Keel Infrastructure Corp. (BITF) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the 2021 Annual and Special Meeting of Bitfarms Ltd. Please note that this meeting is being recorded. I would like to introduce Nicolas Bonta, Chairman of the corporation. Mr. Bonta, the floor is yours.

Good morning, ladies and gentlemen. I'm Nicolas Bonta, Chairman of the Bitfarms Board of Directors, and I will act as chair of the meeting. On behalf of the Board, I would like to welcome you to the 2021 Annual General and Special Meeting of Shareholders of Bitfarms Ltd. This meeting is being held virtually due to COVID-19. I'm here with Bitfarms President, Mr. Geoffrey Morphy. Also participating in this meeting virtually are the members of the current Board and management team. A few housekeeping matters to go through before we commence the business at hand. First of all, microphones are automatically on mute. All resolutions will be moved and seconded. Mr. Geoffrey Morphy will provide an update on Bitfarms' activities following the meeting. All the meeting registered shareholders and duly appointed proxy shareholders will have an opportunity to participate, ask questions and vote, all in realtime through the web-based platform. Shareholders can ask questions using the chat feature on the virtual meeting platform. All questions will be read aloud before being addressed at the end of the meeting. The general shareholders' questions that are not relevant to a particular discussion may also 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. If during the meeting, we encounter any technical difficulties, please remain logged on, and we'll resume as soon as practical. If I'm unable to rejoin, Emiliano Grodzki, Chief Executive Officer and a director of the corporation, will continue in my absence and assume the chair. The meeting will now come to order. And unless there is an objection, I shall ask Dennis Peterson to act as secretary of the meeting and Kieran Webb of TSX Trust Company to act as scrutineer. I now instruct the secretary to table to the meeting the following documents: notice of the meeting; number two, instrument of proxy; number three, management information circular dated April 28, 2021 and an addendum to the management information circular in respect of the meeting dated June 23, 2021, collectively the information circular; and audited financial statements and management discussion and analysis of the corporation for the fiscal year ended December 31, 2020. I also confirm that the above material was sent to each director of the corporation, our auditors and each person who was a shareholder of record of the corporation on April 28, 2021. These documents are tabled in order that any shareholder may examine the same if so desired. In view of the fact that the notice of meeting and the statutory declaration proving service in accordance with the relevant bylaws of the corporation have been tabled and are available for inspection, I will now entertain a motion that the reading of the notice of meeting and the statutory declaration proving service thereof be dispensed with.

Thank you, Mr. Chairman. I'm Dennis Peterson, secretary of the meeting. I move that the reading of the notice of meeting and statutory declaration proving service thereof be dispensed with.

Hello, Mr. Chairman. This is Jude Gee, a representative of Bitfarms Ltd., and I second the motion.

It has now been moved and seconded that the reading of the notice of the meeting and the statutory declaration proving service thereof be dispensed with. All those in favor say aye. [Voting]

Contrary? [Voting]

Carried unanimously. Based on the primary report on attendance provided by the scrutineer, there are 224 shareholders present, in person or by proxy, holding shares and representing 56.04% of the total issued and outstanding. There is a quorum present, and proof of notice calling this meeting has been given in accordance with the corporation bylaws and the Canadian Business Corporations Act. I now declare that the meeting is regularly called and properly constituted for the transaction of business. I direct that the scrutineer's complete report on attendance be annexed to the minutes of the meeting and instruct the secretary to make the declaration of mailing and attached exhibit as a schedule to the minutes of this meeting. Each vote [ in represent ] of an item of business before the meeting will be conducted by electronic ballot. Only registered shareholders and duly appointed proxy holders who have logged in to the meeting using their control number will be able to vote. If you are a registered shareholder and have not voted, you will have an opportunity to vote your shares electronically at the meeting. If you have already submitted your vote, you need not have to vote again. I will direct at the appropriate time that such person to vote online and for tabulation by the scrutineer. I now present to the meeting the statements of financial position and related financial statements of the corporation as at December 31, 2020, together with the report thereon of auditors. Copies of such documents have been made available to all of the shareholders, and it is not proposed to read them to the meeting. Unless anyone objects, I will now ask that someone move and someone second a resolution that the auditor's report be taken as read.

My name Peter Georgas, representative of Bitfarms Ltd. I move the auditor's report on the financial statements of the corporation for the fiscal year ended December 31, 2020 be taken as read.

My name is Ben Gagnon, Chief Mining Officer of Bitfarms. I second the motion.

All those in favor signify by saying aye. [Voting]

Contrary? [Voting]

Carried unanimously. I declare the resolution carried. I now request the polls to be opened. 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 5. Are there any questions from shareholders on the election of directors of the corporation? If there are no questions -- yes, sorry?

Mr. Chairman, I confirm there are no questions at this time. Dennis Peterson, secretary for the meeting.

If there are no questions, I declare the meeting open for nominations.

Hello, Mr. Chairman. This is Darcy Donelle, a representative of Bitfarms Ltd. I nominate the following persons as directors of the corporation for the ensuing year: Emiliano Joel Grodzki; Nicolas Bonta; Brian Howlett; Pierre Seccareccia; and Andres Finkielsztain.

The nominees [ named and nominees of ] management as disclosed in the information circular. Are there any further nominations?

Mr. Chairman, Dennis Peterson, secretary of the meeting, I confirm there are no other nominations.

Since there are no further nominations, I declare the nominations to be closed.

Thank you, Mr. Chairman. My name is Ben Gagnon, Chief Mining Officer of Bitfarms. I move that Emiliano Joel Grodzki, Nicolas Bonta, Brian Howlett, Pierre Seccareccia and Andres Finkielsztain are hereby elected as directors of the corporation to hold office until the next annual meeting or until their successors are elected or appointed.

Hello, Mr. Chairman. Dennis Peterson, secretary of the meeting, I confirm and second that motion.

For those registered shareholders and proxy appointments who have not voted, please complete your online ballots on your screen for this resolution. You have heard the motion as moved and seconded, and based upon the proxies duly received by the corporation to date, each director nominee has already received the requisite majority approval from the corporation shareholders to be reelected to the Board of Directors for the ensuing year. The next item of business is a resolution appointing auditors for the ensuing year and authorizing the directors to fix their remuneration. Are there any questions from shareholders in regard to this resolution?

Mr. Chairman. Dennis Peterson, secretary for the meeting, I confirm there are no questions at this time.

If there are no questions, I will request a motion appointing auditors for the ensuing year and authorizing the directors to fix their remuneration. Would someone so move?

Mr. Chairman, this is Jude Gee, a representative of Bitfarms Ltd. I move that PricewaterhouseCoopers LLP be appointed as the auditors of the corporation for the ensuing year or until their successors are appointed, to serve as such remuneration as may be fixed by the directors.

My name is Peter Georgas, representative of Bitfarms Ltd. I second the motion.

For those registered shareholders and proxy appointments who have not voted, please complete your online ballot on your screen for this resolution. You have heard the motion as moved. As previously mentioned, a sufficient number of proxies has been submitted for the resolution to pass. The next item of business is a resolution to ratify, confirm and approve bylaw #3, in respect of the advance notice requirements for nominations of directors by shareholders in certain circumstances. In order for this resolution to be effective, it must be passed by a majority of the votes cast at the meeting. Are there any questions from shareholders in regard to the -- this resolution?

Hello, Mr. Chairman. Dennis Peterson, secretary of the meeting, I confirm that there are no questions from shareholders at this time.

If there are no questions, I will request a motion approving the bylaw #3 as a bylaw of the corporation. Would someone so move?

Mr. Chairman, my name is Ben Gagnon, Chief Mining Officer of Bitfarms. I move to pass with or without variation an ordinary resolution to ratify, confirm and approve the bylaw #3, in respect of the advance notice requirements for nominations of directors by shareholders in certain circumstances.

Hello, Mr. Chairman. This is Darcy Donelle, a representative of Bitfarms Ltd. I second that motion.

For those registered shareholders and proxy appointments who have not voted, please complete your online ballot on your screen for this resolution. You have heard the motion has moved. As previously mentioned, a sufficient number of proxies has been submitted for the resolution to pass. The next item of business is a resolution to ratify, confirm and approve the bylaw #4 in respect of the forum for complaints asserting a cause of action under the U.S. Securities Act of 1933. In order for this resolution to be effective, it must be passed by a majority of the votes cast at the meeting. Are there any questions from shareholders in regard to this resolution?

Hello, Mr. Chairman. Dennis Peterson, secretary of the meeting. I confirm that there are no questions from shareholders at this time.

If there are no questions, I will request a motion approving bylaw #4 as a bylaw of the corporation. Would someone so move?

Mr. Chairman, this is Ben Gagnon, Chief Mining Officer of Bitfarms. I move to pass with or without variation an ordinary resolution to ratify, confirm and approve the bylaw #4 in respect of the forum for complaints asserting the cause of action under the U.S. Securities Act of 1933.

Mr. Chairman, Dennis Peterson, secretary of the meeting, I second that resolution.

For those registered shareholders and proxy appointments, we have not voted -- who have not voted, please complete your online ballot on your screen for this resolution. You have heard the motion as moved. As previously mentioned, a sufficient number of proxies has been submitted for the resolution to pass. The next item of business is to approve the corporation's long-term incentive plan for the ensuing year, the LTIP resolution as more particularly described in the information circular. The corporation has disseminated an addendum to the information circular to note that disinterested shareholder approval will be required for approval of the corporation's LTIP and that the maximum number of restricted stock units issuable under the LTIP is fixed at $10 million. The LTIP is a partially rolling incentive plan, under which 10% of the outstanding shares of the corporation at any given time are available for issuance thereunder. The addendum to the information circular was filed under the corporation's SEDAR profile on June 23, 2021. In order to be effective, the LTIP resolution is required to be passed by the affirmative vote of a majority of the votes cast at the meeting by disinterested shareholders as at the record date. Insiders of the corporation hold 23,189,778 shares of the corporation and will abstain from voting such shares on the LTIP resolution. Are there any questions from shareholders in regard to this resolution?

Mr. Chairman, Dennis Peterson, secretary of the meeting, I confirm that there are no questions from shareholders at this time.

As there are no questions, I will request a motion approving the corporation's long-term incentive plan for the ensuing year. Would someone so move?

Mr. Chairman, this is Jude Gee, a representative of Bitfarms Ltd. I move to pass with or without variation an ordinary resolution of disinterested shareholders to approve the corporation's long-term incentive plan, as more particularly described in the information circular.

My name is Peter Georgas, representative of Bitfarms Ltd. I second the motion.

For those registered shareholders and proxy appointments who have not voted, please complete your online ballot on your screen for this resolution. You have heard the motion as moved. As previously mentioned, a sufficient number of proxies has been submitted for the resolution to pass. The next item of business is to approve a special resolution authorizing the corporation to make an application for the continuance of the corporation under the Business Corporations Act (Ontario), as more particularly described in the information circular. In order for this resolution to be effective, it must be passed by not less than 2/3 of the votes cast at the meeting. Are there any questions from shareholders in regard to this resolution?

Hello, Mr. Chairman. Dennis Peterson, secretary of the meeting, I confirm that there are no questions from shareholders at this time.

As there are no questions, I will request a motion authorizing the corporation to make an application for the continuance of the corporation under the Business Corporations Act (Ontario). Would someone so move?

Mr. Chairman, my name is Ben Gagnon, Chief Mining Officer of Bitfarms. I move to pass with or without variation a special resolution authorizing the corporation to make an application for the continuation of the corporation under the Business Corporations Act of Ontario, as more particularly described in the information circular dated April 28, 2021.

Mr. Chairman, this is Darcy Donelle, a representative of Bitfarms Ltd. I second that motion.

For those registered shareholders and proxy appointments who have not voted, please complete your online ballot on your screen for this resolution. You have heard the motion as moved. As previously mentioned, a sufficient number of proxies has been submitted for the resolution to pass. Each registered shareholder and proxy appointment who has not previously voted should vote by completing your online ballot on your screen. The polls will now be open for another 45 seconds. [Voting]

I now ask the TSX Trust to now close the polls. Final voting results will be available after the meeting. Based upon the preliminary voting results provided by the scrutineer, I hereby declare that with respect to the election of directors, each nominee has been overwhelmingly voted for election as a director of the corporation, and I declare them duly elected to act as director of the corporation until the next annual election of directors or until their successors are elected. I declare that PricewaterhouseCoopers LLP is appointed as the auditors of the corporation for the ensuing year or until their successors are appointed to serve at such remunerations as may be fixed by the directors. With respect to the ordinary resolution for the approval of the corporation bylaw #3, I declare the resolution carried. With respect to the ordinary resolution for the approval of the corporation's bylaw #4, I declare the resolution carried. With respect to the ordinary solution of disinterested shareholders to approve the corporation's long-term incentive plan, I declare the resolution carried. With respect to the special resolution for the continuance of the corporation under the Business Corporations Act (Ontario), I declare the resolution carried. Unless there is further business to come before the meeting, I will entertain a motion to terminate this meeting.

Mr. Chairman, my name is Ben Gagnon, Chief Mining Officer of Bitfarms. I move that this meeting be terminated.

Mr. Chairman, Dennis Peterson, secretary for the meeting, I second the motion.

I hereby declare the meeting terminated. I will now turn the meeting over to Geoffrey Morphy, who will present the corporation's activities and provide an update. The presentation is posted on our website. Over to you, Geoff.

Good afternoon, ladies and gentlemen, and thanks for joining in and attending our annual and special meeting virtually. As a note, after my presentation, registered shareholders and duly appointed proxy holders can ask questions using the chat feature on the virtual meeting platform and by clicking the Ask a Question icon on the left. Type your message within the chat box in the message screen. Once you're happy with your message, click the Ask Now button. We will answer as many questions as time permits. Please limit your questions to topics relating to today's subject matter, and please keep your questions short and to the point. Now onto my presentation. Thank you, Nico, for the kind introduction, and good afternoon, everyone. Welcome to our Third Annual Meeting of Shareholders. I want to begin by extending my gratitude to you, our shareholders, for your ongoing faith in Bitfarms' leadership team and in our vision for the future of the company and bitcoin. I also want to sincerely thank all of the employees of Bitfarms, Backbone Solutions and Volta Electrique for their many efforts over the past year. Our team has demonstrated tremendous perseverance and determination to advance the company in terms of its physical capabilities, increasing our hash rate and transforming the company from a little-known microcap in Canada, to a global company now traded on the global market tier on Nasdaq. I know I speak on behalf of our Board of Directors and the leadership team in saying thank you and job very well-done. Our Board and management team, led by Executive Chairman and Founder, Nicolas Bonta, along with CEO and Founder, Emiliano Grodzki, also deserve special thanks for their direction, engagement and support during these challenging and exciting times. Their experience and wise counsel have been appreciated by me and certainly by all the employees. Bitfarms have been building and operating industrial-scale bitcoin mining facilities since its founding in 2017. Our mission is to provide investors direct exposure to a pure-play bitcoin mining operation, coupled with a long-term bitcoin-holding strategy. Over the past 12 months, this talented team has pursued our mission and transformed Bitfarms from a regional small-scale bitcoin mining company, to one of the largest miners in the world, with international expansion plans and a global investor base. These are some of the particularly noteworthy accomplishments achieved over the past year. Over the past 12 months, Bitfarms' hash rate increased from 780 petahash per second, to over 1.42 exahash per second, representing an increase of 82%. We are mining an average of over 8 bitcoin per day. In the first half of 2021, we raised over $155 million in Canadian funds in the capital markets to fund our growth. Proceeds were deployed to retire our Dominion loan facility, giving us greater flexibility in financing and our growth initiatives. We negotiated and secured orders for over 65,000 new miners. We became an authorized service center for MicroBT, which enhances our operational efficiency and equipment uptime. We rebuilt our proprietary equipment management software to accommodate our growth and international expansion plans. We engaged CORE IR, a leading investor relations, public relations and strategic advisory firm as well as YAP Global, an international public relations and communications firm, to enable us to deliver our compelling story to the market. As a result of these accomplishments, in the first quarter of 2021, we delivered record quarterly revenues, gross mining profit and adjusted EBITDA. We became the first cryptominer to be audited by one of the big 4 audit firms. The firm had just launched its new cryptomining and blockchain specialty group, and we were honored that they selected Bitfarms as one of their first clients for this practice. We retained Katten Muchin Rosenman LLP, a top U.S. securities law firm. We entered into a relationship with one of the oldest and most trusted investment banks in the United States, which led our highly successful capital raises that I prefer -- that I previously mentioned. Now for a deeper dive into some of these highlights. Financial performance. During the past 12 months, we took significant action to fortify our balance sheet and enhance our structure in the investment community. During 2021, we raised over CAD 155 million in 4 private placements. These funds are being used to fuel our operation [Audio Gap] improve our balance sheet and provide greater financial flexibility. In February, a major investment bank initiated research coverage on Bitfarms, increasing our exposure in the investment community. Most important, this past Monday, our shares began trading on the Nasdaq Global Select Market. We are now trading on both the TSX Venture Exchange and on Nasdaq. This important milestone is a significant recognition of our accomplishments to date, provides access to greater liquidity, attract a global investor base, reduces our cost of capital and hopefully, an opportunity to unlock corporate value. From the standpoint of our financial performance, Bitfarms delivered a record first quarter of 2021 with respect to its revenue, gross mining profit and adjusted EBITDA. Mining revenues reached approximately USD 27.7 million, representing a 208% increase over the same period last year. Adjusted EBITDA reached $19.8 million in the first quarter, representing a 578% increase from the same period last year. The gross mining margin grew to 80% in the first quarter compared to 47% in the same quarter last year, contributing to a record quarterly gross mining profit of approximately $22.3 million versus $4.1 million in the same period last year. Notably, this was achieved despite the bitcoin halving event, which occurred on May 11, 2020. Due to certain [Audio Gap] items, Bitfarms delivered a net loss of [ $7.6 million ] or $0.06 per share in the quarter compared to $2.4 million and $0.03 per share in the same period last year, respectively. Operations. Our 5 mining facilities in Quebec, Canada are built to the highest standards. Thanks to our vertical integration with Volta Electrique, our 100%-owned electrical engineering subsidiary, we are able to design and construct and maintain all of our electrical infrastructure using in-house talent, which significantly reduces cost and downtime. Operationally, we worked hard to build a foundation for continued growth as we pursue our goals of 3 exahash by the end of 2021 and 8 exahash by the end of 2022. 2 months ago, we also became an approved service center in Canada for MicroBT. This is an important ability as it allows us to keep our miners plugged in and generating new bitcoin, as mentioned [ earlier ]. During recent months, we have signed purchase agreements for over 55,000 MicroBT miners. Some of them already have been delivered, but the remaining miners will be delivered now through the end of 2022. The MicroBT service center enables us to repair our own miners under warranty and get paid to do so. It also significantly reduces the time and cost associated with shipping miners to the United States or China and then back, and this is for repair. During the last 3 years, we have used our own proprietary software to monitor and manage our mining operations. As our mining operations scale to significantly higher levels of equipment and locations, we have onboarded new developers to overhaul and improve the software to better manage our new-gen miners. This will provide significant greater access, controls and rich data collection across a large number of facilities as we look at strategic opportunities for new data centers around the world. Organizational and governance. Environmental considerations have become an increasingly important factor in cryptomining. Bitfarms has been an early adopter and leader on this front. We determined early on that we could achieve a balanced approach to the environment and financial returns. Since our company's inception in 2017, we have mined over 11,300 bitcoin and all with over 99% of electricity derived from renewable sources. Moving forward, we will continue to pursue a balance of environmental consciousness and financial returns. We strengthened the Board with seasoned business executives, with considerable capital markets and operational experience. Further, we enhanced Board independence by appointing an independent lead director to serve alongside 2 other skilled independent Board members, resulting in the majority of our Board members being independent. Financial position. A quick look at our financial position. In early 2021, we announced an exciting new bitcoin pilot retention program, which positions our company as a proxy for directly buying and holding bitcoin. As such, bitcoin's selected coin bases are bitcoin's custodian. As of June 9, we've deposited over 1,114 bitcoin into long-term custody. Bitfarms ended the first quarter of 2021 with approximately USD 53 million in cash, not including gross proceeds from our most recent private placement of CAD 75 million. Combined with its bitcoin holdings at the time, Bitfarms ended the quarter with a strong liquid position of approximately USD 85 million. Equity markets took notice of what was happening at Bitfarms. Our market cap increased from CAD 30.1 million on June 25, 2020, to CAD 858.9 million at the end of trading yesterday afternoon. This represents an increase of 2,753% or over 28.5x. People. To achieve our growth initiatives, we have strengthened and enhanced the caliber and capabilities of our leadership team. This is critically important as we pursue our corporate target of achieving 3 exahash by the end of 2021 and 8 exahash by the end of 2022. It is wonderful when you can recognize talent and promote from within. In late August, my role shifted from being a Board member, to assuming the operational day-to-day responsibilities. In December, the Board promoted me to President. Ben Gagnon, who joined Bitfarms in December 2019, is our in-house cryptomining expert, with over 6 years of experience building and operating mining facilities in Mainland China, Canada and the United States. Ben was promoted from Director of Mining Operations, to Chief Mining Officer. Ben is a widely recognized thought leader in cryptocurrency mining and is regularly sought out by business media for insights and perspective. Nathaniel Port joined Bitfarms in 2018 and is one of our earliest employees. Mr. Port was recently promoted to Senior Vice President of Finance and Accounting. He was instrumental in developing Bitfarms' finance function, contributed significantly towards the company's strategic financial objectives and worked tirelessly on our application and submissions to get traded on Nasdaq. With our announced expansion plans, we also needed to add solid people to the team. Darcy Donelle joined Bitfarms in early April as Vice President, Corporate Development. He brings years of public company capital markets experience, supplemented by in-depth financial analysis, valuation and accounting qualifications and experience. His capabilities will be instrumental as we identify and access the best opportunities that will drive our growth. In mid-April, [ Damian Pola ] agreed to join us as General Manager of our Latin American operations. He is leading our South American development and pursuing other growth initiatives. [ Damian ] is amply qualified for the role with his extensive background in project management and project finance. He joined us from BNP in New York. Earlier this month, we hired Jeff Lucas as our new CFO. Jeff has extensive qualifications and experience and will manage our growth [ of our capital markets' ] relationships and build out our administrative infrastructure to support our growth, both domestically and internationally. We have supplemented these new appointments with a great team of managers and continue to promote others within the company whose talents and successful efforts have been critical to our success. Overall, we have assembled a talented cadre of enthusiastic, hard-charging doers who are committed to Bitfarms' success and value working as a team to achieve our corporate goals. The year ahead. In November 2020, we announced our first corporate goal. The goal was to end 2021 with a hash rate of 3 exahash per second. At the time, this represented over a 3x increase in our computational performance. To achieve this goal, we are developing additional infrastructure in Quebec and leveraging existing hydroelectric contracts. In addition, we announced the purchase of thousands of next-generation miners from trusted manufacturers: MicroBT; and Bitmain. These mining rigs will be installed in our expanding infrastructure throughout 2021. 3 months ago, we announced next year's goal of reaching 8 exahash per second. This was done with rock-solid conviction as we placed the largest order in our history. The order involves the purchase of 48,000 next-generation MicroBT miners, which will be delivered through 2022. I also want to speak about recent events in China. As a policy, Bitfarms does not publicly comment on industry-related events and rumors. However, developments in China over the past 3 months are of such significance it is worthy of some comment since their impact is being felt by miners around the world, including Bitfarms. It is reported that 65% of the bitcoin global hash rate is based in China. These developments are expected to have a profound impact on our industry. In mid-April, we read reports that a coal mine in China experienced a flood and all bitcoin miners in the region were shut down as a precaution. This caused the global hash rate to decline by about 35%. As previously announced, Bitfarms enjoys approximately a 1% global market share. In the chart being presented, you can see the temporary jump in our market share over a 1.5-week period as a direct impact of this development. As a result of the China ban, pulling approximately 90 exahash off-line, this means our market share has effectively doubled or could double from the peak global network hash rate, which occurred in mid-April. With a greater market share, Bitfarms is able to capture a greater portion of the bitcoin mined each day for its shareholders. Just last week, the world learned that the Chinese government issued a ban on cryptomining and trading. We understand that approximately 90% of the miners in China have been shut down. We also know from calls and numerous e-mails that they are seeking to relocate their miners elsewhere in the world. If these figures are accurate, this dislocation means that approximately half the global hash rate is either shut down or could be shut down very shortly. Within the industry, we pay attention to a metric called difficulty. Difficulty is a measure of the computing power required to add new blocks of transactions to the blockchain. Difficulty within the bitcoin network self-adjusts roughly every 2 weeks to ensure that blocks continue to be mined, on average, every 10 minutes. Difficulty was measured at 23.58 trillion back on April 15. Based on current activity, it is estimated that difficulty will fall to about 16 trillion at the end of June. This is a 32.2% reduction, and further reductions may be possible. This is bad news and good news. The bad news is that because the Chinese mining companies are shutting down miners, it is believed that it is these miners that are selling bitcoin to finance their move elsewhere in the world and driving down bitcoin prices as we've seen over the past week. The good news is twofold. First, -- it once again proves the resilience and durability of the bitcoin protocol and network. A substantial amount of the system was taken off-line and transactions to continue to take place without a hiccup. This is likely the greatest demonstration [ of bitcoin's any frugality ] we have ever seen. Second, miners elsewhere in the world, including Bitfarms, are earning incrementally more block rewards for their mining effort. We are mining more bitcoin on a daily basis and experiencing the highest production levels in our history. I will ask you to direct your attention to the chart to see how Bitfarms market share has moved upwards since the Chinese ban was announced. The exodus from China marks a pivotal movement -- sorry, a pivotal moment for bitcoin miners. The supply of miners has gone from scarce to plentiful as Chinese miners are searching for spare infrastructure to host their mining rigs around the world. Given China was the largest bitcoin mining country in the world and is the single-largest electricity producer, infrastructure of this magnitude simply does not exist and will likely take years to develop. Given Bitfarms' operational capabilities and established mining infrastructure in North America, we enjoy a significantly more powerful position in the market and industry than we did just a few months or weeks ago. The overarching point I wish to make about these events is to remind you that Bitfarms enjoys the strongest operations team in the industry and is best positioned to capitalize on these developments. This concludes the presentation. We would be happy now to respond to any questions from our shareholders and proxy holders. Mauro, if you could sort of tabulate the questions and to read the questions aloud, then we will, as a management team, respond to the questions.

No problem. A question that we have received from multiple shareholders is with regards to do we plan to have any additional money-raising or offerings?

Okay. Well, I can start with an answer to that question. Given the growth outlined in our presentation to 3 exahash by the end of this year, which is more than a 3x increase from last year and 8 exahash next year, which means over an 8x increase in our computational throughput in a 2-year period, we will need to augment what we're doing with what I expect to be equity and debt. We have a history of using debt financing to reduce dilution. And this equipment finance is favorable because as this industry evolves, the cost of capital comes down. By moving on to the Nasdaq, we certainly have access to much greater capital and hopefully, better terms. But I expect that we will need to raise more money going forward. And hopefully, this provides some look into our future that way. If anybody else on the management team wants to add something else, please jump off mute and add some color. Otherwise, we'll leave it there and move on to the next question. Okay.

Okay. Next question. I believe you've already addressed this in your last slide, Geoff. But the question is does the current Bitmain sales suspension potentially affect our upcoming deliveries for miners in the fall?

We maintain direct relationships because of our size and scale with the manufacturers. And given recent events, we're quite literally having daily calls. Bitmain has assured us that our orders for the balance of this year will be filled. We do not have any Bitmain orders for next year at this juncture. They're all with MicroBT. So I expect that we're in good shape.

Okay. Next question. Do you plan to mine any crypto, such as Ethereum or Doge?

Well, I do not expect that we will ever mine Dogecoin, but our company, when it was started, started with Ethereum. So this is something that is familiar to us and our founders and to our operational crew. We haven't done that for quite some time, and we haven't mined litecoin for about 1.5 years. We are completely focused on bitcoin at this time. We like the strength of bitcoin long-term and what it's capable of. But with that said, we are constantly looking at new opportunities. And with the Board and with the management team, we have looked at Ethereum. And I will not say no to that. I'm just saying that we're looking at it and looking at the opportunity that might come to pass, but it's not in our strategic plans at this moment.

Okay. Multiple questions asking if using solar power is feasible to mine BTC.

We are looking at all the renewables. And what we like about hydroelectric power is that the water runs day and night. The -- with solar, the sun only comes out during the day. And as such, you need to do a considerable amount of energy management if you're going to use solar, just like wind. I think, at times, the wind blows, and at other times, it's very soft and you don't get the same type of output that you really need. The bitcoin mining is consistent. You need the same amount of power every minute of the day, every hour of the day, every day of the week. So to implement a solar plan, you really need a broader [Audio Gap] you can take advantage of another solar technology or energy source to supplement the company when required. We have had discussions with a private [Audio Gap] we have talked about doing energy management with hydro as a backup. Now these plans are not anywhere close to fruition, but these are the type of conversations that we are having and I would expect other bitcoin mining companies that are concerned about the environment are having with counterparties every day. So it's a tough one to do on its own because it will not bring the economics and the return on assets to shareholders that you guys are expecting. But I think as part of a broader-based energy management plan, it's possible.

Okay. Next question. With regards with the changes happening in China, do you believe there will be a potential consolidation of miners?

I'm going to start the answer here, and then maybe I'll move it over to Ben Gagnon, our Chief Mining Officer, who has done a lot of thinking and work on this area to add a little bit extra color. But let me start. In terms of the life cycle hypothesis, when you're in the high-growth part of the curve, everybody is growing, everybody is experiencing great margins, and everybody generally does well. And we're certainly there at this point. But as the industry matures, margins thin a bit, competition increases, and generally, at that point, consolidation occurs. So even without talking about the China effect, it's something that is going to come. And we have had people come to us saying, "Will you buy my company?" And in many cases, those overtures are coming because they don't have access to the capital like we do. They've got older mining equipment that doesn't perform as well. And I think they're just looking for a really sweet exit. And we're not about to make an acquisition to buy older equipment with more expensive electricity contracts that won't really be accretive or move us forward. So we've turned down all of those situations. Ben, why don't you talk -- why don't you provide your answer to this question?

Sure. Thanks, Geoff. The situation with China is quite unique. I think what is going to -- what we'll see play out is a number of those different Chinese miners are looking for opportunities to move out, with hosting into other locations. We'll see what happens there. But the reality is, if you look at the math, there are several gigawatts worth of mining equipment that do not have a new home in the West. And I think people will get very, very competitive. You're not going to be with limited electrical infrastructure. It doesn't make sense to be running the old equipment anymore. You're probably going to want to consolidate into some of the newer stuff. But this is still a very, very early development. The China situation really only happened 5 days ago. So it's really up in the air what will happen. But given that bitcoin mining is a very capitally intensive industry, I think what we'll see is the securitization of bitcoin miners continues to accelerate. And with that, there might be a greater consolidation of miners in the securitized space.

Thanks, Ben.

Okay. Next question. Does your pool of bitcoin have any opportunity to raise funds?

Our pool?

Yes. The BTC we are holding, basically, does it have any opportunity to raise funds or leverage?

Okay. I'll start the answer here and if one of the others on the team wants to jump in, please feel free. This is a tremendous asset for us and one that we don't take lightly, certainly because making sure that this bitcoin is kept safe, is #1 in our mind. But this is an asset that we can lever off of to raise more money. It's an emergency source of capital if we need to make purchases or whatever. But we can -- there's also new opportunities to raise -- to use this as a yield-generating device. This is an area where we've seen some of our competitors starting to do this. From our audit standpoint, we need to make sure that all of these various positions and how you do this is very much safeguarded. And we're looking at the options, but we're not ready to really pull the trigger on any of those situations at this point. Does anybody else from the team want to jump in on this one? Okay.

The next question is what are the benefits, as you see them, of being traded on the global level on the Nasdaq versus the capital?

I'm going to turn this one over to Emiliano, who is a founder, and takes incredible pride of what we've been able to achieve. And he's delighted about this event. So Emi, why don't you respond to this question on what's possible now that we're on the Nasdaq?

Great. Great. Do you hear me?

Yes.

Well, I believe that we had the vision for -- I founded this company 5 years ago. And we [ remember ] that our goal will be developing the infrastructure of the company of the future. And as the founder of this company, I believe that the huge milestone for being in Nasdaq, it's the combination of the effort of all the team and we deserve continuous development in our -- of our business in one of the bigger markets on the world. And I believe that there, we can find the proper funding for continuous growth in our company in the proper way.

Thanks, Emi. And as I said in my presentation, just getting to the Nasdaq is such an accomplishment for us. Not only does it hopefully unlock value for us, but we know that from inquiries we've had, quite literally from around the world, that investors want to invest in Bitfarms. And it was cumbersome to do with OTC and just being on the Toronto Venture Exchange. So we've really opened up our company to investment from both retail and institutional investors quite literally around the world. And we get inquiries every day from all over the place. So we think this is a great way of doing this. And as we tell our story and as people are able to compare our value against our competitors' value and see what we believe is a valuation gap, that people are going to seize on this opportunity, and that's going to help all of us as shareholders and the company to grow, but also as we grow at an increased pace to give us access to capital with better terms and conditions. And we're very excited about that.

Okay. Next question. Do you see a premium being assigned to green bitcoin?

That's a popular question.

Yes.

More and more so, we are getting contacts from exchanges and banks who realize that there's an opportunity ahead of us here. And maybe, we get more calls than other people because we are already over 99% green in terms of our -- the electricity we use in Quebec. But there's always been an interest in getting pristine coins. Now there seems to be more interest in green coins. To really get this advanced, at some point, there might have to be a fork in the bitcoin protocols to really identify green coins. But I think the marketplace will work that out over time, but there is an increasing interest to that and how that might be able to be done. But we're still very early in the stages, but there certainly seems to be a marketplace for it.

Okay. Next question. Can you provide any details with your project in Argentina?

Sure. Our project in Argentina is advancing, as we announced to the market probably about 2 months ago. We continue to work on contracts and plans to make sure that our execution goes smoothly there. I expect these activities to continue. We will give updates to the market as we go along, but it's still our plan to bring initial production online in Argentina in the first quarter of next year.

Very well. There being no further questions, I would now like to thank everyone for participating. Geoff, if you want to give us a closing remark?

Well, that's really pretty much it. If there are no further questions, I would like to thank everyone again for participating, and thank you very much for your time and interest. We'll see you again next year. Bye-bye.

Thank you.

Ladies and gentlemen, thank you for attending today's meeting. You may now disconnect.