I N V E S T O R P R E S E N T A T I O N M A Y TASE: BLCM.TA / USD ADR: BITFY

Transcription

1 I N V E S T O R P R E S E N T A T I O N M A Y TASE: BLCM.TA / USD ADR: BITFY

2 L E G A L D I S C L A I M E R Forward Looking Statements This presentation (the Presentation ) has been prepared by Backbone Hosting Solutions Inc., operating under the commercial brand Bitfarms (the Company ) and is being delivered for information purposes only. The Presentation is confidential and is made available strictly on the basis that it will not be reproduced, redistributed or disclosed, in whole or in part, to any other person at any time, nor its contents disclosed or used for any purpose, without the prior written consent of the Company. The Presentation does not contain all information that a prospective investor may require. It is an overview only and does not contain all information necessary or desirable for investment decisions. Unless otherwise specified in the Presentation, information contained in the Presentation may not be current. No reliance may be placed for any purpose whatsoever on the information contained in the Presentation or on its completeness, and no liability whatsoever is accepted for any loss howsoever arising from any use of the Presentation or its contents or otherwise in connection therewith. Certain statements contained in the Presentation constitute forward-looking statements and forward-looking information (collectively, Forward-looking Statements ) and the Company cautions recipients of the Presentation about important factors that could cause the Company s actual results to differ materially from those projected in any Forward-looking Statements included in the Presentation. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as will likely result, are expected to, expects, will continue, is anticipated, anticipates, believes, estimates, intends, plans, forecast, projection and outlook ) are not historical facts and may be Forward-looking Statements and may involve estimates, assumptions and uncertainties which could cause actual results or outcomes to differ materially from those expressed in such Forwardlooking Statements. No assurance can be given that these expectations will prove to be correct, and such Forward-looking Statements included in the Presentation should not be relied upon. In addition, the Presentation may contain Forward-looking Statements attributed to third party industry sources. Neither the Presentation nor any copy of it may be taken or transmitted except in compliance with the applicable securities laws and the prior written consent of the Company. By accepting the Presentation, the recipient represents and warrants that it is a person to whom the Presentation may be delivered or distributed without a violation of the laws of any relevant jurisdiction. No securities commission or other regulatory authority in any jurisdiction has passed upon this information. The Presentation and the information do not constitute an offer of securities for sale in the United States. /2

3 B I T F A R M S O V E R V I E W Bitfarms owns and operates one of the largest cryptocurrency mining operations in North America MW with +15,000 miners installed across 4 operating facilities within the province of Quebec, Canada - Current operations represent ~0.7% of the Bitcoin network hashrate (1) - Hardware, infrastructure and hashpower is 100% owned - Q audited revenues averaging ~USD$200,000 per day - Strong operating margins supported by 100% green energy hydro power at average of CAD$0.04 / kwhr Investment highlights - 95% ASIC hardware dedicated to mining Bitcoin or Bitcoin Cash Emphasis on operational efficiencies and vertical integration - Deep relationships within the province of Quebec facilitating aggressive contracted capacity growth Bitfarms now has MW of contracted power - Recently acquired Volta, an electrical contractor with a 40-person staff available to Bitfarms on a 24/7 basis - 100%-owned proprietary software provides chip-level diagnostics on 3-second intervals - Central repair facility (St-Jean) with staff trained directly by leading hardware manufacturer in Asia - Currently developing 100%-owned private mining pool with platform testing completed Public listing completed with Blockchain Mining Ltd., A Tel-Aviv listed company (TASE: BLCM.TA) (1) As of April 30, /3

4 M I N I N G E X P L A I N E D An Introduction to Cryptocurrency Farming (aka Mining) I N , A N E W T E C H N O L O G Y W A S I N V E N T E D F O R A D E C E N T R A L I Z E D, I N T E R N E T - B A S E D D I S T R I B U T E D L E D G E R T E C H N O L O G Y T H A T I N C L U D E D A N A T I V E A C C O U N T I N G T O K E N ( B I T C O I N ). T H I S T E C H N O L O G Y I S K N O W N A S B L O C K C H A I N T E C H N O L O G Y. Since the creation of Bitcoin in 2009, there have been over 1,600 different cryptocurrencies created. As of April 30, 2018, these cryptocurrencies have a combined market capitalization of US$430 billion with Bitcoin representing ~36.5% of all cryptocurrencies. The fundamental principle governing the scalability, security, and adoption for Blockchain networks is the requirement for decentralized "farms or mines which can physically exist anywhere on the planet as long as they are connected to the internet. These farms provide significant computing power that, depending on the algorithm employed, requires increasing amounts of electrical energy over-time to run complex computations as a proof of work. By virtue of this act, the computing power provided by these farms secures and authenticates the integrity of the blockchain networks preventing a malicious actor from changing the contents of the ledger. It also means there is not one single point-of-failure to shut down the network. In exchange for investing the upfront capital and providing this integral service, farmers are rewarded with ongoing fees in the form of transaction fees and newly created cryptocurrencies at various intervals depending on each blockchain network's algorithm. /4

5 B I T F A R M S Corporate overview B i t f a r m s o w n s a n d o p e r a t e s b l o c k c h a i n f a r m s t h a t p o w e r t h e g l o b a l d e c e n t r a l i z e d f i n a n c i a l e c o n o m y. O u r f a r m s p r o v i d e c o m p u t i n g p o w e r t o c r y p t o c u r r e n c y n e t w o r k s s u c h a s b i t c o i n, b i t c o i n c a s h, e t h e r e u m, l i t e c o i n a n d d a s h, e a r n i n g f e e s f r o m e a c h n e t w o r k f o r s e c u r i n g a n d p r o c e s s i n g t r a n s a c t i o n s 2 4 / 7. /5

6 Management team & Board of Directors W E S F U L F O R D C H I E F E X E C U T I V E O F F I C E R, B I T F A R M S Mr. Fulford has spent the last twelve years working as an investment banker. Most recently, Wes led the fintech and financial institutions investment banking practice for Desjardins Capital Markets in Toronto. Prior to his move to Toronto in 2006, Wes began his career working at Assante Asset Management and another Winnipeg-based asset manager. Mr. Fulford is a CFA charterholder and has a B. Comm. (Honours) degree. N I C O L A S B O N T A C H A I R M A N & F O U N D E R Born in Argentina, Mr. Bonta is a hotelier and real estate Investor. In 1998, Nicolas founded one of the first boutique hotel companies in Argentina named "Own Hotels" which has grown to 6 locations in the city of Buenos Aires and Montevideo, Uruguay. R O D R I G O M E N E N D E Z G E N E R A L C O U N S E L A N D D I R E C T O R T O M E R D A V I D I N D E P E N D E N T D I R E C T O R J O S H U A H E R S H K O V I C I I N D E P E N D E N T D I R E C T O R P I E R R E - L U C Q U I M P E R P R E S I D E N T O F O P E R A T I O N S, F O U N D E R & D I R E C T O R Born in Saint Quentin, New-Brunswick, Pierre-Luc founded Globo.Tech Communications in 1999 while still attending High School. As an early adopter of broadband, the proliferation of digital content accessibility and the consumerization of the web, Globo.Tech made investments in critical internet infrastructures and provided various internet hosting solutions and DDoS mitigation far before these became well-known business models. E M I L I A N O G R O D Z K I C H I E F S T R A T E G Y O F F I C E R, F O U N D E R & D I R E C T O R Mr. Grodzki is an Argentinian entrepreneur and business man. He has been a business builder and innovator since his early teens,founding, incubating, and exiting interdisciplinary ventures in the design, food, and construction industries. In 2016, Emiliano discovered the world of cryptocurrencies and began to invest in and mine cryptocurrencies from Argentina. M A T H I E U V A C H O N D I R E C T O R O F S O F T W A R E E N G I N E E R I N G & F O U N D E R Born in Montreal, Canada, Mr. Vachon is a software engineer and internet entrepreneur with over 15 years of experience in designing, engineering, and scaling software and hardware internet technology ventures. /6

7 Competitive advantage We own and operate 100% of our farms in a vertically integrated operation. We design, construct, and operate our facilities using a team that has grown to over 100 employees and contractors. Operating within the province of Quebec, a global hub for blockchain technology, with low hydroelectricity rates, reliable grid infrastructure, innovative universities and supportive policymakers. Founders possess technical experience in designing, building, operating, and scaling server farms and data centres having founded one of the largest independent hosting companies in Canada. Excellent reciprocal relationships with leading chip and hardware manufacturers, allowing us to quickly secure new miners for ongoing development. Completion of platform testing associated with 100% owned and developed public mining pool. Direct pool ownership and administration will increase transaction fees and profit margins on daily coin rewards. 100% owned electrical contracting company with 40 employees / electricians allowing us to manage 24/7 shifts and expedited facility buildouts. Superior economic returns through regular sale of mined coins and redeployment of proceeds into ongoing growth. /7

8 B I T F A R M S Operations overview B i t f a r m s o p e r a t e s 4 Q u e b e c - b a s e d c r y p t o c u r r e n c y f a r m s w i t h a c u r r e n t i n s t a l l e d c a p a c i t y o f M W p o w e r i n g o v e r 1 5, m i n e r s. /8

9 ST- H Y A C I N T H E, Q U E B E C St-Hyacinthe, Quebec 10 MW 91 PH/s Facility Size Power Capacity Hashpower Property info Energy Source 40k Sq. Ft 10 MW 91 PH/s Leased Hydroelectric St.Hyacinthe Our newest facility in Saint-Hyacinthe is 40,000 square feet and has a power capacity of 10 MW, delivering a total hashpower of 91 PH/s. Bitcoin and Bitcoin Cash are the cryptocurrencies mined at this location. This leased facility is powered by clean hydroelectricity. /9

10 F A R N H A M, Q U E B E C Farnham, Quebec 10 MW 86 PH/s Facility Size Power Capacity Hashpower Property info Energy Source 60k Sq. Ft 10 MW 86 PH/s Leased Hydroelectric 252 GH/s 6000 GH/s Farnham Our 60,000 square foot facility in Farnham has a power capacity of 10 MW, delivering a total hashpower of 86 PH/s. Bitcoin, Bitcoin Cash, Litecoin and Dash are the cryptocurrencies mined at this location. This leased facility is powered by clean hydroelectricity. /10

11 C O W A N S V I L L E, Q U E B E C Cowansville, Quebec 6.5 MW 29 PH/s Facility Size Power Capacity Hashpower Property info Energy Source 25k Sq. Ft 6.5 MW 29 PH/s Leased Hydroelectric Cowansville Our 25,000 square foot facility in Cowansville has a power capacity of 6.5 MW, delivering a total hashpower of 29 PH/s. Bitcoin and Bitcoin Cash are the cryptocurrencies mined at this location. This leased facility is powered by clean hydroelectricity. /11

12 N O T R E - D A M E, Q U E B E C Notre-Dame, Quebec 1 MW 55 GH/s Facility Size Power Capacity Hashpower Property info Energy Source 15K Sq. Ft 1 MW 55 GH/s Leased Hydroelectric Our 15,000 square foot facility in Notre-Dame is Bitfarms first facility. Notre-Dame has a power capacity of 1 MW and delivers a total hashpower of 55 GH/s from GPU hardware. Ethereum is the cryptocurrency mined at this location, and this leased facility is powered by clean hydroelectricity. Notre Dame /12

13 O P E R A T I O N A L E X P A N S I O N Construction pipeline 135 MW; 1.29 XH/s EXPANSION OF CURRENT OPERATIONS St-Hyacinthe 2, Quebec, Canada Facility Size Power Capacity Property info Energy Source 40k Sq. Ft 10 MW Leased Hydroelectric Cowansville 2, Quebec, Canada Facility Size Power Capacity Property info Energy Source 25k Sq. Ft 12 MW Leased Hydroelectric NEW FACILITIES Magog, Quebec, Canada Facility Size Power Capacity Property info Energy Source 20k Sq. Ft 10 MW Leased Hydroelectric Projected Hashpower 91 PH/s Projected Hashpower 109 PH/s Projected Hashpower 91 PH/s St.Hyacinthe St.Jean.Richelieu Cowansville Sherbrooke Magog Sherbrooke 1, 2 & 3 Quebec, Canada Facility Size Power Capacity Property info Energy Source 150K Sq. Ft 98 MW Owned Hydroelectric Saint-Jean-Richelieu, Quebec, Canada Facility Size Power Capacity Property info Energy Source 25k Sq. Ft 5 MW Leased Hydroelectric Projected Hashpower 892 PH/s Projected Hashpower 49 PH/s /13

14 Leadership in P R O P R I E T A R Y M O N I T O R I N G & R E P A I R Operational efficiency B i t f a r m s h a s d e v e l o p e d a p r o p r i e t a r y m o n i t o r i n g p l a t f o r m t h a t p r o v i d e s l i v e h a s h p o w e r a n d t e m p e r a t u r e d i a g n o s t i c s f o r a l l + 1 5, m i n e r s o n 3 s e c o n d i n t e r v a l s. U n d e r p e r f o r m i n g h a r d w a r e i s i d e n t i f i e d a n d s e r v i c e d i m m e d i a t e l y b y o u r o p e r a t i o n s s t a f f a t e a c h f a r m. I n M a r c h , B i t f a r m s c o m p l e t e d c o n s t r u c t i o n o f a c u s t o m d e s i g n e d r e p a i r f a c i l i t y i n S a i n t - J e a n - s u r - R i c h e l i e u, Q u e b e c. O u r t e a m o f t e c h n i c i a n s h a v e b e e n t r a i n e d d i r e c t l y b y l e a d i n g h a r d w a r e m a n u f a c t u r e r s a n d w i l l e n a b l e u s t o a c h i e v e t a r g e t e d h a r d w a r e d o w n t i m e o f l e s s t h a n 3-4 % ( i n d u s t r y l e a d i n g ). /14

15 C R Y P T O C U R R E N C Y Reward size & opportunity /15

16 M I N I N G R E W A R D S Mining opportunity size D A I L Y M I N I N G R E W ARDS FOR BITCOIN, E THEREUM, L I TECOIN A N D D A S H I N USD $18.9M daily $6.9B annually $12.9M daily $4.7B annually $2.6M daily $0.9B annually $2.2M daily $0.8B annually $1.0M daily $362M annually Blocks per day: 144 Block Reward: 12.5 Blocks per day: 5,400 Block Reward: 3.0 Blocks per day: 146 Block Reward: 12.5 Blocks per day: 576 Block Reward: 25 Blocks per day: 550 Block Reward: 3.35 Trxn Fees per Block: 1.59 BTC price: $9,295 Trxn Fees per Block: 0.50 ETH price: $683 Trxn Fees per Block: 0.06 BCH price: $1,392 Trxn Fees per Block: 0.17 LTC price: $151 Trxn Fees per Block: 0.33 DASH price: $490 Total Mining Rewards Available: $38M daily / $14B annually * As of April 30, /16

17 B I T F A R M S Financial overview I n s u p p o r t o f o u r p u b l i c t r a n s a c t i o n w i t h B l o c k c h a i n M i n i n g L t d., B i t f a r m s h a s b e c o m e o n e o f t h e f e w g l o b a l c r y p t o c u r r e n c y m i n e r s t o p u b l i s h a u d i t e d f i n a n c i a l r e s u l t s. P l e a s e s e e o u r T A S E d i s c l o s u r e. /17

18 C A P I T A L S T R U T U R E Financial Highlights & ownership Pro Forma Bitfarms ownership BLCM Public Float 9.2% T I C K E R TASE: BLCM.TA U S A D R : B I T F Y TASE Share Price (NIS) (1) 1,750 Share Price (USD) (1) $4.90 Pro Forma Fully Diluted Shares O/S 83.3M Market Capitalization (NIS) Market Capitalization (USD) Selected Q Financial Results (2) Revenue from sale of mined cryptocurrency tokens FV of tokens mined and not sold Net income $1,457M $523.2M US$8.7M US$3.4M US$4.9M (1) As of April 30, (2) Audited financial results of Backbone Hosting Solutions Inc. ( Bitfarms ) for 56-day operating period from November 6 th to December 31 st, On April 11, 2018, under the agreement between Blockchain Mining Ltd. ( BLCM or the Company ) and Backbone Hosting Solutions Inc., operating under the commercial brand Bitfarms, BLCM acquired 60.7% of the issued and outstanding shares of Bitfarms in exchange for 23,124,911 common shares of the Company, and the right to acquire 17,335,090 common shares of the Company, all of which have been issued to founding shareholders and principals of Bitfarms (the Transaction ). In a second transaction, the Company plans to acquire an additional 39.3% interest from the minority investors in Bitfarms in exchange for 26,206,666 shares of BLCM. Upon the completion of both transactions, Blockchain Mining Ltd. will have issued 66,667,266 shares to Backbone and have fully-diluted issued and outstanding shares of 83,281,591.. Bitfarms Minority Investors 31.5% Founders, Directors, Officers & Advisors 59.3% /18

19 Installed MW % of Total Network Hash power N E T W O R K H A S H P O W E R Hash rate growth vs. Projected installed MW & % of BTC network hash power (1) BTC network % Installed MW 4.84% Hash rate vs. Network Bitfarms currently has 162.5MW of combined operational and contracted power capacity. In Q2 2018, we expect to grow current operations by % another ~10MW with the completion of our 5 th computing centre in Magog, Quebec % Throughout the second half of 2018, Bitfarms will begin focusing efforts on the infrastructure buildout at Sherbrooke, with the expectation of 2.23% bringing an additional 40MW online before the end of the year % % 1.00% % Q Q2 2018E 2018E 2019E 0.0% (1) Q BTC network hash power as of March 30 th, 2018 was 27.8 XH/s. Q2 2018E, 2018E and 2019E market share (i.e. % of Network) is based on the April 30, 2018 BTC network hash power (29.6 XH/s) carried forward. /19

20 W E S F U L F O R D C H I E F E X E C U T I V E O F F I C E R TASE: BLCM.TA USD ADR: BITFY S U I T E 3 1 2, B O U L E V A R D L E D U C B R O S S A R D, Q U É B E C J 4 Y 0 E 3 C A N A D A I N F B I T F A R M S. I O I N V E S T O R P R E S E N T A T I O N M A Y