Keel Infrastructure Corp. 10-K

Item 8. Financial Statements and Supplementary Data F- 1 BITFARMS LTD. TABLE OF CONTENTS Report of Independent Registered Public Accounting Firm (PCAOB identification # 271 ) F-3 Financial Statements Consolidated Balance Sheets as of December 31, 2025 and 2024 F-6 Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023 F-7 Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2025, 2024 and 2023 F-8 Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023 F-9 Notes to the Consolidated Financial Statements F-10 1. Organization F-10 2. Significant Accounting Policies F-11 3. Business Combination F-26 4. Acquisition of Assets F-29 5. Rights to renewable energy credits and Waste tax credits F-30 6. Accounts Receivable, Net F-30 7. Other Assets F-30 8. Digital Assets F-31 9. Inventories F-31 10. Derivative Assets and Liabilities F-32 11. Assets Held for Sale and Discontinued Operations F-34 12. Impairment from Continuing Operations F-39 13. Property, Plant and Equipment, Net F-40 14. Long-term Deposits, Equipment Prepayments and Other F-41 15. Refundable Deposits F-42 16. Accounts payable and Accrued expenses F-42 17. Long-term Debt F-43 18. Leases F-46 19. Income Taxes F-49 20. Share Capital F-52 21. Stock-based Compensation F-57 22. Financial Instruments F-62 23. Loss Per Share F-68 24. Segment and Geographical Information F-70 25. Additional Details to the Statements of Operations F-71 26. Additional Details to the Statements of Cash Flow F-74 27. Commitments and Contingencies F-75 28. Subsequent Events F-77 F- 2 Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of Bitfarms Ltd. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Bitfarms Ltd. and its subsidiaries (the Company) as of December 31, 2025 and 2024, and the related consolidated statements of operations, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control ‒ Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control ‒ Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 9A of the Company’s Annual Report on Form 10-K. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. F- 3 Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. As described in Management’s Annual Report on Internal Control over Financial Reporting, management has excluded Stronghold Digital Mining, Inc. from its assessment of internal control over financial reporting as of December 31, 2025, because it was acquired by the Company in a purchase business combination during 2025. We have also excluded Stronghold Digital Mining, Inc. from our audit of internal control over financial reporting. Stronghold Digital Mining, Inc. is a wholly-owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent 12.2% and 27%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2025. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. F- 4 Revenues from sale of computational power used for hashing calculations As described in Notes 2, 11 and 25 to the consolidated financial statements, the Company recorded $264.9 million of revenues from sale of computational power used for hashing calculations to mining pool operators for the year ended December 31, 2025, of which $58.7 million are included within discontinued operations. A significant portion of this revenue was sold to one mining pool operator (the Mining Pool Operator). In exchange for providing computational power to mining pool operators, the Company receives non-cash consideration in the form of Bitcoin based on a prescribed formula, and accounts for the Bitcoin to be received as variable consideration. The principal considerations for our determination that performing procedures relating to revenues from sale of computational power used for hashing calculations is a critical audit matter are the significant judgment used by the auditor in determining the procedures to be performed over the revenue balance and a high degree of auditor effort required to perform the procedures to test (i) the computational power provided to the Mining Pool Operator; (ii) the associated contractual amounts the Company is entitled to receive in return for providing the computational power; and (iii) the quantity of the Bitcoin received from the Mining Pool Operator. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of certain controls relating to the revenues from the sale of computational power used for hashing calculations. These procedures also included, among others, (i) testing the computational power provided to the Mining Pool Operator by confirming directly with the Mining Pool Operator; (ii) testing the associated contractual amounts the Company is entitled to receive by recalculating the amount based on the prescribed formula; (iii) agreeing all the Bitcoin received directly to the blockchain and tracing all receipts during the year to the Company’s wallet addresses by using our proprietary software; and (iv) testing the settlement and ending balances of Bitcoin or cash by agreeing to third-party custodian data and the Company’s bank statements. /s/ PricewaterhouseCoopers LLP Chartered Professional Accountants, Licensed Public Accountants Toronto, Canada March 31, 2026 We have served as the Company’s auditor since 2020. F- 5 BITFARMS LTD. CONSOLIDATED BALANCE SHEETS (Expressed in thousands of U.S. dollars - audited) As of December 31, As of December 31, 2025 2024 Assets Current Cash 573,462 59,542 Accounts receivable, net 5,471 1,259 Digital assets 174,726 87,298 Digital assets - restricted 5,559 32,826 Other assets 2,825 4,282 Rights to renewable energy credits and waste tax credits 18,478 — Assets held for sale 28,664 9,419 Short-term prepaid deposits 6,317 14,554 Inventories 8,676 1,137 Derivative assets 2,287 3,418 Total current assets 826,465 213,735 Non-current Restricted cash 57,500 — Property, plant and equipment, net 358,333 237,255 Operating lease right-of-use assets, net 11,103 21,299 Finance lease right-of-use assets, net 2,127 2,281 Long-term deposits and equipment prepayments 31,033 44,572 Refundable deposits 350 14,216 Intangible assets, net 2,983 4,636 Assets held for sale — 125,138 Investment in equity securities 1,250 — Long-term derivative assets 5,200 — Total assets 1,296,344 663,132 Liabilities Current Accounts payable and accrued expenses 46,443 25,792 Current portion of long-term debt 97,022 146 Current portion of operating lease liabilities 1,490 1,959 Current portion of finance lease liabilities 235 130 Derivative liabilities 2,922 128 Total current liabilities 148,112 28,155 Non-current Long-term debt 572,447 1,430 Operating lease liabilities 10,606 17,440 Finance lease liabilities 1,978 2,310 Deferred tax liability 65 65 Other non-current liabilities 2,761 2,586 Total liabilities 735,969 51,986 Commitments and contingencies (Note 27) Stockholders’ equity Common stock - no par value; Authorized – unlimited number of shares; Issued and outstanding – 601,579,999 and 479,332,885 shares 1,064,572 837,764 Additional paid-in capital 108,284 101,319 Accumulated deficit ( 612,481 ) ( 327,937 ) Total stockholders’ equity 560,375 611,146 Total liabilities and stockholders’ equity 1,296,344 663,132 See accompanying notes to the consolidated financial statements F- 6 BITFARMS LTD. CONSOLIDATED STATEMENTS OF OPERATIONS (Expressed in thousands of U.S. dollars, except per share amounts - audited) Year ended December 31, 2025 2024 2023 Revenues 229,276 133,274 120,400 Cost of revenues ( 248,180 ) ( 149,186 ) ( 144,142 ) Gross loss ( 18,904 ) ( 15,912 ) ( 23,742 ) Operating expenses General and administrative expenses ( 78,339 ) ( 61,925 ) ( 33,867 ) Change in fair value of digital assets ( 50,522 ) 26,015 7,558 Realized gain on sale of digital assets 28,219 27,209 7,713 (Loss) gain on disposition of property, plant and equipment and deposits ( 1,612 ) 227 ( 2,055 ) Impairment of long-lived assets and deposits ( 28,442 ) ( 3,628 ) ( 5,604 ) Operating loss ( 149,600 ) ( 28,014 ) ( 49,997 ) Interest income 6,288 6,037 1,420 Interest expense ( 8,623 ) ( 745 ) ( 2,865 ) (Loss) gain on derivative assets and liabilities ( 50,415 ) 17,819 48 Gain on extinguishment of long-term debt — — 12,835 Other expense ( 6,063 ) ( 2,110 ) ( 1,528 ) Total other (expense) income ( 58,813 ) 21,001 9,910 Loss before taxes from continuing operations ( 208,413 ) ( 7,013 ) ( 40,087 ) Income tax (expense) recovery ( 101 ) ( 346 ) 154 Loss from continuing operations ( 208,514 ) ( 7,359 ) ( 39,933 ) Loss from discontinued operations ( 76,030 ) ( 21,006 ) ( 15,578 ) Net loss ( 284,544 ) ( 28,365 ) ( 55,511 ) Loss per common share Basic and diluted loss per share from continuing operations ( 0.38 ) ( 0.02 ) ( 0.15 ) Basic and diluted loss per share from discontinued operations ( 0.14 ) ( 0.05 ) ( 0.06 ) Basic and diluted loss per share ( 0.52 ) ( 0.07 ) ( 0.21 ) Weighted average number of common shares outstanding Basic and diluted 551,676,757 414,669,947 262,237,117 See accompanying notes to the consolidated financial statements F- 7 BITFARMS LTD. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Expressed in thousands of U.S. dollars, except number of shares - audited) Number of shares Common stock Additional paid-in capital Accumulated deficit Total stockholders’ equity Balance as of January 1, 2023 224,200,170 412,233 78,370 ( 244,061 ) 246,542 Net loss — — — ( 55,511 ) ( 55,511 ) Stock-based compensation — — 10,915 — 10,915 Issuance of common shares 97,386,182 99,973 — — 99,973 Issuance of equity warrants — — 10,457 — 10,457 Settlement of restricted share units 250,002 692 ( 692 ) — — Exercise of stock options and warrants 12,316,976 18,503 ( 5,521 ) — 12,982 Balance as of December 31, 2023 334,153,330 531,401 93,529 ( 299,572 ) 325,358 Net loss — — — ( 28,365 ) ( 28,365 ) Stock-based compensation — — 12,681 — 12,681 Issuance of common shares 137,006,905 292,534 — — 292,534 Settlement of restricted share units 416,666 1,116 ( 1,116 ) — — Exercise of stock options and warrants 7,755,984 12,713 ( 3,775 ) — 8,938 Balance as of December 31, 2024 479,332,885 837,764 101,319 ( 327,937 ) 611,146 Net loss — — — ( 284,544 ) ( 284,544 ) Stock-based compensation — — 14,984 — 14,984 Issuance of replacement stock-based compensation — — 232 — 232 Issuance of common shares 97,983,548 172,794 — — 172,794 Issuance of equity warrants — — 20,088 — 20,088 Settlement of restricted share units 2,744,083 4,430 ( 4,430 ) — — Exercise of stock options and warrants 27,783,304 60,849 ( 25,220 ) — 35,629 Settlement of share awards 1,543,320 1,558 ( 1,558 ) — — Repurchase and cancellation of common shares ( 7,807,141 ) ( 12,823 ) 2,869 — ( 9,954 ) Balance as of December 31, 2025 601,579,999 1,064,572 108,284 ( 612,481 ) 560,375 See accompanying notes to the consolidated financial statements F- 8 BITFARMS LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in thousands of U.S. dollars - audited) Year ended December 31, 2025 2024 2023 Cash flows from (used in) operating activities Net loss ( 284,544 ) ( 28,365 ) ( 55,511 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 122,630 135,424 84,323 Impairment of long-lived assets and deposits 101,843 3,628 12,586 Total other expense (income) 58,969 ( 21,102 ) ( 8,846 ) Digital assets earned and hosting revenue received in Bitcoin ( 262,931 ) ( 186,527 ) ( 141,306 ) Stock-based compensation 14,984 12,681 10,915 Income tax expense (recovery) 833 ( 186 ) 2,232 Renewable energy credits earned ( 22,763 ) — — (Gain) loss on disposition of assets and other ( 5,457 ) ( 691 ) 1,598 Digital assets exchanged for services 9,992 1,463 — Realized gain on disposition of digital assets ( 28,219 ) ( 27,209 ) ( 7,713 ) Asset retirement obligation accretion expense 222 270 214 Change in fair value of digital assets 50,522 ( 26,015 ) ( 7,558 ) Interest income received 4,626 5,649 1,787 Interest expenses paid ( 1,259 ) ( 1,738 ) ( 13,923 ) Income taxes (paid) received ( 427 ) ( 1,510 ) 11,590 Proceeds from disposition of renewable energy and waste tax credits 13,274 — — Changes in non-cash working capital components 1,111 ( 7,479 ) 2,725 Net change in cash related to operating activities ( 226,594 ) ( 141,707 ) ( 106,887 ) Cash flows from (used in) investing activities Proceeds from sale of digital assets 171,091 152,135 129,309 Purchase of property, plant and equipment and intangible assets ( 100,297 ) ( 286,919 ) ( 48,436 ) Proceeds from sale of property, plant and equipment and assets held for sale 34,565 5,460 3,111 Costs related to purchase and sale of assets held for sale ( 7,988 ) — — Purchase of marketable securities ( 33,975 ) ( 22,375 ) ( 36,262 ) Proceeds from disposition of marketable securities 33,962 24,688 48,507 Refundable Hosting Deposit — ( 15,600 ) — Purchase of derivative assets and liabilities ( 154,443 ) ( 13,961 ) — Settlement of derivative assets and liabilities 172,915 31,120 — Equipment and construction prepayments ( 20,164 ) ( 52,935 ) ( 22,869 ) Proceeds from disposal of business 63,038 — — Acquisition of business ( 48,084 ) — — Investment in equity securities ( 1,250 ) — — Acquisition of assets ( 5,626 ) — ( 2,394 ) Net change in cash related to investing activities 103,744 ( 178,387 ) 70,966 Cash flows from (used in) financing activities Repayment of long-term debt ( 785 ) ( 4,141 ) ( 30,545 ) Proceeds from long-term debt, net of transaction costs 666,469 1,695 — Repayment of finance lease liabilities ( 820 ) ( 1,079 ) ( 2,458 ) Lease incentive received — 714 — Issuance of common shares and warrants 72,747 289,534 109,074 Exercise of stock options and warrants 35,711 8,883 12,983 Purchase of capped calls ( 69,090 ) — — Repurchase and cancellation of common shares ( 9,954 ) — — Net change in cash related to financing activities 694,278 295,606 89,054 Net increase (decrease) in cash and restricted cash 571,428 ( 24,488 ) 53,133 Cash, beginning of the year 59,542 84,038 30,887 Exchange rates differences on currency translation ( 8 ) ( 8 ) 18 Cash and restricted cash, end of the year 630,962 59,542 84,038 Cash flows from (used in) discontinued operations 13,147 2,131 ( 1,114 ) See accompanying notes to the consolidated financial statements F- 9 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 1: ORGANIZATION Bitfarms Ltd. (the “Company” or “Bitfarms”) is a North American digital and energy infrastructure company in transition to developing, owning, and operating data center facilities and energy infrastructure for high-performance computing (“HPC”) and artificial intelligence (“AI”) workloads. The Company currently maintains its legacy North American Bitcoin Mining operations to help fund its development efforts. These activities are comprised mainly of selling its computational power used for hashing calculations for the purpose of cryptocurrency mining in multiple jurisdictions that include Canada, the United States and Paraguay. Refer to Note 11 for disclosures related to discontinued operations in Paraguay and Argentina. 9159-9290 Québec Inc. (“Volta”), a wholly-owned subsidiary of the Company, assists the Company in building and maintaining its Canadian data centers and provides electrician services to both commercial and residential customers in Québec, Canada. Bitfarms owns and operates data centers housing computers (referred to as “Miners”) designed for the purpose of validating transactions on the Bitcoin Blockchain (referred to as “Mining”). Bitfarms generally operates its Miners 24 hours per day to produce computational power used for hashing calculations (measured by hashrate) that Bitfarms sells to Mining Pool operators under a formula-driven rate commonly known in the industry as Full Pay Per Share (“FPPS”). Under FPPS, Mining Pool operators compensate Mining companies for their computational power used for hashing calculations, measured by hashrate, based on what the Mining Pool operator would expect to generate in revenue for a given time period if there was no randomness involved. The fee paid by a Mining Pool operator to Bitfarms for its computational power used for hashing calculations may be in cryptocurrency, U.S. dollar, or another currency. However, the fees are paid to Bitfarms on a daily basis in Bitcoin (as defined below). Bitfarms accumulates the cryptocurrency and transaction fees it receives or exchanges them for U.S. dollar through reputable and established cryptocurrency trading platforms. Terms and definitions In these financial statements, the terms below have the following definitions: Term Definition 1 Backbone Backbone Hosting Solutions Inc. 2 Backbone Argentina Backbone Hosting Solutions SAU 3 Backbone Mining Backbone Mining Solutions LLC 4 Backbone Paso Pe D&N Ingenieria SA 5 Backbone Paraguay Backbone Hosting Solutions Paraguay SA 6 Backbone Sharon Backbone Sharon LLC 7 Backbone Yguazu Zunz SA 8 Volta 9159-9290 Québec Inc. 9 BVVE Blockchain Verification and Validation Equipment (primarily Miners and Mining-related equipment) 10 MW Megawatt 11 ARS Argentine pesos 12 BTC Bitcoin 13 CAD Canadian dollars 14 USD United States dollars F- 10 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 2: SIGNIFICANT ACCOUNTING POLICIES Basis of presentation and principles of consolidation These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. The Company also consolidates certain variable interest entities (“VIEs”) for which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements also include the Company’s discontinued operations, consisting of the Company’s Paraguay and Argentina operations. The consolidated financial statements are presented in USD and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) including the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding financial reporting. Additionally, since there are no differences between net income (loss) and comprehensive income (loss), all references to comprehensive income (loss) have been excluded from the consolidated financial statements. Nature of variable interest entities (VIEs) Certain of the Company’s wholly-owned subsidiaries are considered VIEs primarily because their equity investment at risk isn’t sufficient to permit the entities to finance their activities without additional subordinated financial support. The Company has determined that it is the primary beneficiary of each of its consolidated VIEs because it has the power to direct the activities that most significantly affect the economic performance of the VIEs and the obligation to absorb losses or the right to receive benefits that could potentially be significant. Accordingly, the assets, liabilities, revenues and expenses of these VIEs are included in the Company’s consolidated financial statements. The consolidated VIEs do not have assets that are restricted to settling the obligations of the VIEs, and creditors of the VIEs do not have recourse solely to the assets of the VIEs. As a result, separate presentation of VIE assets and liabilities on the consolidated balance sheets is not required. The Company’s maximum exposure to loss as a result of its involvement with the consolidated VIEs is reflected in the carrying amounts of the assets and liabilities included in the consolidated financial statements. The Company did not provide financial or other support to its consolidated VIEs during the periods presented that it was not previously contractually required to provide. F- 11 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Continued) Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires Management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated balance sheets and the reported amounts of revenue and expenses during the reporting periods. Actual results may differ materially from those estimates. The most significant accounting estimates inherent in the preparation of the Company’s consolidated financial statements include revenue recognition; measurement of digital assets; determination of the useful lives, residual values, depreciation method and recoverability of long-lived assets; impairment analysis of property, plant and equipment; allocating the fair value of purchase consideration to assets acquired and liabilities assumed in business combinations and measurement of financial instruments. Foreign currencies The Company’s functional currency is the USD as all of its cryptocurrency Mining revenues, most of its capital expenditures and most of its financing are measured or transacted in USD. In addition, the Company’s reporting currency is USD. Transactions in foreign currencies are initially recorded at the exchange rate in effect on the transaction date. Monetary assets and liabilities in foreign currencies are subsequently translated into the functional currency at the exchange rate in effect at each reporting date. Exchange rate differences, other than those capitalized to qualifying assets or carried to equity in hedging transactions, are included in profit or loss. Non-monetary assets and liabilities in foreign currencies stated at cost are translated at the exchange rate in effect at the transaction date. Non-monetary assets and liabilities in foreign currencies carried at fair value are translated at the exchange rate at the date on which the fair value was determined. Business combinations The Company first evaluates whether an acquired set of activities and assets meets the definition of a business in accordance with ASC 805, Business Combinations. If the acquired set does not meet the definition of a business, the transaction is accounted for as an asset acquisition. In an asset acquisition, the cost of the acquisition, including transaction costs, is allocated to the identifiable assets acquired and liabilities assumed based on their relative fair values at the acquisition date. No goodwill is recognized in an asset acquisition. The Company accounts for business combinations using the acquisition method when it has obtained control. The Company measures goodwill as the fair value of the consideration transferred including the fair value of any non-controlling interest recognized, less the net recognized amount of the identifiable assets acquired and liabilities assumed, all measured at their fair value as of the acquisition date. Transaction costs, other than those associated with the issuance of debt or equity securities, that the Company incurs in connection with a business combination are expensed as incurred. When the initial accounting for a business combination has not been finalized by the end of the reporting period in which the transaction occurs, the Company reports provisional amounts. Provisional amounts are adjusted during the measurement period, which does not exceed one year from the acquisition date. These measurement period adjustments, or recognition of additional assets or liabilities, reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognized at that date. The cumulative impact of measurement period adjustments to the provisional amounts are recognized in the period that the adjustment is determined. F- 12 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Continued) Revenue recognition The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of the revenue standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: 1) Identify the contract with the customer 2) Identify the performance obligations in the contract 3) Determine the transaction price 4) Allocate the transaction price to the performance obligations in the contract, and 5) Recognize revenue when the company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: ● The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and ● The entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following: ● Variable consideration ● Constraining estimates of variable consideration ● The existence of a significant financing component ● Non-cash consideration ● Consideration payable to a customer Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time, as appropriate. F- 13 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Continued) Revenue recognition (Continued) The Company has four revenue streams: i) sale of computational power used for hashing calculations, ii) energy sales, iii) hosting agreements and iv) electrical services. i. Revenues from the sale of computational power used for hashing calculations The Company has entered into arrangements with Mining pool operators, which are the Company’s customers in accordance with ASC 606, and has undertaken the single performance obligation of providing a service to perform hash calculation services in exchange for non-cash consideration in the form of Bitcoin, which is variable consideration. Providing hash calculation services to the Mining pool operators is an output of the Company’s ordinary business activities. Bitcoin are calculated based on a formula which, in turn, is based on the hashrate contributed by the Company’s provided computing power used for hashing calculations allocated to the Mining pool operators, assessed over a 24-hour period, and distributed daily based on the FPPS formula. The Company assesses the estimated amount of the variable non-cash consideration to which it expects to be entitled for providing computational power used for hashing calculations at contract inception and subsequently determines whether it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. The uncertainties regarding the daily variable consideration to which the Company is entitled for providing its computational power used for hashing calculations are no longer constrained at 23:59:59 UTC regardless of the timing of the Bitcoin received. The amount earned is calculated based on the Company’s computing power used for hashing calculations provided to the Mining pool operators and the estimated (a) block subsidies and (b) daily average transaction fees which the Mining pool operators expect to earn, less (c) a Mining pool discount. (a) Block subsidies refer to the block rewards that are expected to be generated on the Bitcoin network as a whole. The fee earned by the Company is first calculated by dividing (1) the total amount of hashrate the Company provides to the Mining pool operator, by (2) the total Bitcoin network’s implied hashrate (as determined by the Bitcoin network difficulty), multiplied by (3) the total amount of block subsidies that are expected to be generated on the Bitcoin network as a whole. (b) Transaction fees refer to the total fees paid by users of the network to execute transactions. The fee paid by the Mining pool operator to the Company is calculated by dividing (1) the total amount of transaction fees that are actually generated on the Bitcoin network as a whole less the 3 largest and 3 smallest blocks, divided by (2) the total amount of block subsidies that are actually generated on the Bitcoin network as a whole less the 3 largest and 3 smallest blocks, multiplied by (3) the Company’s fee earned as calculated in (a) above. The Company is entitled to its relative share of consideration even if a block is not successfully added to the blockchain by the Mining pool. (c) Mining pool discount refers to the discount applied to the total amount earned based on the FPPS formula otherwise attributed to computing power service providers for their sale of computing power used for hashing calculations as defined in the rate schedule of the agreement with the Mining pool operator. F- 14 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Continued) Revenue recognition (Continued) i. Revenues from the sale of computational power used for hashing calculations (Continued) The Company is entitled to the fee from the Mining pool operators as calculated above regardless of the actual performance of the Mining pool operators. Therefore, even if the Mining pool operators do not successfully add any block to the blockchain in a given contract period, the fee remains payable by the Mining pool operators to the Company. Accordingly, the Company is not sharing in the earnings of the Mining pool operators. The Company’s enforceable right to compensation begins when, and continues as long as, the Company provides its services to the Mining pool operators, and the Company decides when to provide these services under the contracts. The Company’s agreements with the Mining pool operators provide the Mining pool operators and the Company with the enforceable right to terminate the contract at any time without substantively compensating the other party for the termination. Upon termination, the Mining pool operators are required to pay the Company the amount due related to previously satisfied performance obligations. As a result, the Company has determined that the duration of the contract is less than 24 hours and the contract is continuously renewed throughout the day. Each contract period concludes at 23:59:59 UTC. The Company has also determined that the Mining pool operators’ renewal right is not a material right as the terms, conditions, and compensation amounts are at then-current market rates. Bitcoin earned is received in full and can be paid in fractions of cryptocurrency. Revenues from providing a service to perform hash calculations for the Mining pool operators are recognized upon delivery of the service (i.e., when the Mining pool operators obtain control of the hash calculations) over a 24-hour period. The Company updates the estimated transaction price of the non-cash consideration received at its fair market value. Management estimates fair value daily based on the quantity of Bitcoin received multiplied by the price quoted from Coinbase Inc. (“Coinbase Prime”) on the day it was received. Management considers the prices quoted on Coinbase Prime to be a Level 1 input for fair value measurement purposes. ii. Revenue from electrical services The Company sells electrical components and provides electrician installation of those components as well as repair and maintenance services. Revenues are recognized according to the stage of completion of the transaction as of the balance sheet date. The stage of completion is estimated based on the costs incurred for the transaction compared to the total estimated cost of completion for the project. Under this input-based measure, revenues are recognized in the reporting period in which the services are provided. In the event that the outcome of the contract cannot be measured reliably, the revenues are recognized to the extent of the recoverable expenses incurred. iii. Revenue from hosting services The Company has entered into hosting agreements under which it operates Mining-related equipment on behalf of third parties within its facilities. Revenue from hosting agreements is recognized as the Company satisfies its performance obligation of operating the hosting equipment over time. The consideration for the Company’s hosting agreement comprises (a) the variable cost-of-power fee, denominated in cash, and (b) a portion of the Bitcoin mined by the customer’s Mining-related equipment that the Company hosts, denominated in Bitcoin. The amount of consideration does not include a significant financing component and, therefore, is not adjusted for the effects of the time value of money in determining the transaction price. F- 15 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Continued) Revenue recognition (Continued) iii. Revenue from hosting services (Continued) Estimates for variable cost-of-power fees and variable Bitcoin consideration are fully constrained. The Company includes these amounts in the transaction price only when it is probable that no significant revenue reversal will occur once the uncertainty is resolved. Each quarter, when uncertainty is resolved, the Company includes in the transaction price (a) the actual amount of the variable cost-of-power fee and (b) the noncash Bitcoin consideration equal to the product of (1) the Company’s share of Bitcoin Mined by customers’ hosted equipment during the period and (2) the quoted Bitcoin price in the Company’s principal market at contract inception. At the end of each reporting period, the Company also reassesses the estimated transaction price to determine whether an estimate of the variable consideration over the remaining contract term is fully constrained. Because there is only one performance obligation to provide an integrated hosting service to the Company’s hosting customers, the entire transaction price described above is allocated to the single performance obligation and recognized over time as the integrated hosting service is provided. Since the variable consideration is fully constrained, the Company recognizes revenue based on the actual cost-of-power and Bitcoin Mining components of the transaction price each reporting period when uncertainty regarding the amount of variable consideration is resolved. iv. Energy revenue The Company operates as a market participant through the Pennsylvania, New Jersey, Maryland Interconnection (“PJM”), a Regional Transmission Organization (“RTO”) that coordinates the movement of wholesale electricity. The Company sells energy from its Panther Creek and Scrubgrass generating plants in the open market in the PJM RTO in the real-time, location marginal pricing market. Revenues from the sale of energy are recognized as the energy is delivered as a series of distinct units that are substantially the same and have the same pattern of transfer to the customer over time and are, therefore, accounted for as a distinct performance obligation. Revenue from the sale of energy is recognized over time as energy volumes are generated and delivered to the RTO (which is contemporaneous with generation), using the output method based on megawatt hours for measuring progress. The Company applies the right to invoice practical expedient in recognizing revenue from the sale of energy. Under this practical expedient, revenue from the sale of energy is recognized based on the invoiced amount which corresponds directly with the value provided to the customer for the Company’s performance obligation completed to date. Cost of revenues Cost of revenues include costs directly attributable to the Company’s revenue-generating activities. These costs primarily consist of electricity and energy costs used in cryptocurrency mining operations, depreciation and amortization of mining equipment and related infrastructure, hosting expenses, infrastructure operating costs, and electrical components and related salaries. Cost of revenues may also include inventory consumption, customs duties, and other costs directly associated with the operation and maintenance of Bitcoin data centers. Certain government incentives, including renewable energy credits (“RECs”), waste tax credits (“WTCs”), and sales tax recoveries are recognized as reductions of the related expenses when earned. F- 16 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Continued) Cash and cash equivalents Cash and cash equivalents consist of deposits and short-term, highly-liquid investments with original maturities of three months or less. The Company only holds cash and maintains its cash in accounts at high-quality financial institutions that are insured by the Federal Deposit Insurance Corporation. Rights to renewable energy credits and waste tax credits The Company uses refuse, which is classified as a Tier II Alternative Energy Source under Pennsylvania law, to produce energy for sale. RECs are generated from renewable sources (i.e., refuse) and may be sold or traded. Government grants related to WTCs are issued by the Commonwealth of Pennsylvania. The Company recognizes rights to RECs and WTCs as intangible assets when the underlying energy generation or waste coal consumption occurs. The quantity of RECs recognized is based on net megawatt-hour (“MWh”) generation during the period and estimated conversion rates derived from recent historical experience, while WTCs are recognized based on actual waste coal consumption multiplied by the applicable statutory credit rate. The value of RECs recognized incorporates estimates of market prices based on recent transactions or pricing information obtained from third party brokers. RECs are generally certified by PJM approximately two months after the related generation, at which time estimates are updated as necessary. WTCs are typically certified by the Commonwealth of Pennsylvania in the year following the related waste coal consumption. Simultaneously, as the rights to RECs and WTCs are recognized as intangible assets, a corresponding contra expense within cost of revenues is recognized to offset the fuel expenses incurred to produce energy. The Company is permitted and does sell these intangibles, recognizing a gain or loss on disposal in the consolidated statement of operations. Income tax Income taxes are comprised of current and deferred taxes. These taxes are accounted for using the asset and liability method. Current tax is recognized in connection with income for tax purposes, unrealized tax benefits and the recovery of tax paid in a prior period and measured using the enacted tax rates and laws applicable to the taxation period during which the income for tax purposes arose. Deferred tax is recognized on the difference between the carrying amount of an asset or a liability, as reflected in the financial statements, and the corresponding tax base used in the computation of income for tax purposes and measured using the enacted tax rates and laws as at the balance sheet date that are expected to apply to the income that the Company expects to arise for tax purposes in the period during which the difference is expected to reverse. Management assesses the likelihood that a deferred tax asset will be realized, and a valuation allowance is provided to the extent that it is more likely than not that all or a portion of a deferred tax asset will not be realized. The determination of both current and deferred taxes reflects the Company’s interpretation of the relevant tax rules and judgment. Income taxes are recognized in the consolidated statements of operations, except when they relate to an item that is recognized in other comprehensive loss or directly in equity, in which case, the taxes are also recognized in other comprehensive loss or directly in equity respectively. Where income taxes arise from the initial accounting for a business combination, these are included in the accounting for the business combination. F- 17 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Continued) Income tax (Continued) In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures (“ASU 2023-09”) , to enhance the transparency and decision usefulness of income tax disclosures by requiring disaggregated information about a reporting entity’s effective tax rate reconciliation and information on income taxes paid. The Company retrospectively adopted ASU 2023-09 in the year ended December 31, 2025. Refer to Note 19 for the required disclosures. Digital assets Digital assets are received as non-cash consideration for providing computational power used for hashing calculations and hosting services, in accordance with the Company’s revenue recognition policy under ASC 606. Digital assets are classified as current assets in the consolidated balance sheets as they are highly liquid, and the Company expects to realize them in cash within twelve months. The Company adopted ASU 2023-08, Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”) as of January 1, 2023. As a result, digital assets are measured at fair value each reporting period, with changes in fair value recognized in the consolidated statements of operations. The fair value of digital assets is measured using the period-end closing price from the Company’s principal market, which is Coinbase Prime. When the Company sells digital assets, gains or losses from the disposal are measured as the difference between the cash proceeds and the cost basis, determined using a weighted average cost method. Inventories Electronic and networking components, waste coal, limestone, and fuel oil are valued at the lower of average cost or net realizable value and include all related transportation and handling costs. The Company performs periodic assessments to determine the existence of obsolete, slow-moving and unusable inventory and recognizes an allowance to reduce such inventories to net realizable value as necessary. Assets held for sale The Company classifies long-lived assets or an asset group to be sold as “held for sale” in the period in which all of the following criteria are met: (i) the Company is committed to their sale, (ii) the assets are available for immediate sale in their present condition, (iii) there is a program to locate a buyer, (iv) it is probable that a sale will be completed within one year from the date of classification, (v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (vi) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. From the date of such initial classification, the assets are no longer depreciated and are presented separately as current assets at the lower of their carrying amount and fair value less costs to sell, and any related liabilities (in the asset group) are separately classified as current liabilities. Discontinued operations A discontinued operation is a component of the Company that has either been abandoned, sold or classified as “held for sale” and represents a strategic shift that has (or will have) a major effect on the Company’s operations and financial results. F- 18 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Continued) Property, Plant and Equipment, Net Property, plant and equipment are carried at cost, including directly attributable costs, less accumulated depreciation, accumulated impairment losses and any related investment grants, and excluding day-to-day servicing expenses. Cost includes spare parts and auxiliary equipment used in connection with plant and equipment. The cost of an item of property, plant and equipment includes the initial estimate of the costs of dismantling and removing the item and restoring the site on which the item is located when a legal obligation exists at the time the asset is placed in service. Interest related to construction of assets is capitalized when the financial statement effect of capitalization is material, construction of the asset has begun, and interest is being incurred. Interest capitalization ends at the earlier of the asset being substantially complete and ready for its intended use or when interest costs are no longer being incurred. Property, plant and equipment are depreciated as follows: Asset Class Depreciation Method Depreciation period BVVE Miners Straight-line 3 years Mining-related equipment Straight-line 5 years Leasehold improvements Straight-line Shorter of the lease term and the expected life of the improvement Machinery and equipment Straight-line 5 to 30 years Buildings Declining balance 4 % Power Plants Declining balance 4 % Vehicles Declining balance 30 % The useful life, depreciation method and residual value of an asset are reviewed at least each year-end and any changes are accounted for prospectively as a change in accounting estimate. Depreciation of an asset ceases at the earlier of the date that the asset is classified as “held for sale” and the date that the asset is derecognized. F- 19 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Continued) Leases Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company determines whether an arrangement contains a lease at the inception of the arrangement in accordance with ASC 842, Leases . The Company determines lease classification at lease commencement as either operating or finance. The Company recognizes a ROU asset and a corresponding lease liability at lease commencement for leases with a term greater than 12 months. Lease liabilities are measured at the present value of lease payments over the lease term. The Company has elected not to recognize ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less that do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. The Company continues to recognize the lease payments associated with these leases as expenses as incurred over the lease term. The Company generally uses its incremental borrowing rate to determine the present value of lease payments as the rate implicit in the lease is not readily determinable. Additional quantitative information regarding the Company’s leases, including lease costs and maturity analyses of lease liabilities are disclosed in Note 18. F- 20 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Continued) Leases (Continued) For finance leases, lease liabilities are increased to reflect the accretion of interest and reduced for the lease payments made. ROU assets are depreciated over the shorter of the lease term and the estimated useful lives of the assets, as follows: Asset Class Depreciation Method Depreciation period Leased premises Straight-line 4 - 10 years Machinery and equipment Straight-line 3 - 4 years Vehicles and other Straight-line 3 - 5 years BVVE Straight-line 3 years For operating leases, the lease expense is recognized on a straight-line basis over the lease term and is included in cost of revenues and general and administrative expenses in the consolidated statements of operations, depending on the nature of the asset. Variable lease payments are generally expensed as incurred and include certain index-based changes in rent, certain performance or usage-based payments, and other charges included in the lease. Intangible assets Intangible assets consist of acquired software and access rights to electricity with finite useful lives. Intangible assets acquired separately are initially measured at cost plus direct acquisition costs. Intangible assets acquired in business combinations are measured at their fair value as of the acquisition date. Intangible assets are amortized as follows: Asset Class Amortization Method Amortization period Systems software Sum of years 5 years Access rights to electricity Straight-line Lease term of the data center or the access rights period The amortization period and the amortization method for an intangible asset are reviewed at least each year end and any changes are accounted for prospectively as a change in accounting estimate. Impairment of long-lived assets The Company’s long-lived assets (including property, plant and equipment, right-of-use assets and intangible assets with finite useful lives) are assessed for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In order to determine if assets have been impaired, assets are grouped and tested at the lowest level for which identifiable independent cash flows are available (“asset group”). When indicators of potential impairment are present, the Company prepares a projected undiscounted cash flow analysis for the respective asset or asset group over the remaining useful life of the asset or asset group. If the sum of the undiscounted cash flow is less than the carrying amount of the asset or asset group, an impairment loss is recognized equal to the excess of the carrying amount over the fair value of the asset or asset group, if any. Fair value is generally determined using discounted cash flow techniques or other valuation methods consistent with the market participant assumptions, as applicable. Impairment losses are recognized in the consolidated statements of operations in the period in which the impairment is identified and are not reversed in subsequent periods. F- 21 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Continued) Impairment of financial assets The Company recognizes an allowance for potentially uncollectable accounts under the current expected credit loss (“CECL”) impairment model in accordance with ASC 326, Financial Instruments – Credit Losses, for all financial assets measured at amortized cost, including accounts receivable and refundable deposits. The CECL impairment model requires an estimate of expected credit losses measured over the contractual life of an instrument, which considers forecasts of future economic conditions in addition to information about past events and current conditions. Based on this model the Company considers many factors, including the aging of the balances, collection history, the counterparty’s credit rating, current economic conditions, and reasonable and supportable forecasts, among other factors. The allowance is estimated as the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive, which may be discounted at the original effective interest rate (“EIR”), when the effect of discounting is material. Bad debts are written off against the allowance after all collection efforts have ceased. Non-hedge derivative instruments The Company enters into Bitcoin option contracts to reduce the risk of variability of cash flows resulting from the fluctuations in the Bitcoin price that impact future sales of digital assets. In addition, the Company entered into contracts and earned premiums by agreeing to sell Bitcoin if the price reached specific targets (“Bitcoin call option’’) to reduce the risk of variability of cash flows. These derivatives are not designated for hedge accounting under ASC 815, Derivatives and Hedging and are accounted for at fair value upon initial recognition and at each balance sheet date with changes in fair value recognized as gain or loss on derivative assets and liabilities within other income (expense) in the consolidated statement of operations. Convertible debt Upon issuance, the Company assesses the various terms and features of the convertible debt instruments to determine whether there are any embedded derivatives that are required to be accounted for separately from the host contract that do not qualify for a scope exception under ASC 815, Derivatives and Hedging (“ASC 815”) and recognized on the consolidated balance sheets at fair value. The fair value of bifurcated derivative liabilities, if any, are required to be revalued at each balance sheet date, with corresponding changes in fair value recognized in the consolidated statements of operations. Convertible debt instruments that do not require bifurcation are accounted for as a single liability measured at amortized cost. The Convertible debt instruments are initially recorded at principal amount, net of issuance costs. Debt issuance costs are presented as a direct deduction from the carrying amount of the debt and are amortized to interest expense over the contractual term using the effective interest method. Interest expense includes the contractual coupon and amortization of issuance costs. The fair value of the Convertible debt instruments is disclosed in accordance with ASC 825, Financial Instruments . Fair value is estimated using a discounted cash flow model based on the Company’s current borrowing rate for similar instruments and is classified within Level 2 of the fair value hierarchy under ASC 820, Fair Value Measurement . F- 22 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Continued) Capped Call Transactions Capped call transactions entered into in connection with convertible debt issuances are evaluated under ASC 815-40 to determine whether they qualify for equity classification. Instruments that do not qualify for equity classification are recognized as derivative assets or liabilities and measured at fair value at each reporting date, with changes in fair value recognized in the consolidated statements of operations. Fair value is determined using a monte carlo option pricing model that incorporates relevant market-based inputs, including the Company’s share price, expected volatility, risk-free interest rate, expected term and contractual terms of the instruments. The fair value measurement is classified within the appropriate level of the fair value hierarchy under ASC 820 based on the nature of the inputs used. Fair value measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurement assumes that the transaction to sell the asset occurs in the principal market or, in the absence of a principal market, in the most advantageous market. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. For liabilities, fair value measurement reflects the effect of nonperformance risk, including the Company’s own credit risk. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. Fair value measurement of long-lived assets takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The fair values are measured using the cost, market or income approaches. Assets and liabilities measured at fair value, or whose fair value is disclosed, are classified into categories within the fair value hierarchy based on the lowest level input that is significant to the overall fair value measurement. The determination of the level in the fair value hierarchy requires judgment, including the assessment of the significance of a particular input to the overall fair value measurement. Level Fair Value Hierarchy Level definitions Level 1 Quoted (unadjusted) prices in active markets for identical assets or liabilities Level 2 Observable, market-based inputs, other than quoted prices included in Level 1, for similar assets or liabilities that are directly or indirectly observable in the marketplace Level 3 Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions F- 23 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Continued) Stock-based compensation Compensation expense for stock-based awards granted to employees and board members is measured at the grant-date fair value of the equity instruments. The fair value of stock options (“Options”) is determined using the Black-Scholes option pricing model. Restricted share units (“RSUs”) are measured based on the grant-date fair value of the Company’s common shares. The fair value of performance share units (“PSUs”) is determined using a Monte Carlo valuation model. Stock-based awards granted to non-employees are measured based on the fair value of the equity instruments expected to be issued in exchange for goods or services received. Stock-based compensation expense is recognized within general and administrative expenses in the consolidated statement of operations, with a corresponding increase in additional paid-in capital, over the requisite service period. The Company has elected to account for forfeitures of awards as they occur. Options and RSUs are service-based awards that vest in installments. The Company recognizes stock-based compensation expense using the graded vesting attribution method over the requisite service period. PSUs are performance-based awards granted to senior management as part of the Company’s long-term incentive plan. PSUs entitle participants to receive a specified number of common shares of the Company, subject to the achievement of predetermined market and service conditions over a defined vesting period. PSUs vest in a single tranche at the end of the performance cycle, contingent upon the attainment of certain corporate performance objectives. The number of common shares issued upon vesting is subject to a performance multiplier based on the level of achievement of the performance objectives and may range from 0 % to 200 % of the target award. The likelihood of achieving the market condition is incorporated into the fair value of the PSUs and compensation expense will be recognized if the requisite service period is fulfilled even if the market condition is never satisfied. Warrants The Company accounts for warrants issued by the Company by first assessing whether the warrants meet all of the requirements for equity classification, including whether the warrants are indexed to the Company’s own shares of common stock and whether the warrant holders could require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment is conducted at the time of issuance of the warrants and reassessed as of each subsequent balance sheet date while the warrants are outstanding. For issued warrants that do not meet all the criteria for equity classification, such warrants are required to be classified as liabilities initially at their fair value on the date of issuance and subsequently remeasured to fair value on each balance sheet date thereafter. Changes in the estimated fair value of liability-classified warrants are recognized in Other (expense) income within the consolidated statements of operations. Earnings per share Earnings per share is computed by dividing net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding during the period. Potential common shares are included in the calculation of diluted earnings per share if their effect dilutes earnings per share from continuing operations. Potential common shares that were converted during the period are included in diluted earnings per share only up to the conversion date, and from that date are included in basic earnings per share. F- 24 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Continued) Segment reporting Operating segments are identified based on the manner in which the Company’s Chief Executive Officer (“CEO”) as its chief operating decision maker (“CODM”) reviews financial information, evaluates operating performance, and allocates resources. Operating segments are defined as components of the Company that engage in business activities from which they may earn revenues and incur expenses, whose operating results are regularly reviewed by the CODM, and for which discrete financial information is available. The Company operates multiple Bitcoin data centers, each of which constitutes an operating segment. The Company aggregates operating segments into a single operating segment when the segments have similar economic characteristics and meet the aggregation criteria prescribed by ASC 280, Segment Reporting. The Company has aggregated all of its mining operating segments into a single operating segment, which is the Company’s only reportable segment, Cryptocurrency Mining, as the operating segments have similar economic characteristics. The CODM evaluates segment performance based on net income (loss). Refer to Note 24 for the Company’s segment and geographical disclosures. Recently issued accounting pronouncements In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal Use Software (“ASU 2025-06”). ASU 2025-06 eliminates the distinction between software project development stages and clarifies the threshold applied to begin capitalizing costs. The new standard is effective for the Company for its annual and interim periods beginning January 1, 2028, and permits prospective, modified prospective, retrospective or early adoption. The Company is currently evaluating the impact of adopting the standard. In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). ASU 2025-05 provides an optional practical expedient when applying the guidance related to the estimate of expected credit losses for current accounts receivable and current contract assets resulting from transactions arising from contracts with customers. The new standard is effective for the Company for its annual and interim periods beginning January 1, 2026, with early adoption permitted. The Company is evaluating the impact of adopting the standard. In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity (“ASU 2025-03”), which amends the guidance for identifying the accounting acquirer in transactions involving the acquisition of a variable interest entity that meets the definition of a business. The guidance is intended to reduce diversity in practice and improve consistency in the application of acquisition accounting. The new standard is effective for the Company for its annual periods beginning January 1, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting the standard. In March 2025, the FASB issued ASU No. 2025-02, Liabilities (Topic 405): Amendments to SEC Paragraph Pursuant to SEC Staff Accounting Bulletin No. 122 (“ASU 2025-02”). ASU 2025-02 amends the Accounting Standard Codification to remove the text of SEC Staff Accounting Bulletin (“SAB”) 121, as rescinded by SAB 122. The new standard is effective immediately and did not have a material impact on the Company’s Consolidated Financial Statements. F- 25 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Continued) Recently issued accounting pronouncements (Continued) In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments (“ASU 2024-04”). ASU 2024-04 clarifies the accounting for induced conversions of convertible debt instruments and improves the consistency of accounting for settlements of convertible debt that occur at terms different from those specified in the original contract. The new standard is effective for the Company for its annual and interim periods beginning January 1, 2026, with early adoption permitted. The Company is currently evaluating the impact of adopting the standard. In November 2024, the FASB issued ASU No. 2024-03 , Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) : Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires additional disclosures of certain expenses in the notes of the financial statements, to provide enhanced transparency into the expense captions presented on the Consolidated Statements of Operations. Additionally, in January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”), to clarify the effective date of ASU 2024-03. The new standard is effective for the Company for its annual periods beginning January 1, 2027 and for interim periods beginning January 1, 2028, with early adoption permitted. The Company is currently evaluating the impact of adopting the standard. NOTE 3: BUSINESS COMBINATION On March 14, 2025 (the “Acquisition Date”), the Company acquired 100 % of the issued share capital of Stronghold Digital Mining, Inc. (“Stronghold”) in a stock-for-stock merger transaction. Under the terms of the merger agreement, each Stronghold shareholder received 2.52 shares of Bitfarms for each Stronghold share they owned. A total of 59,866,609 common shares and 12,893,650 warrants were issued. In addition, the Company paid $ 51,060 on closing to retire Stronghold’s outstanding loans and other closing costs. The acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805, Business Combinations . The fair value of the 59,866,609 shares issued as part of the consideration paid for Stronghold was based on the published share price on March 14, 2025 of $ 1.11 per share. Issuance costs of $ 196 , which were directly attributable to the issuance of the shares, were netted against the deemed proceeds. As a result of the business combination, the pre-existing hosting agreements between the Company and Stronghold were effectively settled. A gain of $ 945 was recognized on the settlement of the Refundable Hosting Deposits. Refer to Note 15 and Note 22 for more details. Stronghold is a vertically integrated power generation and data center company focused on environmental remediation and reclamation services in Pennsylvania, United States. The Stronghold transaction is aligned with the Company’s strategic objectives to diversify its operations and expand its presence in the United States through vertical integration of power generation and energy arbitrage capabilities. F- 26 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 3: BUSINESS COMBINATION (Continued) Details of the final purchase price allocation and the fair value of the net assets acquired on March 14, 2025 are as follows: As of March 14, 2025 Purchase consideration Cash paid through repayment of debts 44,982 Reimbursement of Stronghold’s acquisition-related costs 6,078 Fair value of shares issued 66,452 Fair value of warrants issued 11,477 Fair value of replacement stock-based compensation 232 Settlement of Refundable Hosting Deposits 15,474 Fair value of consideration transferred 144,695 Net identifiable assets acquired Cash 2,976 Accounts receivable 1,095 Short-term prepaid deposits 1,732 Other assets (current) 118 Rights to renewable energy credits and waste tax credits 8,989 Inventories 3,269 Property, plant and equipment 152,264 Intangible assets, net 51 Operating and finance lease right-of-use assets 1,594 Other non-current assets 1,550 Accounts payable and accrued expenses ( 23,488 ) Current portion of long-term debt ( 420 ) Current portion of operating and finance lease liabilities ( 800 ) Long-term debt ( 460 ) Non-current operating and finance lease liabilities ( 756 ) Other non-current liabilities ( 3,019 ) Total net identifiable assets acquired 144,695 F- 27 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 3: BUSINESS COMBINATION (Continued) Total acquisition-related costs that were not directly attributable to the issuance of shares amounted to $ 7,081 , of which $ 1,571 were incurred during the first quarter of 2025, and $ 5,510 were expensed during the year ended December 31, 2024. These amounts were included in general and administrative expenses in the consolidated statements of operations. From the acquisition date through December 31, 2025, Stronghold’s total revenue and net income (net of tax) included in the consolidated statements of operations was $ 77,748 and $ 2,196 , respectively. The following pro-forma summary presents consolidated information of the Company as if the business combination had occurred on January 1, 2024 for the indicated periods: Year ended December 31, (unaudited) 2025 2024 Revenue from continuing operations 231,342 198,048 Net loss from continuing operations ( 216,012 ) ( 63,055 ) The unaudited pro forma financial information should not be considered indicative of actual results that would have been achieved had the acquisition of Stronghold actually been consummated on the date indicated and does not purport to be indicative of the Company’s future financial position or operating results. These pro forma results include the impact of depreciation and amortization of property, plant and equipment and intangible assets acquired, and the impact of the acquisition on interest expense and income tax expense. No adjustments have been reflected in the pro forma financial information for anticipated growth and efficiency opportunities. There were no material nonrecurring pro forma adjustments directly attributable to the acquisition included within the unaudited pro forma financial information. The following table presents the supplemental cash flow information: Year ended December 31, 2025 Cash outflow, net of cash acquired Cash consideration 51,060 Less: cash balances acquired ( 2,976 ) Net cash outflow related to investing activities 48,084 Measurement period adjustments The Company obtained new information about amounts and the related facts and circumstances that existed at the Acquisition Date that should have been recognized as of the Acquisition Date. During the second quarter of 2025, adjustment to recognize additional accrued liabilities and rights to energy credits of $ 1,500 and $ 3,104 , respectively, were recognized with a corresponding net decrease of $ 1,602 in property, plant and equipment. During the third quarter of 2025, an adjustment to recognize WTCs that existed as of the Acquisition Date of $ 5,885 was recognized with a corresponding decrease in property, plant and equipment. In addition, other adjustments of $ 1,462 were recognized with a corresponding increase in property, plant and equipment. The measurement period adjustments are reflected in the final purchase price allocation table above. F- 28 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 4: ACQUISITION OF ASSETS Acquisition of leased property and energy agreements On October 24, 2025, the Company acquired the previously leased site in Sharon, Pennsylvania, United States (“Sharon Property”), the energy rights and energy construction agreements for $ 5,000 and 8,500,000 common shares. The lease agreement for the site was terminated. Refer to Note 18 for details regarding the lease. The acquisition of the Sharon Property does not meet the definition of a business combination as its primary assets consist mainly of land, building and contractual energy rights for up to 120 MW of power capacity and electrical construction contracts. Therefore, the transaction has been recorded as an acquisition of a group of assets. The purchase price is as follows: Purchase price Cash consideration 5,000 Value of 8,500,000 common shares transferred at closing 33,745 Derecognition of lease liability ( 9,014 ) Right-of-use asset surrendered 10,055 Transaction costs 626 40,412 Assets acquired Land 39,710 Building 702 40,412 F- 29 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 5: RIGHTS TO RENEWABLE ENERGY CREDITS AND WASTE TAX CREDITS As of December 31, 2025 Rights to renewable energy credits Rights to waste tax credits Total Balance as of January 1, — — — Additions related to business combination 3,104 5,885 8,989 Additions during the period 17,076 5,687 22,763 Less: sale of credits to third parties ( 13,274 ) — ( 13,274 ) Balance as of period end 6,906 11,572 18,478 NOTE 6: ACCOUNTS RECEIVABLE, NET The balance of the allowance for credit losses on accounts receivable is as follows: As of December 31, As of December 31, As of December 31, 2025 2024 2023 Balance as of January 1, ( 63 ) ( 51 ) ( 37 ) Current period allowance — ( 17 ) ( 28 ) Write offs charged against allowance — — 16 Recoveries collected — — ( 1 ) Allowance for credit losses ( 3 ) 5 ( 1 ) Balance as of December 31, ( 66 ) ( 63 ) ( 51 ) NOTE 7: OTHER ASSETS As of December 31, As of December 31, 2025 2024 Sales taxes receivable 1,065 2,681 Income taxes receivable 355 424 Other receivables 1,405 1,177 2,825 4,282 F- 30 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 8: DIGITAL ASSETS Bitcoin transactions and the corresponding values for the years ended December 31, 2025 and 2024 were as follows: Year ended December 31, 2025 2024 Quantity Value ($) Quantity Value ($) Balance of digital assets including restricted digital assets as of January 1, 1,285 120,124 804 33,971 Bitcoin earned* 2,008 202,691 1,992 126,920 Bitcoin earned from discontinued operations 579 58,713 922 59,607 Hosting revenue received in Bitcoin 46 1,527 — — Bitcoin received in exchange for goods 10 1,128 — — Change in Bitcoin earned, not received ( 6 ) ( 512 ) — — Bitcoin exchanged for cash ( 1,765 ) ( 171,091 ) ( 2,419 ) ( 152,135 ) Bitcoin exchanged for goods and services ( 97 ) ( 9,992 ) ( 14 ) ( 1,463 ) Realized gain on disposition of digital assets — 28,219 — 27,209 Change in fair value of digital assets — ( 50,522 ) — 26,015 Balance of digital assets including restricted digital assets as of December 31,* 2,060 180,285 1,285 120,124 Less: Restricted digital assets as of December 31,** ( 64 ) ( 5,559 ) ( 351 ) ( 32,826 ) Balance of digital assets excluding restricted digital assets as of December 31, 1,996 174,726 934 87,298 * Management estimates the fair value of Bitcoin earned on a daily basis as the quantity of cryptocurrency received multiplied by the price quoted on Coinbase Prime on the day it was received. Management considers the prices quoted on Coinbase Prime to be a Level 1 input under ASC 820, Fair Value Measurement. ** As of December 31, 2025, Restricted digital assets comprise Bitcoin held by a third party in connection with Bitcoin selling contracts. As of December 31, 2024, Restricted digital assets comprise Bitcoin payments (“Bitcoin Pledged”) to a third party as deposits for Miners. As the Company retains the contractual right to redeem the Bitcoin Pledged, the third party does not obtain control of the underlying asset and the arrangement does not meet the definition of a sale. Refer to Note 10, 14 and 22 for additional details. NOTE 9: INVENTORIES As of December 31, As of December 31, 2025 2024 Waste, limestone and fuel oil* 5,805 — Electronic and networking components 2,871 1,137 8,676 1,137 * On the Acquisition Date, inventories from the Stronghold business combination amounted to $ 3,269 . Refer to Note 3 for more details. F- 31 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 10: DERIVATIVE ASSETS AND LIABILITIES Bitcoin option and selling contracts The Company purchased Bitcoin option contracts that provide it with the right, but not the obligation, to sell digital assets at a fixed price. The Company also entered into contracts and earned premiums by agreeing to sell Bitcoin if the Bitcoin price reached specific targets. Bitcoin redemption options and redemption obligations Starting in November 2024, the Company entered into purchase orders of Miners with a supplier which allows the Company to pay for the Miners in cash, Bitcoin or a combination of both. In the event that the Company elects to pay using Bitcoin (Bitcoin Pledged, as defined in Note 8) either in full or partially, the Company has the option to redeem the Bitcoin Pledged at the price originally pledged in four quarterly installments (“Bitcoin Installments”) within 12 months after the redemption period starts. The redemption period starts when the Miners are shipped. If the Company elects not to redeem one of the Bitcoin Installments, the Company forfeits the right to redeem the remaining Bitcoin Installments. The right to redeem the Bitcoin (“Bitcoin Redemption Option”) meets the definition of an embedded derivative. A redemption obligation was recognized for the remaining Bitcoin Redemption Options for which Miners have been shipped, reflecting the Company’s obligation to either redeem the Bitcoin Pledged for cash or use the Bitcoin Pledged for the purchase of the Miners. As of December 31, 2025, the redemption obligation was nil since the Company exercised its option to redeem 393 Bitcoin for $ 37,097 and forfeited its remaining options to redeem 41 Bitcoin totaling $ 4,352 during the year ended December 31, 2025. No redemption obligation was recognized as of December 31, 2024, as the Miners ordered, for which the deposit payment in Bitcoin was made, had not yet been shipped. Capped call transactions In October 2025, in connection with the Convertible Notes, the Company entered into capped call transactions, with a cap price of $ 11.88 per share (representing a 125 % premium over the reference price). The capped call transactions do not meet the scope exception from derivative accounting, as they fail the equity classification requirements as the Company cannot settle these transactions by means other than cash and are therefore treated as a derivative asset, which are measured at fair value. F- 32 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 10: DERIVATIVE ASSETS AND LIABILITIES (Continued) The following table summarizes the derivatives and reconciles the fair value measurement, which are classified within Level 2 of the fair value hierarchy: As of December 31, As of December 31, 2025 2024 Capped call transactions Bitcoin redemption options Bitcoin option and selling contracts Bitcoin redemption options Bitcoin option and selling contracts Derivative Assets Derivative Assets Derivative Assets Derivative Liabilities Derivative Assets Derivative Assets Derivative Liabilities Balance as of January 1, — 3,418 — ( 128 ) — 1,281 — Initial recognition 69,090 1,072 — — 1,349 — — Purchases — — 89,478 64,965 — 13,610 351 Settlement — — ( 73,659 ) ( 99,256 ) — ( 30,762 ) ( 358 ) Remeasurement recognized in statement of operations ( 63,890 ) ( 4,490 ) ( 13,532 ) 31,497 2,069 15,871 ( 121 ) Balance as of period end 5,200 — 2,287 ( 2,922 ) 3,418 — ( 128 ) Total derivative assets 2,287 3,418 Total long-term derivative assets 5,200 — Total derivative liabilities ( 2,922 ) ( 128 ) The following gain (loss) on derivatives is recognized in the consolidated statements of operations: Year ended December 31, 2025 2024 2023 Gain (loss) on Bitcoin options and selling contracts Unrealized change in fair value of outstanding contracts 1,323 ( 179 ) 409 Realized gain (loss) on settled contracts 16,642 15,929 ( 361 ) 17,965 15,750 48 Gain (loss) on Bitcoin redemption options Unrealized change in fair value ( 2,069 ) 2,069 — Realized loss on settled options ( 2,421 ) — — ( 4,490 ) 2,069 — Loss on Capped call transactions Unrealized change in fair value ( 63,890 ) — — (Loss) gain on derivative assets and liabilities ( 50,415 ) 17,819 48 Refer to Note 22 for more details of derivative instruments. F- 33 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 11: ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS As of December 31, 2025 and 2024, the Company determined it had surplus Miners and Mining electrical equipment that met the criteria as “assets held for sale” under ASC 360-10-45 as of the respective balance sheet dates. These assets were measured at the lower of their carrying amount and fair value less costs to sell at the time of the classification. These surplus assets are not determined to be discontinued operations as their planned sale did not represent a strategic shift on the Company’s operations and financial results. The fair value of these assets were determined using the market approach, which is based on recent sales prices for similar Miners and equipment. Such fair value measurements are a non-recurring Level 3 measurement under the fair value hierarchy. The key assumption used by Management to determine fair value is the most recent amount contracted with a third party for a comparable Miner or equipment sold. In addition to surplus Miners and equipment, the Company classified assets in Paraguay which met the criteria as “assets held for sale” during the year ended December 31, 2025, which have been classified as discontinued operations in the consolidated financial statements, as detailed in this note. The Paraguay disposal group included the Paso Pe Bitcoin data center which met the “held for sale” criteria during the third quarter of 2025 and the Yguazu Bitcoin data center which met the criteria and was sold in the first quarter of 2025. The comparative balance sheet amounts as at December 31, 2024 for the Paso Pe and the Yguazu Bitcoin data centers are classified as held for sale. The following table provides the components of the assets or disposal groups that either met the criteria of “assets held for sale” as of December 31, 2025 or December 31, 2024. Certain of the prior period comparative balance sheet amounts of December 31, 2024 are reclassified to conform to the current-period presentation as of December 31, 2025. The separate presentation of certain assets as “non-current” as of December 31, 2024 is to distinguish when certain assets are classified as “held for sale” for comparative presentation purposes only. As of December 31, As of December 31, 2025 2024 Miners 166 4,832 Mining electrical components 3,198 1,117 Assets of disposal group classified as held for sale: Other assets 1,404 3,428 Inventories - electronic and networking components 426 42 Property, plant and equipment 17,168 105,297 Finance lease right-of-use assets, net — 306 Long-term deposits and equipment prepayments 1,145 11,795 Refundable deposits - security deposits for energy 5,157 7,740 28,664 134,557 Current portion of assets “held for sale” ( 28,664 ) ( 9,419 ) Non-current portion of assets “held for sale” — 125,138 F- 34 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 11: ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS (Continued) Discontinued operations In 2025, the Company began a significant transformation of its corporate strategy, exiting its Latin American Bitcoin Mining operations in Paraguay and Argentina to fully concentrate on the U.S. and Canadian HPC infrastructure markets. As a result of these strategic decisions, the Company classified certain of its Latin American asset groups as “held for sale” and its operations as discontinued operations. As discussed below, the Argentina asset group was abandoned, and therefore its assets were not classified as “held for sale”. The combined results of the Company’s Argentina and Paraguay operations for the years ended December 31, 2025, 2024 and 2023 are presented below: Year ended December 31, 2025 2024 2023 Argentina Paraguay Total Argentina Paraguay Total Argentina Paraguay Total Revenues* 10,612 48,101 58,713 33,647 25,960 59,607 19,050 6,916 25,966 Cost of revenues ( 14,331 ) ( 43,337 ) ( 57,668 ) ( 41,014 ) ( 32,508 ) ( 73,522 ) ( 18,336 ) ( 7,380 ) ( 25,716 ) Gross (loss) profit ( 3,719 ) 4,764 1,045 ( 7,367 ) ( 6,548 ) ( 13,915 ) 714 ( 464 ) 250 Operating expenses General and administrative expenses ( 5,902 ) ( 3,953 ) ( 9,855 ) ( 6,465 ) ( 1,723 ) ( 8,188 ) ( 5,758 ) ( 95 ) ( 5,853 ) Gain (loss) on disposition of property, plant and equipment and deposits 1,728 116 1,844 ( 507 ) 971 464 945 ( 488 ) 457 Impairment of long-lived assets ( 35,294 ) ( 38,107 ) ( 73,401 ) — — — ( 6,982 ) — ( 6,982 ) Operating (loss) gain ( 43,187 ) ( 37,180 ) ( 80,367 ) ( 14,339 ) ( 7,300 ) ( 21,639 ) ( 11,081 ) ( 1,047 ) ( 12,128 ) Interest expense — — — — ( 51 ) ( 51 ) ( 7 ) ( 60 ) ( 67 ) Other (expense) income ( 525 ) 369 ( 156 ) 1,835 ( 1,683 ) 152 ( 991 ) ( 6 ) ( 997 ) Total other (expense) income ( 525 ) 369 ( 156 ) 1,835 ( 1,734 ) 101 ( 998 ) ( 66 ) ( 1,064 ) Loss before income taxes ( 43,712 ) ( 36,811 ) ( 80,523 ) ( 12,504 ) ( 9,034 ) ( 21,538 ) ( 12,079 ) ( 1,113 ) ( 13,192 ) Income tax (expense) recovery ( 1 ) ( 731 ) ( 732 ) 751 ( 219 ) 532 ( 2,347 ) ( 39 ) ( 2,386 ) Loss after income tax ( 43,713 ) ( 37,542 ) ( 81,255 ) ( 11,753 ) ( 9,253 ) ( 21,006 ) ( 14,426 ) ( 1,152 ) ( 15,578 ) Gain on disposition of Yguazu Bitcoin data center — 5,225 5,225 — — — — — — Loss from discontinued operations ( 43,713 ) ( 32,317 ) ( 76,030 ) ( 11,753 ) ( 9,253 ) ( 21,006 ) ( 14,426 ) ( 1,152 ) ( 15,578 ) * Revenues are presented based on the geographical contribution of computational power used for hashing calculations (measured by hashrate) or sales to external customers. F- 35 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 11: ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS (Continued) Discontinued operations (Continued) The net cash flows incurred by Argentina’s and Paraguay’s operations are, as follows: Year ended December 31, 2025 2024 2023 Net change in cash related to operating activities ( 12,773 ) ( 25,188 ) 13,522 Net change in cash related to investing activities 26,194 27,615 ( 14,349 ) Net change in cash related to financing activities ( 274 ) ( 296 ) ( 287 ) Net change in cash generated by the discontinued operations 13,147 2,131 ( 1,114 ) i. Argentina’s operations as discontinued operations During the second quarter of 2025, the Company’s energy supplier halted the supply of electricity to the Company’s Rio Cuarto, Argentina Bitcoin data center. Following this event, on August 11, 2025, the Company determined that it would discontinue and abandon its operations in Rio Cuarto, Argentina. The Company negotiated to eliminate its asset retirement obligation and reduced the reserved power to a minimum. As of September 30, 2025, the Company’s Argentina operations were abandoned and classified as a discontinued operation. As these operations represent an asset group that was abandoned, it is not classified as “held for sale” of a disposal group. Notwithstanding, commencing in the second quarter of 2025, the Company also identified certain electrical equipment and BVVE that could be sold separately and not abandoned. Impairment on Argentina asset group in the first quarter of 2025 During the first quarter of 2025, due to indicators of impairment that included the decline of the Company’s market capitalization and Bitcoin price, the Company performed recoverability tests for operating Bitcoin data centers in Canada, United States, Paraguay and Argentina. The Company also experienced an increase in gas prices which affected the Company’s cost of energy in Argentina. In performing a recoverability test, the Company calculated the sum of the estimated undiscounted future cash flows from continued use and eventual disposition for the Argentina asset group, and determined it was lower than its carrying amount, therefore the Argentina asset group was not recoverable, and an impairment loss in the amount of $ 17,504 was recognized to write down the carrying amount of the asset group to its fair value. To measure the impairment loss, fair value was determined using an income approach under ASC 820 based on a discounted cash flow model incorporating management’s estimates of future cash flows, expected Bitcoin prices, projected operating expenses, and a market-based discount rate. Due to the use of significant unobservable inputs, the fair value measurement was classified within Level 3 of the fair value hierarchy. F- 36 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 11: ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS (Continued) Discontinued operations (Continued) i. Argentina’s operations as discontinued operations (Continued) Impairment in Argentina asset group in the second quarter of 2025 Management considered the suspension of the cryptocurrency Mining activities in Argentina as an indicator of impairment and performed a recoverability test for its operating Bitcoin data center in Argentina. The sum of the estimated undiscounted future cash flows for the Argentina asset group was determined to be lower than its carrying amount, therefore the Argentina asset group is not recoverable and an impairment loss in the amount of $ 14,872 was recognized to write down the carrying amount of the asset group to its fair value less cost to sell. As the Argentina operations represent an asset group that was abandoned, it is not classified as held for sale of a disposal group. Notwithstanding, commencing in the second quarter of 2025, the Company also identified certain electrical equipment and BVVE that could be sold separately and not abandoned. As of December 31, 2025, the Company had $ 2,703 assets held for sale and were measured at the lower of their carrying amount and fair value less costs to sell. Fair value was determined using an income approach under ASC 820 based on a discounted cash flow model as previously described above. Impairment of assets during the third quarter of 2025 Additional impairment loss of $ 1,432 was recognized to write down the carrying amount of certain assets to their fair value less cost to sell in the third quarter of 2025. Impairment on short-term prepaid deposits during the second quarter of 2023 In 2022, the Company entered into agreements with external brokers to be able to proceed with the importation of its Miners into Argentina. Under the agreements, the Company was required to make advance deposits to the external brokers, which were classified as short-term prepaid deposits on the consolidated balance sheets. During the second quarter of 2023, the Company decided to terminate the importation agreements with the external brokers as of June 30, 2023. The Company assumed the cost of terminating the importation agreements with external brokers as part of a revised importation strategy and, as a result, impaired $ 6,982 of short-term prepaid deposits. This impairment is presented in the consolidated statements of operations under loss from discontinued operations. F- 37 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 11: ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS (Continued) Discontinued operations (Continued) ii . Paraguay’s operations as discontinued operations and assets held for sale During the first quarter of 2025, the Company finalized the sale of its Yguazu Bitcoin data center in Paraguay. Subsequently, during the third quarter of 2025, the Company determined that the Paso Pe Bitcoin data center met the criteria to be classified as “held for sale”, and that all operations in Paraguay should be classified as discontinued operations as the Company makes a strategic shift towards HPC data center projects in North America. For comparability, as at December 31, 2024, the Company reclassified the assets related to Paso Pe and Yguazu Bitcoin data centers in Paraguay as assets “held for sale”. Sale of the Yguazu Bitcoin Data Center On March 17, 2025, the Company completed the sale of its 200 MW Bitcoin data center under development in Yguazu, Paraguay to HIVE Digital Technologies Ltd. (“HIVE”) pursuant to a January 24, 2025 share purchase agreement. The transaction involved the sale of the Company’s 100 % ownership stake in the Yguazu Bitcoin data center and resulted in the derecognition of the subsidiary’s assets and liabilities. The transaction details are as follows: As of March 17 2025 Consideration Advance received in January 2025 upon signing the LOI 20,000 Cash received upon closing 12,038 Receivable over 6 equal monthly payments following the closing date* 31,000 Other costs assumed by HIVE 222 Total consideration received 63,260 Net assets transferred Current assets 2,590 Property, plant and equipment 34,006 Intangible asset 309 Long-term deposits and equipment prepayments 18,321 Security deposit for energy 2,809 Total net assets transferred 58,035 Gain on disposal of subsidiary 5,225 * As of December 31, 2025, the $ 31,000 interest-free receivable was fully collected. Impairment of Paraguay asset group in the third quarter of 2025 During the third quarter of 2025, upon classifying the assets of its Paso Pe operations as “held for sale”, the Company assessed their value at fair value less costs to sell which resulted in an impairment loss of $ 26,962 on its Paraguay operations. Impairment of Paraguay asset group in the fourth quarter of 2025 During the fourth quarter of 2025, the Company reassessed the fair value less costs to sell of the Paso Pe operations, which were classified as “held for sale” and reported as discontinued operations. Based on this reassessment, the Company recognized a further impairment loss of $ 11,145 related to the Paraguay asset group, reflecting the write-down to fair value less costs to sell as of December 31, 2025. This impairment loss is presented within loss from discontinued operations in the consolidated statements of operations. Subsequent to December 31, 2025, in January 2026, a definitive purchase agreement was signed for the sale of the Paso Pe operations for total consideration of approximately $ 25,300 , which is expected to close in the second quarter of 2026. In February 2026, the definitive purchase agreement was amended to extend the exclusivity period from 60 days to 105 days. As of the date these financial statements were issued, the sale transaction had not been completed. F- 38 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 12: IMPAIRMENT FROM CONTINUING OPERATIONS The following table summarizes the impairment loss in the consolidated statements of operations: Year ended December 31, 2025 2024 2023 Impairment of assets held for sale* $ 9,893 $ 3,628 $ 504 Short-term prepaid deposits — — — Property, plant and equipment 18,549 — 5,100 Impairment from continuing operations 28,442 3,628 5,604 * Upon classification as “held for sale”, the assets were measured at the lower of carrying amount or fair value less cost to sell. 2025 impairment loss from continuing operations During the year ended December 31, 2025, as a result of the significant decrease in the market price of a long-lived asset (Miners), and significant adverse change in the extent or manner in which certain asset groups are being used, the Company performed evaluations of the recoverable amount of the assets for the asset groups at the Company’s Bitcoin data centers in Québec, Washington state, and Sharon, Pennsylvania separately. Following the Company’s market approach analysis to determine the fair value of the asset groups, the Company recognized an impairment loss of $ 16,690 related to the Miners and buildings of the Bitcoin data center in Sharon, Pennsylvania. The total impairment loss is included in “Impairment of long-lived assets and deposits” with the loss from continuing operations. In addition, an impairment charge of $ 1,859 was recognized related to the obsolescence of electrical components. During the year ended December 31, 2025, the Company recognized $ 9,893 of impairment on Miners “held for sale” as a result of the reassessment of the fair value less costs to sell. 2024 impairment loss During the year ended December 31, 2024, the Company recognized $ 3,628 of impairment on Miners “held for sale” as a result of the reassessment of the fair value less costs to sell. 2023 impairment loss Impairment on mineral assets during the second quarter of 2023 The Suni mineral asset was acquired in connection with the reverse acquisition of Bitfarms Ltd (Israel) on April 12, 2018, and its value at the time was estimated at $ 9,000 based on an independent appraiser’s valuation. Suni is an iron ore deposit located in Canada that was held by the acquiree. Since its acquisition, following the presence of impairment indicators, the Suni mineral asset was written down to a carrying amount of $ 3,250 as of December 31, 2022. During the second quarter of 2023, the planned disposal of the Suni mineral asset resulted in the recognition of an impairment charge of $ 3,250 , reducing the carrying amount to nil . This impairment charge is presented in the consolidated statements of operation under Impairment of long-lived assets and deposits. On July 27, 2023, the Company sold the Suni mineral asset for a nominal amount to a third party. Impairment on electrical components during the fourth quarter of 2023 During the third quarter of 2023, the Company de-energized its 2 MW immersion cooling pilot project in Washington state as the equipment did not perform to the Company’s expectations of performance and costs. With the de-energization of the immersion cooling pilot project, the 2 MW of hydroelectricity remains available to the Company to use in the future. During the fourth quarter of 2023, in connection with the planned disposal of the de-energized immersion cooling electrical components, Management tested those assets for impairment, resulting in an impairment charge of $ 1,882 before being reclassified to assets “held for sale”. This impairment charge is presented within loss from continuing operations under Impairment of long-lived assets and deposits. F- 39 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 13: PROPERTY, PLANT AND EQUIPMENT, NET As of December 31, 2025 and December 31, 2024, property, plant and equipment (“PPE”) consisted of the following: As of December 31, As of December 31, 2025 2024 BVVE 354,011 335,349 Land and buildings 63,888 5,039 Power plants 102,133 — Machinery and Equipment 11,989 — Leasehold improvements 14,538 59,449 Vehicles 1,544 1,754 548,103 401,591 Accumulated Depreciation ( 189,770 ) ( 164,336 ) Carrying amount 358,333 237,255 Assets not subject to depreciation As of December 31, 2025, property, plant and equipment that are not yet placed into service amounted t o $ 12,169 and are not yet subject to depreciation. March 2025 Miner exchange In March 2025, an exchange agreement (“March 2025 Swap Order”) was entered into to exchange Miners. The Company returned 4,160 Bitmain T21 Miners and purchased 3,660 Bitmain S21+ Miners. In consideration for the returned products, the Company received a credit of $ 9,484 which was applied against the purchase price of $ 11,858 . In March 2025, the Company paid the net $ 2,374 in Bitcoin which can be redeemed on a quarterly basis (i.e., 29 Bitcoin Pledged). Refer to Note 10 for more details. As of December 31, 2025, all Miners on the March 2025 Swap Order were received. Changes in the useful life, residual value and depreciation method During the fourth quarter of 2025, the Company initiated a strategic transition from Bitcoin Mining operations to HPC/AI. This change in operations caused management to evaluate estimated useful lives of certain long-lived assets with a carrying value of $ 78,340 . This constitutes a change in accounting estimate under ASC 250-10-45-17. Management revised the useful lives and residual value of affected assets to align with the decommissioning dates, which resulted in accelerated depreciation to ensure the carrying value is reduced to residual value by the end of each asset’s service period. This change in estimate was applied prospectively effective November 1, 2025. As a result, the Company recognized additional depreciation expense of $ 1,282 for the year ended December 31, 2025. The impact on basic and diluted loss per share was non-significant. In addition, during the year end December 31, 2024, as part of the Company’s annual review of its estimates used to account for property, plant and equipment, the Company reassessed the depreciation method, the useful life and the residual values of all BVVE and accordingly, revised their specific useful life, residual value and depreciation methods. The Company modified the useful life of the Miners and Mining-related equipment from 5 to 3 years and the depreciation method from sum-of-years to the straight-line method as this method better reflected the pattern of consumption. The residual values of the Miners and Mining-related equipment remained nil . These modifications represent changes in accounting estimates and were applied prospectively, starting December 1, 2024, resulting in an additional depreciation expense of $ 2,061 during the year ended December 31, 2024. These changes in estimates result in a non-significant increase in basic and diluted loss per share. F- 40 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 13: PROPERTY, PLANT AND EQUIPMENT, NET Applicable to specific Miners - Changes in the useful life, residual value and depreciation method During the year ended December 31, 2024, the Company revised its planned use of certain older Miners as they are expected to be replaced by newer equipment. The older Miners continued to be operated until replacement. As a result, the Company revised its accounting estimates for these assets, including reducing their remaining useful lives from five years to two years , updating estimated residual values to reflect expected proceeds upon disposition, and changing the depreciation method to straight-line to better reflect the pattern of consumption of economic benefits. These changes were accounted for prospectively as a change in estimate and resulted in higher depreciation expense of $ 58,163 for the year ended December 31, 2024. The Company determined that the carrying amounts of the older Miners remained recoverable and no impairment was recorded. NOTE 14: LONG-TERM DEPOSITS, EQUIPMENT PREPAYMENTS AND OTHER As of December 31, As of December 31, 2025 2024 Miner purchase order deposits — 34,791 Other BVVE and electrical components 18 2,738 Cash deposits on construction work and materials* 20,146 2,530 Equipment and construction prepayments 20,164 40,059 Insurance prepaids, security deposits for energy and rent 9,199 4,513 Deferred transaction fees - undrawn tranche of the credit facility 1,670 — 31,033 44,572 * Deposits for construction work and materials mainly related to the HPC/AI expansions. Following the sale of the Yguazu Bitcoin data center, the Company sold $ 18,321 of long-term deposits and equipment prepayments to HIVE. Refer to Note 11 for more details. March 2024 Miner purchase order deposits During the first quarter of 2024, the Company ordered 19,369 Bitmain T21 Miners, 3,975 Bitmain S21 Miners and 762 Bitmain S21 Hydro Miners (collectively defined as the “March 2024 Purchase Order”) for $ 51,285 , $ 13,608 and $ 4,338 , respectively, with deliveries scheduled from April 2024 to November 2024. In November 2024, the Company amended the March 2024 Purchase Order and upgraded 12,853 Bitmain T21 Miners to 12,853 S21 Pro Miners for $ 22,654 . As of December 31, 2025, all Miners on the March 2024 Purchase Order were received and the equipment prepayment amount was nil . F- 41 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 15: REFUNDABLE DEPOSITS As of December 31, As of December 31, 2025 2024 Refundable Hosting Deposits — 14,216 Other 350 — 350 14,216 In September 2024 and in October 2024, the Company entered into two Miner hosting agreements (the “Panther Creek Hosting Agreement” and the “Scrubgrass Hosting Agreement”) with Stronghold which commenced on October 1, 2024 and November 1, 2024, respectively. In connection with the execution of these two Miner Hosting Agreements, the Company made two deposits of $ 7,800 each with Stronghold (the “Panther Creek Refundable Deposit” and “Scrubgrass Refundable Deposit”, collectively, the “Refundable Hosting Deposits”). The Refundable Hosting Deposits bear an annual interest rate at Secured Overnight Financing Rate (“SOFR”) + 1 % (the “Annual Interest Rate”). The Annual Interest Rate is lower than the rate used in determining the fair value, resulting in the Panther Creek Refundable Deposit and the Scrubgrass Refundable Deposit being recognized at a fair value of $ 7,125 and $ 7,542 , respectively, upon initial recognition. Subsequently, the Refundable Deposits are recognized at amortized cost. The Refundable Hosting Deposits were initially planned to be repaid in full to the Company within one business day from the end of the initial term expiring on December 31, 2025. Following the acquisition of Stronghold on March 14, 2025, the Panther Creek Hosting Agreement and Scrubgrass Hosting Agreement were terminated, settling the Refundable Hosting Deposits. Refer to Note 22 for more details on the financial instrument details. NOTE 16: ACCOUNTS PAYABLE AND ACCRUED EXPENSES As of December 31, As of December 31, 2025 2024 Accounts payable 16,271 8,231 Accrued expenses 18,703 13,825 Government remittances payable 11,469 3,736 46,443 25,792 F- 42 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 17: LONG-TERM DEBT The Company’s long-term debt is as follows: As of December 31, As of December 31, 2025 2024 Building financing 1,704 1,576 Equipment financing 1,642 — Credit Facility 104,857 — Unamortized transaction costs - Credit Facility ( 10,049 ) — Convertible Notes 589,565 — Unamortized debt discount - Convertible Notes ( 18,250 ) Total long-term debt, net of transaction cost and debt discount 669,469 1,576 Current portion of long-term debt ( 97,022 ) ( 146 ) Non-current portion of long-term debt 572,447 1,430 Movement in long-term debt is as follows: As of December 31, As of December 31, 2025 2024 Balance as of January 1, 1,576 4,022 Issuance of long-term debt 689,306 1,695 Addition from business combination 880 — Repayments ( 1,930 ) ( 4,435 ) Interest on long-term debt 7,841 294 Transaction costs and debt discount ( 31,447 ) — Amortization of transaction costs and debt discount 3,148 — Foreign exchange 95 — Balance as of period end 669,469 1,576 Building financing In March 2024, the Company sold its Garlock building in Sherbrooke, Québec, Canada for $ 1,695 and immediately leased it back for 10 years. Since the lease agreement included a substantive repurchase option of the building in the form of a call option, the Company has not transferred the control of the asset to the buyer, and the transaction does not qualify as a sale. Accordingly, it is accounted for as a financing arrangement for the proceeds received from the buyer, and the building continues to be recognized as property, plant and equipment of the Company. F- 43 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 17: LONG-TERM DEBT (Continued) Credit Facility In April 2025, the Company signed a credit facility for up to $ 300,000 (the “Credit Facility”) with Macquarie. Initial Tranche An initial $ 50,000 was drawn (the ‘‘Initial Tranche’’), bearing interest at 8 % per annum, with monthly payments and a term of two years . Interest for the first three months was paid in kind and added to the loan. The payments shall be solely interest until the Initial Tranche maturity date, April 1, 2027, at which time the principal debt of $ 50,000 and interest paid in kind will be payable in full. The effective interest rate of the Credit Facility as of December 31, 2025 was 17.9 %. The agreement specified a minimum base return of 25 % and can be reduced to 9 % depending on when principal payments are made (i.e., before end of term). In connection with the Initial Tranche, Macquarie received 5,330,946 equity warrants convertible for common shares of the Company with an initial fair value of $ 2,900 . Refer to Note 20 for more details. The $ 50,000 proceeds from the Initial Tranche were allocated to the equity warrants and debt based on relative fair value. Therefore, a discount on debt of $ 2,711 is deducted from the carrying amount of the debt and is amortized over the term of the Initial Tranche. Second Tranche An additional $ 250,000 (“Second Tranche) was made available to the Company as it achieves specific development milestones at the Panther Creek, Pennsylvania, United States location and as it contributes $ 50,000 in kind or in cash to Macquarie as collateral. Conversion of the Credit Facility In October 2025, the Company converted the entirety of the loan into a $ 300,000 project debt facility for the development of the Panther Creek property and secured at the project level with a parent company guarantee. The Initial Tranche was rolled into the project debt facility and the facility is subject to new terms and restrictions from those of the Initial Tranche. The Company drew an additional $ 50,000 from the converted facility, for a total of $ 100,000 drawn and issued an additional 2,197,127 equity warrants convertible for common shares of the Company with an initial fair value of $ 7,093 . Refer to Note 20 for more details. The $ 50,000 proceeds from the Second Tranche were allocated to the equity warrants and debt based on relative fair values. Therefore, a discount on debt of $ 5,899 is deducted from the carrying amount of the debt and is amortized over the term of the Second tranche. The amendment also included a demand feature whereby the lender could demand repayment for a 60 -day period beginning on February 1, 2026. The facility has therefore been classified as a current liability. F- 44 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 17: LONG-TERM DEBT (Continued) Credit Facility (Continued) Transaction costs Transaction costs of $ 3,900 relating to agent fees and legal fees were capitalized and deducted from the carrying amount of the debt. Covenants and restrictions The Credit Facility includes various financial and non-financial covenants for the Company and its subsidiaries including restrictions on dispositions, dividends, the incurrence of debt and liens, material changes in the nature of the Company’s business activities, related party transactions and investments. The Company is also required to maintain a restricted cash balance of at least $ 50,000 in a designated account. As of January 31, 2026, the most recently completed calendar month prior to the extinguishment of the debt, the Company was in compliance with the covenants of its Credit Facility. During February 2026, the Credit Facility was fully repaid and the cash balance of $ 57,500 is no longer restricted. Refer to Note 28 for more details. Convertible Senior Notes In October 2025, the Company issued $ 588,000 aggregate principal amount of convertible senior notes (the “Convertible Notes”), which included the full exercise of the purchasers’ option to purchase up to an additional $ 88,000 principal amount of Convertible Notes. The Convertible Notes are unsecured, bear interest at 1.375 % per annum, payable semi-annually and mature on January 15, 2031 , unless earlier converted, redeemed or repurchased. The Company purchased capped calls to reduce the potential dilution to its common stock (or reduce the Company’s cash payment obligation if the Convertible Notes are settled in cash) if the trading price of the Company’s common stock price exceeds the conversion price of the Convertible Notes at the time of conversion. The capped calls are a legally separate derivative instrument which is accounted for separately from the Convertible Notes. Refer to Notes 10 and 22 for more details. Prior to October 15, 2030, the Convertible Notes may be converted only upon the occurrence of certain events, including: (i) during specified periods when the market price of the Company’s common shares exceeds 130 % of the applicable conversion price, (ii) during specified periods when the trading price of the Convertible Notes is less than 98 % of the product of the last reported sale price of the Company’s common shares and the applicable conversion rate, (iii) following a notice of redemption by the Company, or (iv) upon the occurrence of specified corporate events. On or after October 15, 2030 and until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Convertible Notes at any time, regardless of these conditions. Upon conversion, the Company may settle the obligation in cash, common shares, or a combination of both, at its discretion. The initial conversion rate is 145.6876 common shares per $ 1 principal amount, which is equivalent to an initial conversion price of approximately $ 6.86 per share, representing a 30 % premium over the $ 5.28 reference price. The $ 5.28 reference price is the last reported sale price of the Company’s common share on Nasdaq on October 16, 2025. The conversion rate is subject to customary anti-dilution adjustments and, in certain circumstances, may be increased for conversions in connection with a make-whole fundamental change or following a notice of redemption. The Convertible Notes are not redeemable prior to October 20, 2028, except upon the occurrence of certain changes in laws governing Canadian withholding taxes. On or after October 20, 2028, the Company may redeem the Convertible Notes, in whole or in part, for cash if the last reported sale price of its common shares has been at least 130 % of the conversion price for at least 20 trading days, whether or not consecutive, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption. In the event of a fundamental change, holders may require the Company to repurchase their Convertible Notes for cash at 100 % of the principal amount thereof, plus accrued and unpaid interest, if any, up to, but excluding, the repurchase date. As at December 31, 2025, none of the conditions permitting the holders of the Convertible Notes to convert their notes early or to require the Company to repurchase the Convertible Notes for cash have been met. Accordingly, the Convertible Notes are classified as long-term debt. Transaction costs of $ 18,937 relating to agent fees and legal fees were capitalized and deducted from the carrying amount of the Convertible Notes. Net proceeds from the offering were $ 569,063 . F- 45 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 18: LEASES The components of lease expense are as follows: Year ended December 31, 2025 2024 2023 Finance lease expense Amortization of ROU assets 829 1,170 1,381 Interest on lease obligations 93 88 217 Operating lease expense 4,202 2,925 2,162 Amortization of initial direct costs 278 139 — 5,402 4,322 3,760 Based on the nature of the ROU asset, amortization of finance ROU assets, operating lease expense, short-term lease expense, and variable lease expense are recognized in either cost of revenues or general and administrative expenses and interest on finance lease obligations is recognized in other income (expense) on the consolidated statement of operations. Refer to Note 25 for more details. Other information related to leases is as follows: As of December 31, As of December 31, 2025 2024 ROU assets Operating lease ROU assets 11,103 21,299 Finance lease ROU assets 2,127 2,281 Total ROU assets 13,230 23,580 Current portion of lease liabilities Operating lease liabilities 1,490 1,959 Finance lease liabilities 235 130 Long-term portion of lease liabilities Operating lease liabilities 10,606 17,440 Finance lease liabilities 1,978 2,310 Total lease liabilities 14,309 21,839 Weighted-average remaining lease term (in years) Operating lease 6 years 7 years Finance lease 5 years 5 years Weighted-average discount rate Operating lease 9 % 9 % Finance lease 7 % 8 % F- 46 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 18: LEASES (Continued) Cash flow information related to leases is as follows: Year ended December 31, 2025 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases 3,336 2,456 2,284 Operating cash flows used in finance leases 114 131 283 Financing cash flows used in finance leases 820 1,079 2,458 ROU assets obtained in exchange for lease liabilities: Operating leases 3,276 8,960 986 Finance leases 603 968 567 Future minimum lease payments required under non-cancellable leases as of December 31, 2025, were as follows: Operating leases Finance leases Total 2026 2,728 631 3,359 2027 3,182 576 3,758 2028 3,274 495 3,769 2029 3,222 451 3,673 2030 and thereafter 12,131 1,206 13,337 Total minimum lease payments 24,537 3,359 27,896 Less: payments related to leases not yet commenced ( 7,848 ) — ( 7,848 ) Less: imputed interest ( 4,593 ) ( 1,146 ) ( 5,739 ) Total lease liabilities 12,096 2,213 14,309 F- 47 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 18: LEASES (Continued) Sharon lease agreement On August 27, 2024, the Company entered into an agreement to lease a site in Sharon, Pennsylvania, United States, providing the Company immediate capacity of 12 MW of electricity and potential for up to an additional 98 MW for a total 110 MW of development capacity by 2026. Upon signing the lease agreement, the Company issued common shares with a total value of $ 3,000 as a non-refundable deposit which was capitalized as part of the ROU asset. The initial lease term is five years with options to renew for a total of seventeen years along with an option to purchase the site at fair market value through the lease term or upon a change of control, as defined therein. The lease has variable minimum monthly payments increasing over the term of the lease from $ 33 to $ 138 , with annual adjustments beginning after the third year . Prior to June 30, 2026, monthly lease payments can fluctuate based on the energized MW. On initial recognition, the Company recognized $ 11,390 of ROU asset and $ 8,240 of lease liability with the difference of $ 3,000 recognized in share capital as explained above and in Note 20. In October 2025, the Company acquired the leased property. Refer to Note 4 for more details. Magog lease agreement In November 2024, the Company agreed to terminate its lease for the Bitcoin data center in Magog, Québec, Canada, and forfeit its fixed price purchase option in exchange for $ 714 (CAD$ 1,000 ) from the landlord. Concurrently, the Company signed a new lease with the same party with an initial term of 10 years with monthly payments totaling $ 17 (CAD$ 24 ) which took effect on December 1, 2024 and maintain an option to purchase the site at fair market value for the duration of the lease. The new lease agreement is considered a lease modification that resulted in the remeasurement of the lease liability by discounting the revised lease payments in addition with a corresponding adjustment made to the ROU asset of $ 708 . The $ 714 payment from the landlord is considered a lease incentive which reduced the ROU asset carrying amount. F- 48 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 19: INCOME TAXES Loss from continuing operations before income taxes is composed of the following: Year ended December 31, 2025 2024 2023 Loss before income taxes from continuing operations: Canada ( 174,611 ) ( 1,135 ) ( 42,161 ) Foreign - United States ( 33,802 ) ( 5,878 ) 2,074 ( 208,413 ) ( 7,013 ) ( 40,087 ) Current and deferred income tax (expense) recovery from continuing operations is composed of the following: Year ended December 31, 2025 2024 2023 Current tax expense (recovery): Canada - Federal 59 21 216 Canada - Provincial ( 126 ) 34 70 Foreign - United States 168 226 258 101 281 544 Deferred tax expense (recovery): Canada - Federal — — ( 698 ) Foreign - United States — 65 — — 65 ( 698 ) Total income tax expense (recovery) 101 346 ( 154 ) The following table summarizes the amount of income taxes paid (net of refunds received) from continuing operations: Year ended December 31, 2025 2024 2023 Income taxes paid (net of refunds received): Canada - Federal 9 61 — Canada - Provincial ( 40 ) 47 — Foreign - United States 458 458 295 Total income taxes paid (received) 427 566 295 F- 49 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 19: INCOME TAXES (Continued) The following table reconciles the Canadian Federal statutory tax rate to the Company’s effective tax rate: Year ended December 31, 2025 2024 2023 Income tax recovery at federal statutory tax rate ( 31,262 ) 15.0 % ( 1,052 ) 15.0 % ( 6,013 ) 15.0 % Increase (decrease) in taxes resulting from: Provincial taxes*, net of federal effect ( 126 ) 0.1 % 34 ( 0.5 )% ( 1,946 ) 4.9 % Foreign tax effects - United States Tax rate differential ( 2,028 ) 1.0 % ( 353 ) 5.0 % 124 ( 0.3 )% Change in valuation allowance 6,339 ( 3.0 )% 490 ( 7.0 )% ( 281 ) 0.7 % Other 940 ( 0.5 )% 1,036 ( 14.8 )% 56 ( 0.1 )% Non-taxable or non-deductible items Stock based compensation 2,244 ( 1.1 )% 1,888 ( 26.9 )% 1,591 ( 4.0 )% Non-deductible loss on derivatives 4,792 ( 2.3 )% — — % — — % Prior year true-up non capital loss ( 2,232 ) 1.1 % — — % — — % Other 557 ( 0.3 )% ( 304 ) 4.3 % 663 ( 1.7 )% Change in valuation allowance 20,877 ( 10.0 )% ( 1,393 ) 19.9 % 5,652 ( 14.1 )% Other — — % — — % — — % Income tax expense (recovery) 101 — % 346 ( 5.0 )% ( 154 ) 0.4 % * The Company is subject to Canadian federal income tax and Québec makes up the majority (>50%) of the provincial taxes. Deferred tax assets and liabilities Deferred taxes are computed based on enacted tax rates expected to apply at the time of realization. Deferred taxes relate primarily to temporary timing differences arising from the recognition of expenses relating to the depreciation of fixed assets, loss carryforwards and professional fees relating to the Company’s equity activity that are recognized as a reduction of equity. As at December 31, 2025, the Company has analyzed the recoverability of its deferred tax assets and has concluded that it is not more likely than not that sufficient taxable profit is expected to utilize these deferred tax assets. F- 50 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 19: INCOME TAXES (Continued) Deferred tax assets and liabilities (Continued) The components of deferred tax assets and liabilities arising from temporary differences are summarized below: As of December 31, As of December 31, 2025 2024 Deferred tax assets: Operating losses and interest limitation 111,611 52,724 Change in fair value of digital assets 8,998 — Goodwill and intangibles 3,984 — Stock-based compensation 2,852 — Long-term debt 4,120 — Financing fees 2,185 4,439 Investment in discontinued operations 18,252 9,038 Reserves and other 11,688 5,215 Total deferred tax assets 163,690 71,416 Less: valuation allowance ( 160,201 ) ( 53,302 ) Net deferred tax assets 3,489 18,114 Deferred tax liabilities: Property, plant and equipment ( 3,554 ) ( 3,271 ) Change in fair value of digital assets — ( 14,001 ) Reserves and other — ( 907 ) Total deferred tax liabilities ( 3,554 ) ( 18,179 ) Net deferred tax assets (liabilities) ( 65 ) ( 65 ) The following table summarizes the Company’s valuation allowance movement: As of December 31, As of December 31, As of December 31, 2025 2024 2023 Balance as of January 1, 53,302 50,857 30,324 Charged to income tax (expense) recovery 47,850 5,956 10,567 Charged to equity ( 1,878 ) ( 717 ) 1,448 Investment in discontinued operations 9,214 519 8,518 Business combination 64,716 — — Deductions ( 4,197 ) ( 3,313 ) — Property, plant and equipment ( 8,806 ) — — Balance as of December 31, 160,201 53,302 50,857 F- 51 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 19: INCOME TAXES (Continued) Deferred tax assets and liabilities (Continued) The Company’s loss carryforward balances and expiration for continuing operations are summarized below: 2031+ Non-capital loss carryforward Canada 215,980 Foreign - United States 206,013 421,993 The Company has not identified any uncertain tax positions requiring a reserve as of December 31, 2025 and 2024. NOTE 20: SHARE CAPITAL Common shares The Company’s authorized share capital consists of an unlimited number of common shares without par value and are fully paid. Each share entitles the holder to one vote per share and to receive equally any dividends declared by the Company and the remaining property and assets of the Company in the event Bitfarms undergoes a liquidation, dissolution or winding up. The following table details the movement in number of common shares: Year ended December 31, 2025 2024 2023 Outstanding, January 1, 479,332,885 334,153,330 224,200,170 Issuance through at-the market equity offering program 29,616,939 135,474,160 52,120,899 Issuance through business combination 59,866,609 — — Share buyback and cancellation ( 7,807,141 ) — — Exercise of Options 12,591,449 2,644,873 3,047,346 Settlement of share awards 1,543,320 — — Issuance of common shares related to right-of-use asset — 1,532,745 — Exercise of warrants 15,191,855 5,111,111 9,269,630 Settlement of restricted share units 2,744,083 416,666 250,002 2023 private placement — — 44,444,446 Issuance through acquisition of assets 8,500,000 — 820,837 Outstanding, December 31, 601,579,999 479,332,885 334,153,330 F- 52 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 20: SHARE CAPITAL (Continued) Common shares (Continued) At-The-Market Equity Offering Program (“ATM Program”) Bitfarms commenced an ATM Program on March 11, 2024 (the “2024 ATM Program”), pursuant to which the Company could, at its discretion and from time-to-time, sell common shares of the Company, resulting in the Company receiving aggregate gross proceeds of up to $ 375,000 . During the year ended December 31, 2025, the Company issued 29,616,939 common shares in exchange for gross proceeds of $ 75,094 at an average share price of approximately $ 2.54 . The Company received net proceeds of $ 72,747 after paying commissions of $ 2,253 to the sales agent and $ 94 in other transaction costs. During the year ended December 31, 2024, the Company issued 135,474,160 common shares in the 2024 ATM Program in exchange for gross proceeds of $ 299,905 at an average share price of approximately $ 2.21 . The Company received net proceeds of $ 290,473 after paying commissions of $ 8,997 to the sales agent for the 2024 ATM Program and $ 435 in other transaction costs. The Company capitalized $ 939 of professional fees and registration expenses in common shares to initiate the 2024 ATM Program. During the year ended December 31, 2023, the Company issued 52,120,899 common shares in its at-the-market equity offering program that commenced on August 16, 2021 (“the 2021 ATM Program”) in exchange for gross proceeds of $ 70,770 at an average share price of approximately $ 1.36 . The Company received net proceeds of $ 68,504 after paying commissions of $ 2,187 to the sales agent for the 2021 ATM Program and $ 79 in other transaction costs. F- 53 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 20: SHARE CAPITAL (Continued) Common shares (Continued) Corporate Share Buyback Program On July 22, 2025, the Company announced that the TSX had approved a normal course issuer bid (“NCIB”), under which the Company may repurchase up to 49,943,031 of its common shares, representing approximately 10 % of the Company’s public float as of July 14, 2025. Purchases under the NCIB commenced on July 28, 2025, and will terminate no later than July 27, 2026. All common shares purchased on the TSX or Nasdaq under the NCIB will be cancelled. The Company has entered into an automatic repurchase arrangement with a designated broker to facilitate repurchases under the NCIB, including during pre-determined blackout periods. The timing and number of shares repurchased will be determined by Management based on market conditions. During the year ended December 31, 2025, the Company repurchased 7,807,141 common shares for cancellation through the Corporate Share Buyback Program under the NCIB in exchange for $ 9,877 at an average share price of approximately $ 1.27 and paid $ 77 of commissions to the purchasing agent. Sharon Lease Agreement On August 27, 2024, the Company entered into an agreement to lease a site in Sharon, Pennsylvania, United States, and issued 1,532,745 common shares with a total value of $ 3,000 as a non-refundable deposit. 2023 private placement In November 2023, the Company completed a private placement for total gross proceeds of $ 43,799 (CAD $ 60,001 ) in exchange for 44,444,446 common shares and 22,222,223 warrants and 3,000,000 broker warrants to purchase common shares. Shareholder rights plan On June 10, 2024, the Board approved a shareholder rights plan (the “June 2024 Rights Plan”). On July 24, 2024, the Capital Markets Tribunal of the Ontario Securities Commission issued an order to cease trading any securities issued, or that may be issued, in connection with or pursuant to the June 2024 Rights plan. Also on July 24, 2024, the Board approved the adoption of a new shareholder rights plan (the “July 2024 Rights Plan”), pursuant to which one right (a “Right”) will be issued and attached to each common share outstanding as at August 6, 2024 (the “Record Time”). A Right will also be attached to each common share issued after the Record Time. Subject to the terms of the July 2024 Rights Plan, the Rights become exercisable if a person (the “Acquiring Person”), along with certain related persons (including persons “acting jointly or in concert” as defined in the July 2024 Rights Plan), acquires or announces its intention to acquire 20 % or more of the common shares without complying with the “Permitted Bid” provisions of the July 2024 Rights Plan. Following a transaction that results in a person becoming an Acquiring Person, the Rights entitle the holder thereof to purchase common shares at a significant discount to the market price. The July 2024 Rights Plan was subject to the acceptance of the TSX and shareholder ratification within six months of its adoption. The TSX notified the Company that the TSX would defer its consideration of the acceptance of the July 2024 Rights Plan until (a) such time as it was satisfied that the appropriate securities commission will not intervene pursuant to National Policy 62-202 and (b) the July 2024 Rights Plan was ratified by the shareholders of the Company by no later than January 24, 2025. A deferral of acceptance of the July 2024 Rights Plan by the TSX did not affect the adoption or operation of the July 2024 Rights Plan. The Board recommended that shareholders of the Company ratify the July 2024 Rights Plan, which was approved at the Company’s special meeting of shareholders on November 20, 2024. F- 54 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 20: SHARE CAPITAL (Continued) Equity warrants Details of the outstanding number of warrants are as follows: Year ended December 31, 2025 2024 2023 Number of Warrants Weighted Average Exercise Price (USD) Number of Warrants Weighted Average Exercise Price (USD) Number of Warrants Weighted Average Exercise Price (USD) Outstanding, January 1, 10,841,482 1.17 35,105,390 2.83 19,152,797 4.21 Granted 20,421,723 1.74 — — 25,222,223 1.18 Exercised ( 17,355,910 ) 1.20 ( 5,111,111 ) 1.17 ( 9,269,630 ) 1.18 Expired — — ( 19,152,797 ) 4.21 — — Outstanding, December 31, 13,907,295 1.97 10,841,482 1.17 35,105,390 2.83 The weighted average contractual life of the warrants as of December 31, 2025, was 2.2 years (December 31, 2024 and 2023: 1.9 years and 1.6 years, respectively). In November 2023, the Company completed a private placement that included 22,222,223 warrants and 3,000,000 broker warrants to purchase common shares (the “2023 Private Placement”). The warrants and broker warrants are convertible for a fixed number of common shares of the Company which results in a classification of the warrants and broker warrants as equity instruments. In February 2024, 5,000,000 warrants and 111,111 broker warrants related to the 2023 Private Placement were exercised resulting in the issuance of 5,111,111 common shares for proceeds of approximately $ 5,986 . On March 11, 2024, 25,000 warrants relating to the acquisition of the Garlock building in Sherbrooke, Québec, Canada issued during 2022 expired. These warrants were recognized as equity instruments. On March 14, 2025, the Company issued 12,893,650 warrants at an average exercise price of $ 1.30 as part of the consideration paid to acquire Stronghold. The total value was $ 11,477 using the Black-Scholes valuation model. Refer to Note 3 for more details. The warrants are convertible into a fixed number of common shares of the Company, which are classified as equity instruments. In April 2025, in connection with the Credit Facility, the Company granted Macquarie 5,330,946 warrants (the “2025 Warrants”) with an exercise price of $ 1.17 . The holder has the right to exercise the warrants before 2030 to subscribe for and purchase common shares from the Company. These warrants are classified as equity instruments. In September 2025, 1,000,000 warrants and 111,111 broker warrants related to the 2023 private placement were exercised resulting in the issuance of 1,111,111 common shares for proceeds of approximately $ 1,307 . In addition, 111,111 broker warrants were exercised on a cashless basis in exchange for 65,672 common shares. F- 55 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 20: SHARE CAPITAL (Continued) Equity warrants (Continued) In October 2025, in connection with the Credit Facility with Macquarie (see Note 17 for more details), the Company granted Macquarie 2,197,127 warrants with a strike price of $ 5.69 and a term of 5 years. The holder has the right to exercise the warrants before 2030 to subscribe for and purchase common shares from the Company. These warrants are classified as equity instruments. In October 2025, a total of 10,802,742 warrants related to the consideration paid to acquire Stronghold were exercised resulting in the issuance of 10,802,742 common shares for proceeds of approximately $ 13,153 . In December 2025, a total of 5,330,946 warrants related to the Credit Facility were exercised on a cashless basis, in exchange for 3,212,330 common shares. The Black-Scholes option-pricing model utilized the following weighted-average inputs to determine the fair values of the warrants granted during the year ended December 31, 2025: Dividend yield (%) — % Expected share price volatility (%)* 98 % Risk-free interest rate (%) 4.03 % Expected life of warrants (years) 5.60 Share price (CAD) $ 1.88 Exercise price (USD) $ 1.74 Fair value of warrants (USD) $ 1.05 Number of warrants issued 20,421,723 * Expected share price volatility is estimated based on a combination of the Company’s stock price and Bitcoin price data. F- 56 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 21: STOCK-BASED COMPENSATION Stock-based compensation expense is recognized within general and administrative expenses in the consolidated statements of operations. The stock-based compensation expense related to (i) Options, RSUs , and (ii) PSUs for employees, directors, consultants and former employees and share awards for a former executive of Stronghold were as follows: Year ended December 31, 2025 2024 2023 Options 8,102 10,045 10,012 RSUs 4,140 2,034 594 PSUs 969 — — Share awards 1,557 — — 14,768 12,079 10,606 Long-Term Incentive Plan (“2025 LTIP”) The 2025 LTIP Plan was adopted in July 2025 and provides the Company the ability to grant various share-based compensation such as, but not limited to, Options, RSUs and PSUs. The 2025 LTIP is a 10 % rolling plan, permitting the issuance of up to 10 % of the Company’s outstanding shares in respect of the awards granted. Options Under 2025 LTIP During the year ended December 31, 2025, the Board approved Options grants to purchase 1,822,500 common shares in accordance with the 2025 LTIP (for the years ended December 31, 2024 and 2023: nil common shares). All Options issued according to the 2025 LTIP become exercisable when they vest and can be exercised for a maximum period of 5 years from the date of the grant. Under 2021 LTIP During the year ended December 31, 2025, the Board approved Options grants to purchase 2,536,227 common shares in accordance with the 2021 Long-Term Incentive Plan (the “2021 LTIP “) adopted on May 18, 2021 (the years ended December 31, 2024 and 2023: 9,010,000 and 13,156,250 common shares, respectively). All Options issued according to the 2021 LTIP become exercisable when they vest and can be exercised for a maximum period of 5 years from the date of the grant. As part of the options granted during the year ended December 31, 2025, the Company granted 302 Options to certain employees of Stronghold as part of the business combination described in Note 3. On March 31, 2023, upon the voluntary surrender by Option holders, the Company cancelled outstanding Options exercisable for 10,535,000 common shares. The Company intended, but had no obligation, to grant new Options no less than 90 days after the cancellation date of the original Options to the persons who formerly held the cancelled Options. As the Options were cancelled without the concurrent grant of a replacement award, the cancellation was treated as a settlement for no consideration, and all remaining unrecognized stock-based compensation expense associated with the cancelled Options was accelerated for an amount of $ 914 during the first quarter of 2023. F- 57 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 21: STOCK-BASED COMPENSATION (Continued) Options (Continued) Details of the outstanding Options are as follows: Year ended December 31, 2025 2024 2023 Number of Options Weighted Average Exercise Price ($CAD) Number of Options Weighted Average Exercise Price ($CAD) Number of Options Weighted Average Exercise Price ($CAD) Outstanding, January 1, 26,865,764 2.64 20,939,387 2.41 21,804,233 3.47 Granted 4,358,727 1.92 9,010,000 2.96 13,156,250 2.58 Exercised ( 12,591,449 ) 2.36 ( 2,644,873 ) 1.50 ( 3,047,346 ) 0.85 Cancelled — — — — ( 10,633,750 ) 5.15 Forfeited ( 565,625 ) 2.30 ( 142,500 ) 2.97 — — Expired ( 1,370,752 ) 2.70 ( 296,250 ) 5.90 ( 340,000 ) 5.47 Outstanding, December 31, 16,696,665 2.67 26,865,764 2.64 20,939,387 2.41 Exercisable, December 31, 9,687,377 1.58 9,515,764 1.58 11,112,519 2.01 Additional information on Options are as follows: Year ended December 31, 2025 2024 2023 Weighted-average grant date fair value of Options granted 0.72 per share 1.12 per share 1.12 per share Weighted-average grant date fair values of Options vested 1.08 per share 1.03 per share 1.19 per share Weighted-average grant date fair value of non-vested Options 0.93 per share 1.19 per share 1.08 per share Total intrinsic values of the Options exercised 21,021 5,544 6,442 Total fair value of Options vested 2,722 10,318 12,932 Year ended December 31, 2025 Total intrinsic values of the Options outstanding 12,757 Total intrinsic values of the Options exercisable 9,156 As at December 31, 2025 Weighted-average remaining contractual life of the outstanding Options 3.3 years Weighted average remaining contractual life of the exercisable Options 3.1 years Unrecognized compensation cost related to the non-vested Options 1,452 Remaining weighted-average vesting period 0.7 years F- 58 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 21: STOCK-BASED COMPENSATION (Continued) Options (Continued) The weighted-average inputs used to value the Options grants using the Black-Scholes model are as follows: Year ended December 31, 2025 2024 2023 Dividend yield (%) — — — Expected share price volatility (%)* 78 % 82 % 96 % Risk-free interest rate (%) 3.70 % 3.68 % 4.33 % Expected life of Options (years) 3.0 years 3.0 years 3.0 years * Expected share price volatility is estimated based on a combination of the Company’s stock price and Bitcoin price data. RSUs Details of the RSUs are as follows: Year ended December 31, 2025 2024 2023 Number of RSUs Weighted Average Grant Price ($CAD) Number of RSUs Weighted Average Grant Price ($CAD) Number of RSUs Weighted Average Grant Price ($CAD) Outstanding, January 1, 897,666 3.61 624,998 4.05 400,000 3.73 Granted 6,767,857 1.57 706,000 3.27 475,000 3.83 Settled ( 2,744,083 ) 2.25 ( 416,666 ) 3.64 ( 250,002 ) 3.13 Forfeited ( 73,865 ) 1.45 ( 16,666 ) 5.01 — — Outstanding, December 31, 4,847,575 1.56 897,666 3.61 624,998 4.05 Under the 2025 LTIP During the year ended December 31, 2025, the Board approved the grant of 3,984,432 RSUs to certain members of Management which vest 1/3 annually over three years. Under the 2021 LTIP During the year ended December 31, 2025, the Company granted 1,890,000 RSUs to certain employees and executive Management of Stronghold as part of the business combination described in Note 3. 1,631,700 RSUs were fully vested upon grant and 258,300 RSUs vest approximately 17 % every 3 months. In addition, the Company granted 893,425 RSUs to independent directors of the Board. These RSUs fully vest in 9 months. The fair value of the RSUs is based on the Company’s share price at the date of grant. During the year ended December 31, 2024, the Board approved the grant of 706,000 RSUs to certain members of senior Management. Of the 706,000 RSUs, 175,000 RSUs vest 50 % approximately one month from the grant date and an additional 25 % every 6 months and 531,000 RSUs vest 33 % three months from the grant date and an additional 33 % every six months . During the year ended December 31, 2023, the Board approved the grant of 475,000 RSUs to certain members of senior Management and Directors which vest 25 % at the time of grant and an additional 25 % every 6 months. F- 59 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 21: STOCK-BASED COMPENSATION (Continued) RSUs (Continued) Additional information on RSUs are as follows: Year ended December 31, 2025 2024 2023 Total fair value of RSUs vested 4,427 1,160 691 As at December 31, 2025 Unrecognized compensation cost related to the unvested RSUs 2,908 Remaining weighted-average vesting period 1.8 years PSUs Details of the PSUs are as follows: Year ended December 31, 2025 Number of PSUs Weighted Average Grant Price ($CAD) Outstanding, January 1, — — Granted 4,349,985 1.41 Cancelled ( 841,710 ) 1.41 Outstanding, December 31, 3,508,275 1.41 During the year ended December 31, 2025, the Company granted 4,349,985 PSUs to senior executives as part of the 2025 LTIP, which will vest at the end of the three years . PSUs entitle participants to receive a specified number of common shares of the Company, subject to the achievement of predetermined market and service conditions over a defined vesting period. PSUs vest in a single tranche at the end of the performance cycle, contingent upon the attainment of certain corporate objectives. Upon vesting, each PSU converts into one common share of the Company, subject to a multiplier based on the level of achievement. The actual number of shares awarded may be 0 %, 50 %, 100 % or 200 % of the target award. In October 2025, in connection with the former Chief Financial Officer’s departure, the Company accelerated the vesting of certain unvested stock options and RSUs. Additionally, 841,710 outstanding PSUs were exchanged for 380,000 RSUs. The modification resulted in incremental stock-based compensation expense recognized during the year ended December 31, 2025. F- 60 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 21: STOCK-BASED COMPENSATION (Continued) PSUs (Continued) Additional information on PSUs are as follows: Year ended December 31, 2025 Total fair value of PSUs vested — As at December 31, 2025 Unrecognized compensation cost related to the unvested PSUs 5,135 Remaining weighted-average vesting period 2.5 years The fair value of PSUs is determined at the grant date using a Monte Carlo simulation model, which incorporates the probability of achieving market-based performance conditions. The assumptions used to value the PSUs grants using the Monte Carlo simulation model are as follows: Year ended December 31, 2025 Dividend yield (%) — % Expected share price volatility (%) 98 % Risk-free interest rate (%) 3.85 % Expected life of PSU (years) 3.0 years Share awards During the year ended December 31, 2025, following the Stronghold transaction, the Company entered into a stock award agreement as well as a consulting agreement with a former executive of Stronghold and granted 1,543,320 share awards with a grant-date fair value of $ 1.11 per award. The share awards fully vested in September 2025, subject to continued provision of services through this date. Notwithstanding the foregoing, the share awards can be accelerated and fully vested if certain conditions are met. In April 2025, the conditions were met and the share awards were settled. F- 61 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 22: FINANCIAL INSTRUMENTS a. Measurement categories and fair value The following table presents the fair values of the Company’s financial instruments and their level within the fair value hierarchy: As of December 31, As of December 31, Measurement 2025 2024 Financial assets at amortized cost Cash Level 1 573,462 59,542 Restricted cash Level 1 57,500 — Accounts receivable, net Level 2 5,471 1,259 Other receivables Level 2 1,405 1,177 Security deposits for energy Level 2 5,157 7,740 Refundable Hosting Deposits Level 2 — 14,216 Other refundable deposits Level 3 350 — Financial assets at fair value through profit and loss Derivative assets Level 2 7,487 3,418 Total fair value of financial assets 650,832 87,352 Financial liabilities at amortized cost Accounts payable and accrued expenses Level 2 34,974 22,056 Long-term debt* Level 2 699,657 1,576 Financial liabilities at fair value through profit and loss Derivative liabilities Level 2 2,922 128 Total fair value of financial liabilities 737,553 23,760 Net fair value ( 86,721 ) 63,592 * The Credit Facility and the Convertible Notes are recognized at amortized cost using the effective interest rate method. Their carrying amounts amounted to $ 94,808 and $ 571,315 , respectively, as of December 31, 2025, whereas their fair values, which are based on discounted cash flows using a current borrowing rate, amounted to $ 106,060 and $ 590,252 , respectively. There were no transfers between Level 1, 2 or 3 of the fair value hierarchy during the years ended December 31, 2025 and 2024. In addition to assets and liabilities that are measured at fair value on a recurring basis, the Company also measures certain assets and liabilities at fair value on a non-recurring basis. The Company’s long-lived assets, including intangible assets, operating lease right-of-use assets, and property, plant and equipment, are measured at fair value when there is an indication of impairment and the carrying amount exceeds the asset’s projected undiscounted cash flows. These assets are measured at fair value only when an impairment loss is recognized. The carrying amounts of cash, restricted cash, accounts receivable, net, other receivables, security deposits for energy, Refundable Hosting Deposits, other refundable deposits, receivable from disposal of business and accounts payable and accrued expenses presented in the table above are a reasonable approximation of their fair value due to their short-term maturity or they are valued using the income approach valuation technique. F- 62 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 22: FINANCIAL INSTRUMENTS (Continued) a. Measurement categories and fair value (Continued) Derivatives assets and liabilities The fair value of derivatives is categorized as Level 2 as applicable, in the fair value hierarchy and is presented under derivative assets and liabilities in the consolidated balance sheets when there is an outstanding contract at period end. The derivatives are measured at fair values on a recurring basis. Refer to Note 10 for more details. i. Bitcoin option and selling contracts (derivatives) Fair value of derivative financial instruments generally reflects the estimated amounts that the Company would receive or pay, taking into consideration the counterparty credit risk or the Company’s credit risk at each reporting date. The Company uses market data such as Bitcoin option futures to estimate the fair value of option contracts at each reporting date. Refer to Note 10 for more details. ii. Bitcoin Redemption Options (embedded derivatives) The purchase order agreements explained in Note 10 provide the Company with the option to redeem the Bitcoin Pledged at a market price determined when the Bitcoin was first pledged (“Agreed Bitcoin Price”). The right to redeem the Bitcoin Pledged meets the definition of an embedded derivative as the derivative that is embedded in the non-financial contract is not closely related to the economic characteristics and risks of the host non-financial contract. The fair value of the embedded derivative is determined using a combination of the Monte Carlo simulation model to simulate future Bitcoin prices based on probability factors and the Black-Scholes Model to estimate the value of each Bitcoin Redemption Option. At each reporting date, the fair value is determined by multiplying the number of redeemable Bitcoin pledged by the present value of the difference between the Agreed Bitcoin Price and the simulated spot price of Bitcoin while considering the likelihood of exercising the quarterly installments. Change in fair value is recognized in Other expense. iii. Capped call transactions (derivatives assets) In October 2025, the Company entered into capped call transactions in connection with the issuance of Convertible Notes. The fair value of the capped call transactions is determined using an option pricing model that incorporates observable market inputs, including the Company’s share price, expected volatility, risk-free interest rate, expected term and contractual terms of the instruments. As the valuation primarily incorporates observable inputs, the fair value measurement is classified within Level 2 of the fair value hierarchy. The most significant input in the model is the Company’s share price and expected volatility. Due to the decline in the share price from the inception date to December 31st, there was a loss of $ 63,890 during the year ended December 31, 2025, presented within (loss) gain from derivative assets and liabilities in the statement of operations. F- 63 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 22: FINANCIAL INSTRUMENTS (Continued) a. Measurement categories and fair value (Continued) Refundable deposits The refundable deposits are measured at amortized cost using the effective interest rate (“EIR”) method and are classified as Level 2 according to the Company’s fair value hierarchy. Their fair values are a recurring measurement. The valuation technique used is the income approach (discounted future cash flows). Refer to Note 15 for more details. i. Refundable Hosting Deposits Prior to the Stronghold Transaction completed on March 14, 2025, the Refundable Hosting Deposits were accounted for as financial assets and measured at fair value on initial recognition based on the contractual right to receive the principal amount of each refundable hosting deposit plus interest at the end of the contractual term. The valuation technique used is the income approach (discounted future cash flows) with an initial EIR higher than the SOFR + 1 % rate specified in the Hosting Agreements. As a result, the Panther Creek Refundable Deposit and the Scrubgrass Refundable Deposit were initially recognized at a fair value of $ 7,125 and $ 7,542 , respectively, which were lower than the $ 7,800 principal amount of each deposit. Upon initial recognition of the Refundable Deposits, the difference between the fair value and principal of $ 675 and $ 258 , respectively, were recognized as a loss in Other expense during the year ended December 31, 2024. The EIR applicable as of December 31, 2024 was 12 % and 9 %, respectively. The total interest income of $ 364 was recognized in Other expense during the year ended December 31, 2024. In addition, the Company recognized a total CECL of $ 815 in Other expense. Refer to Note 15 for more details. Following the acquisition of Stronghold on March 14, 2025, the Panther Creek and the Scrubgrass Hosting Agreements were terminated, resulting in the settlement of the Refundable Hosting Deposits. ii. Security deposits for energy The security deposits for energy consumption is related to the operational Paso Pe and in-construction Yguazu Bitcoin data centers in Paraguay. The valuation technique used was the income approach (discounted future cash flows) with an EIR of 6 % over an estimated term of 3 years. Following the disposal of the Yguazu Bitcoin data center on March 17, 2025 and the classification of the Paso Pe Bitcoin data center operation in Paraguay as assets “held for sale”, the security deposits for energy were derecognized and amounted to nil as of December 31, 2025. F- 64 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 22: FINANCIAL INSTRUMENTS (Continued) a. Measurement categories and fair value (Continued) Refundable deposits (Continued) The following table details the movement in the refundable deposits: Panther Creek Scrubgrass Refundable Hosting Deposits Security deposits for energy Other Total Balance as of January 1, 2024 — — — 277 — 277 Additions 7,800 7,800 15,600 9,034 — 24,634 Initial loss on recognition ( 675 ) ( 258 ) ( 933 ) ( 1,571 ) — ( 2,504 ) Fair value at initial recognition 7,125 7,542 14,667 7,740 — 22,407 Interest income 261 103 364 — — 364 CECLs ( 409 ) ( 406 ) ( 815 ) — — ( 815 ) Balance as of December 31, 2024 before reclassification to assets “held for sale” 6,977 7,239 14,216 7,740 — 21,956 Balance as of December 31, 2024 presented as non-current assets “held for sale” — — — ( 7,740 ) — ( 7,740 ) Balance as of December 31, 2024 6,977 7,239 14,216 — — 14,216 Addition from business combination — — — — 350 350 Interest Income 187 126 313 226 — 539 Gain on settlement 603 342 945 — — 945 Derecognition ( 7,767 ) ( 7,707 ) ( 15,474 ) ( 2,809 ) — ( 18,283 ) Balance as of December 31, 2025 before reclassification to assets “held for sale” — — — 5,157 350 5,507 Balance as of December 31, 2025 presented as non-current assets “held for sale” — — — ( 5,157 ) — ( 5,157 ) Balance as of December 31, 2025 — — — — 350 350 b. Risk management policy The Company is exposed to foreign currency risk, credit risk, counterparty risk, liquidity risk and concentration risk. The Company’s senior Management monitors these risks. Foreign currency risk Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company’s functional currency is the USD as all of its cryptocurrency Mining revenues, most of its capital expenditures and most of its financing are primarily measured or transacted in USD. The Company is exposed to variability in the CAD and ARS to USD exchange rates when making expenditures payable in CAD and ARS. The Company funds foreign currency transactions by buying the foreign currencies at the spot rate when required. A 5 % increase or decrease in the USD/CAD and USD/ARS exchange rates may have an impact of an increase or decrease of $ 1,095 on retained earnings at December 31, 2025 (December 31, 2024: $ 15 ). F- 65 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 22: FINANCIAL INSTRUMENTS (Continued) b. Risk management policy (Continued) Amounts denominated in CAD and ARS included in the consolidated balance sheets, presented in thousands of USD, are as follows: As of December 31, As of December 31, 2025 2024 CAD ARS CAD ARS Cash 9,278 14,203 5,362 1,983 Accounts receivable, net 127 — 1,259 — Accounts payable and accrued expenses — — ( 5,341 ) ( 1,391 ) Long-term debt ( 1,704 ) — ( 1,576 ) — 7,701 14,203 ( 296 ) 592 Credit risk and counterparty risk Credit risk is the risk of an unexpected loss if a third party fails to meet its contractual obligations, including those related to cash and cash equivalents. The Company mitigates credit risk related to cash by holding the majority of its cash with a Canadian chartered bank. The Company is exposed to counterparty risk primarily through the significant deposits placed with suppliers of Mining hardware to secure orders and delivery dates, deposits made in relation with HPC/AI expansion plans, as well as deposits placed with construction companies and suppliers of electrical components and construction materials. A failure by a supplier to meet its contractual obligations may result in delayed deliveries or long-term deposits and equipment and construction prepayments that are not realized. The Company seeks to mitigate this risk by procuring Mining hardware from larger and more established suppliers and by transacting with counterparties with whom the Company has established relationships and knowledge of their reputation in the market as well as by insuring deposits placed for construction work and materials. Credit risk related to accounts receivable arises from Stronghold energy sales and sales to Volta’s third-party customers. The Company performs ongoing credit evaluations of its customers and maintains an allowance for expected credit losses to cover the estimated amount of receivables that may be uncollectible. The allowance for expected credit losses is based on Management’s assessment of a customer’s credit quality as well as subjective factors and trends, including the aging of receivable balances. F- 66 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 22: FINANCIAL INSTRUMENTS (Continued) b. Risk management policy (Continued) Liquidity risk Liquidity risk is a risk that the Company will not be able to meet its financial obligations as they become due. The Company manages liquidity risk by monitoring its cash balances and forecasted cash flows generated from operations to ensure that sufficient liquidity is maintained to meet projected financial liabilities. The Company’s operations are capital-intensive, and its liquidity is affected by a combination of factors, including the market price of Bitcoin, network difficulty rates, energy costs, and the timing of capital expenditures related to the Company’s planned strategic transition toward HPC infrastructure development. As of December 31, 2025, the Company had cash of $ 573,462 and Bitcoin of $ 180,285 . Management has evaluated the Company’s liquidity position, including forecasted cash flows from Bitcoin Mining operations, anticipated expenditures associated with HPC infrastructure development, and contractual obligations due within 12 months from the date the financial statements are issued. Based on this evaluation, the Company believes that existing cash and Bitcoin, expected cash inflows from Mining operations, and the Company’s ability to manage the timing of expenditures will be sufficient to meet its obligations as they become due for at least the next twelve months. The Company will require additional funds to complete expansion plans into HPC infrastructure development. As of December 31, 2025, the Company is committed to purchase $ 129,662 of property, plant and equipment in the next 12 months. Refer to Note 27 for more details. The following table presents the future principal capital payment of long-term debt and the future minimum lease payments required under non-cancellable leases as of December 31, 2025: 2026 2027 2028 2029 2030 + Total Long-term debt* 607 100,585 592 482 591,018 693,284 Lease liabilities 3,359 3,758 3,769 3,673 13,337 27,896 3,966 104,343 4,361 4,155 604,355 721,180 * The Credit Facility is due on demand and its undiscounted contractual maturities were $1,658 as of December 31, 2025. Concentration risk Concentration risk arises from exposures that are concentrated within the same category, such as geographical location, product typ e, industry sector or counterparty type. The cryptocurrency Mining and hosting industry is highly volatile and subject to significant inherent risk. During the year ended December 31, 2025, the Company earned 88 % (2024: 95 % and 2023: 96 %) of its revenues from one Mining pool operator. The Company has the ability to switch Mining Pools or to mine independently at any time. The Company also holds a portion of its working capital in Bitcoin. A significant decline in the market prices of cryptocurrencies, an increase in the difficulty of cryptocurrency Mining, changes in the regulatory environment and adverse changes in other inherent risks can significantly negatively impact the Company’s operations and the carrying value of its assets. The Company purchased Bitcoin option contracts that provide it with the right, but not the obligation, to sell digital assets at a fixed price. Option contracts are used to mitigate the risk of Bitcoin price volatility and reduce the variability of cash flows associated with future sales of digital assets. Refer to Note 10 for more details. F- 67 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 23: LOSS PER SHARE The following table presents the computation of basic and diluted loss per share from continuing operations: Year ended December 31, From continuing operations: 2025 2024 2023 Numerator: Loss from continuing operations ( 208,514 ) ( 7,359 ) ( 39,933 ) Effect of Convertible Notes — — — Numerator for diluted loss per share ( 208,514 ) ( 7,359 ) ( 39,933 ) Denominator: Denominator for basic loss per share - weighted average shares outstanding 551,676,757 414,669,947 262,237,117 Dilutive impact of Convertible Notes — — — Denominator for diluted loss per share - weighted average shares outstanding 551,676,757 414,669,947 262,237,117 Loss from continuing operations per common share attributable to common shareholders: Basic ( 0.38 ) ( 0.02 ) ( 0.15 ) Diluted ( 0.38 ) ( 0.02 ) ( 0.15 ) The following table presents the computation of basic and diluted loss per share from discontinued operations: Year ended December 31, From discontinued operations 2025 2024 2023 Numerator: Loss from discontinued operations ( 76,030 ) ( 21,006 ) ( 15,578 ) Effect of Convertible Notes — — — Numerator for diluted loss per share ( 76,030 ) ( 21,006 ) ( 15,578 ) Denominator: Denominator for basis loss per share - weighted average shares outstanding 551,676,757 414,669,947 262,237,117 Dilutive impact of Convertible Notes — — — Denominator for diluted loss per share - weighted average shares outstanding 551,676,757 414,669,947 262,237,117 Loss from discontinued operations per common share attributable to common shareholders: Basic ( 0.14 ) ( 0.05 ) ( 0.06 ) Diluted ( 0.14 ) ( 0.05 ) ( 0.06 ) F- 68 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 23: LOSS PER SHARE (Continued) Earnings per share For the year ended December 31, 2025, 2024 and 2023 potentially dilutive securities were excluded from the calculation of diluted loss per share due to their anti-dilutive effect. The following table presents additional potentially dilutive securities that were excluded from the calculation of diluted loss per share as their inclusion would be anti-dilutive: Year ended December 31, 2025 2024 2023 Options 8,995,839 6,046,226 3,864,150 Warrants 6,874,665 5,704,798 768,476 RSUs 4,776,810 859,942 331,735 PSUs 1,682,050 — — Share awards 486,252 — — Convertible note shares 16,663,468 — — 39,479,084 12,610,966 4,964,361 F- 69 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 24: SEGMENT AND GEOGRAPHICAL INFORMATION Reportable segment The Company has aggregated all of its Cryptocurrency Mining operating segments into a single operating segment, which is the Company’s only reportable segment, Cryptocurrency Mining. The CODM manages segment performance and resource allocation based upon net income (loss). The CODM uses consolidated net income (loss) to evaluate the overall financial performance of the Company, to compare actual results against internal budgets and forecasts and to inform capital allocation decisions, including the prioritization of investments across the Company’s Bitcoin Mining Operations. The measure of segment assets is reported on the consolidated balance sheets as total consolidated assets. Significant expenses reviewed by the CODM include those that are presented in the consolidated statements of operations and the more detailed component disclosed in Note 25. Revenues Revenues by country are as follows: Year ended December 31, 2025 2024 2023 North America United States 116,386 16,500 11,466 Canada 112,890 116,774 108,934 Total 229,276 133,274 120,400 Revenues are presented based on the geographical contribution of computational power used for hashing calculations (measured by hashrate) or sales to external customers. Property, Plant and Equipment and other non-current assets The carrying amount of property, plant and equipment and other non-current assets (excluding financial assets, intangible assets and deferred tax assets) by country is as follows: As of December 31, As of December 31, 2025 2024 PPE Other Total non-current assets PPE Other Total non-current assets North America United States 292,196 26,865 319,061 63,147 14,535 77,682 Canada 66,125 17,362 83,487 117,025 52,819 169,844 Total 358,321 44,227 402,548 180,172 67,354 247,526 F- 70 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 25: ADDITIONAL DETAILS TO THE STATEMENTS OF OPERATIONS Disaggregated revenues Year ended December 31, 2025 2024 2023 Cryptocurrency Mining 206,209 128,172 115,340 Cryptocurrency Hosting 4,491 — — Electrical services 4,595 5,102 5,060 Energy sales 13,981 — — 229,276 133,274 120,400 Cost of revenues Year ended December 31, 2025 2024 2023 Energy expenses ( 80,280 ) ( 60,368 ) ( 68,715 ) Sales tax recovery - energy — 17,017 — Depreciation and amortization ( 98,130 ) ( 102,469 ) ( 65,043 ) Sales tax recovery - depreciation and amortization — 8,760 — Hosting expenses ( 7,735 ) — — Infrastructure expenses ( 58,179 ) ( 8,045 ) ( 6,243 ) Electrical components and salaries ( 3,856 ) ( 4,081 ) ( 4,141 ) ( 248,180 ) ( 149,186 ) ( 144,142 ) Inventories During the year ended December 31, 2025, the cost of electrical component inventory and waste, limestone and fuel oil recognized as an expense and included in cost of revenues was $ 44,257 (years ended December 31, 2024 and 2023: $ 3,392 and $ 3,320 , respectively). Energy costs are net of RECs and WTCs During the year ended December 31, 2025, RECs amounted to $ 17,076 , and the WTCs amounted to $ 5,687 , (years ended December 31, 2024 and 2023: RECs and WTCs were nil ), all of which offset energy expenses in the cost of revenues. F- 71 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 25: ADDITIONAL DETAILS TO THE STATEMENTS OF OPERATIONS (Continued) Cost of revenues (Continued) Customs duties During the year ended December 31, 2025, infrastructure expenses included $ 9,244 of customs duties in connection with the importation of Miners in 2021 (years ended December 31, 2024 and 2023: nil ). In 2021, the Company imported Miners into Washington state, United States, that the vendor located in China claimed originated in Malaysia. In early 2022, U.S. Customs and Border Protection (“CBP”) challenged the origination of the Miners, asserting that the Miners were manufactured in China, and notified the Company of a potential assessment of a U.S. importation duty of 25 %. During the third quarter of 2023 and the first quarter of 2025, the Company submitted supporting documentation to CBP in defense of its position that the Miners were manufactured outside China and the associated custom duties in the amount of $ 9,424 do not apply. In 2024, the Company paid $ 180 of the custom duties resulting in an amount of $ 9,244 related to the potential assessment. In August 2025, the Company received a response letter from the CBP indicating that customs duties are required under the circumstances. During the year ended December 31, 2025, the Company paid $ 11,882 to the CBP with a corresponding expense of $ 9,244 recognized as costs of revenues relating to the customs duties and $ 2,658 recognized as other expense (income) relating to interest and penalties. Canadian sales tax recovery In April 2024, the Company received confirmation from the provincial tax authorities that Canadian sales taxes paid from February 5, 2022 onwards are refundable. Between February 5, 2022, the date on which the new cryptocurrency sales tax legislation came into effect, and April 2024, the Company filed monthly sales tax refund claims totaling approximately $ 24,400 (CAD$ 33,000 ) that were not paid to the Company, pending the finalization of the legislation. The refund relates to sales taxes incurred on various expenditures including, but not limited to, electricity costs, cost of property, plant and equipment, professional services, etc. During the year ended December 31, 2024, the Company recognized sales tax recoveries of $ 22,200 related to prior years (2022 and 2023) and $ 2,200 related to the period from January to April 2024. The amounts were presented as direct adjustments to the related expenses and asset categories. During the year ended December 31, 2024, the full $ 24,400 of sales tax claims were refunded by the Canadian tax authorities. In addition to previously not receiving its Canadian sales tax refund claims, the Company was self-assessing sales taxes payable when appropriate. During the year ended December 31, 2024, the Company reversed $ 9,560 of government remittances previously included in PPE and accrued in accounts payable and accrued expenses, as disclosed in Note 16. Of this amount, $ 5,360 was recognized as a decrease to cost of revenues, $520 was recognized as a decrease to general and administrative expense and $ 3,680 was recognized as a decrease to PPE. F- 72 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 25: ADDITIONAL DETAILS TO THE STATEMENTS OF OPERATIONS (Continued) General and administrative expenses Year ended December 31, 2025 2024 2023 Salaries and wages ( 28,234 ) ( 20,243 ) ( 11,370 ) Stock-based compensation ( 14,768 ) ( 12,079 ) ( 10,606 ) Professional services ( 20,624 ) ( 22,874 ) ( 6,238 ) Sales tax recovery - professional services — 1,389 — Insurance, duties and other ( 10,261 ) ( 6,601 ) ( 4,020 ) Travel, motor vehicle and meals ( 2,165 ) ( 1,252 ) ( 812 ) Telecom hosting and telecommunications ( 542 ) ( 303 ) ( 365 ) Advertising and promotion ( 1,745 ) ( 697 ) ( 456 ) Sales tax recovery - other general and administrative expenses — 735 — ( 78,339 ) ( 61,925 ) ( 33,867 ) Other expense Year ended December 31, 2025 2024 2023 Gain on derecognition of warrants — 62 — Gain on settlement of Refundable Hosting Deposits 945 — — Loss on initial recognition of refundable deposits — ( 933 ) — Amortization of transaction costs and debt discount ( 3,148 ) — — Gain (loss) on exchange rates ( 422 ) ( 896 ) ( 590 ) Other financial expenses ( 3,438 ) ( 343 ) ( 938 ) ( 6,063 ) ( 2,110 ) ( 1,528 ) Gain on extinguishment of long-term debt In February 2022, Backbone Mining entered into an equipment financing agreement for gross proceeds of $ 32,000 collateralized by 6,100 Bitmain S19j Pro Miners referred to as the “BlockFi Loan”. The net proceeds received by the Company were $ 30,994 after capitalizing origination, closing and other transaction fees of $ 1,006 . In December 2022, Backbone Mining ceased making installment payments, which constituted a default under the loan agreement, and the BlockFi Loan was classified as current. In February 2023, the Company entered into a settlement agreement with BlockFi pursuant to which an outstanding equipment financing obligation with a carrying amount of $ 20,330 was settled for cash consideration of $ 7,750 . As a result, the Company recognized a gain on extinguishment of long-term debt of $ 12,580 recognized in Gain on extinguishment of long-term debt in the consolidated statements of operations during the year ended December 31, 2023. Upon settlement, all assets previously pledged as collateral were released. F- 73 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 26: ADDITIONAL DETAILS TO THE STATEMENTS OF CASH FLOW Year ended December 31, 2025 2024 2023 Changes in non-cash working capital components: Increase in accounts receivable, net ( 1,503 ) ( 545 ) ( 13 ) Decrease in other current assets 9,988 2,342 1,104 Increase in inventories ( 4,985 ) ( 475 ) ( 117 ) Decrease (increase) in deposits ( 19 ) 5,467 420 Decrease in accounts payable and accrued expenses ( 2,048 ) ( 15,827 ) ( 533 ) Increase in operating lease liabilities 813 1,737 1,708 Decrease in taxes payable ( 406 ) ( 178 ) 156 Decrease in other non-current liabilities ( 729 ) — — 1,111 ( 7,479 ) 2,725 Significant non-cash transactions: Issuance of common shares, warrants and RSUs in connection with the acquisition of Stronghold 78,161 — Issuance of warrants in connection with debt issuance 8,610 — — Equipment prepayments realized as additions to PPE 41,045 32,433 7,372 Addition of ROU assets and related lease liabilities 3,879 9,928 1,553 Purchase of PPE financed by short-term credit 6,402 8,113 1,365 Issuance of common shares in connection with acquisitions of assets 33,745 — 1,354 Issuance of common shares in connection with acquisition of lease — 3,000 — Computational power revenue and its related service expense 3,516 1,023 — Depreciation and amortization* Property, plant and equipment, net 120,929 133,428 82,566 Finance lease right-of-use assets 990 1,363 1,609 Intangible assets, net 711 633 148 122,630 135,424 84,323 * Depreciation and amortization expenses are part of the non-cash adjustments in the cash flow statement, and these amounts also include figures from discontinued operations. See Note 11 for more details. The following table provides a reconciliation of cash and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows: Year ended December 31, 2025 2024 2023 Cash 573,462 59,542 84,038 Restricted cash 57,500 — — Total cash and restricted cash 630,962 59,542 84,038 Amounts included in restricted cash represent amounts pledged as collateral for long-term financing arrangements as contractually required by a lender. F- 74 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 27: COMMITMENTS AND CONTINGENCIES Contingent Liability As the Company continues to periodically import products into the United States, it is subject to review by the CBP regarding the classification and origin of such imports. Refer to Note 25 for more details regarding the Company’s Miners imported in 2021. There were no Miners imported into the United States in 2022 or 2023; and for 2024 and 2025, the Company has not received any assessment or communication of a potential assessment. Furthermore, the Company took several steps to ensure compliance with CBP rules and regulations by sourcing non-Chinese origin equipment including, but not limited to, the specifications of which non-Chinese production facilities could be supplied under our purchase agreements with Bitmain Development PTE. Ltd., in person factory inspections by the Company’s employees to verify production, and the collection of various importation documents that confer non-Chinese origin. While the Company has addressed certain concerns related to previous importations, additional assessments may be made by the CBP in connection with other importations. The Company imported 34,179 Miners in the United States during 2025 (2024: 9,399 ) and had delivered asset values of $ 130,698 (2024: $ 25,782 ). Importation tariffs from China fluctuated between 22.4 % and 150.5 % in 2025 (2024: 22.4 %). Any assessments made on previous importations by the CBP could also include penalties and interest. Subsequent to period end, the U.S. Supreme Court IEEPA Tariff Ruling determined that certain tariffs previously imposed under the International Emergency Economic Powers Act were not lawful. Based on currently available guidance, the tariff rate for imports of Chinese origin is expected to be approximately 27.6 %. However, the timing, scope, and implementation of such changes remain subject to regulatory interpretation and potential further governmental action. At this time, while the Company believes it has taken the appropriate steps to reduce the risk of potential exposure, the Company is unable to predict the outcome of any future assessments or to reasonably estimate the amount, if any, that may be payable in connection with these matters. The facts surrounding each importation may vary and the Company reserves the right and may challenge any assessments. F- 75 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 27: COMMITMENTS AND CONTINGENCIES (Continued) Lawsuits Class Action Lawsuit On May 9, 2025, and as amended on October 21, 2025, a purported shareholder filed a putative class action complaint in the United States District Court for the Eastern District of New York, in a case now titled In re: Bitfarms Securities Litigation, case no 1:25-cv-02630. Co-Lead Plaintiffs Zhao Jun, Gong Lanfang, Michael Pearl, Kazim Khan, and Michael Lawarre sued Bitfarms Ltd., Benjamin Gagnon, Jeffrey Lucas and Geoffrey Morphy alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, promulgated thereunder. The lawsuit alleges that the Company, its current CEO, its former CFO and its former CEO made materially false and/or misleading statements regarding the Company’s business, operations and internal controls over financial reporting. The Plaintiff seeks class certification, unspecified damages plus interest and attorney and expert witness fees and other costs on behalf of a purported class consisting of all persons and entities (subject to specified exceptions) that purchased or otherwise acquired Company common stock from March 21, 2023 and December 9, 2024. The lawsuit was filed by Pomerantz Law Firm. The Company cannot predict the duration or outcome of this lawsuit at this time. As a result, the Company is unable to estimate the reasonably possible loss or range of reasonably possible loss arising from this lawsuit and no provision was recognized as of December 31, 2025. The Company intends to vigorously defend itself in this matter. Commitments The Company is committed to purchase the following property, plant and equipment as of December 31, 2025: 2026 Land 4,935 HPC infrastructure projects in Washington state, United States 124,727 129,662 Agreements to purchase land In August 2025, the Company entered into agreements to purchase 3 acres of land in Washington State, United States and 181 acres of land in Pennsylvania, United States for $ 1,898 and $ 3,500 , respectively. Commitment for HPC Data Center Projects In November 2025, the Company entered into a purchase commitment of $ 128,742 , payable over the next 12 months, for the development and expansion of HPC data center projects with a large publicly traded American multinational provider of critical infrastructure and services for data centers. Under the terms of the agreement, the provider is contracted to deliver a range of services that include engineering, project management assistance, procurement and manufacturing, site management support and factory acceptance testing, all contributing, in addition to other expenses, to the construction of a fully integrated 18 MW hybrid-built data center in Washington state, United States. F- 76 BITFARMS LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of U.S. dollars, except data relating to number of PPE, shares, warrants, options and digital assets - audited) NOTE 28: SUBSEQUENT EVENTS Management has evaluated subsequent events from January 1, 2026 to March 31, 2026. Full repayment of the Credit Facility with Macquarie On February 6, 2026, the Company reimbursed the Credit Facility with Macquarie in full for a total of $ 116,855 . Blockfills Bankruptcy On March 16, 2026, Reliz Ltd., the operating entity of BlockFills, a Chicago-based cryptocurrency brokerage, trading platform, and liquidity provider, filed voluntary petitions for relief under Chapter 11 restructuring proceedings of the United States Bankruptcy Code. As of March 16, 2026, the Company had a net exposure of $ 4,200 with BlockFills in connection with its Bitcoin option and selling contracts. Redomiciliation On February 6, 2026, Bitfarms announced that its board of directors (the “Board”) approved a plan of arrangement (the “Arrangement”) under which Bitfarms will redomicile from Canada to the United States (the “U.S. Redomiciliation”), subject to receipt of shareholder, stock exchange and court approvals. Upon completion of the U.S. Redomiciliation, the ultimate parent company of Bitfarms will be a new corporation formed under the laws of the State of Delaware that will operate under the name Keel Infrastructure Corp. (“Keel Infrastructure”). To effect the U.S. Redomiciliation, each outstanding common share of Bitfarms (a “Common Share”) will be exchanged for one share of common stock of Keel Infrastructure (“Keel Common Stock”), pursuant to the Arrangement. Following completion of the U.S. Redomiciliation, Bitfarms will become an indirect wholly owned subsidiary of Keel Infrastructure, which together with Bitfarms and its other subsidiaries will carry on the business currently conducted by Bitfarms and its subsidiaries. The Arrangement was approved by Bitfarms’ shareholders at a special meeting held on March 20, 2026. The Ontario Superior Court of Justice (Commercial List) issued its final order approving the Arrangement on March 24, 2026. F- 77 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. None.