v3.26.1
Business Combination
 12 Months Ended
Dec. 31, 2025
Business Combination [Abstract]  
BUSINESS COMBINATION

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.

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 

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.