Stronghold Digital Mining (SDIG) Investor Update summary

Strategic rationale and transaction overview

• Bitfarms will acquire 100% of Stronghold Digital Mining in an all-stock deal valued at $125 million equity plus $50 million in assumed debt, representing a 71% premium to Stronghold’s 90-day VWAP, with each share receiving 2.52 Bitfarms shares and Stronghold shareholders owning just under 10% of the combined company.

• The deal enables vertical integration into energy generation with two U.S. power plants, expanding the energy portfolio to potentially over 950 MW by end of 2025 and up to 1.6 GW in future years, with nearly 50% of capacity U.S.-based.

• Stronghold’s assets include two waste-to-energy power plants in Pennsylvania, over 750 acres of land, and significant grid interconnection capacity, supporting both Bitcoin mining and environmental remediation.

• The transaction is expected to deliver $10 million in annual run-rate cost synergies, preserve balance sheet strength, and enable further growth.

• The merger has unanimous board approval and is expected to close in Q1 2025, pending Stronghold shareholder and regulatory approvals.

Power capacity, operational, and expansion opportunities

• Immediate addition of 4.0 EH/s and 165 MW to operating capacity, with plans to upgrade mining fleet for greater efficiency and potential to exceed 10 EH/s in 2025.

• Potential to double site capacity to over 300 MW in the short term and expand to 950+ MW by 2025, with long-term potential up to 1.6 GW.

• Strategic access to the PJM grid enables energy trading, demand response, and cost optimization, with priority in PJM’s queue due to early application.

• Opportunity to merge HPC/AI initiatives with mining operations, leveraging site economics and infrastructure.

• Synergies estimated at $10 million annually, mainly from public company expense reduction, insurance, and administrative efficiencies.

Environmental and ESG impact

• Over 78% of the pro forma mining portfolio will be powered by low-cost renewable energy, with facilities classified as Tier II alternative energy sources in Pennsylvania.

• Stronghold’s plants remediate toxic mining waste, produce electricity and beneficial use ash, and reclaim land and water.

• Circulating Fluidized Bed technology reduces emissions by ~99.9% in particulates and mercury, ~98% in SOx, and ~90% in NOx.

• Ongoing pilot programs for carbon capture show strong potential, with plans to scale up and potentially capture over 60,000 tons of CO2 annually.

• The acquisition extends environmental leadership from using sustainable energy to actively detoxifying legacy pollution.