong support through federal and provincial governments. If Bitfarms converted all of our Canadian Bitcoin mining megawatts to HPC, it would represent up to a 24% increase in data center megawatts in the province and make us one of the largest HPC data center operators in Quebec and Canada. In order for us to capitalize on this opportunity, it will require regulatory approval for converting our crypto mining megawatts to traditional data center megawatts.

While this has broad political support and we have received initial indications of support at various levels for such a conversion, it will take some time to run its course. In the meantime, our mining operations in the province continue to be profitable and we are tentatively planning conversion of the portfolio in 2027 and 2028 in advance of the next halving event. We will provide further updates on Quebec as they materialize. This unique portfolio is attracting huge interest from counterparties and our scale and positioning are unmatched. As we replicate the lessons from Panther Creek across our North American sites, we are well positioned to capture meaningful market share in these high demand HPC markets.

Turning to Slide 7. In recent weeks, there has been a surge of new data center announcements in Pennsylvania. Big names like Google, Meta, Blackstone, Brookfield and CoreWeave have committed over $90 billion in investments citing robust energy and fiber infrastructure and close proximity to the largest data center cluster in the U.S., data center alley and major East Coast metropolitan centers. The robust investment into these data centers and the meaningful job growth that accompanies them will be transformational for many towns and counties across the state and as a result, they're receiving robust political support and attention from the local level all the way up to the Oval office.

As the only public Bitcoin miner with a big Pennsylvania footprint, we're perfectly positioned in what is emerging as the new AI hub. This isn't just luck, it's vision. We've been evaluating Pennsylvania for years, focusing on the same opportunity that is currently taking the industry by storm. With surging demand for power, record capacity auctions and a renewed interest in traditional thermal generating assets; the power plants we acquired in the Stronghold acquisition are worth significantly more now than when we bought them just a few months ago.

Turning to Slide 8. Our flagship campus in Pennsylvania at Panther Creek is advancing rapidly. In the past few weeks, the electric utility PPL has given us the green light for expanding our grid connection confirming firm service of 50 megawatts by year-end 2026 and an additional 300 megawatts as early as 2027. That means more power on a faster schedule confirmed. To support the development, we've also executed binding purchase and sales agreements that more than double the acreage of the site, paving the way for a contiguous and marquee 350-megawatt HPC campus in Eastern Pennsylvania.

The conceptual master site plan that you are looking at on screen now is based on the new power schedule and expanded acreage. This master site plan is finished and has been submitted to Macquarie. It is important to remind everyone that the master site plan may be modified based on the multiple conversations we currently have going with potential customers, but it's a rock solid base to develop the site and customer conversations expeditiously. Phase 1 is 50 megawatts by the end of 2026 and Phase 2 adds 300 megawatts as early as 2027.

The plan includes the development of 4 buildings housing 350 megawatts in total with room for additional expansion in a Phase 3 with a fifth building once the ongoing FERC, Talen and Amazon issues are settled or we have confirmed an alternative arrangement that permits us to use our existing grid connection and power plants for the HPC data center campus. Finally, our new partnership with T5, a top-tier data center developer who's worked with every major hyperscaler to build and operate data centers, is a big deal.

T5 will be responsible for managing the development of our Panther Creek campus and is yet another proof point to investors and prospective customers that validates the development potential. Next steps for Panther Creek include fast tracking permits, locking in long lead items like transformers and generators and breaking ground as originally planned in Q4 this year. CapEx-wise, the Macquarie facility will be sufficient for Phase 1 and with just $10 million of planned CapEx for the remainder of this year, the majority of CapEx will fall into 2026.

Turning to Slide 9. While Washington is much smaller than Pennsylvania, this site is a gem. It's positioned in the West Coast data center alley and the utility has confirmed that all of our Bitcoin mining megawatts can be converted to HPC with no regulatory red tape. Better yet, converting our megawatts would cut our energy cost per megawatt hour by almost 50% below $30 per megawatt hour and make it some of the cheapest power for data centers in the U.S.

To help us further advance customer conversations, we have executed a binding PSA for adjacent land that will more than double our acreage and is expected to give us all the space we need to develop a state-of-the-art HPC facility. In Washington, we're eyeing enterprise customers where the smaller site can be used for greater effect, generating incredibly healthy margins and providing portfolio diversification.

Turning to Slide 10. Following the successful rebalancing of our portfolio earlier this year and the Argentina shutdown, our current operational megawatts are now over 80% North American and with the majority of our growth pipeline in the U.S., our pivot to the U.S. is in full swing. Our actions are not limited to the expansion of energy and the development of HPC infrastructure in the U.S. Recently, we've announced the opening of our second principal executive office in New York City and our planned transition to U.S. GAAP accounting for full year 2025 results.

These actions are expected to simplify our reporting processes, reduce administrative and legal costs, broaden our U.S. investor base and improve our eligibility for inclusion in certain stock indices among other potential benefits. These are important steps on our journey to becoming a U.S. domiciled entity, which we plan to achieve in 2026. We strongly believe the strategic transition will better position Bitfarms to execute our HPC and AI growth strategy, driving improved operational efficiencies and maximizing shareholder value.

Turning to Slide 11. While we have accomplished a lot in the last year, I'm particularly proud of our accomplishments over the last 4 months. Our Bitcoin mining business is locked in projected to produce strong free cash flows of approximately $8 million per month with minimal CapEx and numerous improvements across key performance indicators. With more than 1 gigawatt, our Pennsylvania pipeline is a gold mine in what is quickly emerging as a major AI hub fueled by massive regional investment. HPC and AI development is taking off with rapid progress at our flagship campus, Panther Creek, backed by top advisers, strategic partners and financing.

We've taken key steps towards a planned 2026 U.S. redomicile, which will drive index inclusion and expand our access to U.S. investors and capital. Our portfolio has rebalanced to 80% North American with all U.S. sites well positioned for conversion to HPC and we have dramatically strengthened the balance sheet with approximately $230 million in cash and BTC as of August 11 and access to up to an additional $250 million in the Macquarie facility for Panther Creek development. Our confidence in our business and ability to both execute and create long-term value in this transition has never been stronger.

Despite our strong performance, we believe that the market is undervaluing both our Bitcoin business and HPC potential. Accordingly, we have recently launched the company's first-ever stock buyback program for up to 49.9 million shares or about 9% of outstanding shares. I'm proud to say that in the first 2 weeks, we have already repurchased roughly 5 million shares equivalent to 10% of the total share buyback program. With strong cash flows, ample liquidity and financing; we plan to continue buying back our shares under this program for the foreseeable future.

Now turning to Slide 12. I'll turn the call over to Jeff for the financials.

Thanks, Ben, and good morning, everyone. Turning now to Slide 13. Before I dive into the second quarter results, I'd like to highlight the key financial achievements from the quarter. First, the Macquarie financing. At the beginning of the quarter, we entered into a financing agreement with Macquarie to fund the development and build-out of our Panther Creek, Pennsylvania HPC data center project. The facility provides up to $300 million towards the design, development and initial phase of construction of the project.

The initial $50 million tranche was drawn at closing to fund the soft costs associated with the design of the Panther Creek data center, land acquisition and other initial steps. The $250 million project finance tranche is drawable upon meeting certain conditions, including development milestones. With just $10 million of planned CapEx for the Panther Creek for the remainder of this year, there is no anticipated need to draw down additional tranche until 2026.

We are excited to join forces with Macquarie, an established leader in HPC data center financing. They are truly a partner in our HPC expansion, bringing financial and development expertise to supplement our other partners and advisers. This financing is emblematic of our financing strategy for our total portfolio as we use cost effective debt to fund our growth. Our highly valued and appreciated North American assets combined with the higher margin and predictable earnings streams characteristics of HPC and AI make our HPC properties attractive to debt finance.

Second, cash generation of our Bitcoin mining operations. As we've noted previously, during the development and build-out phase of our HPC program, our Bitcoin mining operation funds our G&A and corporate expenses and the debt service requirements associated with our HPC build-out. We are achieving steady mining margins and, as Ben noted, generating about $8 million of free cash flow from operations per month in excess of our corporate administrative costs to fund our initial capital requirements, debt service as well as our stock buyback program. With our miner upgrade program behind us and having among the most efficient fleet in the business at an average efficiency of 17 watts per terahash, our mining operation is benefiting from the current high Bitcoin price to generate strong cash flows, a solid base for HPC expansion.

Third, our stock buyback program launched in the last week of July. As announced a few weeks ago, our Board of Directors has authorized Bitfarms to repurchase up to about 9% of our outstanding shares over the coming year. Our share repurchase program calls for the buyback to be funded by excess cash flow from our mining operations. As Ben noted, we have repurchased over 4.9 million shares to date and since the inception of the buyback program, our purchases have been at daily volumes that approximate the daily allowable limit for the exchange on which the shares were repurchased.

We believe we're undervalued versus peers and we're using mining free cash flow not our Bitcoin treasury or funds from our debt financing to prove it. With our shares neither reflecting the cash generation potential of our mining activities nor the value of our HPC properties, utilizing our excess cash flow from operations is an effective way to bring value to our shareholders. I'll add that we have not issued shares under our ATM since January and the shares we have repurchased to date under our buyback program are well below the prices at which we issued the shares last year.

And lastly, our U.S. GAAP transition. As Ben noted, this transition is vitally important as we continue to shift our operations towards the United States. We expect to report our full fiscal year 2025 results under U.S. GAAP. We believe this will simplify our financial reporting process, further align us with our U.S. HPC and AI and mining peers and serve as an important stepping stone towards a potential redomicile in 2026. The benefits of a redomicile to the U.S. are plentiful.

Bitfarms would have access to a broader pool of U.S. capital and investors, potential inclusion of major U.S. stock indices and more favorable regulatory and tax environments among other benefits. Building off the successful rebalancing of our energy portfolio to over 80% North American megawatts in 2025, these initiatives further advance our U.S. pivot and align with our HPC and AI growth strategy.

Turning to Slide 14. Let's focus now on our second quarter financial performance. In the second quarter, we earned 718 Bitcoin and achieved total revenue of $78 million, up 87% year-over-year. Revenue from mining activities was $71 million and the balance of $7 million was earned from hosting electricity generation businesses following our acquisition of Stronghold and from our Volta Electrical Services subsidiary. Our gross mining profit was $32 million representing a direct mining margin of 45% and average direct cost of $48,200 per Bitcoin mined.

Cash, general and administrative expense or G&A was $18 million, an increase of about $2 million over the first quarter reflecting Stronghold G&A of approximately $3 million in the second quarter versus about $400,000 for the 2 weeks in which Bitfarms owned Stronghold in the first quarter. Excluding Stronghold's G&A, our second quarter cash G&A would have been roughly 3% lower than the first quarter. Operating loss was $40 million in the quarter and included $15 million of impairment charges attributable to our Argentina operation. As a result, net loss for the second quarter was $29 million or $0.05 per share.

Turning to Slide 15. For the second quarter, our adjusted EBITDA was $14 million or 18% of revenue. This encompasses primarily our self-mining revenue. Our direct mining cost per Bitcoin in the second quarter was $48,200 with our all-in cash cost to mine a Bitcoin at $77,100 compared to revenue per Bitcoin earned during the quarter of $98,000 resulting in profit per Bitcoin of $20,900 for a profit contribution from mining activities of about $15 million.

Turning now to Slide 16. As of August 11, we had total liquidity of approximately $230 million comprised of cash and unencumbered BTC. In addition, under the Yguazu sale agreement, we expect to receive the remaining $10 million from HIVE  by the end of September marking the completion of the sale announced earlier this year. As was mentioned earlier, we project to generate on average about $8 million per month of free cash flow from mining operations, which we expect to be more than sufficient to fund the remainder of the 2025 CapEx, our working capital requirements, our debt service and the share buyback program.

Regarding our Bitcoin One program, we've realized $11 million in profits since the program's inception this past February. This follows the success of our Synthetic HODL program under which we realized $18 million of profit between October 2023 and January 2025 for total net profit since the inception of our market operations activities in October 2023 of over $28 million. We are conducting a strategic review of the program as we further shift our focus in operations towards HPC and AI.

In closing, we believe our financial position provides a solid foundation to execute on the HPC and AI initiatives that Ben laid out today and we look forward to keeping you updated as we continue to develop our U.S. operation.

With that, I'll turn the call back to the operator for questions and answers.

[Operator Instructions] The first question will come from Nick Giles with B. Riley Securities.

This is Fedor Shabalin on behalf of Nick Giles. Ben and team, I just wanted to touch base on Panther Creek. What's the game plan for getting construction procurement lined up? You're planning to break ground in 4Q? And am I right that you're moving ahead regardless of whether you locked in customers at this point? And also curious about the Macquarie financing option, what boxes do you need to check to get the debt facility entirely in place? I remember you mentioned that it would be a multistep process. And if you could ballpark the CapEx you're looking at for the construction phase, that would be really helpful.

Fedor, I'll speak to the initial questions around the development for Panther Creek. Then I'll pass it off to Jeff to answer the questions around Macquarie and CapEx. But to answer the question for what are the next steps for development at Panther Creek. We've recently engaged T5 as owners reps so they're managing the process here with engaging all of the contractors, overseeing the development, securing the permits and everything else. There's a few different things that we are going to be doing over the next couple of months.

But the biggest one that we'll be doing will be the civil works so beginning to clear out the trees, flattening out the land as well as the substation construction. Those are the big development milestones prior to the end of the year. We won't actually start constructing the buildings until the civil works is done so that will be in the first part of next year. But that's what we should expect to happen over the coming months. Jeff?

Sure. So in reference to where we stand currently with Panther Creek here. For the Phase 1 of 50 megawatts, our capital expenditures for the balance of this year 2025 are around $10.5 million. So we're in very good shape for that. For the project in total through 2026, we're envisioning to be around $400 million in total for the full build-out of the facility. Did that address your question?

Yes, you cut off a little bit. But yes, I do have a follow-up on that. I keep hearing that hyperscalers can be a really big business, right? They're just looking for gigawatt scale compasses. And how does it play into your Panther Creek strategy? And based on the conversations you've been having while marketing the site, what's the typical size profile of the players showing interest here?

Yes. It's a good question, Fedor, and you're right. The increase in demand per site is happening quite rapidly. I think last year when Core Scientific and CoreWeave announced their deal, the focus was really on 100-megawatt sites and that number has gone up quite a bit. I think the demand here is tied also to time. So the way that the market is viewing things is that 2026 power is highly valued and prioritized. And because of the timeline on 2026 power, people tend to be a little bit more open to smaller sites in 2026 provided of course that there is the ability to expand beyond that over time.

Most of the HPC customers that you'd speak to, they understand that a site is not built all in one go, but it's separated out into multiple phases. What most customers are looking for is immediate power in 2026 with the ability to expand beyond that over time. So what we're seeing is that the larger the campus, the more interesting for sure. But you really can't get away from that timing aspect, which is kind of bending a lot of perceptions on what people would like and what they're interested in.

But with the 350 megawatts to 410 megawatts that we have there at Panther Creek, this is still a very sizable data center campus. There's roughly 600 megawatts worth of data centers in the state of Pennsylvania alone today. So it would be more than 50% increase in terms of the total data center capacity in the state just by building out this 1 campus. But certainly the demand is tracking upwards.

And our next question will come from Mike Colonnese with H.C. Wainwright.

A follow-up on the CapEx spend on Panther Creek. Jeff, you mentioned the $400 million total build-out cost, which implies $8 million per megawatt. Curious what that entails from a data center readiness perspective and the implications for potential economics that you could secure from a potential deal with this type of build. I know in the past you've talked about powered shell through fully developed and constructed Tier 3 data center. But what does this entail again from the $8 million per megawatt and what you can expect from a potential contract on that site?

Sure. Let me start that off and then, Ben, you can follow up afterwards. I think first of all, that's a number that we're working on at this point in time and that may vary depending on the arrangement that we put in place with their prospective customers that we finally come to an agreement with here. But that's actually the expectation we have for a full build-out of having the site ready for larger GPUs here at that point in time. So that's the position we have here as we're currently assuming here. That may change again given the nature of whatever arrangement we have in place with our prospective customers. Anything you wish to add?

Sure. When we're looking at the build-out, we're trying to optimize for a few different things here, Mike. We historically have always tried to optimize on return on invested capital and we're also trying to optimize for the multiples expansion being driven by these kind of long-term contracted revenues that come out of these HPC contracts. I think generally speaking, trying to optimize across those 2 variables is quite difficult because the best return on invested capital in this industry is going to be for just the development of powered land. If you can just get a piece of land and you can put some 500 megawatts on it, that investment is going to be the best possible return that you can have per dollar invested, but the market is not really going to give us value for that transactional nature.

And so there needs to be a shift further up the stack so that you can get those long-term contracted revenues, which is going to drive that multiples expansion that we're targeting. But we're also being quite realistic and pragmatic here that this is an execution game and that the higher up the stack we go, the more you're going to get from that multiples expansion, the more CapEx you're going to have to raise and the more difficult it is to execute. And by looking more broadly at what we could possibly do, we have a better way to recognize value out of those portfolio assets through a powered shell or a colo opportunity.

Very helpful. And a follow-up for me. As it relates to the potential Bitcoin mining conversions at your Quebec data centers, I know in the future now, but can you just provide more color in terms of what would need to happen for you to ultimately make that decision? And is there potential to convert the rest of the portfolio if demand is strong enough from prospective HPC/AI tenants?

So it's a great question on Quebec. We spent a lot of work and time evaluating the Quebec opportunity. We've had numerous different consultants and strategic partners out there evaluating the sites. We think there's a lot of good conversion potential for Quebec. But as I mentioned earlier on in the call, we will need to convert over the crypto mining megawatts to data center megawatts and that requires regulatory approval. There is no clearly defined regulatory approval path because nobody has ever done this particular conversion of megawatts over.

The crypto mining megawatt tariff is relatively new only having been established a few years ago and the huge demand on HPC is also relatively new. So nobody has actually asked Hydro-Quebec to try and convert these prior to us asking Hydro-Quebec to convert these megawatts. I will say that politically Quebec has never been a huge fan of Bitcoin or Bitcoin mining. I think that's largely true for the federal government in Canada as well, but they are very interested in HPC, AI and sovereign data centers.

And so here's a great opportunity for both Bitfarms to convert over and develop our sites, but also for the relative power brokers and political interest in local, provincial and federal to all really take some strategic objectives here with conversion over Bitcoin mining megawatts to data center megawatts. So I think everyone is aligned in terms of the value creation opportunity that's here and wanting to get this done. But unfortunately, I can't comment to a specific pathway and a timeline for converting over those megawatts right now, but we will provide an update as soon as we have that because we are actively pursuing it.

And the next question will come from Gareth Gacetta with Cantor Fitzgerald.

Just a quick one on the Macquarie credit facility. So in order to draw down that second $250 million, I guess you have to submit kind of a draft statement to Macquarie. So how long do you expect that approval process to take and how long until you're actually able to access the capital?

So the process is going on at the moment here in the review process. While we expect it to take probably a couple of months here, there's always a chance that the requirements could push us into early 2026. What I think is very important to point out here, as we've noted here with Panther Creek here, we have about $10.5 million of capital expenditure requirements this year. That and even going to our expenditures into early 2026, we're more than sufficient with our liquidity actually to fund that and then get reimbursed when the other piece comes into play here. But so far, things are going well with Macquarie and they are in the process of reviewing our master site plan as we presented it to them.

Got it. And then just a quick follow-up here. How are you thinking about the levels of share buybacks going forward? Are you thinking kind of consistent to what happened this quarter? Any additional color would be good.

So let me add just a few comments as well. We are continuously assessing our cash flow generation for Bitcoin mining activities here. As we've noted, we're generating about $8 million of excess cash flow above our operating requirements, which includes our overall G&A here per month for the balance of the year here. So that's going to dictate in large part what we actually do with our buyback plan. And we are anticipating continuing in the range of where we are now, but of course that's going to depend upon the opportunities and the CapEx requirements that arise over the remaining 4.5 months of the year.

And the next question will come from Brian Kinstlinger with Alliance Global Partners.

With the master plan now submitted, at a high level can you talk about whether potential customers have begun the evaluation process or what has to happen before that begins? And then how has T5 changed those conversations in general?

So yes, we're actively in conversations with potential customers now. This really started in earnest after we had secured the land and the big driver forward now is having the certainty from the ESAs from PPL as to what we can expect from grid connections and when we can expect them. That's been a huge driver forward in these conversations. And the other part is having the right counterparty here for helping us to develop out the sites and manage the whole process.

T5 is a very known data center builder and operator. They work with every major hyperscaler in the space. They're building numerous of these data centers for CoreWeave. So this is a trusted party and that brings a lot of confidence to potential customers when we're having these conversations. And so those 2 things are really helping to drive this forward, the certainty around the energy supply and delivery date as well as the increased confidence in the development partner of both key items.

Great. And a follow-up just on the Bitcoin mining business. Is there a way to think about maybe 1 year out and 2 years out how you think about what your hash rate under management might be?

It's a great question for thinking that far out. Really what we should expect is that we're not planning any mining growth. And now as we convert over to HPC and AI, there could be some gradual pullbacks in the exahash. In the Q4 deck, one of the things that we outlined was our best expectations for network hash rate and Bitcoin price through every quarter end from 2025 and 2026. I think that is a very good projection for where the economics might be able to go in the future and what that might imply for revenue and gross mining margin for Bitfarms and for the industry at large.

And I think if you look at that and you look at the kind of revenues associated with that, we're going to get continued revenue and free cash flow performance out of our mining fleet, at least we expect to throughout the remainder of 2026. But I think when you look at the relative opportunity between HPC and AI and Bitcoin mining investments right now, it's really hard for us to justify any further investments into Bitcoin mining given the HPC development opportunity and the potential. So you can expect that the hash rate should stay flat and as we progress with HPC development especially at Panther Creek, there may be some gradual reductions in the hash rate over time.

Okay. And the next question is going to come from Stephen Glagola with JonesTrading.

Just following up on an earlier question in Q&A. Could you put some concrete figures or guidance around how you think about sort of annual revenue per critical IT megawatt on a powered shell lease at Panther Creek as well as maybe the corresponding EBITDA margin from this lease structure? And additionally, what like PUE benchmark would you consider appropriate for this?

There's a lot of estimates that you can point to for what a revenue figure would be per megawatt per [ NU ] or what have you for these various structures. But I don't really want to commit to one right now because it's going to be highly dependent on the customer conversations we have and the structure that gets put in place. What I think is important to focus on here is that the power that we have is in the right place at the right time and there's significant value creation opportunity in that and far greater opportunity than any sort of Bitcoin mining economics that we can see or foresee.

When it comes to how we're planning out and modeling that, we do have a lot of inputs that come from the customer conversations and our advisers, but it's a little premature to be estimating and forecasting things like EBITDA without those customer conversations firmed into a term sheet and a contract.

And if I could just ask 1 more follow-up on the T5 data centers. I know they're overseeing all the contracting, permitting, construction. Maybe just elaborate sort of on the cost implications of this. I think specifically I believe you guys are getting a flat fee. Maybe any additional detail on how that fee is structured and color around how CapEx at Panther Creek is impacted by this arrangement.

We don't expect this to be materially impacting CapEx beyond the estimates that we provided earlier. The estimates that Jeff had provided on the $400 million, that's inclusive of those fees. And really the key things here with time to market is execution. And so bringing in the right parties who know how to execute, who can deliver on time we should expect to actually pay for itself in terms of higher performance, higher delivery, higher certainty and less cost overruns from being behind schedule and over budget.

By the way, Steve, 1 comment you asked about the PUE. Generally, the PUEs that you see in our industry around 1.5 in that range. By virtue of where our operations and our properties are located here, we're sort of looking towards and projecting a PUE of around 1.25. So it's a little better than the industry overall.

And our next question will come from Mike Grondahl with Northland.

A couple of questions. The first one, Ben, you talked a little bit about it on the last question, but why did you select T5 and is there a specific economic arrangement you can share there? And then maybe secondly, I'll just ask it now related to Panther Creek, did you guys disclose how much the land -- that binding agreement to purchase the land, how much that was and when you would expect that to close?

[p id="717652235" name="Benjamin Gagnon" type="E" />

Sure. And thanks, Mike, for the question. Just answering the first question here on the land, I believe it's 178 acres. Total value here is I think $3.5 million. We should expect it to close this quarter or shortly after. So this is happening. We've done all of our due diligence on the site. Everything is basically just the formal closing process now on the land and should be done in advance of us beginning our construction and beginning all the civil works in the coming weeks. Sorry, Mike, I'm blinking on the first part of your question. Could you repeat it?

Just why T5 and the economic arrangement there?

[p id="717652235" name="Benjamin Gagnon" type="E" />

Of course. So we ran through a process here. We did a bidding process. T5 was one of I think 4 different companies who were bidding into the opportunity. We did site visits to multiple different data centers built by all of these different data center companies and we really liked T5's build quality. We really liked their team. They've got a fantastic reputation in the industry. They've got great experience working with every single major hyperscaler. So for the kind of customers that we're targeting at the Panther Creek site, T5 knows exactly what the customer wants, how they build and they're a trusted party to do it.

And during the process for selecting and bidding, they came in at a very competitive price with this very competitive offering. The other thing that I'd like to add on T5 is that they're one of the few companies out there that do a full service offering. This is everything from managing the design, engineering, construction all the way through to the operations and maintenance. And so this is 1 partner that as we progress with them and as we get more comfortable and more confident in their abilities, there may be opportunities to extend that relationship with them throughout the process longer so that they can provide more value and more services as we do the build-out.

Got it. And then 1 for Jeff. Jeff, the $18 million that I think comes back to you from Paraguay and it looks like you have some miners, roughly $25 million for sale. When does Bitfarms -- that $18 million and the roughly $25 million, when would you expect to have that?

Jeff, you want me to take this one because it's [indiscernible]. So Mike, the majority of that $18 million comes from miner sales. All of those miners have been imported into the U.S. and are in the warehouse being actively marketed for sale. Not entirely sure exactly when those miners would sell, but they're brand new miners and brand new miners are generally pretty liquid and they sell for fair market value. So we did that upgrade process in order to make sure that when we were going through the sale process we're selling brand new top of the line miners and not use miners at a discount.

I think we can expect the revenues from that to be coming in over the next 2 to 3 months, which could be a little bit faster, it could be a little bit longer, but I think that's a rough timeline for that. With regards to the remaining funds, the majority of the remainder of that $18 million comes from our prepayment in electricity. So we had about $3.5 million in prepaid electricity at the Argentina site, which is now going to be recovered through the latest agreement and that's going to be paid out over the span of 18 months in a straight line.

Got it. And then just 1 for clarity. The $18 million from Paraguay and the $25 million you mentioned with miner sales, are those 2 separate numbers or am I kind of double counting them?

To clarify, it's $18 million from Argentina not from Paraguay and there is some double counting in those figures. The rough expectation on miners from Argentina specifically is about $13 million out of the $25 million of total miners available for sale.

And our next question will come from Martin Toner with ATB Capital Markets.

Is there anything preventing you from doing a deal on Panther Creek like right now and on how many megawatts would you say you could potentially do based on whatever timeline you give me? Same question for Washington.

There's nothing preventing us from doing the deal now. We're actively in conversations with different customers. It's just that these deals take a lot longer than a Bitcoin mining transaction, which can be done in the span of a week or 2. With Bitcoin mining, it's just really as simple as negotiating with Bitmain or MicroBT. But when we're talking with the kind of customers that we're talking with at Panther Creek, these are very large organizations with processes in place and a very strong system of procedures and rules and due diligence that they need to follow.

So there's nothing preventing us from doing a deal now. We have the power certainty. We have the land. We have the plans in place. Really it's dependent on the customers' willingness to come in and the customers' appetite for power and time. The same thing is true for Washington. The difference with Washington is that the site is quite a bit smaller than Panther Creek because we just have just shy of 20 megawatts there. This is still a really, really attractive site. When you look at where the data centers are clustered in the United States, this is the largest data center cluster on the West Coast because it services Vancouver, Seattle and Portland. It has great proximity to basically every major fiber optic cable which carries off data to Asia and there is a robust amount of hydroelectric power in the region.

So this is some of the cheapest power in the United States for data centers and it's all renewable. It drives a huge amount of demand. And there we'd be looking at targeting an enterprise customer, somebody who's looking to expand their compute capacity and not really a data center company, but they're using the data centers to facilitate a business or a service or an analytical purpose for their company. And we're actively in those conversations with potential customers right now as well for Washington. It's going to be a slightly different structure for Washington due to the relatively smaller scale and the different type of customer that we're looking to engage with, but there is no barrier to developing a contract or a deal now. We have everything in place to do that.

What are the prospects of adding to the portfolio in the Northwest and is that something that you guys are actively looking at?

There's plenty of opportunities to continue to grow our energy pipeline. We have a fairly active corp dev team. I think our biggest focus right now is twofold. One, it's on executing on the power that we already have. We have over 1 gigawatt in the pipeline of highly valuable megawatts in the right locations and that is the big opportunity that we're trying to execute on right now. So the priority is execution first, growth second. On the growth side, where we're looking to focus most of our efforts really is on developing the power story at Scrubgrass.

We didn't speak to it much on the call, but we believe that there is a big opportunity to expand Scrubgrass beyond what we've already announced. We don't have a firm certainty as to exactly how much that can be expanded, but we believe it can go well beyond 500 megawatts. And so our focus on the growth side is really developing the energy story at Scrubgrass right now, but we're also evaluating other opportunities in the area.

Super. Last one for me. Is there a time in 2027 when you envision being able to get your first dollar of HPC revenue at Panther Creek?

It's really going to be dependent on those customer conversations, but we will have power energized by the back half of 2026 at Panther Creek and we expect to have the first building up by the end of 2026 as well. But it's really going to be dependent on those customer conversations that we're having right now as to exactly when that first revenue is going to come in.

And our next question will come from Brian Dobson with Clear Street.

So you repurchased shares in the quarter. Certainly there was a lot of pressure on the stock related to RIOT selling down its position. Are you looking to take advantage of that expected selling pressure going forward via your repo?

So we believe our shares are undervalued for a couple of reasons and that's why we've announced the share buyback program and we're already executing on it. The opportunity is here today. We're not entirely sure how long we should expect to be undervalued by the market. But I think when our shares are so clearly undervalued relative to competitors and relative to the HPC opportunity, it's a really easy call to make to continue buying back shares in the open market. It's a great use of capital and it's a great thing for shareholders and for shareholder value. It's something that we believe really strongly in. We believe in this company and we believe in the potential of this management team. And until the market changes its view, we should be active in the market buying back shares.

Just as a second question, there are some very exciting tailwinds in Pennsylvania. Can you maybe elaborate on a little bit about how your conversations with potential clients have changed or improved since those tailwinds were announced by the administration?

Yes. Pennsylvania is really emerging as the AI hub here I think for several reasons. It's a huge energy state. It has great proximity to data center alley in Virginia, D.C., New York, Philly; all these major markets it's in really close proximity to with robust energy and fiber infrastructure. And it also has pretty close proximity to all the undersea fiber optic cables that carry data off to Europe and Africa. The interest in Pennsylvania is not really surprising to us given how long we've been looking at it. But it's a great underwriting of the development potential when we see the major players like Amazon and CoreWeave really putting serious capital down in all of these areas surrounding our site.

Amazon is just committed to $20 billion to 2 sites both within 40 miles, CoreWeave $6 billion to a site less than 30 miles away. I think that's helping to underwrite the value and the development potential here because this isn't just Bitfarms saying the potential is here. This is everyone saying the potential is here and putting their money down in a very major way. So I think it's definitely helping with customer conversations. It always helps to have another counterparty kind of underwrite the same value opportunity.

And the next question will come from Bill Papanastasiou with KBW.

Perhaps you could just walk us through the Quebec portfolio and make note of perhaps your Top 3, 5 sites that you think are most attractive to potentially convert into AI/HPC?

Yes. It’s a great question, Bill. The biggest area for us to convert in Quebec right now is the town of Sherbrooke. That's the one that we're prioritizing the most. We have 170 megawatts in the province. Between the 3 sites that we have at Sherbrooke, there's 96 megawatts there. So that has the highest amount of concentration for any of our sites and we also have the most amount of scale. Sherbrooke is a really interesting city. It's one of the largest cities outside of Montreal in what's called kind of the Eastern townships area and it's backed by a huge college campus and technical school there.

So there's robust fiber and power infrastructure connected with the school and connected with the city. And that is really going to be the lowest hanging fruit and highest value opportunity that we're focusing on developing in Quebec is those 96 megawatts that we have in Sherbrooke. I think that's where we have the most political support from the local community. That's where we have the most economic incentive from the local community and it's also where we have the best opportunity to deploy at scale.

I show no further questions at this time. I would now like to turn the call back over to Ben for closing remarks.

Thank you, everyone, for joining today. I'd just like to quickly reiterate our team's huge excitement about the position that we've been building. We're quickly becoming a U.S.-focused energy and compute infrastructure company and we have a really strong underlying Bitcoin mining business with a lot of exciting potential to HPC and AI. We look forward to keeping you up to date on our progress as we continue and thank you very much again for joining the call.

This does conclude today's conference call and thank you for participating. You may now disconnect.

Welcome to the Annual General and Special Meeting of Bitfarms Ltd. Please note that the meeting is being recorded. Please note that only shareholders can address the meeting by typing your questions or comments in the box called ask a question at the left side of your screen.

I would like to introduce Brian Howlett, Chairman of the Board of Directors of Bitfarms Ltd., Mr. Howlett, please go ahead.

[Foreign Language] Good morning, ladies and gentlemen. I am Chairman of the Board of Directors of Bitfarms Limited. I will act as Chair of the meeting. I also apologize for the delays we had with technical difficulties.

On behalf of the Board, I would like to welcome you to the 2025 Annual General and Special Meeting of the shareholders of Bitfarms.

We have six items of business to conduct today. First, to receive the corporation's audited consolidated financial statements for the years ended December 2024 and 2023, together with the auditor's report thereon before the meeting. To elect the directors of the corporation for the ensuing year. To appoint PricewaterhouseCoopers LLP as the auditors of the corporation for the ensuing year and to authorize the directors to fix their remuneration. To consider, and if deemed advisable, pass an ordinary resolution approving the new Omnibus Incentive Plan of the corporation as more particularly described in the information circular. To consider, and if deemed advisable, pass a special resolution approving the future consolidation of the common shares on the basis of one post-consolidation share for up to 10 pre-consolidation common shares. And finally, to transact any other business that may properly brought before the meeting or adjournment or postponement thereof.

At the meeting, registered shareholders and duly appointed proxy holders will have an opportunity to vote. TSX shall open the polling momentarily, which remain open for the duration of the meeting. We will go through the items of business one by one, but shareholders may vote on each of the items at any time prior to the polls being closed. Please follow the instructions on screen as provided by the operator. Once the formal business of the meeting has been completed, there will be an opportunity to ask questions. General shareholder questions that are not relevant to the matters before the meeting may not be addressed. Depending on the number of questions received, we may not be able to address them all. Nonetheless, we always appreciate comments and feedback from our shareholders and encourage you to reach out to our Investor Relations department with any questions that may not have been addressed today.

The meeting will now come to order. Unless there is an objection. I will ask Mario Rodriguez to act as Secretary and TSX Trust, who is representative, Julie Kim to act as scrutineer.

The notice calling this meeting and accompanying management information ensuring that a form of proxy and the consolidated financial statements of the corporation together with the auditor's report thereon and the new Omnibus Incentive Plan of the corporation, have been made available to each of the shareholders of the corporation. The corporation has utilized notice and access process under National Instrument 54-101, Communication with Beneficial Owners of Securities of the Reporting Issuer, a National Instrument 51-102, Continuous Disclosure Operations for the Distribution of Meeting Materials. Additional copies of the meeting materials are available on the corporation's website on SEDAR+ and on EDGAR.

If an affidavit of mailing of the documentation required to be mailed under the notice and access provisions has been provided by TSX Trust cast to the corporation, and I direct this affidavit to be effect annexed to the minutes of the meeting. Accordingly, unless there's an objection, I will dispense with the reading of the notice of meeting.

Based on the preliminary report on attendance provided by the scrutineer, there are 551 shareholders represented in person or by proxy holding 244,085,154 shares representing approximately 43.9% of the total issued note standing. There is a quorum present and proof of notice calling this meeting has been given in accordance with the corporation's bylaws and the Ontario Business Corporations Act.

I now declare the meeting is regularly called and properly constituted for the transaction of business. I direct that the scrutineer's complete report on attendance be annex at the minutes of the meeting, together with the declaration of mailing.

As indicated, all shareholders and/or proxy nominees who have logged into the meeting and are virtually present at the meeting and have not previously submitted a proxy will be able to vote using their control number by following the instructions included in the information circular dated May 23, 2025.

I now instruct TSX to open the polls, which will remain open over the course of the meeting. Shareholders may vote on any of the items for business while the polls are open. The scrutineers shall close the polls and tally the votes towards the end of the meeting once we have put forward each of the items for business to be voted on.

There are several matters that must be dealt with during the formal part of the meeting. In order to expect these matters, I have requested that certain persons make and second the formal motions, and I will call on these persons at the appropriate time. Shareholders may make comments specific to those motions prior to the vote but should hold any comments on general management to the question period following the termination of the meeting.

I now present to the meeting the financial statements of the corporation for the years ended September 31, 2024, and 2023, together with the report of the auditors thereon. Copies of such documents have been mailed to all shareholders of the corporation and are also available on the corporation's profile on SEDAR+ and EDGAR. It is not proposed to ask the shareholders to approve the financial statements.

However, after the formal part of the meeting, we will be pleased to answer any relevant questions concerning the financial statements.

It is now in order to proceed with the election of directors for the ensuing year. The number of directors to be elected at the meeting is six. The management nominates the following persons specified by management information are delivered with the notice of meeting, namely Benjamin Gagnon; Brian Howlett; Edith Hoffmeister; Fanny Phillip; Amy Freedman; and Andrew J. Chang, to be elected to serve as directors of the corporation to hold office until the next Annual Meeting of Shareholders or until their successes are duly elected by the appointed in accordance with the articles or bylaws of the corporation.

The company has not received any advanced notice of any other nominations in accordance with the company's advanced notice bylaw. Accordingly, I declare the nominations closed.

I have been advised by the scrutineer that proxies deposited for the meeting have been positively voted for the election of all six nominees. The exact voting results of each director shall be disclosed in a news release to be issued by the corporation later today. I would ask someone to move the following resolution, which I will now read.

Be it hereby resolved that Benjamin Gagnon; Brian Howlett, Edith Hofmeister; Fanny Phillip; Amy Freedman; and Andrew J. Chang be elected as Directors of the corporation to hold office until the close of the next Annual Meeting of Shareholders or until their taxes are duly elected or appointed in accordance with the articles and bylaws of the corporation.

Would someone please move?

I so move.

May I have the motion seconded?

I second the motion.

As previously indicated, online participants are able to vote on the resolution at any time prior to the poll being closed.

The next item for business is appointing PricewaterhouseCoopers LLP as the auditors of the corporation for the ensuing year and authorizing the directors to fix their remuneration. Are there any questions from shareholders in regard to this resolution?

I have been advised by the scrutineer that the proxies deposited for the meeting have been positively voted for the appointment of the auditor, and I would ask someone to move the following resolution, which I will now read.

Be it hereby resolved that PricewaterhouseCoopers LLP be and they are hereby appointed as auditors of the corporation to hold office until the close of the next Annual Meeting of Shareholders or until their successors are appointed a touch remuneration that may be fixed by the directors and the directors be and are hereby authorized to fix such remuneration.

Would someone so move?

I so move.

Would someone please second? Jeffrey?

I second the motion.

Thank you. Online participants may vote on the motion at any time prior to the poll being closed.

The next item for business is to consider and if deemed appropriate, to pass an ordinary resolution approving the new Omnibus Long-term Incentive Plan of the corporation and all unallocated entitlements thereunder. The new plan is commonly referred to as a rolling plan. pursuant to which stock options, restricted share units, deferred share units and preferred share units may be issued to eligible participants. Under the plan, a total of all security-based compensation awards may equal no more than 10% of the total number of common shares issued and outstanding at the time of any grant. A copy of this plan is attached as Schedule B to the information circular. A summary of the plan may be found in the circular under the heading Approval of the long-term equity incentive plan. If the new plan is approved and will replace the old long-term equity incentive plan of the corporation and all future grants or awards will be made pursuant to the new plan.

The resolution requires the approval of not less than 50% of the votes cast by the holders of the common shares be represented in person or by proxy at the meeting. Are there any questions with respect to this resolution from shareholders?

I have been advised by the scrutineer that the proxies deposited for the meeting have been voted on with the approval of the resolution.

I would ask someone will move the following resolution, which I will now read.

Be it hereby resolved as an ordinary resolution that the corporation's long-term incentive plan under which 10% of the outstanding common shares of the company may be awarded as share-based compensation to eligible persons in the form attached to Schedule B to the management information circular dated May 23, 2025, is hereby approved and confirmed the unallocated entitlements thereunder approved until June 30, 2028. And any one director or offer the corporation and the same is hereby authorized for on behalf of the corporation to execute or cause to be executed and to deliver or cause to be delivered all such documents and filings and to do so or cause to be done, all such accent things in the opinion of such director officer that may be necessary or desirable in order to carry out the terms of this resolution. Such determination to be conclusively evidenced by the execution and delivery of such documents or doing any such act or thing. Would someone so move?

I so move.

Someone, please second?

I second the motion.

Online participants may vote on the motion at any time until the polls are closed.

The next item of business to consider and if deemed appropriate to pass a special resolution approving the future consolidation of the corporation's common shares on the basis of one post-consolidation compensation common share or up to 10 pre-consolidation common shares. At such time, as may be determined by the Board had a sold expression up to June 30, 2027, or as more particularly described in the circular. The Board believes that consolidation may be necessary in the future to maintain compliance with NASDAQ minimum bid requirements and to enhance the corporation to attack new investors. A full discussion regarding the rationale and impact of the consolidation may be found in the information circular under the heading Approval of Consolidation. If the resolution is approved, the Board shall not be obligated to proceed with such consolidation unless it determines to do so at its sole discretion.

The resolution requires the approval of not less than 2/3 of the votes cast by holders of the common shares present in person or by proxy at the meeting. Are there any questions with regards to shareholders with respect to this resolution?

I have been advised by the scrutineer that proxies deposited for the meeting have been voted for the approval of the resolution. I would ask that someone move the following resolution, which I know will read.

Be it hereby resolved as a special resolution net. The articles of the corporation be amended to change a number of common shares issued and outstanding of the corporation by consolidating the issue and outstanding common shares on the basis of one post-consolidated common share for up to 10 pre-consolidated common shares of the corporation or for such lesser or a whole fractional number of existing common shares that the directors in their sole discretion determined to be appropriate.

In the event of the consolidation the result of common shares holding a fraction of the common share, such holders shall not receive any whole new common share or any cash consolation for each fraction, such a minute to become effective at the date of the future determined by the Board of Directors of the corporation which dates shall not be later than June 30, 2027.

Any director or officer of the corporation be and hereby authorized for and on behalf of the corporation to execute and deliver or cause to be delivered articles of amendment to the Director under the Business Corporation Act of Ontario at such time as the Board determines to implement the consolidation prior to the effect of time.

Notwithstanding this special solution has been passed by the holders of the common shares. The directors of the corporation are hereby authorized at their sole discretion to revoke this special resolution in whole or in part at any time prior to being given effect without further notice to or approval of the shareholders of the common shares.

Any one Director or Officer of the core vision and the same hereby authorized for and on behalf of the corporation to execute our cost to be executed and to deliver our cost to be delivered all such documents and filings to do what caused to be done all such actual things in the opinion of the director or officer may be necessary or desirable in order to carry out the term to this resolution, such determination to be conclusively evidenced by the execution and delivery of such documents or doing any act or such thing. Would someone please move?

I so move.

Seconded by?

I second the motion.

Thank you. I would now call for a brief adjournment of the meeting in order to allow the TSX to tally the votes received online.

I can confirm that there were no votes received online, so I'd like to call the meeting back to order.

TSX Trust has reported that the resolutions respecting the elections of Benjamin Gagnon; Brian Howlett; Edith Hofmeister; Fanny Philip; Amy Freedman; Brian Howlett; and Andrew J. Chang, and the appointment of auditors have been carried by a majority of votes cast at the meeting.

The resolution with respect to the corporation's Omnibus Incentive Plan resolution have been carried by a firm of votes cast by holders of more than 50% of the common shares represented at the meeting.

Additionally, resolution with respect to the common share consolidation resolution has been carried by affirmative votes cast by shareholders more than 2/3 of the common shares represented at the meeting.

If any shareholder is interested in the exact number of votes cast in favor of our for or against our resolutions, which have been voted on, particularly may be obtained by inquiry from the Corporate Secretary and will be published by the corporation via news release following the meeting. Is there any other formal business that may be properly brought before the meeting?

As there is no further business, I would entertain a motion to terminate the meeting.

I move that this meeting be terminated.

Seconded?

I second the motion.

I hereby declare the meeting terminated.

We will now enter the question-and-answer portion of the meeting. If anyone has a question, please inform the moderator.

There being no further questions, I would like to thank everyone again for participating, and this concludes our call.

Thank you for attending today's meeting. You may now disconnect.