Blockchain Mining Ltd. and Backbone Hosting Solutions Inc. (Bitfarms) Execute Definitive Agreement

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Blockchain Mining Ltd. Calls an Extraordinary General Meeting to be Held on February 19, 2018 for Shareholder Approval of Transaction

Blockchain Mining Ltd. Provides Unaudited Financial Summary of Bitfarms Operations

Blockchain Mining Ltd. Provides General Update and Capital Markets Strategy

TEL AVIV, Israel and MONTREAL, Jan. 14, 2018 (GLOBE NEWSWIRE) — Blockchain Mining Ltd. (“BLCM” or the “Company”) (TASE:BLCM) (OTC:NRHYY) is pleased to announce that it has executed a Definitive Agreement with Backbone Hosting Solutions Inc., known by its operating name “Bitfarms”, for the acquisition of 100% of issued and outstanding shares of Backbone creating one of the world’s largest cryptocurrency mining companies by installed power and hash power.

Backbone Hosting Solutions Inc. (“Bitfarms”) owns and operates blockchain farms that power the global decentralized financial economy. Bitfarms provides computing power to cryptocurrency networks such as bitcoin, bitcoin cash, ethereum, litecoin, and dash earning fees from each network for securing and processing transactions 24/7. Since 2013, predecessors to Bitfarms have constructed 4 farms in Quebec, Canada which have 27.5 MW of installed capacity and over 200 Ph/s of installed hash-power. Bitfarms construction pipeline includes an additional 3 farms with over 100 MW of power capacity. The Company has been self-funded since its creation and has over 200 shareholders. For more information on Bitfarms, visit:

Transaction Summary

Pursuant to the Definitive Share Exchange agreement, BLCM will acquire 60.7% of the issued and outstanding shares of Backbone in exchange for 40,460,001 common shares of the BLCM.

Additionally, BLCM will propose a subsequent share exchange to Backbone minority shareholders pursuant to which BLCM will acquire the remaining 39.3% of the issued and outstanding shares of Backbone from these minority investors in exchange for 26,206,666 common shares of the BLCM.

In total, up to 66,666,667 shares of BLCM shall be issued to the shareholders of Backbone.

As at January 12, 2018, there were 16,614,924 BLCM common shares issued and outstanding.

Assuming both phases of the transaction are completed, BLCM expects to have approximately 83,281,591 issued and outstanding common shares on a fully diluted basis. Approximately 20% of those shares will be held by shareholders of BLCM today, and 80% will be held by former shareholders of Backbone.

Closing Process and Timeline of Events

The transaction has been approved by the board of directors of BLCM and Backbone and is now subject to shareholder approval in an Extraordinary General Meeting (“EGM”) which will be held at the law offices of Zitvar, Galor & Co. at 7 Begin St. Ramat Gan on February 19, 2018. Mr. Roy Sebag, the largest shareholder of Blockchain Mining Ltd. with over 54% of the votes, has expressed his desire to vote in favor of the transaction at the EGM.

Once the votes are cast and a simple majority is achieved, the transaction will be officially closed subject to customary closing conditions.

Resulting Company Management and Board of Directors

Following shareholder approval at the EGM, BLCM will appoint the following members as management and Board of Directors of the Company:

Nicolas Bonta – Chairman of the Board of Directors
Pierre-Luc Quimper – President and Director
Emiliano Joel Grodzki – Chief Executive Officer and Director
Rodrigo Menendez – General Counsel and Director
Roy Sebag – Chief Investment Officer and Director
Tomer David – Independent Director
Joshua Hershkovici – Independent Director
Mathieu Vachon, Director of Software Engineering
Anthony Levesque – VP of Operations
Louis Valois – VP of Infrastructure

Full Biographies for each member of the Board of Directors can be viewed at the Company’s investor presentation at

Blockchain Mining Ltd. intends to change its name to: Bitfarms Ltd. upon completion of the second phase of the transaction (Minority Investor Share Exchange). As such, a request has already been made to change the Company’s ADR Symbol from “NRHYY” to “BITFY”.

Backbone Hosting Solutions Inc. (Bitfarms) Auditor Appointment and Unaudited Financial Results

Blockchain Mining Ltd. is pleased to report that it has appointed Nexia Friedman, LLP in Montreal, which is an affiliate of the Company’s Israel Auditor Strauss Lazer & Co., to complete the IFRS audit for Backbone Hosting Solutions Inc. This process has already been initiated and the audited figures are expected to be consolidated into Blockchain Mining Ltd.’s results next FY 2017.

Backbone was formally organized as a Canadian corporation on November 6, 2017 as a result of a property assignment of farms and technology from the founders and minority investors. As such, all financial results have been reported from this date onwards.

Operating Activity (in US Dollars)

Over the 56 day period from November 6, 2017 to December 31, 2017, Backbone generated the following financial results (unaudited):

Mining Revenue………………………………….……………………………….$ 10,611,968

Mining Operating Costs………………………………………………………….…$ (899,866)

Net Mining Margin for the Period………………………………………….……..$ 9,712,102

Over this same period, Backbone generated a gain of $1,937,218 on mined cryptocurrency coins which were held for resale or long-term investment.

Operating Activity (Notes)

During this 56 day period, Backbone mined 587 Bitcoin (BTC), 1,337 Bitcoin Cash (BCH), 188 Dash (Dash), 4,023 Litecoin (LTC), and 385 Ethereum (ETH).

Over the last 7 days of operation in December 2017, Backbone averaged $266,171 in daily mining revenue. That daily revenue figure has grown to an average of $297,192 in the first 11 days of 2018, even in light of lower spot prices for Bitcoin. This is in part due to Backbone installing additional power and hash-power through capital reinvestment of operating cash-flow. Additionally, the growth in revenue can be attributed to Backbone’s proprietary software which mines the most profitable coins at any moment, concentrating the entirety of computational power in all farms on a specific blockchain. As an example, since December 21, 2017, Backbone has been primarily mining Bitcoin Cash (BCC) which has resulted in higher daily revenue figures in USD even in light of a lower spot price for Bitcoin and other cryptocurrencies.

Unaudited Balance Sheet (in US Dollars) at Period Ended December 31, 2017

Cash at Banks………………………………………………………………….…..$ …

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