Keel Infrastructure Corp 6-K, filed Aug 8, 2023

Keel Infrastructure Corp. (KEEL)

6-K 2023-08-08 For: 2023-08-08

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Added on April 06, 2026

About this 6-K

Keel Infrastructure Corp filed this 6-K on August 8, 2023.

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Exhibits

Exhibit No.		Description

99.1		Interim Condensed Consolidated Financial Statements for the three and six months ended June 30, 2023.
99.2		Management’s Discussion & Analysis for the three and six months ended June 30, 2023.
99.3		CEO Certification of Interim Filings - Interim Certificate dated August 8, 2023.
99.4		CFO Certification of Interim Filings - Interim Certificate dated August 8, 2023.
99.5		Press Release dated August 8, 2023

BITFARMS LTD.

By:	/s/ L. Geoffrey Morphy
	Name:	L. Geoffrey Morphy
	Title:	President and Chief Executive Officer

	Financial Statements	Page
	Interim Consolidated Statements of Financial Position	3
	Interim Consolidated Statements of Profit or Loss and Comprehensive Profit or Loss	4
	Interim Consolidated Statements of Changes in Equity	5
	Interim Consolidated Statements of Cash Flows	6

	Notes to the Interim Condensed Consolidated Financial Statements
1.	Nature of Operations	7
2.	Liquidity	8
3.	Basis of Presentation and Significant Accounting Policies	8
4.	Significant Accounting Judgments and Estimates	10
5.	Other Assets	10
6.	Digital Assets	11
7.	Impairment	12
8.	Property, Plant and Equipment	13
9.	Long-term Deposits, Equipment Prepayments, Other and Commitments	15
10.	Trade Payables and Accrued Liabilities	15
11.	Long-term Debt	16
12.	Leases	18
13.	Income Taxes	19
14.	Asset Retirement Provision	20
15.	Share Capital	20
16.	Financial Instruments	22
17.	Transactions and Balances with Related Parties	23
18.	Net Earnings (Loss) Per Share	24
19.	Share-based Payment	24
20.	Additional Details to the Statement of Profit or Loss and Comprehensive Profit or Loss	26
21.	Geographical Information	28
22.	Additional Details to the Statements of Cash Flows	29
23.	Subsequent Events	29

			As of June 30,			As of December 31,
	Notes		2023			2022
Assets
Current
Cash				30,891			30,887
Trade receivables				1,019			701
Other assets		5		6,815			4,512
Short-term prepaid deposits		7		2,849			12,921
Taxes receivable				12,196			12,142
Digital assets		6		14,597			4,635
Digital assets - pledged as collateral		6, 11		2,137			2,070
Assets held for sale				1,554			1,220
				72,058			69,088
Non-current
Property, plant and equipment		8, 21		200,530			219,428
Right-of-use assets		12		14,732			16,364
Long-term deposits, equipment prepayments and other		9		38,296			38,185
Intangible assets				21			33
Total assets				325,637			343,098
Liabilities
Current
Trade payables and accrued liabilities		10		18,875			20,541
Current portion of long-term debt		11		15,556			43,054
Current portion of lease liabilities		12		2,982			3,649
				37,413			67,244
Non-current
Long-term debt		11		73			4,093
Lease liabilities		12		13,122			14,215
Asset retirement provision		14		2,284			1,979
Total liabilities				52,892			87,531
Shareholders’ equity
Share capital				467,281			429,120
Contributed surplus				70,098			65,512
Revaluation surplus				1,144			—
Accumulated deficit				(265,778	)		(239,065	)
Total equity				272,745			255,567
Total liabilities and equity				325,637			343,098

August 4, 2023		*/s/ Nicolas Bonta*		*/s/ Geoffrey Morphy*		*/s/ Jeffrey Lucas*
Date of approval of the financial statements		Chairman of the Board of Directors		President & Chief Executive Officer		Chief Financial Officer

			Three months ended June 30,						Six months ended June 30,
	Notes		2023			2022			2023			2022

Revenues		6, 21		35,479			41,815			65,529			82,144
Cost of revenues		20		41,519			32,311			79,922			55,603
Gross (loss) profit				(6,040	)		9,504			(14,393	)		26,541
Operating expenses
General and administrative expenses		20		9,155			15,392			17,515			29,235
Realized loss on disposition of digital assets		6		—			77,880			—			77,914
(Reversal of) revaluation loss on digital assets		6		—			70,475			(2,695	)		66,773
(Gain) loss on disposition of property, plant and equipment				(7	)		948			1,559			936
Impairment on short-term prepaid deposits and property, plant and equipment		7		9,982			—			9,982			—
Impairment on goodwill		7		—			17,900			—			17,900
Operating loss				(25,170	)		(173,091	)		(40,754	)		(166,217	)
Net financial income		20		(182	)		(11,857	)		(12,370	)		(15,940	)
Net loss before income taxes				(24,988	)		(161,234	)		(28,384	)		(150,277	)
Income tax recovery		13		(94	)		(19,316	)		(424	)		(12,878	)
Net loss				(24,894	)		(141,918	)		(27,960	)		(137,399	)

Other comprehensive income
Item that will not be reclassified to profit or loss:
Change in revaluation surplus - digital assets, net of tax		6		579			—			2,391			—
Total comprehensive loss, net of tax				(24,315	)		(141,918	)		(25,569	)		(137,399	)

Loss per share		18
Basic and diluted				(0.10	)		(0.70	)		(0.12	)		(0.69	)
Weighted average number of common shares outstanding		18
Basic and diluted				246,129,000			203,503,000			239,372,000			200,515,000

	Notes	Number of shares		Share capital		Contributed surplus			Retained earnings (accumulated deficit)			Revaluation surplus			Total equity
Balance as of January 1, 2023			224,200,000		429,120		65,512			(239,065	)		—			255,567
Net loss			—		—		—			(27,960	)		—			(27,960	)
Change in revaluation surplus - digital assets, net of tax			—		—		—			—			2,391			2,391
Total comprehensive loss, net of tax			—		—		—			(27,960	)		2,391			(25,569	)
Transfer of revaluation surplus on disposal of digital assets to retained earnings, net of tax			—		—		—			1,247			(1,247	)		—
Share-based payment	19		—		—		4,998			—			—			4,998
Issuance of common shares	15		33,551,000		37,587		—			—			—			37,587
Settlement of restricted share units	19		108,000		279		(279	)		—			—			—
Exercise of stock options	19		400,000		295		(133	)		—			—			162
Balance as of June 30, 2023			258,259,000		467,281		70,098			(265,778	)		1,144			272,745

Balance as of January 1, 2022			194,806,000		378,893		43,704			(15	)		—			422,582
Net loss			—		—		—			(137,399	)		—			(137,399	)
Share-based payment	19		—		—		14,032			—			—			14,032
Issuance of common shares and warrants	15		11,478,000		35,925		22			—			—			35,947
Exercise of stock options	19		55,000		35		(12	)		—			—			23
Balance as of June 30, 2022			206,339,000		414,853		57,746			(137,414	)		—			335,185

	Term	Definition
1	Backbone	Backbone Hosting Solutions Inc.
2	Volta	9159-9290 Quebec Inc.
3	Backbone Argentina	Backbone Hosting Solutions SAU
4	Backbone Paraguay	Backbone Hosting Solutions Paraguay SA
5	Backbone Mining	Backbone Mining Solutions LLC
6	BTC	Bitcoin
7	BVVE	Blockchain Verification and Validation Equipment
8	CAD	Canadian Dollars
9	USD	U.S. Dollars
10	ARS	Argentine Pesos

	Notes	BVVE and electrical components			Mineral assets		Land and buildings			Leasehold improvements			Vehicles			Total
Cost
Balance as of January 1, 2023			308,205			9,000		4,392			45,278			1,082			367,957
Additions			29,609			—		314			4,212			43			34,178
Dispositions			(6,189	)		—		—			(5	)		(74	)		(6,268	)
Transfer to assets held for sale			(5,695	)		—		—			—			—			(5,695	)
Balance as of June 30, 2023			325,930			9,000		4,706			49,485			1,051			390,172

Accumulated Depreciation
Balance as of January 1, 2023			120,097			6,000		270			21,636			526			148,529
Depreciation			38,049			—		74			1,453			88			39,664
Dispositions			(5,010	)		—		—			(5	)		(56	)		(5,071	)
Transfer to assets held for sale			(4,938	)		—		—			—			—			(4,938	)
Impairment	7		—			3,000		—			—			—			3,000
Impairment on deposits transferred to PPE			8,031			—		—			427			—			8,458
Balance as of June 30, 2023			156,229			9,000		344			23,511			558			189,642

Net book value as of June 30, 2023			169,701			—		4,362			25,974			493			200,530

			BVVE and electrical components			Mineral assets		Land and buildings			Leasehold improvements			Vehicles			Total
Cost
Balance as of January 1, 2022			156,647			9,000		4,549			5,783			547			176,526
Measurement period adjustment to business combination			(1,127	)		—		(18	)		—			—			(1,145	)
Additions			164,437			—		3,239			39,495			552			207,723
Dispositions			(3,609	)		—		(3,378	)		—			(17	)		(7,004	)
Transfer to assets held for sale			(8,143	)		—		—			—			—			(8,143	)
Balance as of December 31, 2022			308,205			9,000		4,392			45,278			1,082			367,957

Accumulated Depreciation
Balance as of January 1, 2022			35,766			1,800		286			1,560			264			39,676
Depreciation			66,319			—		193			1,703			124			68,339
Dispositions			(2,562	)		—		(366	)		—			(13	)		(2,941	)
Transfer to assets held for sale			(6,040	)		—		—			—			—			(6,040	)
Impairment			24,820			4,200		157			13,107			151			42,435
Impairment on deposits transferred to PPE			1,794			—		—			5,266			—			7,060
Balance as of December 31, 2022			120,097			6,000		270			21,636			526			148,529

Net book value as of December 31, 2022			188,108			3,000		4,122			23,642			556			219,428

	MicroBT Whatsminer*			Bitmain S19j Pro		Innosilicon T3 & T2T**			Bitmain S19XP			Total
Quantity as of January 1, 2023		45,375			7,172		5,711			—			58,258
Additions		5,808			2,880		—			409			9,097
Dispositions		(540	)		—		(2,591	)		(409	)		(3,540	)
Quantity as of June 30, 2023		50,643			10,052		3,120			—			63,815
Classified as assets held for sale		(1,972	)		—		(3,120	)		—			(5,092	)
Presented as property, plant and equipment		48,671			10,052		—			—			58,723

	As of June 30,			As of December 31
	2023			2022
	six-month period			twelve-month period
Balance as of January 1,		47,147			11,167
Issuance of long-term debt		—			67,201
Payments		(20,862	)		(38,532	)
Gain on extinguishment of long-term debt		(12,580	)		—
Interest on long-term debt		1,924			7,311
Balance as of period end		15,629			47,147

		Maturity date		Stated rate				Effective rate*				Monthly repayment ($)				Long-term debt balance ($)				NBV of Collateral ($)				Collateral**
NYDIG Loan		February 2024			12.0	%			14.4	%			2,043				15,523				27,935				10,395

	Leased premises			Vehicles			Other equipment			Total ROU assets			Lease liabilities
As of January 1, 2023		15,694			265			405			16,364			17,864
Additions and extensions to ROU assets		—			318			—			318			318
Reclass to property, plant and equipment		—			—			(364	)		(364	)		—
Depreciation		(1,444	)		(98	)		(17	)		(1,559	)		—
Lease termination		—			(27	)		—			(27	)		(12	)
Payments		—			—			—			—			(2,837	)
Gain on extinguishment of lease liabilities		—			—			—			—			(255	)
Interest		—			—			—			—			719
Foreign exchange		—			—			—			—			307
As of June 30, 2023		14,250			458			24			14,732			16,104
Less current portion of lease liabilities														(2,982	)
Non-current portion of lease liabilities														13,122

Grant date	June 30, 2023
Dividend yield (%)		—
Expected share price volatility (%)		104	%
Risk-free interest rate (%)		4.49	%
Expected life of stock options (years)		3
Share price (CAD)		1.89
Exercise price (CAD)		1.89
Fair value of options (USD)		0.89
Vesting period (years)		1.5
Number of options granted		8,471,000

1.	Introduction	3
2.	Company Overview	4
3.	Financial Highlights	5
4.	Second Quarter 2023 Financial Results and Operational Highlights	6
5.	Production and Mining Operations	7
6.	Expansion Projects	9
7.	Financial Performance	13
8.	Selected Quarterly Information	23
9.	Non-IFRS and Other Financial Measures and Ratios	24
10.	Liquidity and Capital Resources	28
11.	Financial Position	35
12.	Financial Instruments	36
13.	Related Party Transactions	36
14.	Internal Controls Over Financial Reporting	36
15.	Recent and Subsequent Events	37
16.	Share Capital	37
17.	Risk Factors	38
18.	Significant Accounting Estimates	42
19.	Significant Accounting Policies and New Accounting Policies	42
20.	Cautionary Note Regarding Forward-Looking Statements	42
21.	Cautionary Note Regarding Non-IFRS and Other Financial Measures and Ratios	44
22.	Additional Information	44
23.	Glossary of Terms	45

	As of June 30,		As of December 31,
	2023		2022
Sales taxes receivable*		5,861		3,816
Electrical component inventory		663		588
Other receivables		291		108
		6,815		4,512

Term	Definition
Q2 2023	Three months ended June 30, 2023
Q2 2022	Three months ended June 30, 2022
YTD Q2 2023	Six months ended June 30, 2023
YTD Q2 2022	Six months ended June 30, 2022

Country	Operating power as of August 7, 2023	Contracted power as of August 7, 2023
Canada	153 MW	180 MW	^{1, 2}
United States	20 MW	24 MW	²
Paraguay	10 MW	160 MW	²
Argentina	29 MW	210 MW	²
	212 MW	574 MW


¹	The Company has secured the rights for a total of 10 MW of hydro-electricity in the province of Quebec. Bitfarms does not currently have an expansion plan for these 10 MW of power, but is continuing its efforts to search for economically viable properties for these 10 MW of hydro-electricity.

²	Refer to section 6 - Expansion Projects for details on the timing of the remaining MW not yet operational.

	Three months ended June 30,						Six months ended June 30,
(U.S.$ in thousands except where indicated)	2023			2022			2023			2022
Revenues		35,479			41,815			65,529			82,144
Gross (loss) profit		(6,040	)		9,504			(14,393	)		26,541
Gross margin ⁽¹⁾		(17	)%		23	%		(22	)%		32	%
Operating loss		(25,170	)		(173,091	)		(40,754	)		(166,217	)
Operating margin ⁽¹⁾		(71	)%		(414	)%		(62	)%		(202	)%
Net loss		(24,894	)		(141,918	)		(27,960	)		(137,399	)
Basic and diluted loss per share		(0.10	)		(0.70	)		(0.12	)		(0.69	)
Gross Mining profit ⁽²⁾		14,329			27,160			26,514			57,300
Gross Mining margin ⁽²⁾		42	%		66	%		42	%		71	%
Adjusted EBITDA ⁽²⁾		7,672			19,703			14,241			42,001
Adjusted EBITDA margin ⁽²⁾		22	%		47	%		22	%		51	%


¹	Gross margin and Operating margin are supplemental financial ratios; refer to section 9 - Non-IFRS and Other Financial Measures and Ratios.

²	Gross Mining profit, Gross Mining margin, EBITDA, EBITDA margin, Adjusted EBITDA, and Adjusted EBITDA margin are non-IFRS measures or ratios; refer to section 9 - Non-IFRS and Other Financial Measures and Ratios.


¹	Gross margin and Operating margin are supplemental financial ratios; refer to section 9 - Non-IFRS and Other Financial Measures and Ratios.

²	Gross Mining profit, Gross Mining margin, EBITDA, EBITDA margin, Adjusted EBITDA, and Adjusted EBITDA margin are non-IFRS measures or ratios; refer to section 9 - Non-IFRS and Other Financial Measures and Ratios.

³	Represents the direct cost of BTC based on the total electricity costs divided by the total number of BTC mined.

(U.S. $ in thousands except where indicated)	Note		BTC			(USD)			% Change
BTC and revenues, including Volta, for the three months ended June 30, 2022			1,257			41,815			—
Impact of increase in network difficulty during Q2 2023 as compared to Q2 2022		1		(720	)		(20,161	)		(48	)%
Impact of increase in average Bitfarms’ BTC hashrate during Q2 2023 as compared to Q2 2022		2		686			19,206			46	%
Impact of difference in average BTC price in Q2 2023 as compared to Q2 2022		3					(5,864	)		(14	)%
Other Mining variance and change in Volta							483			1	%
BTC and revenues for the three months ended June 30, 2023				1,223			35,479			(15	)%

Notes
1	Calculated as the difference in BTC mined in Q2 2023 compared to Q2 2022, based on the change in network difficulty, multiplied by Q2 2023 average BTC price
2	Calculated as the difference in BTC mined in Q2 2023 compared to Q2 2022, based on the change in Bitfarms’ average BTC hashrate, multiplied by Q2 2023 average BTC price
3	Calculated as the difference in average BTC price in Q2 2023 compared to Q2 2022 multiplied by BTC mined in Q2 2022

	Three months ended June 30,
(Hashrate in EH/s except where indicated)	2023		2022		Change		% Change
Canada		3.6		2.5		1.1		44	%
USA		0.6		0.6		—		—	%
Argentina		0.4		—		0.4		100	%
Paraguay		0.3		0.1		0.2		200	%
		4.9		3.2		1.7		53	%

(U.S. $ in thousands except earnings per share)	Q2 2023			Q1 2023			Q4 2022			Q3 2022			Q2 2022			Q1 2022			Q4 2021			Q3 2021
Revenues		35,479			30,050			27,037			33,247			41,815			40,329			59,598			44,774
Net (loss) income		(24,894	)		(2,479	)		(16,843	)		(84,808	)		(141,918	)		4,519			9,677			23,733
Basic net (loss) earnings per share		(0.10	)		(0.01	)		(0.08	)		(0.40	)		(0.70	)		0.02			0.05			0.14

Net (loss) income before income taxes		(24,988	)		(2,809	)		(16,652	)		(89,533	)		(161,234	)		10,957			17,937			34,706
Interest expense		1,023			1,620			3,271			3,394			4,546			3,010			837			788
Depreciation expense		20,528			20,700			20,777			20,720			17,857			13,066			10,287			6,261
EBITDA		(3,437	)		19,511			7,396			(65,419	)		(138,831	)		27,033			29,061			41,755
EBITDA margin		(10	)%		65	%		27	%		(197	)%		(332	)%		67	%		49	%		93	%
Share-based payment		2,462			2,536			3,795			3,961			7,927			6,105			10,036			5,787
Realized (gain) loss on disposition of digital assets		—			(587	)		28,567			44,329			77,880			34			137			177
(Reversal of) revaluation loss on digital assets		—			(2,695	)		(23,284	)		(45,655	)		70,475			(3,702	)		3,869			(13,893	)
Gain on extinguishment of long-term debt and lease liabilities		—			(12,835	)		—			—			—			—			—			—
Impairment (reversal) on short-term prepaid deposits, equipment and construction prepayments, property, plant and equipment and right-of-use assets		9,982			—			(8,903	)		84,116			—			—			1,800			(1,860	)
Impairment on goodwill		—			—			—			—			17,900			—			—			—
Gain on disposition of marketable securities		(4,955	)		(2,171	)		(7,317	)		(13,690	)		(19,705	)		(10,937	)		(3,875	)		(2,274	)
Net financial expenses (income) and other		3,620			2,810			1,933			2,683			4,057			3,765			(552	)		622
Adjusted EBITDA		7,672			6,569			2,187			10,325			19,703			22,298			40,476			30,314
Adjusted EBITDA margin		22	%		22	%		8	%		31	%		47	%		55	%		68	%		68	%

Measures	Definition	Purpose
Gross Mining profit	Gross Profit before: (i) non-Mining revenues; (ii) depreciation and amortization; (iii) purchase of electrical components and other expenses; and (iv) electrician salaries and payroll taxes.	● To assess profitability after power costs in cryptocurrency production and other infrastructure costs. Power costs are the largest variable expense in Mining. ● To provide the users of the MD&A the ability to assess the gross profitability of the Company’s core digital asset Mining operations.
EBITDA	Net income (loss) before: (i) interest expense; (ii) income tax expense; and (iii) depreciation and amortization.	● To assess profitability before the impact of different financing methods, income taxes, depreciation of capital assets and amortization of intangible assets. ● Used by management to facilitate comparisons of operating performance from period to period and to prepare annual operating budgets and forecasts. ● Useful for providing users of the MD&A with additional information to assist them in understanding components of its financial results, including a more complete understanding of factors and trends affecting the Company’s performance.
Adjusted EBITDA	EBITDA adjusted to exclude: (i) share-based payment; (ii) non-cash finance expenses; (iii) asset impairment charges; (iv) realized gains or losses on disposition of digital assets and (reversal of) revaluation loss on digital assets; (v) gain on disposition of marketable securities, gains or losses on derivative assets and liabilities and discount expense on VAT receivable; (vi) loss on currency exchange; and (vii) other non-recurring items that do not reflect the core performance of the Company.	● To assess profitability before the impact of all of the items in calculating EBITDA in addition to certain other non-cash expenses. ● To provide a consistent comparable metric for profitability of the Company’s core performance across time periods. ● Used by management to facilitate comparisons of operating performance from period to period and to prepare annual operating budgets and forecasts.

Ratios	Definition	Purpose
Gross Mining margin	The percentage obtained when dividing Gross Mining profit by Mining related revenues.	●	To assess profitability after power costs in cryptocurrency production, the largest variable expense in Mining.
		●	To provide the users of the MD&A the ability to assess the profitability of the Company’s core digital asset Mining operations, exclusive of certain general and administrative expenses.
EBITDA margin	The percentage obtained when dividing EBITDA by Revenues.	●	To assess profitability before the impact of different financing methods, income taxes, depreciation of capital assets and amortization of intangible assets.
		●	Used by management to facilitate comparisons of operating performance from period to period and to prepare annual operating budgets and forecasts.
		●	Useful for providing users of the MD&A with additional information to assist them in understanding components of its financial results, including a more complete understanding of factors and trends affecting the Company’s performance.
Adjusted EBITDA margin	The percentage obtained when dividing Adjusted EBITDA by Revenues.	●	To assess profitability before the impact of all of the items in calculating EBITDA in addition to certain other non-cash expenses.
		●	To provide a consistent comparable metric for profitability of the Company’s core performance across time periods.
		●	Used by management to facilitate comparisons of operating performance from period to period and to prepare annual operating budgets and forecasts.

(U.S. $ in thousands except where indicated)
Categories	Use of proceeds from August 16, 2021 to June 30, 2023
MicroBT Miners		105,607
Bitmain Miners		29,298
Washington Expansion		27,152
Sherbrooke Expansion (completed in 2022)		22,201
Argentina Expansion, net of gain on disposition of marketable securities		47,162
Cowansville Expansion (completed in 2022)		573
Paraguay Expansion		3,230
Baie-Comeau Expansion		2,076
		237,299

(U.S. $ in thousands)	2023		2024		2025		2026		2027 and thereafter		Total
Trade accounts payable and accrued liabilities		10,302		—		—		—		—		10,302
Long-term debt		12,256		4,085		—		—		—		16,341
Lease liabilities		2,004		3,745		2,649		2,488		9,069		19,955
		24,562		7,830		2,649		2,488		9,069		46,598

Terms	Definition
ASIC	ASIC stands for Application Specific Integrated Circuit and refers primarily to specific computer devices designed to solve the SHA-256 algorithm.
Bitcoin (BTC)	BTC is a decentralized digital currency that is not controlled by any centralized authority (e.g. a government, financial institution or regulatory organization) that can be sent from user to user on the BTC network without the need for intermediaries to clear transactions. Transactions are verified through the process of Mining and recorded in a public ledger known as the Blockchain. BTC is created when the BTC network issues Block Rewards through the Mining process.
Block Reward	A BTC block reward refers to the new BTC that are awarded by the Blockchain network to eligible cryptocurrency Miners for each block they successfully mine. The current block reward is 6.25 BTC per block.
Blockchain	A Blockchain is a cloud-based public ledger that exists on computers that participate on the network globally. The Blockchain grows as new sets of data, or ‘blocks’, are added to it through Mining. Each block contains a timestamp and a link to the previous block, such that the series of blocks form a continuous chain. Given that each block has a separate hash and each hash requires information from the previous block, altering information an established block would require recalculating all the hashes on the Blockchain which would require an enormous and impracticable amount of computing power. As a result, once a block is added to the Blockchain it is very difficult to edit and impossible to delete.
Exahash	One quintillion (1,000,000,000,000,000,000) hashes per second or one million Terahash.
Hash	A hash is a function that converts or maps an input of letters and numbers into an encrypted output of a fixed length, which outputs are often referred to as hashes. A hash is created using an algorithm. The algorithm used in the validation of BTC transactions is the SHA-256 algorithm.
Hashrate	Hashrate refers to the number of hash operations performed per second and is a measure of computing power in Mining cryptocurrency.
Megawatt	A megawatt is 1,000 kilowatts of electricity and, in the industry of cryptocurrency Mining, is typically a reference to the number of megawatts of electricity per hour that is available for use.
Miners	ASICs used by the Company to perform Mining.
Mining	Mining refers to the process of using specialized computer hardware, and in the case of the Company, ASICs, to perform mathematical calculations to confirm transactions and increase security for the BTC Blockchain. As a reward for their services, BTC Miners collect transaction fees for the transactions they confirm, along with newly created BTC as Block Rewards.
Mining Pool	A Mining pool is a group of cryptocurrency Miners who pool their computational resources, or hashrate, in order to increase the probability of finding a block on the BTC Blockchain. Mining pools administer regular payouts to mitigate the risk of Miners operating for a prolonged period of time without finding a block.

Terms	Definition
Network Difficulty	Network difficulty is a unitless measure of how difficult it is to find a hash below a given target. The BTC network protocol automatically adjusts Network Difficulty by changing the target every 2,016 blocks hashed based on the time it took for the total computing power used in BTC Mining to solve the previous 2,016 blocks such that the average time to solve each block is ten minutes.
Network Hashrate	Network hashrate refers to the total global hashrate (and related computing power) used in Mining for a given cryptocurrency.
Petahash	One quadrillion (1,000,000,000,000,000) hashes per second or one thousand Terahash.
SHA-256	SHA stands for Secure Hash Algorithm. The SHA-256 algorithm was designed by the US National Security Agency and is the cryptographic hash function used within the BTC network to validate transactions on the BTC Blockchain.
Terahash	One trillion (1,000,000,000,000) hashes per second.

(signed) “Geoffrey Morphy”
Geoffrey Morphy
Chief Executive Officer

(signed) “Jeffrey Lucas”
Jeffrey Lucas
Chief Financial Officer

	Q2 2023		Q1 2023		Q2 2022
Total BTC mined		1,223		1,297		1,257
Average Watts/Average TH efficiency**		37		39		39
BTC sold		1,109		1,267		3,357

	As of June 30,		As of March 31,		As of June 30,
	2023		2023		2022
Operating EH/s		5.3		4.8		3.6
Operating capacity (MW)		207		188		160
Hydropower (MW)		178		178		160