ARGO BLOCKCHAIN PLC — Capital/Financing Update 2021

Sep 27, 2021

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the contents of this document or the action you should take, you should consult a person authorised for the purposes of the Financial Services and Markets Act 2000 (FSMA) who specialises in advising on the acquisition of shares and other securities.

This document comprises a prospectus relating to Argo Blockchain PLC (Company), prepared in accordance with the Prospectus Regulation Rules of the Financial Conduct Authority (FCA) made under section 73A of FSMA and approved by the FCA under section 87A of FSMA. This document has been filed with the FCA and made available to the public in accordance with Rule 3.2 of the Prospectus Regulation Rules.

The Ordinary Shares are listed on the standard segment of the Official List maintained by the FCA and traded on the London Stock Exchange's Main Market for listed securities. Application will be made to the FCA for the New Ordinary Shares to be admitted to the standard segment of the Official List and to the London Stock Exchange for admission to trading on the London Stock Exchange's Main Market for listed securities (together Admission). Application will be made for the American Depositary Receipts to be approved for listing on the Nasdaq Global Select Market (Nasdaq). It is expected that Admission will become effective and that dealings on the London Stock Exchange in the New Ordinary Shares will commence at 8.00 a.m. on 28 September 2021 (or such later date as may be the business day following the admission of the ADSs to Nasdaq). The New Ordinary Shares will, when issued, rank pari passu with each other and with all Existing Ordinary Shares and will rank in full for all dividends and other distributions thereafter declared, made or paid in respect of the Existing Ordinary Shares.

No Ordinary Shares or any other securities in the Company have been marketed to, nor are available for purchase, in whole or in part, by the public in the United Kingdom or elsewhere in connection with Admission. This prospectus does not constitute or form part of any invitation to purchase, subscribe for, sell or issue, or any solicitation of any offer to purchase, subscribe for, sell or issue Ordinary Shares.

The Company and each of the Directors, whose names appear on page 58 of this document, accept responsibility for this document. To the best of the knowledge of the Company and the Directors, the information contained in this document is in accordance with the facts and this document makes no omission likely to affect its import.

This prospectus has been approved by the Financial Conduct Authority, as competent authority under Regulation (EU) 2017/1129 (which forms part of domestic law pursuant to the European Union (Withdrawal) Act 2018). The Financial Conduct Authority only approves this prospectus as meeting the standards of completeness, comprehensibility and consistency imposed by Regulation (EU) 2017/1129 and such approval should not be considered as an endorsement of the issuer or the quality of the securities that are the subject of this prospectus. Investors should make their own assessment as to the suitability of investing in the securities.

__________________________________________________________________________________________

(incorporated in England and Wales under the company number 11097258 with Legal Entity Identifier 213800WPCCYSDYY26J54)

Admission of the New Ordinary Shares to the Official List and to trading on the London Stock Exchange's Main Market

_________________________________________________________________________________________

THE WHOLE OF THE TEXT OF THIS DOCUMENT SHOULD BE READ BY SHAREHOLDERS. YOUR ATTENTION IS SPECIFICALLY DRAWN TO THE DISCUSSION OF CERTAIN RISK AND OTHER FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH ANY INVESTMENT IN THE ORDINARY SHARES, AS SET OUT IN THE SECTION ENTITLED "RISK FACTORS" ON PAGES 11 TO 50 OF THIS DOCUMENT.

PROSPECTIVE INVESTORS SHOULD BE AWARE THAT AN INVESTMENT IN THE COMPANY INVOLVES A SIGNIFICANT DEGREE OF RISK AND THAT, IF CERTAIN OF THE RISKS DESCRIBED IN THIS DOCUMENT OCCUR, INVESTORS MAY FIND THEIR INVESTMENT IS MATERIALLY ADVERSELY AFFECTED.

ACCORDINGLY, AN INVESTMENT IN THE ORDINARY SHARES IS ONLY SUITABLE FOR INVESTORS WHO ARE PARTICULARLY KNOWLEDGEABLE IN INVESTMENT MATTERS AND WHO ARE ABLE TO BEAR THE LOSS OF THE WHOLE OR PART OF THEIR INVESTMENT.

NOTICE TO US SHAREHOLDERS

Additional information and where to find it

In connection with the offering of the American Depositary Receipts in the United States, the Company has filed relevant materials, including a Registration Statement on Form F-1 (the Registration Statement) with the United States Securities and Exchange Commission (the SEC). For more information on the ADS Offering, investors should read the Registration Statement, together with all other relevant documents filed with the SEC. Shareholders may obtain the documents free of charge at the SEC's website, http://www.sec.gov, or for free from the Company at https://argoblockchain.com/investors/#Shareholder\_Information\_section

Non-solicitation

This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy any securities under the US federal securities laws, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of section 10 of the Securities Act of 1933, as amended (the Securities Act).

APPLICATION WILL BE MADE FOR THE NEW ORDINARY SHARES TO BE ADMITTED TO A STANDARD LISTING ON THE OFFICIAL LIST. A STANDARD LISTING WILL AFFORD INVESTORS IN THE COMPANY A LOWER LEVEL OF REGULATORY PROTECTION THAN THAT AFFORDED TO INVESTORS IN COMPANIES WITH A PREMIUM LISTING ON THE OFFICIAL LIST, WHICH ARE SUBJECT TO ADDITIONAL OBLIGATIONS UNDER THE LISTING RULES. IT SHOULD BE NOTED THAT THE FCA WILL NOT HAVE THE AUTHORITY TO (AND WILL NOT) MONITOR THE COMPANY'S COMPLIANCE WITH ANY OF THE LISTING RULES TO WHICH THE COMPANY IS NOT SUBJECT (SUCH AS THOSE ONLY APPLICABLE TO COMPANIES WITH A PREMIUM LISTING) OR WHICH THE COMPANY HAS INDICATED THAT IT INTENDS TO COMPLY WITH ON A VOLUNTARY BASIS, NOR TO IMPOSE SANCTIONS IN RESPECT OF ANY FAILURE BY THE COMPANY TO SO COMPLY WITH SUCH RULES.

SUMMARY4
RISK FACTORS11 CONSEQUENCES OF A STANDARD LISTING51
IMPORTANT INFORMATION, PRESENTATION OF FINANCIAL AND OTHER INFORMATION
AND NOTICES TO INVESTORS 53
EXPECTED TIMETABLE OF PRINCIPAL EVENTS57
KEY STATISTICS57
DEALING CODES57
DIRECTORS, AGENTS AND ADVISERS58
PART I
INFORMATION ON THE COMPANY, INVESTMENT OPPORTUNITY AND STRATEGY 59
PART II
BLOCKCHAIN BACKGROUND74
PART III
DIRECTORS AND CORPORATE GOVERNANCE 77
PART IV
THE FUNDRAISING83
PART V
SHARE CAPITAL, LIQUIDITY AND CAPITAL RESOURCES AND ACCOUNTING POLICIES85
PART VI
OPERATING AND FINANCIAL REVIEW90
PART VII
UK TAXATION 91
PART VIII
(A) UNAUDITED PRO FORMA STATEMENT OF NET ASSETS 94
(B) REPORT ON THE UNAUDITED PRO FORMA STATEMENT OF NET ASSETS 96
PART IX
ADDITIONAL INFORMATION 98
PART X
DEFINITIONS 120
PART XI GLOSSARY 124
PART XII
INFORMATION INCORPORATED BY REFERENCE 128

SUMMARY

Section A - Introduction and Warnings

THIS SUMMARY SHOULD BE READ AS AN INTRODUCTION TO THE PROSPECTUS. ANY DECISION TO INVEST IN THE SECURITIES SHOULD BE BASED ON CONSIDERATION OF THE PROSPECTUS AS A WHOLE BY THE INVESTOR. AN INVESTOR ACQUIRING ORDINARY SHARES COULD LOSE ALL OR PART OF THEIR INVESTED CAPITAL.

Civil liability attaches to those persons who have tabled the summary,including any translation thereof, but only where the summary is misleading,inaccurate or inconsistent, when read together with the other parts of the prospectus, or where it does not provide, when read together with the otherparts of the prospectus, key information in order to aid investors when considering whether to invest in such securities.

Name of Securities	Ordinary Shares
International Securities Identification Number (ISIN)	GB00BZ15CS02
Issuer Name	The legal and commercial name of the Company is Argo Blockchain PLC.
Issuer Contact Details	Argo Blockchain PLC 9th Floor 16 Great Queen Street London WC2B 5DG
Issuer LEI	213800WPCCYSDYY26J54
Competent Authority and contact details	Financial Conduct Authority 12 Endeavour Square London E20 1JN
Date of approval of Prospectus	23 September 2021

Section B – Key Information on the Issuer

Who is the issuer of the securities?

Domicile and legal form	England, public company limited by shares under the Companies Act 2006
LEI	213800WPCCYSDYY26J54
Country of incorporation	England
Applicable law in the jurisdiction of incorporation and operation.	English law
Principal activities	The Company is a leading blockchain technology company focused on large scale mining of Bitcoin and other cryptocurrencies, which it mines using purpose built computers (or "mining machines") to solve complex cryptographic algorithms (or "verify" or "solve") blocks in the blockchain in exchange for rewards and fees denominated in the native token of that blockchain network.

Major shareholders	Except for the interests of those persons set out in this paragraph, the Directors are not aware, at the date of this document, of any interest which immediately following Admission would amount to 3% or more of the Company's issued share capital:
	(1) Name	(2) Ordinary Shares as at the date of this document	(3) Percentage of Existing Ordinary Shares	(4) Ordinary Shares on Admission	(5) Percentage of Enlarged Share Capital
	Amplify Transformational Data Sharing ETF	20,446,985	5.35%	20,446,985	4.48%*
	*4.37% if the Over-allotment Option is exercised
Controlling shareholder, if any	To the best of the Directors' knowledge, no-one, directly or indirectly, acting individually or jointly, exercises or could exercise control over the Company.
Key managing directors	Peter Wall (Chief Executive Officer & Interim Chairman) Alex Appleton (Chief Financial Officer)
Statutory Auditors	PKF Littlejohn LLP

What is the key financial information regarding the issuer?

Table 1: Income statement for non-financial entities (equity securities)

Consolidated Income Statement of the Group	Unaudited	Audited	Audited	Audited
	Six months ended	Year ended	Year ended	Period ended
	30 June	31 December	31 December	31 December
	2021	2020	2019	2018
	£	£	£	£
Revenue	31,085,716	18,957,417	8,616,879	764,562
Gross profit/(loss)	14,532,436	3,921,351	2,723,230	(646,599)
Operating profit/(loss)	11,108,628	1,598,530	(833,815)	(4,143,315)
Profit/(loss) after taxation	7,213,997	1,442,418	(869,051)	(4,117,285)
Earnings per share (pence)
Basic earnings per share	1.9p	0.6p	(0.2p)	(2.2p)
Diluted earnings per share	1.8p	0.5p	(0.2p)	(2.2p)
Consolidated Statement of Financial Position of the Group	Unaudited	Audited	Audited	Audited
	As at	As at	As at	As at
	30 June	31 December	31 December	31 December
	2021	2020	2019	2018
	£	£	£	£
Total non-current assets	51,105,908	23,779,416	21,437,023	3,076,740

Total current assets	88,601,755		8,863,518		18,570,582
Total assets	139,707,663		32,642,934	24,725,028	21,647,322
Total equity	85,952,293		24,326,888	20,737,942	21,428,753
Total liabilities	53,755,370		8,316,046	3,987,086	218,569
Consolidated Cash Flow Statement of the Group		Unaudited	Audited	Audited	Audited
		Six months ended	Year ended	Year ended	Period ended
		30 June	31 December	31 December	31 December
		2021	2020	2019	2018
		£	£	£	£
Net cash flow from/(used in) operating activities		2,372,843	2,362,084	(887,852)	(5,569,122)
Net cash used in investing activities		(50,198,757)	(1,054,554)	(16,424,467)	(3,528,473)
Net cash generated from financing activities		61,822,761	581,889	1,084,218	25,486,038
Net increase/(decrease) in cash and cash equivalents		13,996,847	1,889,419	(16,228,101)	16,389,443
Cash and cash equivalents at end of period		16,047,608	2,050,761	161,342	16,389,443

Pro-forma Financial Information

Unaudited pro forma statement of net assets of the Group at 30 June 2021

	As at	Note 1
	30 June	US Equity
	2021	Raise	Total
	£		£
ASSETS
Total non-current assets	51,105,908	-	51,105,908
Total current assets	88,601,755	84,269,294	172,871,049
Total assets	139,707,663	-	223,976,957
EQUITY AND LIABILITIES
Total equity	85,952,293	84,269,294	170,221,587
Total liabilities	53,755,370	-	53,755,370
Total equity and liabilities	139,707,663	-	223,976,957

NOTES TO THE UNAUDITED PRO FORMA STATEMENT OF NET ASSETS

Notes:

Note 1: Offering of American Depositary Receipts (amounts denominated in U.S. Dollars have been translated to pounds sterling assuming the noon buying rate of the Federal Reserve Bank of New York on June 30, 2021, which was £1.00 to \$1.3806).

The pro forma statement of net assets has been prepared on the following basis:

• 1. The unaudited net assets of the Group as at 30 June 2021 have been extracted without adjustment from the Histo Financial Information to which is incorporated by reference into this document.
• 1. No adjustments have been made to reflect trading or other transactions of the Group since 30 June 2021, other than those described above and the pro forma statement of net assets assumes the draw down and subsequent repayment of the New Galaxy Term Loan.
• 1. The pro forma statement of net assets does not constitute financial statements.

What are the key risks that are specific to the issuer?

Due to the Company's limited operating history, it may be difficult to evaluate its business and future prospects, and the Company may not be able to achieve or maintain profitability in any given period.

The Company may be unable to raise additional capital needed to grow its business.

The Company has an evolving business model, which is subject to various uncertainties.

The Company is subject to many risks related to the development of a new cryptocurrency mining facility in Texas. Delays or disruptions in the Company's development of the Texas facility could materially and adversely affect the Company's results of operations and financial condition.

The Company's total revenue and cash flow is substantially dependent on the market value of digital assets and the volume of digital assets received from its mining efforts. If such market value or volume declines, its business, operating results and financial condition would be adversely affected.

There are risks related to technological obsolescence, the vulnerability of the global supply chain for cryptocurrency mining hardware to disruption, and difficulty in obtaining new hardware which may have a negative effect on its business.

The Company is subject to an extensive and rapidly-evolving regulatory landscape and any adverse changes to, or its failure to comply with, any laws and regulations could adversely affect its brand, reputation, business, operating results and financial condition.

The Company operates in a highly competitive industry and the Company competes against companies with greater resources and experience, and its business, operating results and financial condition may be adversely affected if the Company is unable to respond to its competitors effectively.

Cyberattacks and security breaches of its own or its third-party service providers or partner's cryptocurrency operations, or those impacting underlying digital asset networks, could adversely impact its business, operating results and financial condition.

The Company's mining facilities and mining equipment may experience damages, including damages that are not covered by insurance.

Section C – Key information on the securities

What are the main features of the securities?

Type, class and ISIN of securities	The securities the subject of Admission are Ordinary Shares (ISIN GB00BZ15CS02)
Currency, denomination and par value of securities	The Ordinary Shares are denominated in pounds sterling at a par value of £0.001 each.
Number of securities issued	The Company has 381,832,335 Ordinary Shares in issue and 86,250,000 New Ordinary Shares will be issued pursuant to the Fundraising (if the Over-allotment Option is exercised in full).
Rights attached to the securities	Each Ordinary Share ranks pari passu for voting rights, dividends and return of capital on winding up. Except as disapplied, Shareholders will have pre-emption rights which will generally apply in respect of future share issues for cash. No pre emption rights exist in respect of future share issues wholly or partly other than for cash.
Seniority of the securities in the event of insolvency	The Ordinary Shares rank behind all debts and liabilities of the Company (secured and unsecured). The Company only has one class of share, which ranks pari passu on insolvency.
Details of any restrictions on free transferability of the securities	There are no restrictions in place.
Dividend or payout policy, if any	The Company does not intend to pay dividends in the near future as any earnings during such time are expected to be retained for use in business operations.

Where will the securities be traded?

The securities are subject to an application for admission to trading on a regulated market.

Market(s) on which the securities will be traded, if any	Applications will be made to the FCA for the New Ordinary Shares to be admitted to the standard segment of the Official List and to the London Stock Exchange for admission to trading on the London Stock Exchange's Main Market for listed securities.
	It is expected that Admission will become effective and that dealings on the LSE in the New Ordinary Shares will commence at 8.00 a.m. on 28 September 2021 (or such later date as may be the business day following the admission of the ADSs to Nasdaq.).

What are the key risks that are specific to the securities?

The Standard Listing of the Ordinary Shares affords shareholders a lower level of regulatory protection than a Premium Listing

The pre-emption rights in the Articles of the Company has been dis-applied, and the Company may be required to raise cash through issuing substantial additional equity, which may dilute the percentage ownership of a Shareholder and the value of its Ordinary Shares

The dual listing of the Company's Ordinary Shares and the ADSs following the offering may adversely affect the liquidity and value of its Ordinary Shares and ADSs.

The market price of the Ordinary Shares has historically been highly volatile, and investors may not be able to resell the Ordinary Shares at or above their initial purchase price.

Section D – Key information on the offer of securities to the public and/or the admission to trading on a regulated market

Under which conditions and timetable can I invest in this security?

General terms and conditions of the offer	Not applicable. This Prospectus does not constitute an offer or an invitation to any person to subscribe for or purchase any Ordinary Shares in the Company. The New Ordinary Shares are being issued in connection with the offering of American Depositary Receipts, which are the subject of the Registration Statement. The New Ordinary Shares are not being offered to the public in the United Kingdom or elsewhere in reliance on this Prospectus.
Expected timetable of the offer	Announcement confirming results of Fundraising	23 September 2021
	Crediting of Ordinary Shares issued in respect of the Fundraising to the Depositary to be held in uncertificated form in CREST	27 September 2021
	Admission and commencement of unconditional dealings in New Ordinary Shares issued in respect of the Fundraising	28 September 2021
Details of the admission to trading on a regulated market, if any	Application will be made to the FCA for the New Ordinary Shares to be admitted to the Standard Listing segment of the Official List and to the London Stock Exchange for such shares to be admitted to trading on the London Stock Exchange's Main Market for listed securities.
Plan for distribution	Not applicable. The New Ordinary Shares are not being offered to the public in the United Kingdom or elsewhere in reliance on this Prospectus.
Amount and percentage of dilution resulting from the offer	The New Ordinary Shares, if the Over-allotment Option is exercised in full, represent 18% of the Enlarged Share Capital, which on Admission will result in the Existing Ordinary Shares being diluted so as to constitute 82% of the Enlarged Share Capital.
Estimate of total expenses of the issue and/or offer	£9,439,963 (inclusive of irrecoverable VAT).
Details and amount of estimated expenses charged to the investor	The costs of the Admission are payable by the Company and Shareholders will not be charged expenses by the Company in respect of the Admission.

Why is this prospectus being produced?

Reasons for offer and admission to trading on a regulated market	This prospectus has been prepared in connection with the proposed Admission of the New Ordinary Shares, which are proposed to be issued in connection with the Fundraising. In order for the Company to comply with its obligations under the Listing Rules, the entire class of Ordinary Shares must be admitted to the Standard Segment of the Official List and to trading on the London Stock Exchange's Main Market. Before and in order for Admission to take place, the Company is required to issue this prospectus.
Use of Net Proceeds	The Net Proceeds will be used to repay £18,108,069 of the outstanding amount of the New Galaxy Term Loan (as defined below), to fund the development of the Company's Texas facility and for working capital and general corporate purposes (including to purchase mining machines), for possible acquisitions that may be identified following the date of this prospectus and other incremental growth, including investments in DeFi projects and other initiatives. The Company does not currently have any definitive or preliminary plans in respect of any such possible acquisitions or investments.
Estimated amount of Net Proceeds	£84,269,294 being the equivalent of \$116,342,188 (based on an exchange rate of £1 to US\$1.3806).
Confirmation of whether the offer is underwritten on a firm commitment basis, including details of any uncovered portion	The Underwriters are contractually obliged to purchase all of the Firm ADSs. They cannot purchase less than the full amount. The Underwriters can choose to purchase all, or any portion of, the Optional ADSs.
Most material conflicts of interest pertaining to the offer or admission to trading, if any.	There are no material conflicts of interest pertaining to the admission to trading. The New Ordinary Shares are not being offered to the public in the United Kingdom or elsewhere in reliance on this Prospectus.

RISK FACTORS

The investment detailed in this document may not be suitable for all its recipients and involves a higher than normal degree of risk. Before making an investment decision, prospective investors are advised to consult an investment adviser authorised under the Financial Services and Markets Act 2000 who specialises in investments of the kind described in this document. Prospective investors should consider carefully whether an investment in the Company is suitable for them in the light of their personal circumstances and the financial resources available to them.

Before deciding whether to invest in Ordinary Shares, prospective investors should carefully consider the risks described below together with all other information contained in this document.

The risks referred to below are those risks the Company and the Directors consider to be the material risks relating to the Company. The risk factors described below may not be exhaustive. Additional risks and uncertainties relating to the Company that are not currently known to the Directors, or that are currently deemed immaterial, may also have an adverse effect on the Company's business. If this occurs the price of the Ordinary Shares may decline and investors could lose all or part of their investment.

Prospective investors should note that the risks relating to the Company, its industry and the Ordinary Shares summarised in the section of this document headed "Summary" are the risks that the Company believes to be the most essential to an assessment by a prospective investor of whether to consider an investment in the Ordinary Shares. However, as the risks which the Company faces relate to events and depend on circumstances that may or may not occur in the future, prospective investors should consider not only the information on the key risks summarised in the section of this document headed "Summary" but also, among other things, the risks and uncertainties described below.

RISKS RELATING TO THE COMPANY'S BUSINESS

Due to the Company's limited operating history, it may be difficult to evaluate its business and future prospects, and the Company may not be able to achieve or maintain profitability in any given period.

The Company began its operations in December 2017, and since its incorporation its business model has evolved significantly. While the Company's annual net revenue has increased since its formation, there is no assurance that this growth rate will continue in future periods and investors should not rely on the revenue growth of any given period as an indication of its future performance. The Company may not generate sufficient revenue to achieve positive cash flow from operations or profitability in any given period, and its limited operating history, and the volatile nature of its business and the cryptocurrency industry make it difficult to evaluate its current business and its future prospects. The Company has encountered and will continue to encounter risks and difficulties, including, but not limited to those described in this section. If the Company does not manage these risks successfully, its business may be adversely impacted. If the Company's growth rate were to decline significantly or become negative, it could adversely affect its operating results and financial condition. If the Company is not able to achieve or maintain positive cash flow from operations, its business may be adversely impacted and the Company may require additional financing, which may not be available on favourable terms or at all, or which would be dilutive to the holders of Ordinary Shares.

The Company may be unable to raise additional capital needed to grow its business.

The Company may need to raise additional capital to fund its operations, pursue its growth strategies, including potential acquisitions of complementary businesses, and respond to competitive pressures or unanticipated working capital requirements. For example, in January 2021 and March 2021, the Company raised gross proceeds of £22.4 million and £26.8 million, respectively, in private placements and subscriptions for its ordinary shares. The Company may not be able to obtain additional debt or equity financing on favourable terms, if at all, which could impair its growth and, by virtue of diverting available capital resources, adversely affect its existing operations. If the Company raises additional equity financing, the holders of Ordinary Shares may experience significant dilution of their ownership interests, and the value of the Ordinary Shares could decline. Furthermore, if the Company incurs additional debt financing, the holders of debt likely would have priority over the holders of Ordinary Shares in order of payment preference. The Company may be required to accept terms that restrict its ability to incur additional indebtedness or to take other actions, including terms that require the Company to maintain specified liquidity or other ratios that could otherwise not be in the interests of the holders of Ordinary Shares.

The Company has an evolving business model, which is subject to various uncertainties.

The Company's business model has significantly evolved since its incorporation and the Company expects it to continue to do so in the future. For example, in the past, the Company operated as a mining-as-a-service (MaaS) business. Beginning in 2019, in the face of an industry-wide downturn, the Company terminated its MaaS contracts and commenced mining for its own account. As digital assets and blockchain technologies become more widely available, the Company expects the services and products associated with them to evolve. In order to stay current with the industry, the Company's business model may need to evolve as well. As a result, from time to time, the Company may modify aspects of its business model relating to its strategy. The Company cannot offer any assurance that these or any other modifications will be successful or will not result in harm to its business. These modifications may increase the complexity of its business and place significant strain on its management, personnel, operations, systems, technical performance, financial resources and internal financial control and reporting functions. The Company may not be able to manage growth effectively, which could damage its reputation, limit its growth and negatively affect its operating results. Further, the Company cannot provide any assurance that the Company will successfully identify all emerging trends and growth opportunities within the cryptocurrency industry and the Company may lose out on such opportunities. Such circumstances could have a material adverse effect on the Company's business, prospects, financial condition and operating results.

The Company is subject to many risks related to the development of a new cryptocurrency mining facility in Texas. Delays or disruptions in the Company's development of the Texas facility could materially and adversely affect the Company's results of operations and financial condition.

As part of the Company's evolving strategy focused on owning and operating its own mining facilities, the Company is developing a new mining facility in Texas, where the Company expects to obtain more than 90% of its power requirements from reliable renewable power sources at less than the current cost of fossil fuel energies in other locations. However, development of the Company's Texas mining facility may be subject to unexpected problems and delays that could adversely impact its ability to develop or operate the project as planned or increase the costs of the project. Some of the risks inherent in the development and construction of a new mining facility or the extension of an existing mining facility include uncertainties regarding:

• timing and cost of construction of the facility, which can be considerable;
• availability and cost of mining equipment;
• availability and cost of skilled labour, power, water and transportation;
• availability and cost of appropriate power arrangements;
• the successful development and implementation of new technologies and processes related to mining, such as immersion technology;
• applicable requirements under local and state laws; and
• availability of funds to finance construction and development, which may mean the Company has to reallocate resources from other proposed investments or developments in its business to fund the development.

Broader social or political opposition to cryptocurrency mining may increase the cost, timing and complexity of the development and construction of the Company's Texas facility. Accordingly, such facility may not be developed as planned or may be less profitable than anticipated or even loss-making. Additionally, given current lead times for new mining hardware, the Company may need to commit to purchasing mining machines in advance of the facility becoming fully operational and, if so, may not have the power capacity to support these mining machines at its other hosted and owned facilities. A failure or material delay in its ability to develop and operate the new facility in accordance with, or in excess of, expectations could have a material adverse effect on its business, prospects, financial condition and operating results.

The Company's operating results have fluctuated and may continue to fluctuate significantly due to the highly volatile nature of digital assets.

All of the Company's sources of revenue are dependent on digital assets and the broader blockchain ecosystem. Due to the highly volatile nature of the blockchain ecosystem and the prices of digital assets, the Company's operating results have fluctuated, and may continue to fluctuate, significantly from period to period in accordance with market sentiments and movements in the broader blockchain ecosystem. In particular, the Company's operating results may continue to fluctuate significantly as a result of a variety of factors, many of which are unpredictable and in certain instances are outside of the Company's control, including:

• changes in the legislative or regulatory environment, or actions by governments or regulators that impact the cryptocurrency industry generally, or its operations specifically;
• difficulty obtaining new hardware and related installation costs;
• access to cost-effective sources of electrical power;
• evolving cryptographic algorithms and emerging trends in the technology securing blockchains, including proof-of-stake;
• changes in the development, usage and market preferences for the cryptocurrencies the Company mines;
• the development and introduction of existing and new products and technology by the Company or its competitors;
• increases in operating expenses that the Company expects to incur to grow and expand its operations and to remain competitive;
• system failure or outages, including with respect to its mining hardware, power supply and third-party networks; and
• breaches of security or data privacy.

As a result of these and other factors, it is difficult for the Company to forecast growth trends accurately and its business and future prospects are difficult to evaluate, particularly in the short term. In addition, as a result of the rapidly evolving nature of its business and the blockchain ecosystem, period-to-period comparisons of its operating results may not be meaningful, and investors should not rely upon them as an indication of future performance. Annual expenses reflected in its financial statements may be significantly different from historical rates. The Company's operating results in one or more future periods may fall below the expectations of securities analysts and investors. As a result, the trading price of the Ordinary Shares may increase or decrease significantly.

The Company's total revenue and cash flow is substantially dependent on the market value of digital assets and the volume of digital assets received from its mining efforts. If such market value or volume declines, its business, operating results and financial condition will be adversely affected.

The Company currently generates substantially all of its revenue from rewards and transaction fees received for successfully validating a "block" of transactions on the Bitcoin blockchain. Similarly, its operating cash flow is substantially dependent on its ability to sell cryptocurrency for fiat currency as needed. As such, any declines in the amount of cryptocurrencies that the Company successfully mines, the price of such cryptocurrencies or market liquidity for cryptocurrencies and digital assets generally would adversely affect its revenue and require it to sell a greater amount of cryptocurrency in order to fund its operations.

The price of cryptocurrencies and digital assets and associated demand for buying, selling, and trading cryptocurrencies and digital assets have historically been subject to significant volatility. For example, Bitcoin's aggregate market value exceeded \$1 trillion in February 2021 compared to \$160 billion in February 2020, based on Bitcoin prices quoted on major exchanges. The price and trading volume of any digital asset is subject to significant uncertainty and volatility, depending on a number of factors, including:

• market conditions across the broader blockchain ecosystem;
• trading activities on digital asset platforms worldwide, many of which may be unregulated, and may include manipulative activities;
• investment and trading activities of highly active retail and institutional users, speculators, miners and investors;
• the speed and rate at which digital assets are able to gain worldwide adoption as a medium of exchange, utility, store of value, consumptive asset, security instrument or other financial asset, if at all;
• changes in user and investor confidence in digital assets and digital asset platforms;
• publicity and events relating to the blockchain ecosystem, including public perception of the impact of the blockchain ecosystem on the environment;
• unpredictable social media coverage or "trending" of digital assets;
• the functionality and utility of digital assets and their associated ecosystems and networks, including digital assets designed for use in various applications;
• consumer preferences and perceived value of digital assets;
• increased competition from other payment services or other digital assets that exhibit better speed, security, scalability or other characteristics;
• the correlation between the prices of digital assets, including the potential that a crash in one digital asset or widespread defaults on one digital asset exchange or trading venue may cause a crash in the price of other digital assets, or a series of defaults by counterparties on digital asset exchanges or trading venues;
• regulatory or legislative changes and updates affecting the blockchain ecosystem;
• the characterization of digital assets under the laws of various jurisdictions around the world;
• the maintenance, troubleshooting and development of the blockchain networks underlying digital assets, including by miners, validators and developers worldwide;
• ongoing technological viability and security of digital assets and their associated protocols, smart contracts, applications and networks, including vulnerabilities against hacks and scalability;
• fees and speed associated with processing digital asset transactions, including on the underlying blockchain networks and on digital asset platforms;
• interruptions in service from, or failures of, major digital asset trading platforms;
• availability of banking and payment services to support digital asset-related projects;
• level of interest rates and inflation; and
• monetary policies of governments, trade restrictions and fiat currency devaluations.

There is no assurance that any digital asset, including Bitcoin, will maintain its value or that there will be meaningful levels of trading activities to support markets in any digital asset. A decline in the market value of digital assets or in the demand for trading digital assets could lead to a corresponding decline in the value of the Company's cryptocurrency assets, the number of transactions on the relevant blockchain network and, as such, the Company's opportunities to earn block rewards and transaction fees, its returns on investments in mining machines, and could adversely affect its business, operating results and financial condition. Further, to the extent that investors perceive investment in the Ordinary Shares as a proxy for exposure to the digital asset industry more generally, volatility in the value of cryptocurrencies could have immediate and substantial negative effect on the price of the Ordinary Shares, irrespective of the actual effect on the Company's business.

Digital assets may be subject to momentum pricing due to speculation regarding future appreciation or depreciation in value, leading to greater volatility. Momentum pricing typically is associated with growth stocks and other assets whose valuation, as determined by the investing public, accounts for future changes in value. It is possible that momentum pricing of digital assets has resulted, and may continue to result, in speculation regarding future changes in the value of digital assets, making digital assets' prices more volatile. As a result, digital assets may be more likely to fluctuate in value due to changing investor confidence, which could impact future appreciation or depreciation in digital asset prices. If this leads to a reduction in the price of digital assets, the Company's business, operating results and financial condition could be adversely affected.

The market value of digital assets may also be affected by the activities of "professionalized" mining operations. Over the past two years, digital asset mining operations have evolved from individual users mining with computer processors, graphics processing units and first-generation ASIC mining machines to businesses with sophisticated operations using the latest ASIC technology, particularly operations mining Bitcoin. These professionalized mining operations are of a greater scale than individual and casual miners and have more defined and regular expenses and liabilities. These regular expenses and liabilities require professionalized mining operations to maintain profit margins on the sale of mined digital assets, including Bitcoin. To the extent the price of digital assets decline and such profit margin is constrained, professionalized miners may be incentivized to more immediately sell any digital assets, including Bitcoin, earned from mining operations, whereas it is believed that individual miners in past years were more likely to hold newly mined digital assets for more extended periods. If professional mining operations were to collectively implement strategies to immediately sell newly mined digital assets, including Bitcoin, it would greatly increase the available trading supply of such digital assets, creating downward pressure on the market price. Such downward pressure could adversely affect the price of the Ordinary Shares and the Company's business, operating results and financial condition.

A majority of the Company's revenue is currently derived from mining Bitcoin. If demand for Bitcoin declines and is not replaced by new demand for cryptocurrencies the Company is able to mine, its business, operating results and financial condition could be adversely affected.

For the six months ended 30 June 2021 and year ended 31 December 2020, the Company derived the majority of its net revenue from transaction fees and cryptocurrency rewards generated in connection with mining Bitcoin. As such its business may be adversely affected if the market for Bitcoin deteriorates or if its price declines, including as a result of the following factors:

• the reduction in mining rewards of Bitcoin, including block reward halving events, which are events that occur after a specific period of time which reduce the block rewards earned by miners;
• disruptions, hacks, splits in the underlying network also known as "forks", attacks by malicious actors who control a significant portion of the networks' hash rate such as "double-spend" or "51% attacks" or other similar incidents affecting the Bitcoin network;
• hard "forks" resulting in the creation of, and divergence into, multiple separate networks, such as Bitcoin Cash;
• the informal governance of the Bitcoin network, which evolves over time largely based on self-determined participation, which may result in revisions to the underlying source code or inaction, that affects the Bitcoin network's speed, scalability, security, usability or value;
• the ability for the Bitcoin network to resolve significant scaling challenges and increase the volume and speed of transactions;
• the ability to attract and retain developers to maintain and update the Bitcoin network;
• the ability to attract and retain market participants to use Bitcoin for payment, store of value, unit of accounting and other intended uses;
• transaction congestion and fees associated with processing transactions on the Bitcoin network;
• the identification of Satoshi Nakamoto, the pseudonymous person or persons who developed Bitcoin, or the transfer of Bitcoin controlled by Satoshi Nakamoto;
• negative perception of Bitcoin, including with respect to the power consumption of its proof-of-work consensus mechanism;
• developments in mathematics or technology, including in digital computing, algebraic geometry and quantum computing, that could result in the cryptography being used by Bitcoin becoming insecure or ineffective; and

• laws and regulations affecting the Bitcoin network or access to this network, including a determination that Bitcoin constitutes a security or other regulated financial instrument under the laws of any jurisdiction.

In addition to Bitcoin, the Company derives revenue from transaction fees and cryptocurrency rewards generated in connection with the mining of Zcash. The market for Zcash could be affected by many of the same factors, as well as by regulatory concerns regarding Zcash privacy features that cause it to be delisted on exchanges or otherwise directly or indirectly impact the value or utility of Zcash, which could adversely affect its business.

In addition to mining Bitcoin and Zcash, the Company plans to expand its mining business to include mining on other blockchain networks which may be subject to similar risks. For example, the Company may derive revenue from transaction fees and cryptocurrency rewards generated in connection with the mining of Ethereum. The market for Ethereum and other digital assets may be affected by many of the same factors as those listed above. Ethereum and other digital assets may also be subject to varying risks related to future regulation of such networks or DeFi applications more broadly, as well as technological risks related to smart contracts and other software used by the relevant network. These risks could cause a decline in the popularity of such blockchain networks (e.g. Ethereum) or otherwise directly or indirectly impact the value or utility of the relevant digital assets (e.g., ETH), which could adversely affect the Company's business. In addition, various blockchain networks are being developed with smart contract capabilities that are competitors to Ethereum and each other, which may drive transaction volume away from the blockchain networks the Company mines and may adversely affect the Company's business.

The Company has in the past, and may in the future, seek to reduce the risk of holding Bitcoin and other cryptocurrencies on its balance sheet by engaging in hedging transactions, such as trading Bitcoin for alternative digital assets or stablecoins or purchasing Bitcoin futures contracts; such efforts may be unsuccessful, and could adversely impact its business, operating results and financial condition.

The Company may at times employ various risk mitigation strategies, such as trading Bitcoin for alternative digital assets or stablecoins or purchasing Bitcoin futures contracts, designed to minimize the impact of volatility in the Bitcoin market and other cryptocurrencies on its balance sheet. Such techniques will not always be possible to implement and when possible will not always be effective in limiting losses and may also result in additional counterparty risk, costs, and potentially losses. Hedging against a decline in the value of a particular cryptocurrency does not eliminate fluctuations in the values of positions the Company holds or prevent losses if the values of such positions decline, but may moderate the decline in value. However, such hedge transactions also limit the opportunity for gain if the value of the hedged cryptocurrency should increase. Moreover, it may not be possible to hedge against a fluctuation that is so generally anticipated that the Company is not able to enter into a hedging transaction at a price sufficient to protect from the anticipated decline in value of the cryptocurrency as a result of such a fluctuation. The Company may choose not to engage in a hedging transaction for a number of reasons, including if the expense associated with such hedging transaction is perceived as being too costly or other factors. The successes of its hedging transactions are subject to its ability to correctly predict market fluctuations and movements and its ability to monitor any hedging transactions that the Company enters into. Therefore, while the Company may enter into such transactions to seek to reduce risks, unanticipated market movements and fluctuations may result in a poorer overall performance than if the Company had not engaged in any such hedging transactions.

Cyberattacks and security breaches of its own or its third-party service providers or partner's cryptocurrency operations, or those impacting underlying digital asset networks, could adversely impact its business, operating results and financial condition.

Digital assets, the wallets in which they are stored and the networks and exchanges on which they are traded are based on software code which has generally been written, maintained and updated by third parties. Flaws in this software code have been exposed by certain actors, sometimes for malicious ends. Most of its sensitive and valuable data, including digital assets are stored with third-party custodians and service providers. The Company also relies on the digital asset community and its third-party service providers to optimize and protect sensitive and valuable data, confidential information and identify vulnerabilities of blockchain networks. The digital asset community will often identify and correct errors and defects in the code underlying digital asset networks, including those that may disable some functionalities of its systems or expose data. For example, in 2018, a vulnerability in the Bitcoin network source code that could in certain circumstances allow miners to double-spend Bitcoin and thereby increase the supply of Bitcoin was discovered. Additionally, in 2016, an anonymous hacker exploited a smart contract running on the Ethereum network to steal approximately US\$60 million of ETH; the Ethereum community responded by adopting a "fork" that effectively reversed the hack. However, a minority of Etherum users have continued to develop and use the original blockchain reflecting the theft, now referred to as "Ethereum Classic" with the digital asset on that blockchain referred to as Ether Classic (ETC), which continues to be used and traded independently from ETH. There can be no guarantee that the measures intended to safeguard digital assets and related software and the work of the digital asset developer community will identify or resolve all vulnerabilities, errors and defects prior to a malicious actor being able to exploit them. Any actual or perceived data security breach the Company experiences, or of its third-party partners or any underlying digital asset network, may:

• lead to theft or irretrievable loss of its fiat currencies or digital assets;
• harm its reputation and brand;
• result in its systems or services being unavailable and interrupt its operations;
• result in improper disclosure of data and violations of applicable data privacy and other laws;
• result in significant regulatory scrutiny, investigations, fines, penalties, and other legal, regulatory, contractual and financial exposure;
• cause the Company to incur significant remediation costs;
• divert the attention of management from the operation of its business; and
• adversely affect its business, operating results and financial condition.

Further, any actual or perceived data security breach or cybersecurity attack directed at other digital asset companies or underlying digital asset networks, whether or not the Company is directly impacted, could lead to a general loss of confidence in the broader blockchain ecosystem or in the use of digital asset networks to conduct financial transactions, which could negatively impact the Company, including the market perception of the effectiveness of its security measures and technology infrastructure.

Attacks upon systems across a variety of industries, including industries related to digital assets, are increasing in frequency, persistence, and sophistication, and, in many cases, are being conducted by sophisticated, well-funded and organized groups and individuals, including state actors. The techniques used to obtain unauthorized, improper or illegal access to systems and information (including personal data and digital assets), disable or degrade services, or sabotage systems are constantly evolving, may be difficult to detect quickly, and often are not recognized or detected until after they have been launched against a target. These attacks may occur on its systems or those of its third-party service providers or partners. The Company may experience breaches of its security measures due to human error, malfeasance, insider threats, system errors or vulnerabilities or other irregularities. In particular, unauthorized parties have attempted, and the Company expects that they will continue to attempt, to gain access to its systems and facilities, as well as those of its partners and third-party service providers, through various means, such as hacking, social engineering, phishing and fraud. In the past, hackers have successfully employed a social engineering attack against one of its service providers and misappropriated its digital assets, although, to date, such events have not been material to its financial condition or operating results. If and as its assets grow, the Company may become a more appealing target for these threats. Threats can come from a variety of sources, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, and insiders. In addition, certain types of attacks could harm the Company even if its systems are left undisturbed. For example, certain threats are designed to remain dormant or undetectable, sometimes for extended periods of time, or until launched against a target and the Company may not be able to implement adequate preventative measures. Any breach of its operations or those of others in the digital asset industry, including third party services on which the Company relies, could materially and adversely affect its business, and the Company expects that its costs and the resources the Company devotes to protecting against these advanced threats and their consequences will continue to increase over time. In addition, some insurers are currently reluctant to provide cybersecurity insurance for cryptocurrency and digital assets. In the event of any attacks, its costs and any impacted assets may not be partially or fully recoverable.

The Company operates in a highly competitive industry and the Company competes against companies with greater resources and experience, and its business, operating results and financial condition may be adversely affected if the Company is unable to respond to its competitors effectively.

The blockchain ecosystem is highly innovative, rapidly evolving and characterized by intense competition, experimentation and frequent introductions of new products and services, and is subject to uncertain and evolving industry and regulatory requirements. The Company expects competition to increase in the future as existing and new competitors introduce new products or enhance existing products. The Company competes against a number of companies operating both within the United States and abroad that focus on digital asset-based services, including mining digital assets.

The Company's existing competitors have, and its potential competitors are expected to have, various competitive advantages over us, such as:

• greater name recognition, longer operating histories and larger market shares;
• more established marketing, banking and compliance relationships;
• greater mining capabilities;
• more timely introduction of new technologies;
• preferred relationships with suppliers of mining machines and other equipment;
• access to more competitively priced power;
• greater financial resources to make acquisitions;
• lower labour, compliance, risk mitigation and research and development costs;
• established core business models outside of the mining or trading of digital assets, allowing them to operate on lesser margins or at a loss;
• operations in certain jurisdictions with lower compliance costs and greater flexibility to explore new product offerings; and
• substantially greater financial, technical and other resources.

If the Company is unable to compete successfully, or if competing successfully requires the Company to take costly actions in response to the actions of its competitors, its business, operating results and financial condition could be adversely affected.

The emergence or growth of other digital assets, including those with significant private or public sector backing, could have a negative impact on the price of Bitcoin and adversely affect its business.

The Company's business strategy is substantially dependent on the market price of Bitcoin. As of 30 June 2021, Bitcoin was the largest digital asset by market capitalization and had the largest user base and largest combined mining power.

Despite this first to market advantage, as of 30 June 2021, there were more than 10,000 alternative digital assets tracked by CoinMarketCap.com, having a total market capitalization of approximately \$1.4 trillion (including the approximately \$646.6 billion market cap of Bitcoin), as calculated using market prices and total available supply of each digital asset.

Many entities, including consortiums and financial institutions are also researching and investing resources into private or permissioned blockchain platforms rather than open platforms like the Bitcoin network. For example, in May 2019, Facebook announced its plans to lead a consortium developing a new cryptocurrency called Libra (which was rebranded to Diem in 2020). Facebook's significant resources and ability to engage users via social media may enable it to bring Diem to market rapidly and to deploy it across industries more rapidly and successfully than competing cryptocurrencies. At the same time, central banks have introduced digital forms of legal tender (CBDCs). China's CBDC project, known as Digital Currency Electronic Payment, has reportedly been tested in a live pilot program conducted in multiple cities in China. A recent study published by the Bank for International Settlements estimated that at least 36 central banks have published retail or wholesale CBDC work ranging from research to pilot projects. Whether or not they incorporate blockchain or similar technology, CBDCs, as legal tender in the issuing jurisdiction, could have an advantage in competing with, or replace, Bitcoin and other cryptocurrencies as a medium of exchange or store of value.

The emergence or growth of alternative digital assets could have a negative impact on the demand for, and price of, Bitcoin. If the Company is unable to transition its mining operations to a replacement digital asset, the reduction in the popularity of Bitcoin could have an adverse impact on its operations and thereby adversely affect an investment in the Ordinary Shares.

The Company may be subject to material litigation, including individual and class action lawsuits, as well as investigations and enforcement actions by regulators and governmental authorities.

The Company may from time to time become subject to claims, arbitrations, individual and class action lawsuits, government and regulatory investigations, inquiries, actions or requests, including with respect to both consumer and employment matters, and other proceedings alleging violations of laws, rules and regulations, both foreign and domestic. The scope, determination and impact of claims, lawsuits, government and regulatory investigations, enforcement actions, disputes and proceedings to which the Company is subject cannot be predicted with certainty, and may result in:

• substantial payments to satisfy judgments, fines or penalties;
• substantial outside counsel legal fees and costs;
• additional compliance and licensure requirements;
• loss or non-renewal of existing licenses or authorizations, or prohibition from or delays in obtaining additional licenses or authorizations, required for its business;
• loss of productivity and high demands on employee time;
• criminal sanctions or consent decrees;
• termination of certain employees, including members of its executive team;
• barring of certain employees from participating in its business in whole or in part;
• orders that restrict its business or prevent the Company from offering certain products or services;
• changes to its business model and practices;
• delays to planned transactions, product launches or improvements; and
• damage to its brand and reputation.

Any such matters can have an adverse impact, which may be material, on its business, operating results or financial condition because of legal costs, diversion of management resources, reputational damage and other factors.

The Company plans to continue to make acquisitions and investments, which could require significant management attention, disrupt its business, result in dilution to the holders of Ordinary Shares, increase its debt or cause the Company to incur significant expenses and adversely affect its financial results.

The Company is actively considering strategic opportunities with the support of its external advisors. However, the Company cannot offer any assurance that acquisitions of businesses, assets and/or entering into strategic alliances or joint ventures will be made or, if made, will be successful. The Company may not be able to find suitable partners or acquisition candidates and may not be able to complete such transactions on favourable terms, if at all. If the Company makes any acquisitions, the Company may not be able to integrate these acquisitions successfully into the existing business and could assume unknown or contingent liabilities. Any future acquisitions also could result in liabilities or future write-offs of intangible assets or goodwill, any of which could have a negative impact on its cash flows, financial condition and results of operations. Integration of an acquired company may also disrupt ongoing operations and require management resources that otherwise would be focused on developing and expanding its existing business. The Company may experience losses related to potential investments in other companies, which could harm its financial condition and results of operations. Further, the Company may not realize the anticipated benefits of any acquisition, strategic alliance or joint venture if such investments do not materialize. To finance any acquisitions or joint ventures, the Company may choose to issue Ordinary Shares, preferred shares or a combination of debt and equity as consideration, which could significantly dilute the ownership of its existing holders of Ordinary Shares or provide rights to such preferred shareholders in priority over the holders of Ordinary Shares. Additional funds to make acquisitions may not be available on terms that are favourable to the Company, or at all. If the price of Ordinary Shares is low or volatile, the Company may not be able to use Ordinary Shares as consideration to acquire other companies or fund a joint venture project.

COVID-19 or any pandemic, epidemic or outbreak of an infectious disease in the UK, Canada and United States or elsewhere may adversely affect its business.

The COVID-19 pandemic has had unpredictable and unprecedented impacts in the United Kingdom, Canada, the United States and elsewhere around the world. To date, the COVID-19 pandemic has had a limited impact on the Company's operations, however the extent to which the COVID-19 pandemic impacts the Company's business in the future will depend on future developments, which are highly uncertain and unpredictable, including new information which may emerge concerning the severity of the outbreak and the actions to contain the outbreak or treat its impact, among others. The Company may incur expenses or delays relating to such events outside of its control, which could have a material adverse impact on its business, operating results and financial condition. As the COVID-19 pandemic continues to develop, governments (at national, provincial and local levels), corporations and other authorities may continue to implement restrictions or policies that could adversely affect global capital markets, the global economy, Bitcoin and other cryptocurrency prices, and Ordinary Share price.

As of the date of this prospectus, the Company has not been declared an essential business. As a result, the Company may be required to substantially reduce or cease operations in response to governmental action or decree as a result of the COVID-19 pandemic. The Company will continue to assess the effect (if any) on its business from the COVID-19 pandemic and any actions implemented by the governments in jurisdictions in which the Company operate. The Company has implemented safety protocols to protect its personnel, but the Company cannot offer any assurance that the COVID-19 pandemic or any other pandemic, epidemic or outbreak of an infectious disease in the United Kingdom, Canada, the United States or elsewhere, will not materially and adversely affect its business.

RISK FACTORS RELATING TO DIGITAL ASSETS

Acceptance and/or widespread use of digital assets is uncertain.

Currently, there is a relatively limited use for digital assets in retail and commercial marketplaces, which the Company believes has contributed to price volatility and could therefore adversely affect an investment in the Ordinary Shares. Banks and other established financial institutions may, and do, refuse to process funds for digital asset transactions, process wire transfers to or from digital asset trading platforms, cryptocurrency-related companies or service providers, and maintain accounts for persons or entities transacting in digital assets. Conversely, a significant portion of digital asset demand is generated by investors seeking a long-term store of value or speculators seeking to profit from the short or long-term holding of the asset. Price volatility undermines digital assets' role as a medium of exchange, as retailers are much less likely to accept it as a form of payment. Use of digital assets as a medium of exchange and payment method may never achieve widespread adoption. Any such failure or a decline in acceptance and adoption could have an adverse effect on the value of Bitcoin, Zcash, Ethereum or any other digital assets the Company mines or otherwise acquires or holds for its own account, which in turn could have a material adverse effect on its ability to continue as a going concern or to pursue its new strategy at all, which could have a material adverse effect on its business, prospects or operations.

The future development and growth of digital assets is subject to a variety of factors that are difficult to predict and evaluate. If the adoption and development of digital assets does not grow as the Company expects, its business, operating results and financial condition could be adversely affected.

Digital assets built on blockchain technology were only introduced in 2008 and remain in the early stages of development. In addition, different digital assets are designed for different purposes. Bitcoin, for instance, was designed to serve as a peer-to-peer electronic cash system, while Zcash was designed to expand upon Bitcoin by enhancing privacy, and Ethereum and other blockchain networks are designed to enable the use of smart contracts as decentralized application platforms. Many other digital asset networks with other intended purposes — ranging from cloud computing to tokenized securities networks — have only recently been established. The further growth and development of any digital assets and their underlying networks and other cryptographic and algorithmic protocols governing the creation, transfer, and usage of digital assets represents a new and evolving paradigm that is subject to a variety of factors that are difficult to evaluate, including:

• many digital asset networks have limited operating histories, have not been validated in production, and are still in the process of developing and making significant decisions that will affect the design, supply, issuance, functionality, and governance of their respective digital assets and underlying blockchain networks, any of which could adversely affect their respective digital assets and underlying networks;
• digital asset networks may implement software upgrades and other changes to their protocols, which could introduce bugs or security risks, or otherwise adversely affect the respective digital assets and underlying networks;
• several large networks, including the Bitcoin and Ethereum networks, are developing new features to address fundamental speed, scalability and power usage issues. If these issues are not successfully addressed, or such new features are unable to achieve widespread adoption, it could adversely affect the underlying digital assets;
• security issues, bugs and software errors have been identified with many digital assets and their underlying blockchain networks, some of which have been exploited by malicious actors. There are also inherent security weaknesses in some digital assets, such as when creators of certain digital asset networks use procedures that could allow hackers to counterfeit the respective digital asset. Any weaknesses identified with a digital asset or its underlying network could adversely affect its price, security, liquidity and adoption. If a malicious actor or botnet (a volunteer or hacked collection of computers controlled by networked software coordinating the actions of the computers) obtains a majority of the computing or staking power on a digital asset network, as has happened in the past, it may be able to manipulate transactions, which could cause financial losses to holders, damage the network's reputation and security and adversely affect the value of the relevant digital asset;
• the development of new technologies for mining digital assets, such as improved application-specific integrated circuits (commonly referred to as ASICs), or changes in industry patterns, such as the consolidation and concentration of mining power in a small number of large mining farms or mining pools, could reduce the security of digital asset networks, lead to increased liquid supply of digital assets and reduce the value and appeal of digital assets;
• if rewards and transaction fees for miners or validators on any particular digital asset network are not sufficiently high to attract and retain miners or validators, a digital asset network's security and speed may be adversely affected, increasing the likelihood of a malicious attack that could adversely affect the value of the digital asset, or digital assets broadly;
• certain digital assets have concentrated ownership or an "admin key," allowing a small group of holders to have significant unilateral control and influence over key decisions relating to their underlying networks, such as governance decisions and protocol changes, as well as the market price of such digital assets;
• the governance of many decentralized digital asset networks is by voluntary consensus and open competition with no clear leadership structure or authority, and many developers are not directly compensated for their contributions. As a result, there may be a lack of consensus or clarity on the governance of any particular digital asset network, a lack of incentives for developers to maintain or develop the network and other unforeseen issues, any of which could result in unexpected or undesirable errors, bugs or changes, or stymie such network's utility and ability to respond to challenges and grow. Additionally, the decentralized nature of the governance of digital asset networks may lead to ineffective decision-making that slows development or prevents a network from overcoming emergent obstacles. The lack of clarity in governance of digital asset networks may lead to ineffective decision-making that slows development and growth of such digital assets; and

• many digital asset networks are in the early stages of developing partnerships and collaborations, all of which may not succeed. Such lack of success could adversely affect the usability and adoption of the respective digital assets.

Various other technical issues with blockchain networks have also been uncovered from time to time that resulted in disabled functionality, exposure of certain users' personal data, theft of users' assets, and other negative consequences, and which required resolution with the attention and efforts of their global miner, user and development communities. If any such risks or other risks materialize, and are not resolved, the development and growth of digital assets may be significantly affected and, as a result, its business, operating results and financial condition could be adversely affected.

The loss or destruction of any private keys required to access the Company's digital assets may be irreversible. If the Company or any of its custodians are unable to access its private keys (whether due to a security incident or otherwise), it could cause direct financial loss, regulatory scrutiny, and reputational harm.

Digital assets are generally controllable only by the possessor of the unique private key relating to the digital wallet in which the digital assets are held. While blockchain protocols typically require public addresses to be published when used in a transaction, private keys must be safeguarded and kept private in order to prevent a third party from accessing the digital assets held in such a wallet. To the extent that any of the private keys relating to any hot or cold wallets containing the Company's digital assets is lost, destroyed, or otherwise compromised or unavailable, and no backup of the private key is accessible, the Company will be unable to access the digital assets held in the related wallet and, in most cases, the private key will not be capable of being restored. The loss or destruction of a private key required to access digital assets may be irreversible. Further, the Company cannot provide assurance that any wallet holding its digital assets, either maintained directly by the Company or by a custodian on its behalf, will not be hacked or compromised. Digital assets, related technologies, and digital asset service providers such as custodians and trading platforms have been, and may in the future be, subject to security breaches, hacking, or other malicious activities. As such, any loss or misappropriation of the private keys used to control the Company's digital assets due to a hack, employee or service provider misconduct or error, or other compromise by third parties could result in significant losses, hurt the Company's brand and reputation, and potentially the value of any Bitcoin, Zcash or other digital assets the Company mines or otherwise acquires or holds for its own account, and adversely impact its business.

Incorrect or fraudulent digital asset transactions may be irreversible.

Digital asset transactions are not, from an administrative perspective, reversible without the consent and active participation of the recipient of the digital assets from the transaction. In theory, digital asset transactions may be reversible with the control or consent of a majority of the processing power on the network, however, the Company does not now, nor is it feasible that the Company could in the future, possess sufficient processing power to effect such a reversal, nor is it likely that sufficient consensus on the relevant network could or would be achieved to enable such a reversal. Once a transaction has been verified and recorded in a block that is added to a blockchain, an incorrect transfer of digital assets or a theft thereof generally will not be reversible, and the Company may not have sufficient recourse to recover its losses from any such transfer or theft. It is possible that, through computer or human error, or through theft or criminal action, its digital assets could be transferred in incorrect amounts or to unauthorized third parties, or to uncontrolled accounts. In the past, hackers have successfully employed a social engineering attack against one of the Company's service providers and misappropriated its digital assets, although, to date, such events have not been material to its financial condition or operating results. To the extent that the Company is unable to recover its losses from such action, error or theft, such events could result in significant losses, hurt its brand and reputation, and adversely impact its business.

Proof-of-work digital asset networks rely on decentralized miners for the network to function, and a reduction in the support of miners could adversely affect the value of the digital asset, and in turn, adversely affect the Company's business.

Cryptocurrency mining for proof-of-work networks involves substantial commitments of physical resources, such as space and purpose-built hardware, and involves substantial ongoing commitments in power to run the network that is performing the mining. If at any time the rewards provided for mining become less valuable than the costs and expenses of running a mining operation, it can be expected that mining of such digital asset would greatly decline or even cease. For example, around the time of the Bitcoin reward halving in May 2020, the total network hash rate on the Bitcoin network declined by approximately 30%. Other external factors, such as a government taking action to prohibit or otherwise regulate mining activity could also result in a reduction in miners, as seen in China during June and July of 2021. The cessation of mining operations would materially harm, if not shut down completely, the ability of the distributed network to verify transactions in such digital asset. A significant reduction in the number of miners may expose a digital asset network's verification process to deliberate manipulation by malicious actors that come to control the verification process.

If the awards and fees paid for maintenance of a digital asset network are not sufficiently high to incentivize miners, miners may respond in a way that reduces confidence in the network. For example, Bitcoin miners collect fees for each transaction they confirm. Miners validate unconfirmed transactions by adding the previously unconfirmed transactions to new blocks in the blockchain. Miners are not forced to confirm any specific transaction, but they are economically incentivized to confirm valid transactions as a means of collecting fees. To the extent that any miners cease to record transactions in solved blocks, such transactions will not be recorded on the blockchain. Historically, miners have accepted relatively low transaction fees and have not typically elected to exclude the recording of transactions in solved blocks; however, to the extent that any such incentives arise (e.g., a collective movement among miners or one or more mining pools to reject low transaction fees), actions of miners solving a significant number of blocks could delay the recording and confirmation of transactions on the blockchain.

Any systemic delays in the recording and confirmation of transactions on a digital asset network could result in greater exposure to double-spending transactions and a loss of confidence in certain or all digital asset networks, or conversely, higher transaction fees on such digital asset networks, either of which could have a material adverse effect on its business, prospects, financial condition, and operating results.

The transition of digital asset networks from proof-of-work mining algorithms to proof-of-stake validation may significantly impact the value of its capital expenditures and investments in machines and real property to support proof-of-work mining, which could make the Company less competitive and ultimately adversely affect its business and the value of the Ordinary Shares.

Proof-of-stake is an alternative method of validating digital asset transactions. Proof-of-stake algorithms do not rely on resource intensive calculations to validate transactions and create new blocks in a blockchain; instead, the validator of the next block is determined by reference to the amount of digital assets a user has "staked" and the amount of time it has been "staked," which typically generates payments to such user in additional digital assets. Should a digital asset network shift from a proof-of-work validation method to a proof-of-stake method, the transaction verification process (i.e., "mining" or "validating") would require less power and may render any company that maintains advantages in the current climate with respect to proof-of-work mining (for example, from lower-priced electricity, processing, real estate, or hosting) less competitive. For example, the Ethereum blockchain is currently undergoing a transition from proof-of-work to proof-of-stake and, if successful, Ethereum mining equipment and other investments in Ethereum mining operations could become obsolete or be repurposed for mining other cryptocurrencies, which may be less profitable. If any of the cryptocurrencies which the Company mine shift to proof-of-stake validation, the Company may lose the benefit of its capital investments and the competitive advantage the Company hope to gain from these capital investments, which were intended to improve the efficiency of its digital asset mining operations only with respect to proof-of-work networks. Such events could have a material adverse effect on its ability to continue as a going concern or to pursue its new strategy at all, which could have a material adverse effect on its business, prospects, financial condition, and operating results.

While the Company has exposure to proof-of-stake networks through certain digital asset holdings and plans to increase such exposure in the future through Argo Labs, such networks are generally not as widely adopted as proof-of-work networks and may be untested at scale. If proof-of-stake networks do not function as intended, the Company's investments could be negatively affected, which may in turn adversely affect its business.

While a primary advantage of a proof-of-stake system is that it is far less power intensive than a proof-of-work system, this may result in lower barriers for entry, which may allow for increased participation by malicious actors with small stakes that attempt to manipulate the blockchain, or increase the risk that the digital asset will experience one or more forks, which could impact its value.

Some proof-of-stake networks require customer assets to be transferred into smart contracts on the underlying blockchain networks, which are not under the Company's or anyone's control. If the validators or delegators staking digital assets, any third-party service providers, or smart contracts fail to behave as expected, suffer cybersecurity attacks, experience security issues, or encounter other problems, such digital assets may be irretrievably lost. In addition, certain proof-of-stake networks dictate requirements for participation in the relevant decentralized governance activity, and may impose penalties, or "slashing," if the relevant activities are not performed correctly, such as if the staker, delegator, or validator acts maliciously on the network, "double signs" any transactions, or experiences extended downtimes. If the Company or any projects it is invested in are slashed by the underlying blockchain network, the Company may experience losses. Furthermore, certain types of staking require the payment of transaction fees on the underlying blockchain network and such fees can become significant as the amount and complexity of the transaction grows, depending on the degree of network congestion and the price of the underlying digital asset. Any penalties or slashing events, or technological errors or vulnerabilities associated with staking activities could result in the loss of digital assets, and adversely impact the Company's business.

Founders of digital assets or digital asset networks may also retain large amounts of a generated digital asset, which may result in such founders having an effective veto or ability to control the digital asset or its associated proof-of-stake blockchain network. As returns associated with staking are connected to the amount of the wealth staked, proof-of-stake systems may encourage hoarding of the digital asset. While there are advantages to having users "buy in" to a digital asset and support its development, excessive hoarding reduces the "decentralized" nature of verification of the blockchain and may impair the spread of such digital asset, including interfering with the widespread adoption of such digital assets for use in transactions.

Proof-of-stake networks are newer and generally not as widely used as proof-of-work networks, and may be untested at scale. As a result, proof-of-stake networks may not work as intended. If proof-of-stake networks do not function as intended, or fail to gain adoption, the value of digital assets relying on proof-of-stake consensus may be negatively affected, which could adversely affect the value of its investments and its business.

If the smart contract based digital assets and decentralised technologies in which the Company is or becomes invested in, such as Ethereum and DeFi, suffer from errors or attacks, or become subject to regulatory oversight or enforcement action, the Company's investments could be negatively affected, which may have an adverse on the Company's business.

Smart contracts are programs that run on certain digital asset networks, such as the Ethereum network and others, that execute automatically when certain conditions are met. Since smart contracts deployed on a blockchain typically cannot be stopped or reversed once the conditions are met, vulnerabilities in their programming can have damaging effects. For example, in June 2016, a vulnerability in the smart contracts underlying "The DAO", a distributed autonomous organization for venture capital funding, allowed an attack by a hacker to steal approximately \$60 million worth of Ethereum from The DAO's Ethereum wallets. In the aftermath of the theft, certain developers and core contributors pursued a "hard fork" of the Ethereum Network in order to erase any record of the theft. Despite these efforts, the price of Ethereum dropped approximately 35% in the aftermath of the attack and subsequent hard fork. Similarly, in March 2020, a design flaw in the MakerDAO smart contract on Ethereum caused forced liquidations of digital assets at significantly discounted prices, resulting in millions of dollars of losses to users who had deposited crypto assets into the smart contract. More recently, a DeFi protocol, known as the Poly Network, that facilitates peer-to-peer transactions across different blockchain networks was subject to a hack that resulted in theft of over \$600 million worth of digital assets. Any such vulnerabilities or flaws that emerge or are discovered in the future could cause smart contract based digital assets, including those the Company directly holds or has exposure to through its investments, to suffer negative publicity, be exposed to security vulnerabilities, decline significantly in value, or lose liquidity all of which could adversely impact the Company's business.

In limited cases, smart contracts can be controlled by one or more "admin keys" or users with special privileges ("super users"). These users have the ability to unilaterally make changes to the smart contract, enable or disable features on the smart contract, change how the smart contract receives external inputs and data, and make other changes to the smart contract. For smart contracts that hold a pool of reserves, these users may also be able to extract funds from the pool, liquidate assets held in the pool, or take other actions that decrease the value of the assets held by the smart contract in reserves. Even for digital assets that have adopted a decentralized governance mechanism, such as smart contracts that are governed by the holders of a governance token, such governance tokens can be concentrated in the hands of a small group of core community members, who would be able to make similar changes unilaterally to the smart contract. If any such super user or group of core members unilaterally makes adverse changes to a smart contract, the design, functionality, features and value of the smart contract and its related digital assets may be harmed. In addition, digital assets held by the smart contract in reserves may be stolen, misused, burnt, locked up or otherwise become unusable and irrecoverable. These super users can also become targets of hackers and malicious attackers. If an attacker is able to access or obtain the super user privileges of a smart contract, or if a smart contract's super users or core community members take actions that adversely affects the smart contract, the affected digital assets may experience significant losses in functionality or value.

DeFi refers to a variety of blockchain-based applications or protocols that provide for peer-to-peer financial services using smart contracts and other technology rather than such services being offered by central intermediaries. Common DeFi applications include borrowing/lending digital assets, and providing liquidity or market making in digital assets. Because DeFi applications and protocols generally rely on the same types of underlying technologies as digital assets, most risks applicable to digital assets (including phishing, hacking, and risks related to blockchain networks) are also applicable to DeFi protocols and hence any investment by the Company into DeFi protocols and related digital assets will be subject to these same risks. Similarly, because DeFi applications rely on smart contracts, any errors, bugs or vulnerabilities in smart contracts used in connection with DeFi activities may adversely affect such activities. In addition, a malicious actor can exploit the structure of one or a series of smart contracts or applications in ways that do not technically constitute exploitation of a "bug" or flaw in the smart contract or application. For example, such an exploit has occurred repeatedly in the Ethereum DeFi ecosystem, whereby a decentralized exchange or lending application is designed to reference an external pricing source for a particular digital asset to determine when to liquidate collateral. By manipulating the price of the particular digital asset on a third-party platform (such as digital asset exchange), the pricing source used by the decentralized exchange or application is consequently manipulated, which then leads to uneconomic collateral liquidations on the decentralized exchange or application. Such errors or manipulation could undermine confidence in DeFi projects or otherwise negatively affect the value of the Company's investments in DeFi projects, which could negatively impact its business. Participating in DeFi ecosystems may require or involve the use of various third-party technology services. In the event of a material business disruption or security breach with any such service providers, or in the broader DeFi ecosystem in general, the Company's investments in DeFi projects could be negatively affected.

In parallel with the wider digital assets sector, DeFi applications and protocols are subject to an uncertain regulatory environment. In part due to its early stage nature, DeFi is subjected to intense scrutiny from financial regulators and governments, who, for the most part, find the complexities in the technology, and the idea of a lack of identifiable regulated intermediaries, extremely challenging. Recently, the SEC has indicated it may be increasing its focus on DeFi projects. Certain SEC officials have made various public statements reflecting their belief that certain DeFi projects may implicate securities, commodities, and banking laws, and in August 2021, the SEC brought what the agency described as its first enforcement action "involving securities using DeFi technology". Accordingly, the use of DeFi applications may be subject to more risks than engaging in similar activities through regulated financial intermediaries. In addition, in certain decentralized protocols, it may be difficult or impossible to verify the identity of a transaction counterparty as necessary to comply with any applicable anti-money laundering, countering the financing of terrorism, or sanctions regulations or controls. As DeFi applications and protocols become more popular and gain adoption, the response of regulators to DeFi products will become an increasing risk. If the DeFi projects in which the Company is invested become subject to regulatory oversight or are subject of regulatory enforcement actions, its investment could be adversely affected which may have a negative impact on its business.

Digital asset trading platforms may be subject to varying levels of regulation, which exposes the Company's digital asset holdings to risks.

While certain digital assets may be traded through one or more exchanges or trading platforms of varying quality, digital assets as a class do not have a central marketplace for exchange. Digital asset platforms on which digital assets may trade pose special risks, as these platforms are generally new and the rules governing their activities are unsettled and their activities may be largely unregulated or under-regulated, and may therefore be more exposed to theft, fraud, and failure than established, regulated exchanges for other products. Digital asset platforms may be start-up businesses with limited institutional backing, limited operating history, and no publicly available financial information.

Digital assets traded on a blockchain do not rely on a trusted intermediary or depository institution. The participation in trading platforms requires users to take on credit risk by transferring digital assets from a personal account to a third party's account. Accordingly, the Company is exposed to credit risk with respect to its counterparties in each transaction, including transactions directly with a counterparty sourced through an exchange or over the counter trading desk, as well as transactions directly with such an exchange. Digital asset exchanges may impose daily, weekly, monthly, or customer-specific transaction or distribution limits or suspend withdrawals entirely, rendering the exchange of digital assets for fiat currency difficult or impossible. Additionally, digital asset prices and valuations on exchanges have been volatile and subject to influence by many factors, including the levels of liquidity on particular platforms and operational interruptions and disruptions. The prices and valuation of digital assets remain subject to any volatility experienced by trading platforms, and any such volatility can adversely affect the Company's digital asset holdings and the value of the digital assets the Company mines. It is possible that while engaging in transactions with various digital asset platforms located throughout the world, any such platform may cease operations voluntarily or involuntarily due to theft, fraud, security breach, liquidity issues, or government investigation without any recourse available to the Company.

Digital asset platforms are appealing targets for cybercrime, hackers, and malware and have been shut down or experienced losses of assets placed on the exchange as a result of cybercrime, and any such event is likely to result in the complete loss of assets placed on such a platform. Any governmental or regulatory action against such a digital asset trading platform may cause assets on such exchange to become frozen for a substantial period of time or forfeited, and could result in material opportunity costs or even in the total loss of such assets. In addition, banks may refuse to process or support wire transfers to or from digital asset trading platforms.

There are a limited number of digital asset trading platforms in operation, and many operate in jurisdictions outside of the United States. Trading on digital asset platforms outside of the United States may involve certain risks not applicable to trading on digital asset exchanges that operate in the United States. Foreign markets may be subject to instability, temporary closures due to fraud, business failure, local capital requirements or government-mandated regulations. Digital asset platforms located outside the United States may not be subject to regulatory, investigative, or prosecutorial authority through which an action or complaint regarding missing or stolen digital assets may be brought. Additionally, due to lack of globally consistent treatment and regulation of digital assets, certain platforms located outside the United States may not be currently available to, or may in the future become unavailable to, certain persons or entities based on their country of domicile, including the United States. While the Company performs diligence on its counterparties and any digital asset trading platforms that the Company may use, it may be difficult, or even impossible, to sufficiently verify the ultimate ownership and control of a digital asset trading platform and other information for evaluating the risks associated with such counterparty or platform. Any of its digital assets that reside on a trading platform that shuts down may be permanently unrecoverable, misapplied or otherwise lost. Additionally, to the extent that the digital asset platforms representing a substantial portion of the trading volume in particular digital asset are involved in fraud or experience security failures or other operational issues, such failures may result in loss or less favourable prices of the digital assets and may adversely affect the Company's business and its operations, and consequently, an investment in the Ordinary Shares.

There may be a lack of liquid markets for digital assets, including Bitcoin, and such markets may be subject to manipulation.

Digital assets may not necessarily benefit from viable trading markets. Traditional securities and derivatives exchanges have listing requirements and vet issuers, requiring them to be subjected to rigorous listing standards and rules and monitoring investors transacting on such platform for fraud and other improprieties. These conditions may not be replicated on a digital asset trading platforms with less regulatory oversight than a traditional exchange's controls and other policies. Digital asset trading platforms that do not maintain high standards and controls for vetting users that transact on the platform may be exposed to higher risk of fraud or manipulation. These factors may decrease liquidity or volume or may otherwise increase volatility of digital assets on such platforms, which may adversely affect us. Such circumstances could have a material adverse effect on the Company's ability to continue as a going concern or to pursue its business strategy at all, which could have a material adverse effect on its business, prospects or operations and potentially the value of any Bitcoin or other digital assets the Company mines or otherwise acquires or holds for its own account, and harm its investors.

The nature of the Company's business requires the application of complex financial accounting rules, and there is limited guidance from accounting standard setting bodies. If financial accounting standards undergo significant changes, the Company's operating results could be adversely affected.

The accounting rules and regulations that the Company must comply with are complex and subject to interpretation by the IFRS Foundation, International Accounting Standards Board, or the IASB, the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on the Company's reported financial results, and may even affect the reporting of transactions completed before the announcement or effectiveness of a change. Recent actions and public comments from the IASB and the SEC have focused on the integrity of financial reporting and internal controls. In addition, many companies' accounting policies are being subject to heightened scrutiny by regulators and the public. Further, there has been limited precedents for the financial accounting of cryptocurrencies and related valuation and revenue recognition, and no official guidance has been provided by the IASB or the SEC. As such, there remains significant uncertainty on how companies can account for cryptocurrencies transactions, cryptocurrencies, and related revenue. Uncertainties in or changes to regulatory or financial accounting standards could result in the need to change the Company's accounting methods and restate its financial statements and impair its ability to provide timely and accurate financial information, which could adversely affect its financial statements, result in a loss of investor confidence, and more generally impact its business, operating results and financial condition.

The Company may be subject to foreign investment and exchange risks.

The Company's functional and presentational currency is sterling. As a result, its consolidated financial statements will carry its assets in sterling. Any business the Company carries out may require the conduct of operations or make sales in currencies other than sterling. Due to the foregoing, changes in exchange rates between sterling and other currencies could lead to significant changes in its reported financial results from period to period. Among the factors that may affect currency values are trade balances, levels of short-term interest rates, differences in relative values of similar assets in different currencies, long-term opportunities for investment and capital appreciation and political or regulatory developments. Although the Company may seek to manage its foreign exchange exposure, including by active use of hedging and derivative instruments, there is no assurance that such arrangements will be entered into or available at all times when the Company wishes to use them or that they will be sufficient to cover the risk. If there was a material adverse movement in such currency, it may have adverse consequences on its financial condition.

RISK FACTORS RELATING TO THIRD PARTIES

The Company relies on a third-party custodian for the long-term holding of its digital assets, and actual or perceived security threats could result in the loss of its assets, which would have an adverse impact on the Ordinary Shares.

The Company relies on third parties to safeguard its digital assets from theft, loss, destruction or other issues relating to hackers and technological attack, including Gemini Custody, a product of the Gemini Trust Company, LLC (the Custodian) for its long-term Bitcoin holdings. Such parties are responsible for taking such steps as they determine, in their sole judgment, to be required to maintain access to the private keys controlling the Company's digital assets and prevent their exposure to hacking, malware and general security threats, including the use of "cold storage," of its long-term holdings.

These safeguards may be breached due to the actions of outside parties, its third-party service providers or partners, error or malfeasance of an employee of the Company, the Custodian or otherwise, and, as a result, an unauthorized party may obtain access to its assets held with the Custodian, the Company's private keys (and therefore the digital assets) or other data.

Additionally, threat actors may attempt to fraudulently induce the Company's employees or those of the Custodian to disclose sensitive information (including personal data) in order to gain access to its or the Custodian's infrastructure. As the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently, or may be designed to remain dormant until a predetermined event and often are not recognized until launched against a target, either or both of the Company and the Custodian or other service providers may be unable to anticipate these techniques or implement adequate preventative measures. In addition, these third parties, including the Custodian, may become insolvent, in which case the Company may have difficulty accessing digital assets held by those third parties and may even lose all or a portion of the digital assets held by such parties. Financial difficulty, fraud or misrepresentation at one of these institutions could also impair its operational capabilities or capital position. An actual or perceived security breach (including data, cyber and physical) at the Custodian could harm its ability to operate, result in loss of its assets, damage its reputation and negatively affect the market perception of its effectiveness, all of which could in turn adversely affect the value of the Ordinary Shares.

The limited rights of legal recourse against the custodians of its digital assets are available to the Company and its lack of insurance protection for risk of loss of its digital assets exposes the Company to the risk of loss of its digital assets for which no person may ultimately be held liable and the Company may not be able to recover its losses.

The Company does not insure the digital assets that the Company holds against loss, including losses due to theft, destruction, inability to access digital assets or loss in value. While the Custodian holding the Company's long-term digital asset holdings has indicated to the Company that it has insurance coverage of up to \$200 million that covers losses of the digital assets it custodies on behalf of its clients, including the Company's digital assets, resulting from theft, the Company cannot be assured that the Custodian will maintain adequate insurance or that such coverage will cover all theft-related losses with respect to its digital assets. For example, if the Custodian suffered a theft resulting in losses greater than \$200 million, claims would be distributed pro rata among affected clients. Furthermore, under the custodian agreement, the Custodian is not liable to the Company for any lost profits or any direct, special, incidental, indirect, intangible, or consequential damages, whether based in contract, tort, or negligence, and whether or not the Custodian has been advised of such losses or the Custodian knew or should have known of the possibility of such damages. In addition, the Company's digital assets held by the Custodian and the digital asset trading platforms the Company uses are not deposits insured by the Federal Deposit Insurance Corporation and are not protected by the Securities Investor Protection Corporation. In the UK, the digital assets held by the Custodian and the digital asset trading platforms the Company uses are not protected by the Financial Services Compensation Scheme. In Canada, its digital assets held by the Custodian and the digital asset trading platforms the Company uses are not insured by the Canadian Deposit Insurance Corporation and are not protected by the Canadian Investor Protection Fund. Therefore, a theft-related loss may be suffered with respect to the Company's digital assets which is not covered by insurance and the Company may not be able to recover any of the value in these digital assets if they are lost or stolen. Certain of the digital asset trading platforms the Company uses are located outside of Western Europe and North America, and the Company may also have difficulty in successfully pursuing claims in the courts of such countries or enforcing in the courts of such countries a judgment obtained by the Company in another country. In general, certain less developed countries lack fully developed legal systems and bodies of commercial law and practices normally found in countries with more developed market economies, and even in more developed market economies, digital assets can present novel challenges with potential uncertainties in applying existing case law or legislation to new or novel scenarios. If the Company is not otherwise able to recover losses and damages arising from the loss or theft of its digital assets, its business and results of operations may suffer, which may have a material negative impact on the Ordinary Share price.

The Company may store its digital assets on digital asset trading platforms that are less secure than that of its Custodian, which could subject its digital assets to the risk of loss or access.

Although the Company relies on the Custodian to secure its long-term digital asset holdings, the Company also stores its digital assets on various digital asset trading platforms, including through "hot" wallets, which requires the Company to rely on the security protocols of these trading platforms to safeguard its digital assets. No security system is perfect and other trading platforms have been subject to hacks resulting in the loss of those businesses' and customers' digital assets in the past. Such trading platforms may not be as well capitalized as the Custodian and (i) may have different or less adequate security procedures and operational infrastructure than the Custodian, (ii) may not have insurance to a level necessary to cover any loss or (iii) may not re-compensate for loss where permitted under the laws of the relevant jurisdiction. In addition, malicious actors may be able to intercept the Company's digital assets when the Company transacts in or otherwise transfers its digital assets, such as moving its digital assets from long-term cold storage with the Custodian to its accounts at a trading platform or other "hot" wallets. Malicious actors may also be able to intercept the Company's digital assets while it is in the process of selling them via such trading platforms. Digital asset trading platforms have been an appealing target for malicious actors in the past, and given the growth in their size and their relatively unregulated nature, the Company believes these trading platforms will become a more appealing target for malicious actors. An actual or perceived security breach at the digital asset trading platforms with which the Company has accounts could harm the Company's ability to operate, result in loss of its assets, damage its reputation and negatively affect the market perception of its effectiveness, all of which could adversely affect the value of the Ordinary Shares.

Banks and financial institutions may not provide banking services, or may cut off services, to businesses that engage in digital asset-related activities or that accept digital assets as payment, including financial institutions of investors in the Ordinary Shares.

In the future, the Company may be unable to find banks or financial institutions that are willing to provide the Company with bank accounts and other services or such service may be interrupted by government action, as has happened to other companies in its industry. This could occur as a result of compliance risk, cost, government regulation or public pressure. The risk applies to securities firms, clearance and settlement firms, national stock and derivatives on commodities exchanges, the over-the-counter market, and the Depository Trust Company. A decision by any such entity to adopt or implement such policies, rules or regulations, could negatively affect the Company's relationships with such financial institutions and impede its ability to convert digital assets to fiat currencies. Such factors could have a material adverse effect on the Company's ability to continue as a going concern or to pursue its new strategy at all, which could have a material adverse effect on its business, prospects or operations and harm investors.

The Company is exposed to risk of non-performance by counterparties in its power supply arrangements, including its counterparties under the planned power arrangements.

The Company is exposed to risk of non-performance by counterparties in its power supply arrangements, whether contractual or otherwise. Risk of non-performance includes inability or refusal of a counterparty to perform because of a counterparty's financial condition and liquidity or for any other reason. For example, its counterparties under the planned power arrangements may be unable to deliver the required amount of power for a variety of technical or economic reasons. Furthermore, there is a risk that during a period of power price fluctuations or prolonged or sharp power price increases on the market, its counterparties may find it economically preferable to refuse to supply power to the Company, despite the contractual arrangements. Any significant non-performance by counterparties could have a material adverse effect on its business, prospects, financial condition, and operating results.

RISKS RELATING TO CRYPTOCURRENCY MINING

There are risks related to technological obsolescence, the vulnerability to disruption of the global supply chain for cryptocurrency mining hardware, and difficulty in obtaining new hardware which may have a negative effect on the Company's business.

The Company's mining operations can only be successful and ultimately profitable if the costs, including hardware and electricity costs, associated with mining cryptocurrencies, including Bitcoin, are lower than the revenue the Company is able to earn from mining such cryptocurrencies. Over the course of its mining operations, the Company's mining machines experience ordinary wear and tear, and may also face more significant malfunctions caused by a number of extraneous factors beyond the Company's control. In addition, advances in mining technology will require the Company to, over time, replace those mining machines which are no longer profitable. These repair and upgrading processes require substantial and continuous capital investment, and the Company may face challenges in doing so on a timely and cost-effective basis. In addition, there is no guarantee that its mining machines will be free from defect or failure, and any such failures or defects could require the Company to seek replacements for newly acquired mining machines.

As new technological innovations occur, including in quantum computing, there are no assurances that the Company will be able to adopt or effect such new innovations, or that the Company will be able to acquire new and improved equipment to stay competitive or that its existing software or other equipment will not become obsolete, uncompetitive or inefficient. Disruption to its supply chain could prevent the Company from acquiring this software and any other equipment required to operate its business and remain competitive, which could have a material adverse effect on its business, results of operations and financial condition.

For example, the Company purchased more than 15,000 Bitmain Antminer 17 series mining machines in 2019 and 2020. Since deployment, the Company's Antminer 17 series fleet has experienced a failure rate of 38%. While the Company is currently taking steps to mitigate such issues, there can be no assurance that it will be successful in doing so, or that it will be able to successfully replace such machines, if necessary, in a timely manner or at all. As new technological innovations occur, including in quantum computing, there are no assurances that the Company will be able to adopt or effect such new innovations, or that the Company will be able to acquire new and improved equipment to stay competitive or that its existing software or other equipment will not become obsolete, uncompetitive or inefficient. Disruption to the Company's supply chain could prevent the Company from acquiring this software and any other equipment required to operate its business and remain competitive, which could have a material adverse effect on the Company's business, results of operations and financial condition.

The Company faces competition in acquiring mining machines from major manufacturers, and at a given time, mining machines may only be available for pre-order months in advance. For example, the lead time for new mining hardware from its manufacturers varies from three to 12 months depending on a number of factors, including: the manufacturer, type of hardware and technology, and market conditions. When mining conditions are favourable, the lead time usually increases from all suppliers and manufacturers in the industry and tends to be between six to 12 months. If the Company is unable to acquire new mining machines, or if its cost for new mining machines is excessively high, the Company may not be able to keep up with its competitors, which may materially and adversely affect its business and results of operations. In some periods, the industry has experienced, and the Company expects may experience again in the future, a scarcity of advanced mining machines, as few manufacturers are capable of producing a sufficient number of mining machines of adequate quality to meet demand. The Company has acquired, and may continue to acquire in the future, mining machines through its third-party hosting providers that have relationships with equipment suppliers. Such orders are typically in "bulk" and therefore there is no guarantee that the Company will receive its full allocation of mining machines if the supplier does not deliver the full order. Furthermore, as the Company transition to operating its own facilities, the Company will be required to establish and maintain relationships with mining machine manufacturers directly, and the Company may face competition from larger or other preferred customer relationships.

As a result of intense competition for the latest generation mining machines, or if the Company unexpectedly needs to replace its mining machines due to a faulty shipment or other failure, the Company may not be able to secure replacement machines at reasonable costs on a timely basis.

Various COVID-19-related restrictions on travel, work, and movement of goods and supplies, as well as the cumulative impact of the mounting number of lost working days as a result of COVID-19 have already put strain on the Company's manufacturing partners and suppliers to produce and deliver a sufficient number of products needed to meet the global demand for mining machines. This has had a particularly strong impact on the global supply chain and availability of semiconductors, which are used in the manufacture of the ASIC chips used in the mining machines the Company operates. The strain on the global supply of semiconductors, largely stemming from manufacturing interruptions due to COVID-19 related disruptions, has resulted in decreased production across many industrial sectors. Should similar outbreaks or other disruptions to the global supply chain for cryptocurrency hardware occur, the Company may not be able to obtain adequate replacement parts for its existing mining machines or to obtain or to lease additional mining machines from manufacturers or other third parties on a timely basis. Such events could have a material adverse effect on its ability to pursue its business strategy, which could have a material adverse effect on its business and the value of the Ordinary Shares.

The Company's mining facilities and mining equipment may experience damages, including damages that are not covered by insurance.

The Company's current mining operations in Canada and the United States are, and any future mining facilities the Company establishes or which the Company mines from will be, subject to a variety of risks relating to physical condition and operation, including:

• the presence of construction or repair defects or other structural or building damage;
• any noncompliance with, or liabilities under, applicable environmental, health or safety regulations or requirements or building permit requirements;
• any damage resulting from natural disasters, such as hurricanes, earthquakes, fires, floods and windstorms; and
• claims by employees and others for injuries sustained at its properties.

The performance and reliability of the Company's mining technology will also be critical to its reputation and its operations. If there are any technological issues with the Company's mining equipment, its entire fleet could be affected. In particular, any error or failure may significantly delay response times or even cause the Company's mining operations to fail. For example, the Company purchased more than 15,000 Bitmain Antminer 17 series mining machines in 2019 and 2020. Since deployment, the Antminer 17 series fleet has experienced a failure rate of 38%. A majority of the failures occurred due to manufacturing defects and flaws, and primarily involved hash boards overheating and burning out, which the Company understands have been experienced across the industry with the model. While the Company is currently taking steps to mitigate such issues, such as the implementation of new technologies and processes like immersion cooling technology, there can be no assurance that the Company will be successful in doing so. Any disruption in the Company's ability to continue mining could result in lower yields and harm its reputation and business. Any exploitable weakness, flaw, or error common to the Company's mining equipment may affect its ability to mine, and if a defect other flaw is exploited, its entire mining operation could go offline simultaneously. Any interruption, delay or system failure could have a material adverse effect on the Company's business, prospects, financial condition, and operating results.

In the event of an uninsured loss, including a loss in excess of insured limits, at any of the hosted or owned facilities in the Company's network, such mining machines may not be adequately repaired in a timely manner or at all and the Company may lose some or all of the future revenues anticipated to be derived from such mining machines.

The Company relies on third-party mining pool operators to pay the Company mining rewards, the failure of which would have a negative impact on its operations.

The Company currently participates in mining pools organized by third parties to receive its mining rewards. Mining pools allow miners to combine their processing power, increasing their chances of solving a block and getting paid by the network, as well as provide ancillary services such as dashboard and other monitoring software. The rewards are collected by the pool operator and then distributed by the pool operator to each miner in the pool, proportionally to a miner's contribution to the pool's overall mining power, used to generate each block.

If the pool operator's system suffers downtime due to a cyberattack, software malfunction or other similar issue, it will negatively impact its ability to mine and receive revenue. Furthermore, the Company is dependent on the accuracy of the mining pool operator's record keeping to accurately record the total processing power provided to the pool for a given Bitcoin or other cryptocurrency mining application in order to assess the proportion of that total processing power the Company provided. While the Company has internal methods of tracking both its power provided and the total power used by the pool, the mining pool operator uses its own record-keeping to determine the Company's proportion of a given reward. The Company may have little means of recourse against the mining pool operator if the Company fails to receive a pay-out or determine the proportion of the reward paid out to the Company by the mining pool operator is incorrect, other than leaving the pool. If the Company is unable to consistently obtain accurate proportionate rewards from its mining pool operators, the Company may experience reduced reward for these efforts, which would have an adverse effect on its business and operations. In addition, its proportion of mining rewards are temporarily held by the operator of the pool until they are distributed to the Company. During this time, its cryptocurrency may be subject to risk of loss due to theft or loss, among other things, and distributions of its cryptocurrency from the pool operator to its Custodian or other wallets may be intercepted by malicious actors.

If the pool operator ceases to provide services (whether related to a cyberattack, software malfunction or other similar issue) or discovers a shortfall in the digital assets held by the pool, the revenue generated by the Company from the pool may never be paid to the Company, and the Company may have little means of recourse against the mining pool operator.

The Company may not be able to secure access to electricity on a sufficiently firm and unrestricted basis or at a price the Company is willing to pay.

Cryptocurrency mining is dependent on access to stable and reliable electricity supply. There has been a substantial increase in the demand for electricity for cryptocurrency mining, and this has had varying impacts on local electricity supply. Additionally, the Company currently relies on renewable sources of power and plans to increase its reliance on renewable sources of power in the future. Renewable power is generally an intermittent and variable source of electricity, which may not always be available. Because the electrical grid has very little storage capacity, the balance between electricity supply and demand must be maintained at all times to avoid a blackout or other cascading problem. Intermittent sources of renewable power are challenging because they disrupt the conventional methods for planning the daily operation of the electrical grid. Their power fluctuates over multiple time horizons, forcing the grid operator to adjust its day-ahead, hour-ahead, and real-time operating procedures.

Should its operations require more electricity than can be supplied in the areas where its mining facilities are located or should the electrical transmission grid and distribution systems be unable to provide the continuous, steady supply of electricity required, the Company may have to limit or suspend activities or reduce the speed of its proposed expansion, either voluntarily or as a result of either quotas imposed by energy companies or governments, or increased prices for certain users (such as the Company). If the Company is unable to procure electricity at a suitable price, the Company may have to shut down its operations in that particular jurisdiction either temporarily or permanently. Additionally, its cryptocurrency mining machines would be materially adversely affected by a power outage. Given the power requirement, it would not be feasible to run mining machines on back-up power generators in the event of a government restriction on electricity or a power outage, which may be caused by weather, acts of God, wild fires, pandemics, falling trees, falling distribution poles and transmission towers, transmission and distribution cable cuts, other force majeure events in the electricity and natural gas markets and/or the negligence or malfeasance of others. If the Company is unable to receive adequate power supply and is forced to reduce its operations due to the availability or cost of electrical power, its business would experience materially negative impacts.

Certain government actors have begun to intervene with the supply of electrical energy to cryptocurrency miners. For example, in the Canadian province of Québec, Hydro-Québec (a Crown entity which manages the generation, transmission and distribution of electricity throughout the province) has set rates and service conditions specifically for enterprises involved in cryptocurrency mining as a result of increased electricity demand from cryptocurrency miners. On 19 July 2018, the Régie de l'Énergie (the Régie), a provincial administrative tribunal which sets the price of electricity supplied directly by Hydro-Québec) approved a provisional tariff of CAD \$0.15/kWh on cryptocurrency mining facilities built after that date. On 29 April 2019, the Régie rendered a decision to create a new class of energy consumers called "Electricity consumer class for cryptographic use applied to blockchain". The Régie decided to allocate to this new class an aggregate supply of 300 megawatts of electricity, with the requirement to curtail electricity use during peak hours at Hydro-Québec's request (up to a maximum of 300 hours a year). Cryptocurrency mining projects will be required to submit tenders to consume electricity from the 300 megawatts block based exclusively on economic development and environmental criteria. On 28 January 2021, the Régie decided that the existing subscriptions on the Hydro-Québec network will be subject to non-firm service, starting in Winter 2021/2022. The non-firm service will apply for a maximum of 300 hours/year, without any monetary compensation. Consequently, cryptocurrency mining entities in Québec are now subject to non-firm service with a restriction on supply and provisional tariffs.

The Company's mining activities for digital assets other than Bitcoin are subject to unique risks, may not be as profitable as mining Bitcoin, and may negatively impact the Company's financial condition.

The Company opportunistically mines digital assets other than Bitcoin, such as Zcash and other cryptocurrencies, and plans to mine other alternative digital assets, including potentially Ethereum, in the future. While these alternative digital assets broadly are subject to the same types of risks as Bitcoin, such risks may impact particular digital assets differently, or not at all. For example, the alternative digital assets the Company mines may have a variety of intended use cases, be subject to different consumer preferences and face different security risks, among other differences, all of which could negatively affect the value and use or adoption of such digital assets. Furthermore, because such alternative digital assets generally do not have the same popularity or operating history as Bitcoin, any actual or perceived risks or adverse events affecting alternative digital assets could result in a greater loss of confidence in such assets than if the same adverse events occurred with respect to Bitcoin.

The Company's mining operations generally involve asset specific capital expenditures. For example, the equihash mining machines the Company uses for mining Zcash cannot be used to mine Bitcoin, and the Company's Bitcoin mining machines cannot be used to mine Zcash. The Company may in the future order mining machines that are purpose-built for mining certain digital assets that use different hashing algorithms. To the extent the Company makes capital investments or purchases related to mining alternative digital assets that decline in value or adoption, or fail to increase in value or adoption according to the Company's expectations, the profitability of such investments or purchases would be adversely affected, which may in turn adversely affect the Company's financial condition and operating results.

If the Company is unable to receive adequate power supply and is forced to reduce its operations due to the availability or cost of electrical power, its business would experience materially negative impacts.

As a result of the Federal Power Act and the U.S. Federal Energy Regulatory Commission's regulations over public utilities and reliability of the interstate transmission grid, suppliers of electricity that are required for its operation may be required to curtail or discontinue the supply of electricity to its cryptocurrency mining operations, including regulations seeking to limit carbon dioxide emissions from power generation.

Under the Federal Power Act (the FPA), the Federal Energy Regulatory Commission (FERC) has jurisdiction over certain facilities used in the generation and transmission of electricity, including transmission facilities, certain generation interconnection facilities, power plant change in control, operation of the transmission grid, and various "paper" facilities, such as wholesale power sales contracts and market-based rate tariffs. The FPA requires FERC to establish and maintain reliability standards, and FERC has designated the National Electric Reliability Coordinator to effectuate this obligation. Operation of the transmission grid in several regions in which the Company may locate its cryptocurrency mining facility are governed by Independent System Operators (ISO) or Regional Transmission Organizations (RTO), all of which are public utilities subject to FERC jurisdiction. To effectuate the continuous, firm supply of electricity necessary for productive operation of the Company's crypto-mining operations, it is expected to be necessary to co-locate its facilities with power generation facilities and have such power generation facilities obtain approval from relevant ISO/RTO and other authorities to derate their generation resource for ISO/RTO purposes in favour of supplying electricity to the Company's mining operations. Such approvals may not be forthcoming on terms that are economic or practicable. Federal authorities may also pursue and implement legislation and regulation that seeks to limit the amount of carbon dioxide produced from electric generation, which would affect its ability to source electricity from fossil fuel-fired electric generation in a potentially material adverse manner. The bankruptcy or insolvency of any power generator or wholesale market supplier from whom the Company expects to obtain supply for its mining operations could also result in a curtailment or loss of supply, which would have a material adverse effect on ability to continue mining operations.

The Company may be affected by price fluctuations in the wholesale and retail power markets.

While the Company anticipate that the majority of its power arrangements will contain fixed power prices, the Company expects that they may contain certain price adjustment mechanisms in case of certain events. Furthermore, some portion of its power arrangements is expected to be priced by reference to published index prices and, thus, reflect market movements.

Market prices for power, generation capacity and ancillary services, are unpredictable. Depending upon the effectiveness of any price risk management activity undertaken by the Company, an increase in market prices for power, generation capacity, and ancillary services may adversely affect its business, prospects, financial condition, and operating results.

RISKS RELATING TO GOVERNMENT REGULATION

The Company is subject to an extensive and rapidly-evolving regulatory landscape and any adverse changes to, or its failure to comply with, any laws and regulations could adversely affect its brand, reputation, business, operating results and financial condition.

The Company's activities are not currently regulated in the United Kingdom as the Company is not a cryptoasset exchange or custodian wallet provider. The Company does not offer cryptoasset derivatives and the Company does not engage with or advertise to retail consumers. The Company's business is to mine cryptoassets as principal, and it bears the risks and rewards of such endeavours. The Company has no current plans to engage in the offering of crypto derivatives or engage with retail consumers.

The Company's business may be or may become subject to extensive laws, rules, regulations, policies, orders, determinations, directives, treaties, and legal and regulatory interpretations and guidance in the markets in which the Company operates or in which it is incorporated, being the United Kingdom, including those typically applied to financial services and banking, securities, commodities, the exchange, and transfer of digital assets, cross-border and domestic money and cryptocurrency transmission businesses, as well as those governing data privacy, data governance, data protection, cybersecurity, fraud detection, payment services (including payment processing and settlement services), consumer protection, antitrust and competition, bankruptcy, tax, anti-bribery, economic and trade sanctions, anti-money laundering, and counter-terrorist financing. Many of these legal and regulatory regimes were adopted prior to the advent of the internet, mobile technologies, digital assets, and related technologies. As a result, they often do not contemplate or address unique issues associated with digital assets, are subject to significant uncertainty, and vary widely across UK, U.S. federal, state, and local and international jurisdictions.

These legal and regulatory regimes, including the laws, rules, and regulations thereunder, evolve frequently and may be modified, interpreted, and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another. Moreover, the relative novelty and evolving nature of the Company's business and the significant uncertainty surrounding the regulation of digital assets requires the Company to exercise its judgement as to whether certain laws, rules, and regulations apply to the Company, and it is possible that governmental bodies and regulators may disagree with the Company's conclusions. To the extent the Company has not complied with such laws, rules, and regulations, the Company could be subject to significant fines, limitations on its business, reputational harm, and other regulatory consequences, as well as criminal penalties, each of which may be significant and could adversely affect its business, operating results and financial condition.

The Company's activities are not currently regulated in the United Kingdom as it does not engage in any regulated activities for the purposes of the UK Financial Services and Markets Act 2000 and it is not subject to any registration requirement with the UK Financial Conduct Authority in relation to anti-money laundering rules under The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 as it is not a crypto asset exchange or custodian wallet provider. The Company does not offer crypto asset derivatives nor does it engage with or advertise to retail consumers. Its business is to mine crypto assets as principal, and it bears the risks and rewards of such endeavours. The Company has no current plans to engage in the offering of crypto asset derivatives or engage with retail consumers.

In addition to existing laws and regulations, various governmental and regulatory bodies, including legislative and executive bodies, in the United Kingdom, United States and in other countries may adopt new laws and regulations, or new interpretations of existing laws and regulations may be issued by such bodies or the judiciary, which may adversely impact the development and use of digital assets as a whole, cryptocurrency mining operations, and its legal and regulatory status in particular by changing how the Company operates its business, how its operations are regulated, and what products or services the Company and its competitors can offer, requiring changes to the Company's compliance and risk mitigation measures, imposing new licensing requirements or new costs of doing business, or imposing a total ban on certain activities or transactions with respect to digital assets, as has occurred in certain jurisdictions in the past.

Due to its business activities, if laws or regulations or their respective interpretation change, the Company may become subject to ongoing examinations, oversight, and reviews by U.S. federal and state regulators, the UK Financial Conduct Authority, and foreign financial service regulators, which would have broad discretion to audit and examine its business if the Company becomes subject to their oversight. Adverse changes to, or its failure to comply with, any laws and regulations have had, and may continue to have, an adverse effect on its reputation and brand and its business, operating results and financial condition.

The Company is subject to governmental regulation and other legal obligations related to data privacy, data protection and information security. If the Company is unable to comply with these, the Company may be subject to governmental enforcement actions, litigation, fines and penalties or adverse publicity.

The Company collects and process data, including personal, financial and confidential information about individuals, including its employees and business partners. The collection, use and processing of such data about individuals is governed by data privacy laws and regulations enacted in the UK, EU, U.S. (federal and state), and other jurisdictions around the world. These data privacy laws and regulations are complex, continue to evolve, and on occasion may be inconsistent between jurisdictions leading to uncertainty in interpreting such laws and it is possible that these laws, regulations and requirements may be interpreted and applied in a manner that is inconsistent with the Company's existing information processing practices, and many of these laws are significantly litigated and/or subject to regulatory enforcement. The implication of this includes that various federal, state and foreign legislative or regulatory bodies may enact or adopt new or additional laws and regulations concerning data privacy, data retention, data transfer, and data protection. Such laws may continue to restrict or dictate how the Company collects, maintains, combines and disseminates information and could have a material adverse effect on its business, results of operations, financial condition and prospects.

In the United States, there are numerous federal and state laws and regulations that could apply to its operations or the operations of its partners, including data breach notification laws, financial information and other data privacy laws, and consumer protection laws and regulations (e.g., Section 5 of the FTC Act), that govern the collection, use, disclosure, and protection of personal information.

The General Data Protection Regulation (the GDPR), which came into effect in the European Union on 25 May 2018, applies to the collection, use, retention, security, processing, and transfer of personal data of individuals in the European Economic Area (EEA) and the United Kingdom, which could further add to the Company's compliance costs and limit how the Company process information. It is possible that the GDPR may be interpreted or applied in a manner that is adverse to the Company or otherwise inconsistent with its practices; or that the European Union or national supervisory authorities may hold that the Company is not in full compliance with the GDPR's requirements. In addition, the GDPR increases the scrutiny of transfers of personal data from the EEA to the United States and other jurisdictions that the European Commission does not recognize as having "adequate" data protection laws; in July 2020, the Court of Justice of the European Union limited how organizations could lawfully transfer personal data from the EEA to the United States by invalidating the EU-US Privacy Shield and imposing further restrictions on use of the standard contractual clauses, which could increase the Company's costs and its ability to efficiently process personal data from the EEA. Following the withdrawal of the United Kingdom from the European Union and the expiry of the transition period, from 1 January 2021, the Company has to comply with the GDPR and separately the GDPR as implemented in the United Kingdom, each regime having the ability to fine up to the greater of €20 million/£17 million or 4% of global turnover. The relationship between the United Kingdom and the European Union in relation to certain aspects of data protection law remains unclear, including how data transfers between European Union member states and the United Kingdom will be treated. These changes may lead to additional compliance costs and could increase the Company's overall risk. Failure to comply with the requirements of the GDPR and the applicable national data protection laws of the EEA member states may result in fines and other administrative penalties. Government enforcement actions can be costly and interrupt the regular operation of the Company's business, and data breaches or violations of data privacy laws can result in fines, reputational damage and civil lawsuits, any of which may adversely affect the Company's business, financial condition, and results of operations. Also, like many websites, the Company uses cookies and other tracking technologies on its website. In recent years, European lawmakers and regulators have expressed concern over electronic marketing and the use of nonessential cookies, web beacons and similar technology for online behavioural advertising, or tracking technologies, leading to an effort to replace the current rules on e-marketing (currently set out in the ePrivacy Directive and national implementing laws) with a new ePrivacy Regulation. When implemented, the new ePrivacy Regulation is expected to alter rules on tracking technologies and significantly increase fining powers to the same levels as the GDPR.

The Company is subject to extensive environmental, health and safety laws and regulations that may expose the Company to significant liabilities for penalties, damages or costs of remediation or compliance.

The Company's operations and properties are subject to extensive laws and regulations governing occupational health and safety, the discharge of pollutants into the environment or otherwise relating to health, safety and environmental protection requirements in the United Kingdom, the United States and every other country and locality in which the Company operates. These laws and regulations may impose numerous obligations that are applicable to the Company's operations, including acquisition of a permit or other approval before conducting construction or regulated activities; restrictions on the types, quantities and concentration of materials that can be released into the environment; limitation or prohibition of construction and operating activities in environmentally sensitive areas, such as wetlands; imposing specific health and safety standards addressing worker protection; and imposition of significant liabilities for pollution resulting from its operations, including investigation, remedial and clean-up costs. Failure to comply with these requirements may expose the Company to fines, penalties and/or interruptions in its operations that could have a material adverse effect on its financial position, results of operations and cash flows. Certain environmental laws may impose strict, joint and several liability for costs required to clean up and restore sites where hazardous substances have been disposed or otherwise released into the environment, even under circumstances where the hazardous substances were released by prior owners or operators or the activities conducted and from which a release emanated complied with applicable law. Moreover, it is not uncommon for neighbouring landowners and other third parties to file claims for personal injury and property damage allegedly caused by noise or the release of hazardous substances into the environment.

The trend in environmental regulation has been to place more restrictions and limitations on activities that may be perceived to impact the environment, and thus there can be no assurance as to the amount or timing of future expenditures for environmental regulation compliance or remediation. New or revised regulations that result in increased compliance costs or additional operating restrictions could have a material adverse effect on the Company's financial position, results of operations and cash flows.

The regulatory and legislative developments related to climate change, may materially adversely affect the Company's brand, reputation, business, operating results and financial condition.

A number of governments or governmental bodies have introduced or are contemplating legislative and regulatory changes in response to various climate change interest groups and the potential impact of climate change. Given the very significant amount of electrical power required to operate cryptocurrency mining machines, as well the environmental impact of mining for the rare earth metals used in the production of mining servers, the cryptocurrency mining industry may become a target for future environmental and energy regulation. For example, in June and July 2021, the Chinese government prohibited the operation of mining machines and supply of energy to mining businesses, citing concerns regarding high levels of energy consumption, which resulted in a large scale shut down of mining operations. Legislation and increased regulation regarding climate change could impose significant costs on the Company and its suppliers, including costs related to increased energy requirements, capital equipment, environmental monitoring and reporting, and other costs to comply with such regulations. Specifically, imposition of a carbon tax or other regulatory fee in a jurisdiction where the Company operates or on electricity that the Company purchases could result in substantially higher energy costs, and due to the significant amount of electrical power required to operate cryptocurrency mining machines, could in turn put the Company's facilities at a competitive disadvantage. Any future climate change regulations could also negatively impact its ability to compete with companies situated in areas not subject to such limitations. Given the political significance and uncertainty around the impact of climate change and how it should be addressed, the Company cannot predict how legislation and regulation will affect its financial condition, operating performance and ability to compete. Furthermore, even without such regulation, increased awareness and any adverse publicity in the global marketplace about potential impacts on climate change by the Company or other companies in its industry could harm its reputation. Any of the foregoing could have a material adverse effect on its financial position, results of operations and cash flows.

The Company's transactions in digital assets may expose the Company to countries, territories, regimes, entities, organizations and individuals that are subject to sanctions and other restrictive laws and regulations.

The Office of Foreign Assets Control of the U.S. Department of the Treasury (OFAC) and the U.S. Department of State administer and enforce economic sanctions programs based on foreign policy and national security goals against targeted countries, territories, regimes, entities, organizations and individuals. In the UK: the Foreign, Commonwealth and Development Office is responsible for the UK's international sanctions policy, including all international sanctions regimes and designations; the Office of Financial Sanctions Implementation (OFSI), which is a part of HM Treasury, is responsible for ensuring that financial sanctions are properly understood, implemented and enforced (as well as maintaining OFSI's Consolidated List of Financial Sanctions Targets); the Department for International Trade is responsible for implementing trade sanctions and embargoes, HM Revenue & Customs is responsible for enforcing breaches of trade sanctions; and the National Crime Agency is responsible for investigating and enforcing breaches of financial sanctions. In Canada, Global Affairs Canada, Public Safety Canada and the Department of Justice administer and enforce Canada's sanctions regime. These laws and regulations may be implicated by a number of activities, including investing or trading. Because of the pseudonymous nature of blockchain transactions, the Company may not be able to determine the ultimate identity of the individuals with whom the Company transacts with respect to buying or selling digital assets or of other members in mining pools in which the Company participates. The Company participates in mining pools that operate in jurisdictions that are not subject to the same regulatory regimes as the Company is, which creates the risk that the Company may inadvertently engage in transactions with, or contribute processing power to, a mining pool which involves persons, entities, or territories that are the target of sanctions or other restrictions. Moreover, U.S. federal law prohibits any U.S. person from knowingly or unknowingly possessing any visual depiction commonly known as child sexual abuse images or videos. Recent media reports have suggested that persons have imbedded such depictions on one or more blockchains. Because its business requires the Company to download and retain one or more blockchains to effectuate its ongoing business, it is possible that such blockchains contain prohibited depictions without the Company's knowledge or consent. To the extent government enforcement authorities enforce these and other laws and regulations that are impacted by blockchain technology, the Company may be subject to investigation, administrative or court proceedings, and civil or criminal monetary fines and penalties, all of which could harm its reputation and affect the value of the Ordinary Shares.

Failure to comply with anti-corruption and anti-money laundering laws, including the FCPA and similar laws associated with its activities outside of the United States could subject the Company to penalties and other adverse consequences.

The Company operates an international business and may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. The Company is subject to the FCPA, the UK Bribery Act, and other applicable anti-corruption and anti-money laundering laws in certain countries in which the Company conducts activities. The FCPA prohibits providing, offering, promising, or authorizing, directly or indirectly, anything of value to government officials, political parties, or political candidates for the purpose of obtaining or retaining business or securing any improper business advantage. The provisions of the UK Bribery Act extend beyond bribery of government officials and create offenses in relation to commercial bribery including private sector recipients. The provisions of the UK Bribery Act also create offenses for accepting bribes in addition to bribing another person. In addition, U.S. public companies are required to maintain records that accurately and fairly represent their transactions and have an adequate system of internal accounting controls.

In many foreign countries, including countries in which the Company may conduct business, it may be a local custom that businesses engage in practices that are prohibited by the FCPA, UK Bribery Act, or other applicable laws and regulations. The Company faces significant risks if the Company or any of its directors, officers, employees, contractors, agents or other partners or representatives fail to comply with these laws and governmental authorities in the United States, UK and elsewhere could seek to impose substantial civil and/or criminal fines and penalties which could have a material adverse effect on the Company's business, reputation, operating results, prospects and financial condition.

Any violation of the FCPA, UK Bribery Act, other applicable anti-corruption laws, or anti-money laundering laws could result in whistleblower complaints, adverse media coverage, investigations, loss of export privileges, severe criminal or civil sanctions and, in the case of the FCPA, suspension or debarment from U.S. government contracts, any of which could have a materially adverse effect on the Company's reputation, business, operating results, prospects and financial condition. In addition, responding to any enforcement action or internal investigation related to alleged misconduct may result in a significant diversion of management's attention and resources and significant defence costs and other professional fees.

If regulatory changes or interpretations of the Company's activities require its registration or licensure as a money services business (MSB) under the regulations promulgated by FinCEN under the authority of the U.S. Bank Secrecy Act, or otherwise under state laws, the Company may incur significant penalties and on-going compliance costs, which could be substantial or cost-prohibitive. If the Company becomes subject to these regulations, its costs in complying with them may have a material negative effect on its business and the results of its operations.

To the extent that its activities cause the Company to be deemed an MSB under the regulations promulgated by FinCEN under the authority of the U.S. Bank Secrecy Act, the Company may be required to comply with FinCEN regulations, including those that would mandate the Company to implement an effective anti-money laundering program, make certain reports to FinCEN and maintain certain records. To the extent that its activities cause the Company to be deemed a money transmitter under applicable state laws, the Company may be required to comply with state licensure requirements, including those that would mandate the Company to implement varying degrees of safety and soundness, consumer protection and law enforcement requirements.

The Company is not presently registered as an MSB with FinCEN or licensed as a money transmitter or similar business in any state. If an applicable governmental agency determines that the Company has failed to register or obtain a license, the Company could be subject to substantial financial penalties and may be ordered to suspend or terminate operations with respect to the affected jurisdictions.

The Company intends to operate Terra Pool, a mining pool on behalf of pool participants, which exposes the Company to regulatory uncertainty and risk that could result in significant compliance expenses or penalties.

Together with DMG Blockchain solutions, the Company intends to operate Terra Pool, a Bitcoin mining pool. FinCEN has released guidance stating that participating in or leading a mining pool, by itself, does not constitute money transmission.

However, the guidance also stated that where a person or group responsible for distributing mining awards to pool members combines its services with the service of hosting "convertible virtual currency" wallets (that is, wallets for digital assets that have an equivalent value in fiat currency or that act as a substitute for fiat currency) on behalf of pool members, the person or group will fall within FinCEN's definition of money transmitter. Although the Company does not intend to host convertible virtual currency wallets on behalf of pool members in connection with Terra Pool, providing such services in the future would require the Company to comply with FinCEN regulations, including those that would mandate the Company to implement an effective anti-money laundering program, make certain reports to FinCEN and maintain certain records. To the extent that the Company's activities with respect to Terra Pool cause the Company to be deemed a money transmitter under applicable state laws, the Company may be required to comply with state licensure requirements, including those that would mandate the Company to implement varying degrees of safety and soundness, consumer protection and law enforcement requirements.

Further, as noted above, operating or participating in mining pools in which fellow members are unknown raises risks of inadvertently assisting or engaging in transactions with persons, entities, or territories that are the target of U.S., UK, Canadian, or other economic sanctions or that are otherwise engaged in activities in breach of AML and CTF legislation. In operating Terra Pool, the Company plans to conduct KYC diligence and IP address screening on prospective members, but there can be no guarantee that such measures will be successful in preventing sanctioned parties from participating in the pool.

The Company does not intend to sell contracts or shares in Terra Pool, but the operation of a mining pool on behalf of third parties could subject the Company to regulatory scrutiny from the SEC. The Company could be subject to judicial or administrative sanctions for failing to offer or sell interests or participation in Terra Pool in compliance with the registration requirements of the federal and state securities laws. Such a determination could result in injunctions, cease and desist orders, as well as civil monetary penalties, fines, and disgorgement, criminal liability, and reputational harm. In addition, the Company cannot be certain as to how future regulatory developments will impact the treatment of operating a mining pool under the law. Any requirements imposed by the SEC related to its mining pool activities would cause the Company to incur additional extraordinary, non-recurring expenses, thereby materially and adversely impacting an investment in the Ordinary Shares.

As the Company continues to expand and localize its international activities, its obligations to comply with the laws, rules, regulations, and policies of a variety of jurisdictions will increase and the Company may be subject to investigations and enforcement actions by U.S. and non-U.S. regulators and governmental authorities.

As the Company expands and localizes its international activities, the Company has become increasingly obligated to comply with the laws, rules, regulations, policies, and legal interpretations both of the jurisdictions in which the Company operates and those into which the Company offers services on a cross-border basis. Laws regulating financial services, the internet, mobile technologies, digital assets, and related technologies in the United Kingdom, Canada, the United States and other jurisdictions often impose different, more specific, or even conflicting obligations on the Company, as well as broader liability. For example, the Company is subject to laws and regulations related to sanctions and export controls enforced by OFAC and the Department of Commerce Bureau of Industry and Security, and may in the future be required to comply with U.S. anti-money laundering and counterterrorist financing laws and regulations, enforced by FinCEN and certain state financial services regulators.

Regulators worldwide frequently study each other's approaches to the regulation of the digital assets. Consequently, developments in any jurisdiction may influence other jurisdictions. New developments in one jurisdiction may be extended to additional services and other jurisdictions. As a result, the risks created by any new law or regulation in one jurisdiction are magnified by the potential that they may be replicated, affecting the Company's business in another place or involving another service. Conversely, if regulations diverge worldwide, the Company may face difficulty adjusting its products, services, and other aspects of its business with the same effect. These risks are heightened as the Company faces increased competitive pressure from other similarly situated businesses that engage in regulatory arbitrage to avoid the compliance costs associated with regulatory changes.

The complexity of U.S. federal and state, UK, Canadian and other international regulatory and enforcement regimes, coupled with the global scope of the Company's operations and the evolving global regulatory environment, could result in a single event prompting a large number of overlapping investigations and legal and regulatory proceedings by multiple government authorities in different jurisdictions. Any of the foregoing could, individually or in the aggregate, harm its reputation and adversely affect its operating results and financial condition. Due to the uncertain application of existing laws and regulations, it may be that, despite the Company's regulatory and legal analysis concluding that certain products and services are currently unregulated, such products or services may indeed be subject to financial regulation, licensing, or authorization obligations that the Company has not obtained or with which the Company has not complied. As a result, the Company is at a heightened risk of enforcement action, litigation, regulatory, and legal scrutiny which could lead to sanctions, cease, and desist orders, or other penalties and censures which could significantly and adversely affect its continued operations and financial condition.

A particular digital asset's status as a "security" in any relevant jurisdiction is subject to a high degree of uncertainty and if a regulator disagrees with the Company's characterisation of a digital asset, the Company may be subject to regulatory scrutiny, investigations, fines, and other penalties, which may adversely affect its business, operating results and financial condition. Furthermore, a determination that Bitcoin or any other digital asset that the Company owns or mines is a "security" may adversely affect the value of Bitcoin and its business.

The SEC and its staff have taken the position that certain digital assets fall within the definition of a "security" under the U.S. federal securities laws. The legal test for determining whether any given digital asset is a security is a highly complex, fact-driven analysis that may evolve over time, and the outcome is difficult to predict. The SEC generally does not provide advance guidance or confirmation on the status of any particular digital asset as a security. Furthermore, the SEC's views in this area have evolved over time and it is difficult to predict the direction or timing of any continuing evolution. It is also possible that a change in the governing administration or the appointment of new SEC commissioners could substantially impact the views of the SEC and its staff. Public statements made by senior officials at the SEC indicate that the SEC does not intend to take the position that Bitcoin and Ethereum are securities (as currently offered and sold). However, such statements are not official policy statements by the SEC and reflect only the speakers' views, which are not binding on the SEC or any other agency or court and cannot be generalized to any other digital asset. As of the date of this prospectus, with the exception of certain centrally issued digital assets that have received "no-action" letters from the SEC staff, Bitcoin and Ethereum are the only digital assets which senior officials at the SEC have publicly stated are unlikely to be considered securities. With respect to all other digital assets, there is no certainty under the applicable legal test that such assets are not securities, notwithstanding the conclusions the Company may draw based on its riskbased assessment regarding the likelihood that a particular digital asset could be deemed a "security" under applicable laws.

The SEC has brought enforcement actions against the promoters of several digital assets on the basis that the digital assets in question are securities. Such an enforcement action by the SEC or a state securities regulator, or a similar court decision, with respect to Bitcoin and the other digital assets the Company mines or trades would be expected to have an immediate material adverse impact on the trading value of such digital assets. This is because the business models behind most digital assets are incompatible with regulations applying to transactions in securities. If a digital asset is determined or asserted to be a security, it is likely to become difficult or impossible for the digital asset to be traded, cleared or custodied in the United States through the same channels used by non-security digital assets, which in addition to materially and adversely affecting the trading value of the digital asset is likely to significantly impact its liquidity and market participants' ability to convert the digital asset into U.S. dollars. For example, in 2020 the SEC filed a complaint against the promoters of XRP alleging that they raised more than \$1.3 billion through XRP sales that should have been registered under the U.S. federal securities laws, but were not. In the years prior to the SEC's action, XRP's market capitalization at times exceeded \$140 billion. However, in the weeks following the SEC's complaint, XRP's market capitalization fell to less than \$10 billion, which was less than half of its market capitalization in the days prior to the complaint. The SEC's action against XRP's promoters underscores the continuing uncertainty around which digital assets are securities, and demonstrates that factors such as how long a digital asset has been in existence, how widely held it is, how large its market capitalization is and that it has actual usefulness in commercial transactions, ultimately may have no bearing on whether the SEC or a court will find it to be a security.

Under the Investment Company Act of 1940, as amended, a company may fall within the definition of an investment company under section 3(c)(1)(A) thereof if it is or holds itself out as being engaged primarily, or proposes to engage primarily in the business of investing, reinvesting or trading in securities, or under section 3(a)(1)(C) thereof if it is engaged or proposes to engage in business of investing, reinvesting, owning, holding, or trading in securities, and owns or proposes to acquire "investment securities" (as defined) having a value exceeding 40% of its total assets (exclusive of government securities and cash items) on an unconsolidated basis. There is no authoritative law, rule or binding guidance published by the SEC regarding the status of digital assets as "securities" or "investment securities" under the Investment Company Act. Although the Company believes that the Company is not engaged in the business of investing, reinvesting, or trading in investment securities, and the Company does not hold itself out as being primarily engaged, or proposing to engage primarily, in the business of investing, reinvesting or trading in securities, to the extent the digital assets which the Company mines, owns, or otherwise acquires may be deemed "securities" or "investment securities" by the SEC or a court of competent jurisdiction, the Company may meet the definition of an investment company. If the Company falls within the definition of an investment company under the Investment Company Act, the Company would be required to register with the SEC. If an investment company fails to register, it likely would have to stop doing almost all business, and its contracts would become voidable. Generally non-U.S. issuers may not register as an investment company without an SEC order.

Several foreign jurisdictions have taken a broad-based approach to classifying digital assets as "securities," while other foreign jurisdictions, such as Switzerland, Malta, and Singapore, have adopted a narrower approach. As a result, certain digital assets may be deemed to be a "security" under the laws of some jurisdictions but not others. Various foreign jurisdictions may, in the future, adopt additional laws, regulations, or directives that affect the characterization of digital assets as "securities." The classification of a digital asset as a security under applicable law has wide-ranging implications for the regulatory obligations that flow from the mining, sale and trading of such assets. For example, a digital asset that is a security in the United States may generally only be offered or sold in the United States pursuant to a registration statement filed with the SEC or in an offering that qualifies for an exemption from registration. Persons that effect transactions in digital assets that are securities in the United States may be subject to registration with the SEC as a "broker" or "dealer." Foreign jurisdictions may have similar licensing, registration, and qualification requirements.

There can be no assurances that the Company will properly characterize any given digital asset as a security or non-security for purposes of determining which digital assets to mine, hold and trade, or that the SEC, foreign regulatory authority, or a court, if the question was presented to it, would agree with its assessment. The Company could be subject to judicial or administrative sanctions for failing to offer or sell digital assets in compliance with the registration requirements, or for acting as a broker or dealer without appropriate registration. Such an action could result in injunctions, cease and desist orders, as well as civil monetary penalties, fines, and disgorgement, criminal liability, and reputational harm.

Further, if Bitcoin or any other digital asset that the Company mines, holds and trades is deemed to be a security under the laws of any U.S. federal, state, or foreign jurisdiction, or in a proceeding in a court of law or otherwise, it may have adverse consequences for such cryptocurrency. For instance, all transactions in such supported digital asset would have to be registered with the SEC or other foreign authority, or conducted in accordance with an exemption from registration, which could severely limit its liquidity, usability and transactional use. Further, it could draw negative publicity and a decline in the general acceptance of the digital asset. Also, it may make it difficult for such cryptocurrency to be traded, cleared, and custodied as compared to other cryptocurrencies that are not considered to be securities.

Future developments regarding the treatment of cryptocurrencies for U.S. federal income and foreign tax purposes could adversely impact the Company's business.

Due to the new and evolving nature of cryptocurrencies and the absence of comprehensive legal guidance with respect to cryptocurrency products and transactions, many significant aspects of the U.S. federal income and foreign tax treatment of transactions involving cryptocurrencies are uncertain, and it is unclear what guidance may be issued in the future on the treatment of cryptocurrency transactions for U.S. federal income and foreign tax purposes.

In 2014, the IRS released a notice, or "IRS Notice," discussing certain aspects of "convertible virtual currency" (that is, digital currency that has an equivalent value in fiat currency or that acts as a substitute for fiat currency) for U.S. federal income tax purposes and, in particular, stating that such digital currency (i) is "property" (ii) is not "currency" for purposes of the rules relating to foreign currency gain or loss and (iii) may be held as a capital asset. In 2019, the IRS released a revenue ruling and a set of "Frequently Asked Questions", or the "Ruling & FAQs," that provide some additional guidance, including guidance to the effect that, under certain circumstances, hard forks of digital currencies are taxable events giving rise to ordinary income and guidance with respect to the determination of the tax basis of digital currency. However, the IRS Notice and the Ruling & FAQs do not address other significant aspects of the U.S. federal income tax treatment of cryptocurrencies and related transactions.

The UK tax authorities have issued published guidance which covers similar issues to those covered in the IRS guidance mentioned above. Some guidance has also been provided, in particular, regarding the Value Added Tax (VAT) treatment of transactions involving cryptocurrencies, and the availability of certain exemptions from VAT.

There can be no assurance that the IRS or other foreign tax authority will not alter its existing position with respect to cryptocurrencies in the future or that a court would uphold the treatment set forth in the IRS Notice and the Ruling & FAQs, or in the UK published guidance. It is also unclear what additional guidance may be issued in the future on the treatment of existing cryptocurrency transactions and future cryptocurrency innovations for purposes of U.S. federal income tax or other foreign tax regulations. Any such alteration of existing IRS and foreign tax authority positions or additional guidance regarding cryptocurrency products and transactions could result in adverse tax consequences for the Company's business and could have an adverse effect on the value of cryptocurrencies and the broader cryptocurrencies markets. Future technological and operational developments that may arise with respect to digital currencies may increase the uncertainty with respect to the treatment of digital currencies for U.S. federal income and foreign tax purposes. The uncertainty regarding tax treatment of cryptocurrency transactions could impact the Company's business, both domestically and abroad. It is likely that new rules for reporting crypto assets under the "common reporting standard" will be implemented on the Company's international operations, creating new obligations and a need to invest in new onboarding and reporting infrastructure.

The application of the Commodity Exchange Act to the Company's business is unclear and may be subject to change and therefore difficult to predict; to the extent the Company becomes subject to regulation by the CFTC in connection with its business activities, the Company may incur additional compliance costs, which may be significant.

The Commodity Exchange Act, as amended (the "CEA"), does not currently impose any direct obligations on the Company related to the mining or exchange of digital assets. However, the Commodity Futures Trading Commission ("CFTC"), the federal agency that administers the CEA, generally regards Bitcoin and other digital assets as commodities. This position has been supported by decisions of federal courts.

The CEA imposes requirements relative to certain transactions involving Bitcoin and other digital assets that constitute a contract of sale of a commodity for future delivery (or an option on such a contract), a swap, or a transaction involving margin, financing or leverage that does not result in actual delivery of the commodity within 28 days to persons not defined as "eligible contract participants" or "eligible commercial entities" under the CEA (e.g., retail persons). Changes in the CEA or the regulations promulgated by the CFTC thereunder, as well as interpretations thereof and official statements by the CFTC may impact the classification of digital assets and subject them to additional regulatory oversight by the CFTC. Although the CFTC to date has not enacted regulations governing non-derivative or non-financed, margined or leveraged transactions in Bitcoin and other digital assets, it has authority to commence enforcement actions against persons who violate certain prohibitions under the CEA related to transactions in any contract of sale of any commodity, including digital assets, in interstate commerce (e.g., manipulation and engaging in certain deceptive practices).

While no provision of the CEA, or CFTC rules, orders or rulings (except as noted herein) appears to be currently applicable to its business, this is subject to change. The Company cannot be certain as to how future regulatory developments will impact the treatment of digital assets under the law. Any requirements imposed by the CFTC related to its mining activities or its transactions in Bitcoin and digital assets would cause the Company to incur additional extraordinary, non-recurring expenses, thereby materially and adversely impacting an investment in the Ordinary Shares.

Moreover, if its mining activities or transactions in Bitcoin and other digital assets were deemed by the CFTC to constitute a collective investment in derivatives for its shareholders, the Company may be required to register as a commodity pool operator with the CFTC through the National Futures Association. Such additional registrations may result in extraordinary, non-recurring expenses, thereby materially and adversely impacting an investment in the Ordinary Shares. If the Company determines not to comply with such additional regulatory and registration requirements, the Company may seek to cease certain of its operations. Any such action may adversely affect an investment in the Company.

The Company's compliance and risk management methods might not be effective and may result in outcomes that could adversely affect its reputation, operating results and financial condition.

The Company's ability to comply with applicable complex and evolving laws, regulations, and rules is largely dependent on the establishment and maintenance of its compliance, audit, and reporting systems, as well as its ability to attract and retain qualified compliance and other risk management personnel. The Company cannot assure investors that its policies and procedures will be effective or that the Company will be successful in monitoring or evaluating the risks to which the Company is or may be exposed in all market environments or against all types of risks, including unidentified or unanticipated risks. The Company's risk management policies and procedures rely on a combination of technical and human controls and supervision that are subject to error and failure. Some of its methods for managing risk are discretionary by nature and are based on internally developed controls and observed historical market behaviour, and also involve reliance on standard industry practices. These methods may not adequately prevent losses, particularly as they relate to extreme market movements, which may be significantly greater than historical fluctuations in the market. The Company's risk management policies and procedures also may not adequately prevent losses due to technical errors if its testing and quality control practices are not effective in preventing failures. In addition, the Company may elect to adjust its risk management policies and procedures to allow for an increase in risk tolerance, which could expose the Company to the risk of greater losses.

RISK FACTORS RELATING TO INTELLECTUAL PROPERTY

If the Company is unable to protect the confidentiality of its trade secrets, its business and competitive position could be harmed.

The Company's ability to conduct its business in a profitable manner relies on its proprietary mining methods, which the Company protects as a trade secret. The Company relies upon trade secret laws, physical and technological security measures and contractual commitments to protect its trade secrets, including entering into non-disclosure agreements with employees, consultants and third parties with access to its trade secrets. However, such measures may not provide adequate protection and the value of the Company's trade secrets could be lost through misappropriation or breach of its confidentiality agreements. For example, an employee with authorized access may misappropriate the Company's trade secrets and provide them to a competitor, and the recourse the Company takes against such misconduct may not provide an adequate remedy to protect its interests fully, because enforcing a claim that a party illegally disclosed or misappropriated a trade secret can be difficult, expensive and time consuming, and the outcome is unpredictable. Thus, if any of the Company's trade secrets were to be disclosed or misappropriated its competitive position could be harmed. In addition to the risk of misappropriation and unauthorized disclosure, its competitors may develop similar or better methods independently in a manner that could prevent legal recourse by the Company. Thus, there can be no assurance that the Company's trade secrets will be sufficient to protect against competitors operating their business in a manner that is substantially similar to the Company's business.

Third parties may claim that the Company is infringing upon their intellectual property rights, which may prevent or inhibit its operations and cause the Company to suffer significant litigation expense even if these claims have no merit.

The Company's commercial success depends on its ability to operate without undue cost and distraction of claims that the Company is infringing the intellectual property rights of third parties. However, third parties, may own patents (or have pending patent applications that later result in patents) that the Company's operations may infringe. In addition, third parties may purchase patents for the purpose of asserting claims of infringement and attempting to extract license fees via settlements from the Company. There also could be patents that the Company believes the Company does not infringe, but that the Company may ultimately be found to infringe.

Further, because patents can take many years to issue, there may be currently pending applications of which the Company is unaware that may later result in issued patents that the Company's operations infringe.

Finally, third parties could accuse the Company of misappropriating their trade secrets. Any claims of patent infringement or trade secret misappropriation, even claims without merit, could be costly and time-consuming to defend and could require the Company to divert resources away from operations. In addition, if any third party has a meritorious or successful claim that the Company is infringing, the Company may be forced to redesign its operations or secure a license from such third parties, which may be costly or impractical. The Company also may be subject to significant damages or injunctions that may cause a material adverse effect to its business and operations, if the Company cannot license or develop an alternative for any infringing aspect of its business, and may result in a material loss in revenue, which could adversely affect the trading price of the Ordinary Shares and harm its investors.

RISK FACTORS RELATING TO THE COMPANY'S EMPLOYEES AND OTHER SERVICE PROVIDERS

The loss of one or more of the Company's key management personnel, or its failure to attract and retain other highly qualified personnel in the future, could adversely impact its business, operating results and financial condition.

The Company operates in a relatively new industry that is not widely understood and requires highly skilled and technical personnel. The Company believes that its future success is highly dependent on the talents and contributions of a small number of key management personnel. The Company's future success depends on its ability to attract, develop, motivate, and retain highly qualified and skilled employees. Furthermore, if the Company fails to execute an effective contingency or succession plan with the loss of any member of management, the loss of such management personnel may significantly disrupt its business. Due to the nascent nature of the blockchain ecosystem, the pool of qualified talent is extremely limited, particularly with respect to executive talent, engineering, risk management, and financial regulatory expertise. The Company faces intense competition for qualified individuals from numerous software and other technology companies. To attract and retain key personnel, the Company incurs significant costs, including salaries and benefits and equity incentives. Even so, these measures may not be enough to attract and retain the personnel the Company requires to operate its business effectively. The loss of even a few qualified employees, or an inability to attract, retain and motivate additional highly skilled employees required for the planned expansion of the Company's business could adversely impact its operating results and impair its ability to grow.

The Company's officers, directors, employees, and large shareholders may encounter potential conflicts of interests with respect to their positions or interests in certain digital assets, entities, and other initiatives, which could adversely affect its business and reputation.

The Company frequently engages in a wide variety of transactions and maintains relationships with a significant number of digital asset projects, their developers, members of their ecosystem, and investors. These transactions and relationships could create potential conflicts of interests in management decisions that the Company makes. For instance, certain of its officers, directors, and employees are active investors in digital asset projects and technologies themselves, and may make investment decisions that favour projects that they have personally invested in. In addition, the Company's Chief Executive Officer, Mr. Wall, is involved in a number of initiatives related to the blockchain ecosystem and more broadly. This and other initiatives he is involved in could divert Mr. Wall's time and attention from overseeing the Company's business operations which could have a negative impact on its business.

In addition, certain of the Company's officers, directors and employees may become aware of business opportunities that may be appropriate for presentation to the Company. In such instances they may decide to present these business opportunities to other entities with which they are or may be affiliated, in addition to, or instead of, presenting them to the Company. Due to these existing or future affiliations, these officers, directors and employees may have fiduciary obligations to present potential acquisition opportunities to those entities prior to presenting them to the Company which could cause additional conflicts of interest.

Similarly, certain of the Company's directors, officers, employees, and large shareholders may hold cryptocurrencies that the Company is considering mining, and may be more supportive of such mining notwithstanding legal, regulatory, and other issues associated with such cryptocurrencies. While the Company has instituted policies and procedures to limit and mitigate such risks, there is no assurance that such policies and procedures will be effective, or that the Company will be able to manage such conflicts of interests adequately. If the Company fails to manage these conflicts of interests, its business may be harmed and the brand, reputation and credibility of its company may be adversely affected.

The Company's officers, directors and employees will allocate their time to other businesses leading to potential conflicts of interest in their determination as to how much time to devote to its affairs, which could have a negative impact on its ability to execute its business plan.

The Company's officers, directors and employees are required to commit such time its affairs as is necessary for them to fulfil their duties to, which could create a conflict of interest when allocating their time between the Company's operations and their other commitments. The Company's officers, directors and employees are engaged in other business endeavours. If its officers', directors' or employees' other business affairs require them to devote more substantial amounts of time to such affairs, it could limit their ability to devote time to the Company's affairs and could have a negative impact on its ability to deliver the business plan.

The Company's officers, directors, employees, and large shareholders may in the future enter into related party transactions with the Company, which may give rise to conflicts of interest between the Company and these officers, directors, employees and large shareholders.

The Company's officers, directors, employees and large shareholders and one or more of their respective affiliates may in the future enter into other agreements with the Company that are not currently under contemplation. It is possible that the entering into of such an agreement might raise conflicts of interest between the Company and such officers, directors, employees and large shareholders. Historical results of prior investments made by, or businesses associated with, its officers, directors, employees and large shareholders and their respective affiliates may not be indicative of future performance of an investment in the Company.

The ability of Overseas Shareholders to bring actions or enforce judgments against the Company or the Directors may be limited

The ability of an Overseas Shareholder to bring an action against the Company may be limited under law. The Company is a public limited company incorporated in England and Wales. The rights of holders of Ordinary Shares which are set out in the Articles and are governed by English law. These rights may differ from the rights of shareholders in non-UK corporations. An Overseas Shareholder may not be able to enforce a judgment against some or all of the Directors and executive officers. Two of the Directors are residents of Canada and two of the Directors are residents of the US. Consequently, it may not be possible for an Overseas Shareholder to effect service of a process upon the Directors within the Overseas Shareholder's country of residence or to enforce against the Directors judgments of courts of the Overseas Shareholder's country of residence based on civil liabilities under the country's securities laws. There can be no assurance that an Overseas Shareholder will be able to enforce any judgments in civil and commercial matters or any judgments under the securities law of countries other than the UK against the Directors who are residents of the UK, Canada or countries other than those in which judgment is made. In addition, English or other courts may not impose civil liability on the Directors in any original action based solely on foreign securities laws brought against the Company or the Directors in a court of competent jurisdiction in England or other countries. Notwithstanding the foregoing, the exclusive forum provision contained in the Articles will not apply to any claim to enforce any liability or duty created by the Exchange Act or the Securities Act and for which the US federal courts have exclusive jurisdiction.

RISKS RELATING TO THE ORDINARY SHARES

The Standard Listing of the Ordinary Shares affords shareholders a lower level of regulatory protection than a Premium Listing

A Standard Listing affords shareholders in the Company a lower level of regulatory protection than that afforded to investors in a company with a Premium Listing, which is subject to additional obligations under the Listing Rules. A Standard Listing will not permit the Company to gain a FTSE indexation, which may impact the valuation of the Ordinary Shares.

Further details regarding the differences in the protections afforded by a Premium Listing as against a Standard Listing are set out in the section of this document entitled "Consequences of a Standard Listing" on page 51 of this document. Shareholders should note that as noted in that section, Chapter 10 of the Listing Rules does not apply to the Company and as such, the Company is not required to seek Shareholder approval for an acquisition under this Chapter (although it may be required to do so for the purposes of facilitating the financing arrangements or for other legal or regulatory reasons).

The pre-emption rights in the Articles of the Company have been dis-applied, and the Company may be required to raise cash through issuing substantial additional equity, which may dilute the percentage ownership of a Shareholder and the value of its Ordinary Shares

Although the Company will receive the Net Proceeds from the Fundraising, the Directors believe that further equity capital raisings may be required by the Company in order to implement its business plan, which may be substantial. The Directors have been generally authorised to issue Ordinary Shares, or grant rights to subscribe for, or convert any security into, Ordinary Shares up to a maximum aggregate nominal value of £381,832.34, of which, up to a maximum aggregate nominal value of £381,832.34 is on a non-pre-emptive basis.

If the Company does offer its Ordinary Shares as consideration in the future, depending on the number of Ordinary Shares offered and the value of such Ordinary Shares at the time, the issuance of such Ordinary Shares could materially reduce the percentage ownership represented by the holders of Ordinary Shares in the Company and also dilute the value of Ordinary Shares held by such Shareholders at the time. If the issue of shares results in a large shareholder, that shareholder may be able to exert significant influence in the Company.

The pre-emption rights contained in the Articles have also been dis-applied in relation to the issue of new Ordinary Shares for cash pursuant to the Fundraising and subsequently. See paragraphs 5.6 and 5.7 of Part IX: Additional Information for further details. The disapplication of pre-emption rights could cause a Shareholder's percentage ownership in the Company to be reduced and the issuance of new Ordinary Shares, or, as the case may be, other equity securities could also dilute the value of Ordinary Shares held by such Shareholder.

The Company may be unable or unwilling to transition to a Premium Listing in the future

The Company is not currently eligible for a Premium Listing under Chapter 6 of the Listing Rules. There can be no guarantee that the Company will ever meet such eligibility criteria or that a transition to a Premium Listing will be achieved. If the Company does not achieve a Premium Listing, the Company will not be obliged to comply with the higher standards of corporate governance or other requirements which it would be subject to upon achieving a Premium Listing and, for as long as the Company continues to have a Standard Listing, it will be required to continue to comply with the lesser standards applicable to a company with a Standard Listing. This would include where the Company could be operating a substantial business but would not need to comply with such higher standards. In addition, an inability to achieve a Premium Listing will prohibit the Company from gaining a FTSE indexation and may have an adverse effect on the valuation of the Ordinary Shares. Further details regarding the difference in the protections afforded by a Premium Listing as against a Standard Listing are set out in the section entitled "Consequences of a Standard Listing" on page 51 of this document.

Alternatively, in addition to or in lieu of seeking a Premium Listing, the Company may determine to retain a Standard Listing or to seek a listing on another stock exchange, which may not have standards or corporate governance comparable to those required by a Premium Listing or which Shareholders may otherwise consider to be less attractive or convenient.

The Company's use of the Net Proceeds may not produce income or enhance the value of the Ordinary Shares.

The Company cannot assure investors that the Net Proceeds will be used in a manner that would improve its results of operations or increase the Ordinary Share price, nor that these Net Proceeds will be placed only in investments that generate income or appreciate in value. The failure by the Company to apply these funds effectively could harm its business. Pending their use, the Company may invest the Net Proceeds from the offering in a manner that does not produce income or that loses value.

The dual listing of the Company's Ordinary Shares and the ADSs following the offering may adversely affect the liquidity and value of its Ordinary Shares and ADSs.

Following the offering and after the ADSs begin trading on Nasdaq, the Company's Ordinary Shares will continue to be admitted to trading on the LSE. The Company cannot predict the effect of this dual listing on the value of the ADSs and Ordinary Shares.

However, the dual listing of the ADSs and Ordinary Shares may dilute the liquidity of these securities in one or both markets and may adversely affect the development of an active trading market for the ADSs in the United States. The price of the ADSs could also be adversely affected by trading in its Ordinary Shares on the LSE. Although its ordinary shares are currently admitted to trading on the LSE, the Company may decide to cancel the admission of its ordinary shares to trading on the LSE. The Company cannot predict the effect such cancellation would have on the market price of the ADSs or Ordinary Shares.

Raising additional capital may cause dilution to the Company's existing shareholders, restrict its operations or cause the Company to relinquish valuable rights.

The Company may seek additional capital through a combination of public and private equity offerings, debt financings, strategic partnerships and alliances. To the extent that the Company raises additional capital through the sale of equity, convertible debt securities or other equity-based derivative securities, the ownership interests of shareholders will be diluted, and the terms may include liquidation or other preferences that adversely affect the rights of holders of Ordinary Shares. Any indebtedness the Company incurs would result in increased fixed payment obligations and could involve restrictive covenants, such as limitations on its ability to incur additional debt and other operating restrictions that could adversely impact its ability to conduct its business. Any debt or additional equity financing that the Company raises may contain terms that are not favourable to the Company or its shareholders. Furthermore, the issuance of additional securities, whether equity or debt, by the Company, or the possibility of such issuance, may cause the market price of the Ordinary Shares to decline and existing shareholders may not agree with the Company's financing plans or the terms of such financings. If the Company raises additional funds through strategic partnerships, collaborations, and alliances with third parties, the Company may have to relinquish valuable rights to its technologies, or grant licenses on terms unfavourable to the Company.

The market price of the Ordinary Shares has historically been highly volatile, and investors may not be able to resell the Ordinary Shares at or above their initial purchase price.

The market price of the Ordinary Shares has historically been and following the offering is likely to remain volatile and could fluctuate widely due to factors beyond the Company's control. This may happen because of broad market and industry factors, including the performance and fluctuation of the market prices of other companies with business operations similar to the Company's, as well as the fluctuation in the market price of Bitcoin and other cryptocurrencies. In addition, technology stocks have historically experienced high levels of volatility. As a result of this volatility, investors may not be able to sell the Ordinary Shares at or above their initial purchase price. The market price for the Ordinary Shares may be influenced by many factors, including:

• actual or anticipated fluctuations in its financial and operating results;
• the trading price of cryptocurrencies, in particular Bitcoin;
• changes in the market valuations of its competitors;
• rumours, publicity, and market speculation involving the Company, its management, its competitors, or its industry;
• announcements of new investments, acquisitions, strategic partnerships, joint ventures, capital commitments, integrations or capabilities, technologies, or innovations by the Company or its competitors;
• changes in financial estimates or recommendations by securities analysts;
• changes in laws or regulations applicable to the Company or its industry;
• the perception of the Company's industry by the public, legislatures, regulators and the investment community;
• additions or departures of key personnel;
• potential litigation or regulatory investigations;
• general economic, industry, political and market conditions and overall market volatility in the United States or the United Kingdom, including resulting from COVID-19, war, incidents of terrorism, or responses to these events;
• sales of the ADSs or Ordinary Shares by the Company, its directors and officers, holders of the ADSs or the Company's shareholders in the future or the anticipation that such sales may occur in the future; and
• the trading volume of the ADSs on the Nasdaq and the Ordinary Shares on the London Stock Exchange.

Broad market and industry factors may negatively affect the market price of the Ordinary Shares, regardless of the Company's actual operating performance. Further, a decline in the financial markets and related factors beyond its control may cause the price of the Ordinary Shares to decline rapidly and unexpectedly. If the market price of the Ordinary Shares declines, investors may not realise any return on an investment in the Company and may lose some or all of their investment.

Investing in the Ordinary Shares could be subject to greater volatility than investing directly in Bitcoin or other digital assets.

The price of the Company's securities and its competitors' securities are generally correlated to the price of Bitcoin and other digital assets. However, the Company's business is subject to capital costs, which also affect the price of its securities, such as hardware expenses, power expenses and other factors that are not directly reflected in the prices of digital assets the Company mines. For example, when the price of Bitcoin rises, mining machines may become scarce and more costly to acquire, making the Company's existing operations more attractive. However, when the price of Bitcoin declines, the Company's mining revenues may not exceed its operating costs. As a result, the price of the Ordinary Shares could be subject to greater volatility than direct investments in digital assets and an investment in the Ordinary Shares may result in losses.

If securities or industry analysts cease to publish research or reports about the Company's business, or if they adversely change their recommendations regarding the Ordinary Shares, the ADS and Ordinary Share price and trading volume could decline.

The trading market for the ADSs and the Ordinary Shares will likely be influenced by research and reports that securities or industry analysts publish about the Company or its business. The Company does not have any control over these analysts. If one or more analysts who cover the Company downgrade the ADSs or Ordinary Shares, or adversely change their recommendations regarding the ADSs or Ordinary Shares, the market price for the ADSs and Ordinary Shares would likely decline. In addition, if no or only a few analysts commence research coverage on the Company, or if one or more of the analysts who cover the Company cease to cover the Company or fail to regularly publish reports on the Company, the Company could lose visibility in the financial markets, which in turn could cause the market price or trading volume to decline.

Future sales, or the possibility of future sales, of a substantial number of the ADSs or Ordinary Shares could adversely affect the price of the ADSs and Ordinary Shares.

Future sales of a substantial number of the ADSs or Ordinary Shares, or the perception that such sales will occur, could cause a decline in the market price of the ADSs and Ordinary Shares. ADSs may be resold in the public market immediately without restriction, unless purchased by the Company's affiliates. Upon completion of the offering (if the Over-allotment Option is exercised in full), the Company will have 468,082,335 Ordinary Shares outstanding, of which approximately 10,649,983 will be subject to 90 day lock-up agreements entered into by the Company's directors and officers and certain of its shareholders described in paragraph 12.8 of Part IX. The representatives of the Underwriters may, in their sole discretion, release all or any portion of the equity securities subject to the lock-up agreements prior to the expiration of the lock-up agreements. If, after the end of such lockup agreements, these shareholders sell substantial amounts of ADSs or Ordinary Shares in the public market, or the market perceives that such sales may occur, the market price of the ADSs and Ordinary Shares and the Company's ability to raise capital through an issue of equity securities in the future could be adversely affected.

Because the Company does not anticipate paying any cash dividends on the Ordinary Shares in the foreseeable future, capital appreciation, if any, will be the sole source of gains and investors may never receive a return on investment.

Under current English law, a company's accumulated realized profits must exceed its accumulated realized losses (on a non-consolidated basis) before dividends can be declared and paid. Therefore, the Company must have distributable profits before declaring and paying a dividend. In addition, as a public limited company incorporated in England and Wales, the Company will only be able to make a distribution if the amount of its net assets is not less than the aggregate of its called-up share capital and un-distributable reserves and if, and to the extent that, the distribution does not reduce the amount of those assets to less than that aggregate.

The Company has not paid dividends in the past on its ordinary shares. The Company intends to retain earnings, if any, for use in its business and does not anticipate paying any cash dividends in the foreseeable future. As a result, capital appreciation, if any, on the Ordinary Shares will be the sole source of gains for the foreseeable future, and investors will suffer a loss on their investment if investors are unable to sell the Ordinary Shares at or above their purchase price. Investors seeking cash dividends should not purchase the Ordinary Shares.

The Company will incur increased costs as a result of operating as a company whose ADSs are publicly traded in the United States, and its management will be required to devote substantial time to new compliance initiatives.

As a company whose ADSs are publicly traded in the United States, and particularly after the Company is no longer an emerging growth company, the Company will incur significant legal, accounting and other expenses that the Company did not incur as a private company. In addition, the Sarbanes-Oxley Act, and rules subsequently implemented by the SEC and Nasdaq have imposed various requirements on publicly traded companies of effective disclosure and financial controls and corporate governance practices. The Company's management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase its legal and financial compliance costs and will make some activities more timeconsuming and costly. For example, the Company expects that these rules and regulations may make it more difficult and more expensive for the Company to obtain director and officer liability insurance.

Pursuant to Section 404 of the Sarbanes-Oxley Act (Section 404), the Company will be required to furnish a report by its senior management on its internal control over financial reporting, including an attestation report on internal control over financial reporting issued by its independent registered public accounting firm. However, while the Company remains an emerging growth company, the Company will not be required to include an attestation report on internal control over financial reporting issued by its independent registered public accounting firm. To achieve compliance with Section 404 within the prescribed period, the Company will be engaged in a process to document and evaluate its internal control over financial reporting, which is both costly and challenging. In this regard, the Company will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. Despite its efforts, there is a risk the Company will not be able to conclude, within the prescribed timeframe or at all, that its internal control over financial reporting is effective as required by Section 404. If the Company identifies one or more material weaknesses, it could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of its financial statements.

Following the completion of the offering, the Company may be at an increased risk of securities class action litigation.

Historically, securities class action litigation has often been brought against a company following a decline in the market price of its securities. This risk is especially relevant for the Company because technology companies have experienced significant share price volatility recently. If the Company were to be sued, it could result in substantial costs and a diversion of management's attention and resources, which could harm its business.

GENERAL TRANSACTION RISK & RISKS ASSOCIATED WITH A STANDARD LISTING

The cost of the Company in complying with its continuing obligations under the Listing Rules, Prospectus Regulation Rules and Disclosure and Transparency Rules will be financially material

The cost of the Company in complying with its continuing obligations under the Listing Rules, Prospectus Regulation Rules and Disclosure and Transparency rules will be financially material due to the Company's relatively small size on Admission.

The listing of the Company's securities may be cancelled if the Company no longer satisfies its continuing obligations under the Listing Rules, which includes that a sufficient number of Ordinary Shares are in public hands, as defined in the Listing Rules, at all times.

RISKS RELATING TO TAXATION

Taxation of returns from assets located outside the UK may reduce any net return to Shareholders

It is possible that any return the Company receives from any assets, company or business which the Company acquires and which is or are established outside the UK may be reduced by irrecoverable foreign taxes and this may reduce any net return derived by Shareholders from a shareholding in the Company.

Changes in tax law may reduce any net returns for Shareholders

The tax treatment of holders of Ordinary Shares issued by the Company, any special purpose vehicle that the Company may establish and any company which the Company may acquire are all subject to changes in tax laws or practices or in interpretation of the law in the UK or any other relevant jurisdiction. Any such change may reduce any net return derived by Shareholders from an investment in the Company.

There can be no assurance that the Company will be able to make returns for Shareholders in a tax-efficient manner

It is intended that the Company will structure the group to maximise returns for Shareholders in as fiscally efficient a manner as practicable. The Company has made certain assumptions regarding taxation. However, if these assumptions cannot be borne out in practice, taxes may be imposed with respect to any of the Company's assets, or the Company may be subject to tax on its income, profits, gains or distributions in a particular jurisdiction or jurisdictions in excess of taxes that were anticipated. This will alter the post-tax returns for Shareholders (or Shareholders in certain jurisdictions). Any change in laws or tax authority practices or interpretation of the law could also adversely affect any post-tax returns of capital to Shareholders or payments of dividends (if any, which the Company does not envisage paying, at least in the short to medium-term). In addition, the Company may incur costs in taking steps to mitigate any such adverse effect on the post-tax returns to Shareholders.

The risk factors listed above set out the material risks and uncertainties currently known to the Directors but do not necessarily comprise all of the risks to which the Company is exposed or all those associated with an investment in the Company. In particular, the Company's performance is likely to be affected by changes in the market and/or economic conditions and in legal, accounting, regulatory and tax requirements. There may be additional risks that the Directors do not currently consider to be material or of which they are currently unaware.

If any of the risks referred to above materialise, the Company's business, financial condition, results or future operations could be materially adversely affected. In such case, the price of its shares could decline and investors may lose all or part of their investment.

CONSEQUENCES OF A STANDARD LISTING

Application will be made for the Ordinary Shares (issued and to be issued pursuant to the Fundraising) to be admitted to a listing on the Standard Listing segment of the Official List pursuant to Chapter 14 of the Listing Rules, which sets out the requirements for Standard Listings, and for such Ordinary Shares to be admitted to trading on the London Stock Exchange's Main Market for listed securities.

The Company's Ordinary Shares will be listed under Chapter 14 of the Listing Rules (Standard Listing (Shares)) and as a consequence a significant number of the Listing Rules will not apply to the Company. Shareholders will therefore not receive the full protection of the Listing Rules associated with a Premium Listing.

The Company will comply with Listing Principles 1 and 2 as set out in Chapter 7 of the Listing Rules, as required by the FCA.

An applicant that is applying for a Standard Listing of equity securities must comply with all the requirements listed in Chapters 2 and 14 of the Listing Rules, which specify the requirements for listing for all securities. Where an application is made for the admission to the Official List of a class of shares, at least 25% of the shares of the class must be distributed to the public. Listing Rule 14.3 sets out the continuing obligations applicable to companies with a Standard Listing and requires that such companies' listed equity shares be admitted to trading on a regulated market at all times. Such companies must have at least 25% of the shares of any listed class in public hands at all times and the FCA must be notified as soon as possible if these holdings fall below that level.

The continuing obligations under Chapter 14 also include requirements as to:

• the forwarding of circulars and other documentation to the FCA for publication through to the National Storage Mechanism, and related notification to an RIS;
• the provision of contact details of appropriate persons nominated to act as a first point of contact with the FCA in relation to compliance with the Listing Rules and the Disclosure and Transparency Rules;
• the form and content of temporary and definitive documents of title;
• the appointment of a registrar;
• notifying an RIS in relation to changes to equity and debt capital; and
• compliance with, in particular, Chapters 4, 5 and 6 of the Disclosure and Transparency Rules.

As a company with a Standard Listing, the Company will, following Admission, not be required to comply with, inter alia, the provisions of Chapters 6 and 8 to 13 of the Listing Rules, which set out more onerous requirements for issuers with a Premium Listing of equity securities. These include provisions relating to certain listing principles, the requirement to appoint a sponsor, various continuing obligations, including those relating to significant transactions, related party transactions, dealings in own securities and treasury shares and contents of circulars.

The Company notes that in the case of an acquisition, the reverse takeover provisions set out in Listing Rule 5.6 may be triggered. The Company does not currently anticipate making any acquisitions.

The Company will comply with Chapter 5 of the Listing Rules (Suspending, cancelling and restoring listing and reverse takeovers). If completing a Reverse Takeover, the Company's existing Standard Listing will be cancelled and the Company may apply for a new Standard Listing or a listing on another appropriate securities market or stock exchange for the ordinary share capital of the Company. The granting of a new Standard Listing or a listing on another appropriate securities market or stock exchange following a Reverse Takeover cannot be certain. The Company may have its listing suspended in the event of a Reverse Takeover.

As mentioned above, while the Company has a Standard Listing, it is not required to comply with the provisions of, among other things:

• Chapter 6 of the Listing Rules containing additional requirements for the listing of equity securities, which are only applicable for companies with a Premium Listing;
• Chapter 8 of the Listing Rules regarding the appointment of a listing sponsor to guide the Company in understanding and meeting its responsibilities under the Listing Rules in connection with certain matters.

The Company does not have and does not intend to appoint such a sponsor in connection with its publication of this document, the Fundraising or Admission;

• Chapter 9 of the Listing Rules regarding continuous obligations for a company with a Premium Listing, which includes, inter alia, requirements relating to further issues of shares, the ability to issue shares at a discount in excess of 10% of market value, notifications and contents of financial information that are not applicable to the Company;
• Chapter 10 of the Listing Rules relating to significant transactions meaning any subsequent additional acquisitions by the Company, will not require shareholder approval under this Chapter (although such approval may be required for the purposes of facilitating the financing arrangements or for other legal or regulatory reasons);
• Chapter 11 of the Listing Rules regarding related party transactions. However, the Company is obliged to comply with DTR 7.3 relating to related party transactions. DTR7.3 requires the Company to establish and maintain adequate procedures, systems and controls to enable it to assess whether a transaction or arrangement with a related party is in the ordinary course of business and has been concluded on normal market terms, and to (i) make an announcement (ii) gain board approval and (iii) ensure the related party or their associates do not vote in any resolution, relating to material related party transactions;
• Chapter 12 of the Listing Rules regarding purchases by the Company of its Ordinary Shares; and
• Chapter 13 of the Listing Rules regarding the form and content of circulars to be sent to Shareholders.

IT SHOULD BE NOTED THAT THE FCA WILL NOT HAVE THE AUTHORITY TO (AND WILL NOT) MONITOR THE COMPANY'S COMPLIANCE WITH ANY OF THE LISTING RULES WHICH THE COMPANY HAS INDICATED IN THIS DOCUMENT THAT IT INTENDS TO COMPLY WITH ON A VOLUNTARY BASIS, NOR TO IMPOSE SANCTIONS IN RESPECT OF ANY FAILURE BY THE COMPANY TO SO COMPLY. HOWEVER THE FCA WOULD BE ABLE TO IMPOSE SANCTIONS FOR NON-COMPLIANCE WHERE THE STATEMENTS REGARDING COMPLIANCE IN THIS DOCUMENT ARE THEMSELVES MISLEADING, FALSE OR DECEPTIVE.

IMPORTANT INFORMATION, PRESENTATION OF FINANCIAL AND OTHER INFORMATION AND NOTICES TO INVESTORS

In deciding whether or not to purchase Ordinary Shares, prospective purchasers should rely only on their own examination of the Company and/or the financial and other information contained in this document.

Purchasers of Ordinary Shares must not treat the contents of this document or any subsequent communications from the Company or any of its respective affiliates, officers, directors, employees or agents as advice relating to legal, taxation, accounting, regulatory, investment or any other matters.

Prospective investors should inform themselves as to:

• the legal requirements within their own countries for the purchase, holding, transfer or other disposal of the Ordinary Shares;
• any foreign exchange restrictions applicable to the purchase, holding, transfer or other disposal of the Ordinary Shares which they might encounter; and
• the income and other tax consequences which may apply in their own countries as a result of the purchase, holding, transfer or other disposal of the Ordinary Shares. Prospective investors must rely upon their own representatives, including their own legal advisers and accountants, as to legal, tax, investment or any other related matters concerning the Company and an investment therein.

No person has been authorised to give any information or make any representations other than as contained in this document and, if given or made, such information or representations must not be relied on as having been so authorised. Without prejudice to the Company's obligations under the FSMA, Prospectus Regulation Rules, Listing Rules and Disclosure and Transparency Rules, neither the delivery of this document nor any subscription made pursuant to it will, under any circumstances, create any implication that there has been no change in the affairs of the Company since the date of this document or that the information in it is correct as at any time subsequent to its date.

This document comprises a prospectus relating to the Company prepared in accordance with the Prospectus Regulation Rules and has been approved by the FCA under section 87A of FSMA. This document has been filed with the FCA and made available to the public in accordance with Rule 3.2 of the Prospectus Regulation Rules. No arrangement has however been made with the competent authority in any other member state of the EEA (or any other jurisdiction) for the use of this document as an approved prospectus in such jurisdiction and accordingly no public offer is to be made in such jurisdiction.

This document does not constitute, and may not be used for the purposes of, an offer to sell or an invitation to subscribe for or the solicitation of an offer to buy or subscribe for, any Ordinary Shares by any person in any jurisdiction: (i) in which such offer or invitation is not authorised; (ii) in which the person making such offer or invitation is not qualified to do so; or (iii) in which, or to any person to whom, it is unlawful to make such offer, solicitation or invitation. The distribution of this document and the offering of the Ordinary Shares in certain jurisdictions may be restricted. Accordingly, persons outside the UK into whose possession this document comes are required by the Company to inform themselves about, and to observe any restrictions as to the offer or sale of Ordinary Shares and the distribution of this document under, the laws and regulations of any territory in connection with any applications for Ordinary Shares, including obtaining any requisite governmental or any other consent and observing any other formality prescribed in such territory.

No action has been taken or will be taken in any jurisdiction by the Company or the Directors that would permit a public offering of the Ordinary Shares in any jurisdiction where action for that purpose is required, nor has any such action being taken with respect to the possession or distribution of this document other than in any jurisdiction where action for that purpose is required. Accordingly, the Ordinary Shares may not be offered or sold, directly or indirectly, and neither this document nor any other offering material or advertisement in connection with the Ordinary Shares may be distributed or published in or from any country or jurisdiction except under circumstances that will result in compliance with any and all applicable rules and regulations of any such country or jurisdictions. Any failure to comply with this restriction may constitute a violation of the securities laws of any such jurisdiction. Neither the Company nor any of the Directors accepts any responsibility for any violation of any of these restrictions by any other person.

An investment in the Company should be regarded as a long-term investment. There can be no assurance that the Company's objectives will be achieved.

It should be remembered that the price of the Ordinary Shares, and any income from such Ordinary Shares, can go down as well as up.

This document should be read in its entirety before making any investment in the Ordinary Shares. All Shareholders are entitled to the benefit of, are bound by, and are deemed to have notice of, the provisions of the Articles, which prospective investors should review.

FORWARD-LOOKING STATEMENTS

Some of the statements under "Summary", "Risk Factors", "Part I: Information on the Company, Investment Opportunity and Strategy" and elsewhere in this document include forward-looking statements which reflect the Company's or, as appropriate, the Directors' current views, interpretations, beliefs or expectations with respect to the Company's financial performance, business strategy and plans and objectives of management for future operations. These statements include forward-looking statements both with respect to the Company and the sector and industry in which the Company proposes to operate. Statements which include the words "expects", "intends", "plans", "believes", "projects", "anticipates", "will", "targets", "aims", "may", "would", "could", "continue", "estimate", "future", "opportunity", "potential" or, in each case, their negatives, and similar statements of a future or forwardlooking nature identify forward-looking statements.

All forward-looking statements address matters that involve risks and uncertainties because they relate to events that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. Accordingly, there are or will be important factors that could cause the Company's actual results, prospects and performance to differ materially from those indicated in these statements. In addition, even if the Company's actual results, prospects and performance are consistent with the forward-looking statements contained in this document, those results may not be indicative of results in subsequent periods. Important factors that may cause these differences include, but are not limited to:

• the impact of the current Covid-19 pandemic on the Company, its commercial counterparties and the global economy generally;
• the Company's ability to implement effective growth strategies for the Company's business;
• the Company's ability to ascertain the merits or risks of the operations of the Company's business;
• the Company's ability to deploy the Net Proceeds on a timely basis;
• changes in economic conditions generally (and specifically in the UK, Canadian and US markets);
• impairments in the value of the Company's assets or volatility in the price of digital assets more generally;
• the availability and cost of equity or debt capital for future transactions;
• changes in interest rates and currency exchange rate fluctuations, as well as the success of the Company's hedging strategies in relation to such changes and fluctuations (if such strategies are in fact used); and
• legislative and/or regulatory changes, including changes in taxation regimes.

Risks and uncertainties which are material and known to the Directors are listed in the section of this document headed "Risk Factors", which should be read in conjunction with the other cautionary statements that are included in this document.

Any forward-looking statements in this document reflect the Company's, or as appropriate, the Directors' current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to the Company's future business, results of operations, financial conditions and growth strategy. For the avoidance of doubt, nothing in this paragraph qualifies the working capital statement set out in paragraph 14 of Part IX: Additional Information of this document.

These forward-looking statements speak only as of the date of this document. Subject to any obligations under the Prospectus Regulation Rules, the Market Abuse Regulation, the Listing Rules and the Disclosure and Transparency Rules and except as required by the FCA, the London Stock Exchange, the City Code or applicable law and regulations, the Company undertakes no obligation publicly to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. All subsequent written and oral forward-looking statements attributable to the Company or individuals acting on behalf of the Company are expressly qualified in their entirety by this paragraph. Prospective investors should specifically consider the factors identified in this document which could cause actual results to differ before making an investment decision.

NOTICE TO OVERSEAS SHAREHOLDERS

An Overseas Shareholder may not be able to enforce a judgment against some or all of the Directors and executive officers. The Company is incorporated under the laws of England and Wales and the majority of the Directors are residents of either Canada or the United Kingdom. Consequently, it may not be possible for an Overseas Shareholder to effect service of process upon the Directors within the Overseas Shareholder's country of residence or to enforce against the Directors judgments of courts of the Overseas Shareholder's country of residence based on civil liabilities under that country's securities laws. There can be no assurance that an Overseas Shareholder will be able to enforce any judgments in civil and commercial matters or any judgments under the securities laws of countries other than the UK against the Directors who are residents of either Canada or the United Kingdom or countries other than those in which judgment is made. In addition, English or other courts may not impose civil liability on the Directors in any original action based solely on the foreign securities laws brought against the Company or the Directors in a court of competent jurisdiction in England or other countries.

NOTICE TO ALL SHAREHOLDERS

Copies of this document will be available on the Company's website, www.argoblockchain.com from the date of this document until the date which is one month from the date of Admission.

THIRD PARTY INFORMATION

Where information contained in this document has been sourced from a third party, the Company confirms that such information has been accurately reproduced and, so far as the Company is aware and is able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading.

DATA PROTECTION

The Company may delegate certain administrative functions to third parties and will require such third parties to comply with data protection and regulatory requirements of any jurisdiction in which data processing occurs. Such information will be held and processed by the Company (or any third party, functionary or agent appointed by the Company) for the following purposes:

• (a) verifying the identity of the prospective investor to comply with statutory and regulatory requirements in relation to anti-money laundering or anti terrorism procedures;
• (b) carrying out the business of the Company and the administering of interests in the Company;
• (c) meeting the legal, regulatory, reporting and/or financial obligations of the Company in the United Kingdom or elsewhere; and
• (d) disclosing personal data to other functionaries of, or advisers to, the Company to operate and/or administer the Company.

Where appropriate, it may be necessary for the Company (or any third party, functionary or agent appointed by the Company) to:

• (a) disclose personal data to third party service providers, agents or functionaries appointed by the Company to provide services to prospective investors; and
• (b) transfer personal data outside of the EEA to countries or territories which do not offer the same level of protection for the rights or freedoms of prospective investors as the United Kingdom.

If the Company (or any third party, functionary or agent appointed by the Company) discloses personal data to such a third party, agent or functionary and/or makes such a transfer of personal data it will use reasonable endeavours to ensure that any third party, agent or functionary to whom the relevant personal data is disclosed or transferred is contractually bound to provide an adequate level of protection in respect of such personal data.

In providing such personal data, investors will be deemed to have agreed to the processing of such personal data in the manner described above. Prospective investors are responsible for informing any third party individual to whom the personal data relates of the disclosure and use of such data in accordance with these provisions.

DEFINED TERMS

Except for certain names of natural persons and legal entities and capitalised terms that need no further explanation, the capitalised terms used in this document, including capitalised abbreviations, are defined or explained in Part X: Definitions, starting on page 120 of this document.

CURRENCY

Unless otherwise indicated, all references in this document to "GBP", "£", "pounds sterling", "pounds", "sterling", "pence" or "p" are to the lawful currency of the United Kingdom; all references to "\$", "US\$" or "US dollars" are to the lawful currency of the US; and all references to "CDN\$" or "Canadian dollars" are to the lawful currency of Canada.

NO INCORPORATION OF WEBSITE TERMS

Except to the extent expressly set out in this document, neither the content of the Company's website or any other website nor the content of any website accessible from hyperlinks on the Company's website or any other website is incorporated into, or forms part of, this document.

GOVERNING LAW

Unless otherwise stated, statements made in this document are based on the law and practice currently in force in England and Wales and are subject to changes in such laws.

VALIDITY OF PROSPECTUS

The prospectus was approved on 23 September 2021 and is valid for a period of one year from that date. The prospectus will therefore cease to be valid on 22 September 2022. Should a significant new factor occur, or material mistake or inaccuracy be identified during the validity period, the Company would be required to issue a supplement in accordance with the Prospectus Regulation Rules. After the period of validity has expired, the Company is no longer under an obligation to issue such a supplement.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Announcement confirming results of Fundraising and date of this document	23 September 2021
Crediting of Ordinary Shares issued in respect of the Fundraising to the Depositary to be held in uncertificated form in CREST	27 September 2021
Admission and commencement of unconditional dealings in New Ordinary Shares issued in respect of the the Fundraising	28 September 2021

All references to time in this Document are to London time unless otherwise stated.

KEY STATISTICS

Number of Existing Ordinary Shares	381,832,335
Maximum number of New Ordinary Shares if the Over-allotment Option is not exercised	75.000.000
Maximum number of New Ordinary Shares if the Over-allotment Option is exercised in full	86,250,000
Enlarged Share Capital in issue following the issue of the New Ordinary Shares (including exercise of the Over-allotment Option in full)	468,082,335
Percentage of Enlarged Share Capital represented by New Ordinary Shares (including exercise of the Over-allotment Option in full)	18%

DEALING CODES

ISIN	GB00BZ15CS02
SEDOL	BZ15CS0
TIDM – Ordinary Shares	LSE: ARB
	OTC: ARBKF

DIRECTORS, AGENTS AND ADVISERS

Directors	Peter Wall (Chief Executive Officer & Interim Chairman)
	Alex Appleton (Chief Financial Officer)
	Matthew Shaw (Non-Executive Director)
	Colleen Sullivan (Non-Executive Director)
	Maria Perrella (Non-Executive Director)
	Sarah Gow (Non-Executive Director)
	(All c/o the registered office)
Company Secretary	Alex Appleton
Registered Office	9th Floor 16 Great Queen Street London WC2B 5DG
Legal advisers to the Company as to English law	Fladgate LLP 16 Great Queen Street London WC2B 5DG United Kingdom
Legal advisers to the Company as to United States law	Sidley Austin LLP 1001 Page Mill Road, Building 1, Palo Alto, California 94304 United States of America
Auditors and Reporting Accountants	PKF Littlejohn LLP 15 Westferry Circus Canary Wharf London E14 4HD United Kingdom
Registrar	Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol BS13 8AE United Kingdom
Website	www.argoblockchain.com
Ticker	LSE: ARB
	OTC: ARBKF

PART I

INFORMATION ON THE COMPANY, INVESTMENT OPPORTUNITY AND STRATEGY

1. Introduction

Argo is a leading blockchain technology company focused on large-scale mining of Bitcoin and other cryptocurrencies. Argo mines using purpose-built computers (mining machines) to solve complex cryptographic algorithms (or "verify" or "solve" blocks) on the blockchain in exchange for rewards and fees denominated in the native token of that blockchain network.

The Company's mining strategy is to cost-effectively acquire the latest generation mining machines and install them in North American facilities that utilize predominantly renewable and inexpensive power. Argo has a fleet of more than 21,000 machines mining Bitcoin and other cryptocurrencies and, as at 30 June 2021, it could generate approximately 1,075 petahash per second, of which approximately 215 petahash is located in facilities the Company recently acquired in Quebec, Canada, and approximately 860 petahash is located in hosted facilities. The Company's return on investment on mining machines was 228%. Petahash per second is a measure of Bitcoin mining performance and computational power. As of 30 June 2021, the Company's total hashrate placed it in the top 10 publicly listed self-miners that report such data. The Company operates its mining machines from two facilities that it owns in Canada and four hosted facilities in Canada and the United States. As of 30 June 2021, the owned facilities in Canada represent a combined 20 megawatts (MW) of power, and the Company's mining machines at the Company's hosted facilities in Canada and the United States use up to a combined 23.5 MW of power. In addition, the Company recently acquired 160 acres of land in western Texas with access to up to 800 MW of power where the Company is currently developing a mining facility. The facility is expected to support 100 MW of power capacity in the first half of 2022 as part of Phase 1 of development and an additional 100 MW of power capacity upon completion of Phase 2 of development. The Company's investments in mining facilities are designed to significantly expand its mining capacity and provide the Company with meaningful control over its mining operations. The Company is taking these steps as part of a broader strategy to shift its business from contracting for hosting of mining machines in facilities to owning and operating the facilities.

Argo believes that as cryptocurrency continues to develop as an emerging store of value and medium of exchange, it is increasingly important that this asset class evolves in an environmentally and socially responsible manner. The Company is committed to being the industry leader in the development of environmentally responsible approaches to cryptocurrency mining. From inception, the Company has concentrated mining operations in areas with plentiful renewable energy resources to support its operations, including its Quebec facilities which are primarily powered using renewable hydroelectric power, and its new mining facility in western Texas which is purposefully located in a region with a high percentage of renewable power, namely from wind and solar. Additionally, the Company has developed a climate action plan and recently achieved its goal of being a net zero greenhouse gas (GHG) company through the purchase of renewable energy credits (RECs) and verified emissions reductions (VERs). The Company also announced the launch of Terra Pool, the first green mining pool powered exclusively by clean power.

Argo is also focused on exploring and investing in strategic initiatives in software and other technologies in the wider cryptocurrency and blockchain sectors. For example, Argo aims to diversify its revenue streams by investing in adjacent cryptocurrency and blockchain technology initiatives, including Decentralized Finance (DeFi). Argo has established Argo Labs as a dedicated division within the Company to explore investing and participating in various consensus mechanisms, mainly proof-of-stake networks, including Ethereum, as well as Defi projects. The Company recently invested in Pluto Digital PLC, a technology company focused on incubation of decentralized technologies.

The Company will evaluate each digital asset in its portfolio, or that it proposes to acquire in the future (including by mining), to determine whether it would likely be considered a security under English and U.S. federal securities laws, in consultation with outside counsel, as applicable. The Company will base its analysis on relevant caselaw, applying the appropriate tests under English law and frameworks established by the U.S. Supreme Court and taking into consideration relevant guidance by the Securities and Exchange Commission (the SEC) and its staff.

Since inception, Argo has mined more than 4,515 Bitcoin and Bitcoin Equivalent for its own account through to 30 June 2021. While the Company mines cryptocurrency for sale in the ordinary course of business, it believes that cryptocurrency represents an attractive, appreciating investment opportunity, and as such the Company has

historically held cryptocurrency assets that it does not otherwise sell to fund its operating expenses. As at 30 June 2021, Argo held 1,268 Bitcoin and Bitcoin Equivalent valued at approximately £31,896,437 based on prices as of such date. The Company's total revenue was £31,085,716 in the six months ended 30 June 2021, representing a growth rate of 179% over £11,124,455 in the six months ended 30 June 2020. The Company generated net income of £7,213,997 and £523,074 in the six months ended 30 June 2021 and 2020 respectively, and a net loss of £869,051 in 2019. The Company generated EBITDA of £15,978,266, £7,625,309 and £1,387,386 in the six months ended 30 June 2021, in 2020 and in 2019 respectively.

Recent Developments

In July 2021 and August 2021, the Company mined 225 Bitcoin and Bitcoin Equivalent and 206 Bitcoin and Bitcoin Equivalent, respectively. Based on daily foreign exchange rates and cryptocurrency prices during the months, mining revenue in July amounted to approximately £5.6 million and mining revenue in August amounted to approximately £6.8 million. The Company generated this income at a gross margin of 155% and 145% for July and August 2021, respectively, or a Bitcoin and Bitcoin Equivalent Mining Margin of approximately 83% and 86% for July and August 2021, respectively. Favourable changes in the market value of Bitcoin significantly affected the Company's gross margin and Bitcoin and Bitcoin Equivalent Mining Margin in both July and August 2021. The Company sold 61 Bitcoin in the month of August at an average price of £35,324.94 per Bitcoin, generating cash of approximately £2.1 million. On 31 August 2021, the Group held 1,659 Bitcoin and Bitcoin Equivalent valued at approximately £56,898,756 based on prices as of such date. The following table shows a reconciliation of Bitcoin Margin and Bitcoin Equivalent Mining Margin to gross margin, the most directly comparable IFRS measure for the months of July and August 2021. Bitcoin and Bitcoin Equivalent Mining Margin is a financial measure not defined by IFRS.

	MONTH ENDED 31 JULY 2021		MONTH ENDED 31 AUGUST2021
	£	\$	£	\$
Gross profit	9,168,743	12,658,366	10,427,531	14,396,250
Gross margin(1)	155%	155%	145%	145%
Depreciation of mining equipment	846,573	1,168,779	846,382	1,168,515
Change in fair value of digital currencies ……. (5,051,548)		(6,974,167)	(4,736,507)	(6,539,222)
Realised loss on sale of digital currencies	—	—	(305,366)	(421,588)
Crypto-currency management fees	(269,892)	(372,	(327,652)	(452,356)
		612
Mining profit	4,693,876	6,480,366	5,904,388	8,151,599
Bitcoin and Bitcoin Equivalent Mining Margin	83%	83%	86%	86%

(1) Due to favourable changes in fair value of Bitcoin and Bitcoin Equivalents in July and August 2021, gross profit exceeded revenue for these periods.

Smart Growth

Argo aims to optimize its mining by identifying and purchasing the most profitable mining machines with industryleading returns on investment and actively monitoring and adjusting the operation of those machines to enhance their performance. The Company believes this smart-growth strategy, including its commitment to mining efficiency and return on investment in mining machines, will enable the Company to build value over the long term.

Own and Operate Mining Facilities

Argo is investing heavily in purchasing, building and operating its mining facilities. By owning and operating the mining machines at facilities that offer competitive advantages, including access to reliable, low-cost, renewable power and room for expansion, Argo expects to have greater control over the timing of the purchase and deployment of its mining machines. This may also enhance the Company's ability to intelligently and quickly adapt the Company's operating model and reap savings compared to paying third parties for outsourced operations and infrastructure. The Company anticipates that it will continue to consider other opportunities to integrate its operations, including with respect to both the software utilized by the Company's fleet and associated hardware.

Reliable, Low-Cost, Renewable Power

Argo believes the combination of increased mining difficulty, driven by greater hash rates, and the periodic adjustment of reward rates, such as the halving of Bitcoin rewards, will drive the increasing importance of power efficiency in cryptocurrency mining over the long term. As a result, Argo is focused on deploying its mining machines at locations with access to reliable, renewable power sources, as successfully doing so should enable the Company to reduce its power costs. The Group's Quebec facilities are primarily powered using renewable hydroelectric power and the Company purposely partners with mining facilities located in regions where the grid is shifting to renewables. At the mining facility the Company is currently building in Texas, the Company expects to obtain more than 90% of the power requirements from reliable, renewable power sources. The Company expects to enter into power agreements that will allow it to have one of the highest carbon-free energy footprints at a price equal to or less than the current cost of fossil fuel energy in other locations, based on current market power costs as at the date of this document.

Commitment to ESG Initiatives

Argo believes that as cryptocurrency continues to develop as an emerging value storage asset and medium of exchange, it is increasingly important that this asset class evolves in an environmentally and socially responsible manner. To that end, Argo has developed a climate action plan to and recently achieved the goal of being a net zero GHG company through the purchase of RECs and VERs, and has announced the launch of Terra Pool, a green mining pool powered exclusively by clean power.

Diversification

Over the long term, the Company's strategy is to diversify its sources of revenue and value creation by investing in and developing other commercial opportunities related to cryptocurrency and blockchain technologies and initiatives, such as DeFi applications and cryptocurrencies that use alternative consensus mechanisms, such as proof-of stake.

2. Background

The Company was originally incorporated as GoSun Blockchain Limited, a private limited company organized under the laws of England and Wales on 5 December 2017 with company registration number 11097258. On 21 December 2017, GoSun Blockchain Limited changed its name to Argo Blockchain Limited and re-registered as a public limited company, becoming Argo Blockchain plc.

Argo Blockchain plc is the parent holding company of the Group. The Group consists of Argo Blockchain plc and the following subsidiaries of Argo Blockchain plc:

• Argo Innovation Labs Inc. (previously Argo Blockchain Canada Holdings Inc.), a wholly owned subsidiary incorporated and registered in British Columbia, Canada. Argo Blockchain Canada Holdings Inc. was acquired upon its incorporation on January 12, 2018. On January 8, 2019, it changed its name to Argo Innovation Labs Inc.
• Argo Innovation Labs Limited (previously Argo Mining Limited), a wholly-owned subsidiary incorporated and registered in England and Wales. Argo Mining Limited was acquired for £1 on September 1, 2018 and has remained dormant since its acquisition. On January 14, 2019, it changed its name to Argo Innovation Labs Limited; and
• Argo Innovation Facilities (US), Inc., a wholly owned subsidiary, incorporated in Delaware on February 25, 2021.

3. Cryptocurrency and Cryptocurrency Mining Overview

Blockchain and Cryptocurrencies Overview

Cryptocurrencies are a type of digital asset that function as a medium of exchange, a unit of account and/or a store of value (i.e. a new form of digital money). Cryptocurrencies operate by means of blockchain technology, which generally uses open-source, peer-to-peer software to create a decentralized digital ledger that enables the secure use and transfer of digital assets. The Company believes cryptocurrencies and associated blockchain technologies have potential advantages over traditional payment systems, including: the tamper-resistant nature of blockchain networks, rapid-to-immediate settlement of transactions, lower fees, elimination of counterparty risk, protection from identify theft, broad accessibility, and a decentralized nature that enhances network security by reducing the likelihood of a "single point of failure." Recently, cryptocurrencies have gained widespread mainstream attention and have begun to experience greater adoption by both retail and institutional investors and the broader financial markets. For example, Bitcoin's aggregate market value exceeded \$1 trillion in February 2021 compared to \$160 billion in February 2020, based on Bitcoin prices quoted on major exchanges. As cryptocurrencies, and blockchain technologies more generally, have entered the mainstream, prices of digital assets have reached all-time highs and the broader ecosystem has continued to develop. While the Company expects the value of Bitcoin to remain volatile, the Company believes this increase in aggregate market value signals institutionalization and wider adoption of cryptocurrency.

Cryptocurrency Mining and Mining Pools

As a cryptocurrency miner, the Company uses specialized mining machines to solve cryptographic math problems necessary to record and "publish" cryptocurrency transactions to blockchain ledgers. Generally, each cryptocurrency has its own blockchain, which consists of software code (also known as a protocol), which is run by all the computers on the network for such blockchain. Within this code, transactions are collated into blocks, and these blocks must meet certain requirements to be verified by the blockchain software, added to the blockchain or ledger of all transactions and published to all participants on the network that are running the blockchain software. After a transaction is verified, it is combined with other transactions to create a new block of data for the blockchain. For proof-of-work blockchains, the process of verifying valid blocks requires computational effort to solve a cryptographic equation, and this computational effort protects the integrity of the blockchain ledger. This process is referred to as "mining." As a reward for verifying a new block, miners receive payment in the form of the native cryptocurrency of the network (e.g., Bitcoin). This payment is comprised of a block reward (i.e., the automatic issue of new cryptocurrency tokens) and the aggregated transaction fees for the transactions included in the block (paid in existing cryptocurrency tokens by the participants to the transactions). The block reward payments and the aggregated transaction fees are what provide the incentive for miners to contribute hash rate to the network.

A "hash" is the actual cryptographic function run by the mining machines, and is a unique set of numbers and letters derived from the content of the block. The protocol governing the relevant blockchain sets certain requirements for the hash. Mining machines compete to be the first to generate a valid hash meeting these requirements and, thereby, secure payment for solving the block. Hash rate is the speed at which mining machines can complete the calculation, and therefore is a critical measure of performance and computational power. A high rate means a mining machine may complete more calculations over a given period and has a greater chance to solve a block. An individual miner has a hash rate total of its mining machines seeking to mine a specific cryptocurrency, and the blockchain-wide hash rate for a specific cryptocurrency can be understood as the aggregate of the hash rates of all of the mining machines actively trying to solve a block on that blockchain at a given time.

The protocols governing Bitcoin and other cryptocurrencies are coded to regulate the frequency at which new blocks are verified by automatically adjusting what is known as the "mining difficulty," which is the level of computational activity required before a new block is solved and verified. For example, on the Bitcoin blockchain the protocol is coded such that a new block is solved and verified approximately every 10 minutes, while on Ethereum blocks are designed to be solved approximately every 12-15 seconds. As such, to the extent the hash power on the network is increased or decreased due to, for example, fluctuations in the number of active mining machines online, mining difficulty is correspondingly increased or decreased to maintain the preset interval for the verification of new blocks.

On certain cryptocurrency networks, the rewards for solving a block are also subject to periodic incremental halving. Halving is a process designed to control the overall supply and reduce the risk of inflation in cryptocurrencies using a proof-of-work consensus algorithm. After a predetermined number of blocks are added to the blockchain, the mining reward is cut in half, hence the term "halving." The last halving for Bitcoin occurred on May 11, 2020. The next halving for Bitcoin is expected to occur in 2024, and as such, absent any changes to the Bitcoin protocols, the block reward will remain stable until then. By contrast, Ethereum does not have a maximum supply limit or predetermined reduction in reward amounts. Rather, Ethereum currently has a fixed issuance schedule of 2.0 Ether per block mined. However, Ethereum has on two separate occasions reduced the quantity of ETH rewarded per block and may make additional changes in the future, whether or not Ethereum ultimately transitions to a proof-ofstake consensus mechanism. Transaction fees are variable and depend on the level of activity on the network. Generally, transaction fees increase during times of network congestion, as miners will prefer transactions with higher fees, and therefore a higher fee can reduce the time to process a transaction, and decrease when there are fewer transactions on the network.

As the total amount of available hash rate has increased (particularly on the Bitcoin network), it has become increasingly difficult for any individual miner to independently solve a block and as a result "mining pools" have emerged as an efficient way for miners to pool resources. Mining pools aggregate the hash rate of various miners participating in the mining pool. In this way the mining pool, rather than an individual miner, receives the block reward and related transaction fees. The mining pool is organized by a third party who, in return for a percentage of the earned block rewards and transaction fees as a fee, administers the pool and ensures that the participants in the pool receive their share of the block reward and related transaction fees, generally pro-rata to their contributed hash rate. Mining pools offer miners more predictable and consistent revenue compared to mining individually.

4. The Company's Strategy

Smart Growth

The Company aims to optimize its mining by identifying and purchasing the most profitable mining machines with industry-leading returns on investment and actively monitoring and adjusting the operation of those machines to enhance their performance. When planning its short- and long-term operating strategies and capital expenditures, the Company carefully monitors fluctuations and longer-term trends in the value of certain cryptocurrencies, which impacts the return on investment of machines. The Company also regularly evaluates potential innovations in geography, physical footprint, computing technology and similar areas to improve its operations and productivity. The Company believes this smart-growth strategy, including its commitment to mining efficiency and return on investment in mining machines, will enable it to build value over the long term.

Vertical Integration

The Company is investing heavily in vertical integration, including purchasing, building and operating its mining facilities. By owning and operating its mining machines at facilities that offer competitive advantages, including access to reliable, low-cost, renewable power and room for expansion, the Company expects to have greater control over the timing of the purchase and deployment of its mining machines. The Company also may enhance its ability to intelligently and quickly adapt its operating model and reap savings compared to paying a third party for outsourced operations and infrastructure. The Company anticipates that it will continue to consider other opportunities to vertically integrate, including with respect to both the software utilized by its fleet and the hardware it is comprised of.

Reliable, Low-Cost, Renewable Power

Power represents its highest variable direct cost for the Company's mining operations, with electrical power required both to operate the mining machines and to dissipate the significant amount of heat generated by the machines' operation. The Company believes the combination of increased mining difficulty, driven by greater hash rates, and the periodic adjustment of reward rates, such as the halving of Bitcoin rewards, will drive the increasing importance of power efficiency in cryptocurrency mining over the long term. As a result, the Company is focused on deploying its mining machines at locations with access to reliable, renewable power sources, as successfully doing so should enable it to reduce its power costs. The Company's Quebec facilities are powered using renewable hydroelectric power and the Company purposefully partners with mining facilities located in regions where the grid is shifting to renewables. At the mining facility that the Company is currently building in Texas, the Company expects to obtain more than 90% of its power requirements from reliable, renewable power sources at less than the current cost of fossil fuel energy sources in other locations.

Commitment to ESG Initiatives

The Company believes that as cryptocurrency continues to develop as an emerging value storage asset and medium of exchange, it is increasingly important that this asset class evolves in an environmentally and socially responsible manner. To that end, the Company has developed a climate action plan and recently achieved its goal of being a net zero GHG company through the purchase of RECs and VERs. The Company has also announced the launch of Terra Pool, a green mining pool powered exclusively by clean power.

Diversification

Over the long term, the Company's strategy is to diversify its sources of revenue and value creation by investing in and developing other commercial opportunities related to cryptocurrency and blockchain technologies and initiatives, such as DeFi applications and cryptocurrencies that use alternative consensus algorithms, such as proof-of-stake. To this end, the Company has invested in Luxor Technologies, a hash rate management software platform and equihash mining pool operator and Pluto Digital PLC, a venture capital and technology company focused on incubating decentralized technologies. The Company has also established Argo Labs as a dedicated division within the Company to further explore investing and participating in various consensus mechanisms, mainly proof-of-stake networks, including Ethereum, as well as DeFi projects.

Pluto Digital PLC (Pluto)

Pluto has a strong focus on Proof-of-Stake projects and proposes to generate revenue from running nodes and validators. Pluto is deeply networked within the Web 3.0, Ethereum, Polkadot and DeFi communities, giving an opportunity to invest in early-stage projects with high return potential, and indirectly provides the Company with further differentiated exposure to the crypto ecosystem.

On 3 February 2021, the Company purchased 35,450,000 ordinary shares in Pluto for total consideration of £1,064,500. The Company also received one warrant per share purchased, exercisable at 6p for a period of two years, provided that the Group's shareholding on exercise does not exceed 29.99%. On 12 April 2021, Argo invested approximately a further £7.3 million in Pluto as part of a further fundraising round carried out by Pluto in order to maintain Argo's shareholding in Pluto at 24.65%. The Company received 121,000,000 ordinary shares in Pluto. As part of this round, the Company also received 121,000,000 warrants exercisable at a price of 12p for a period of two years. The Company is not required to make any further payments to or investments in Pluto. The Company currently holds 24.65% of the issued share capital of Pluto.

Luxor Technologies (Luxor)

On 7 December 2020, the Company made an investment of US\$100,000 into Luxor, a hash rate management platform used by the Company since its launch in 2020. Luxor has developed proprietary technology which uses a profit switching algorithm to maximise earnings by switching machines between blockchains and venues to maximise hashrate rewards. Luxor supports 28,000 miners globally, and has been used to mine over US\$45,000,000 in cryptoassets since inception.

WonderFi Technologies Inc. (WonderFi)

On 10 May 2021, the Company made an investment of £146,000 (CAD \$250,000) in WonderFi Technologies Inc. (formerly DeFi Ventures Inc.), as part of a larger CAD \$16.4 million fundraising round by WonderFi. WonderFi is a technology company with a mission to bring decentralised finance to the masses through a suite of products and tools which are built on the core principles of simplicity and education. As part of the investment, Peter Wall was appointed as an unpaid advisor to WonderFi.

5. Mining Equipment and Suppliers

The Company's mining hardware primarily consists of Bitmain Antminer T17, S17 and Z11 machines, featuring the latest application-specific integrated circuits (ASICs) for cryptocurrency mining. These machines offer superior speed and efficiency in cryptocurrency mining compared to general computing hardware. The Company has a fleet of more than 21,000 ASIC-based mining machines, which includes 4,500 state-of-the-art Bitmain Antminer S19 and S19-pro ASIC- based mining machines leased from Celsius Networks on a two-year term ending 31 December 2022, which added 430 petahash to its installed computing power.

The lead time for new mining hardware from its manufacturers varies from three to 12 months depending on a number of factors, including but not limited to: the manufacturer, type of hardware and technology, and market conditions. When mining conditions are favourable, the lead time usually increases from all suppliers and manufacturers in the industry and tends to be between six to 12 months. The warranty period from most manufacturers typically varies between six to 12 months. Specifically, the warranty period for the Antminer 17, Antminer Z11 and Antminer Z9 series is six months and the warranty period for the Antminer S19/S19 Pro is 12 months. The manufacturer's warranty usually covers parts replacements, including but not limited to, fans, chips, temperature sensors and heat sinks and labour costs but excludes shipping costs.

While the average uptime of fully functioning mining machines was more than 99% across the Company's entire fleet during 2020, the failure rate of units purchased also affects the actual hash rate versus the capacity based on its gross number of mining machines. The Company's average failure rate across its entire fleet of mining machines is typically 4-5%, with the average being 29% during 2020. The average for 2020 reflects the 38% failure rate experienced by the Company's Antminer 17 series fleet. Although failure of mining machines does not leave them completely inoperable, there can be an extensive repair period involved in replacing various hardware components of mining machines. The Company anticipates employing immersion technology at its mining facility in Texas, once operational, to maintain mining productivity and lower failure rates. The Company's repair process involves inhouse repairs as well as hiring third-party repair centres to help expedite the process. The Company has three fulltime technicians employed via its hosting arrangements to repair its mining machines at its hosted facilities.

6. Mining Facilities

The Company operates its cryptocurrency mining machines from two owned facilities in Canada and four hosted facilities in Canada and the United States. To support its growth, the Company is pursuing a strategy to shift its business from contracting for hosting of its mining machines in facilities to owning and operating its facilities.

LOCATION	OWNED / HOSTED	FACILITY SIZE (FT)	POWER CAPACITY (MW)(1)
Quebec, Canada	Owned	40,000	15
Quebec, Canada	Owned	100,000	5
Quebec, Canada	Hosted	N/A	1.1
Kentucky, United States	Hosted	260,000	17.4
Georgia, United States	Hosted	54,000	3.2
North Carolina, United States	Hosted	250,000	2.9
Texas, United States	Owned	Under construction	Up to 200(2)

The details of the facilities are set out below:

Notes:

(1) For owned facilities, this reflects the maximum power capacity accessible on site. For hosted facilities, this reflects the power usage of the Company's mining machines hosted at that facility.

(2) Total expected power capacity following completion of Phase 2 of the development project. If the Company fully develops the Texas facility, the Company expect to have access to a total of up to 800 MW on the site.

In March 2021, the Company's wholly owned subsidiary, Argo Innovation Facilities (US), Inc., acquired DPN LLC and, as a result, acquired 160 acres of land in western Texas, with an option to purchase an adjacent 157 acres of land, and access to up to 800 MW of electrical power. The Company is currently developing a new 200 MW mining facility on the newly acquired land. Phase 1 of this development is currently in progress, comprising and expected to be completed in the first half of 2022, and includes the electrical interconnection, infrastructure and machine hosting facilities that are expected to support 100 MW of power capacity using immersion technology, at an estimated cost of \$50 million. Phase 2 of this development, which is expected to be completed in the second half of 2022 and is expected to support an additional 100 MW of power capacity using immersion technology, at an estimated cost of \$30 million. The costs of these facilities have been covered from the Company's existing cash resources and the net proceeds of the Fundraising. These estimates do not include the cost of the mining machines that the Company will operate at the new mining facility. Development of this mining facility may be subject to unexpected problems and delays that could impact its ability to develop or operate the project as planned or increase the costs of the project. See "Risk Factors — The Company is subject to many risks related to the development of a new cryptocurrency mining facility in Texas. Delays or disruptions in its development of the Texas facility could materially and adversely affect its results of operations and financial condition."

Under the terms of the Company's hosting arrangements, its hosting providers provide hosting services, which include the supply of electric power and maintenance for the Company's mining machines located at their facilities. Subject to any one-time costs (such as installation and repairs) and adjustments, the fees payable to its hosting providers are based upon its mining machines' projected power consumption per unit.

7. Environmental, Social and Governance Initiatives

The Company believes that cryptocurrency miners have a social responsibility to obtain the power required for their operations from clean power sources. In April 2021, with the assistance of Guidehouse, an ESG policy advisor, the Company undertook the development of a climate action plan and recently achieved its goal of being a net zero GHG company. The Company is also committed to being a clean power leader in the cryptocurrency mining industry, as evidenced by the following initiatives to incentivize and to create the framework for an industry transition to clean power sources.

Launch of a Green Mining Pool

In March 2021, the Company announced its plans to jointly launch Terra Pool, the first Bitcoin mining pool with mining hash power powered by clean power. The pool is a collaboration with DMG Blockchain Solutions and aims to expedite the shift among cryptocurrency miners from conventional sources of power to clean power sources. The Company believes that Terra Pool will offer power accountability among participants and allow greater transparency on the sources of the power used by participants and further its goal of reducing GHG emissions created from the power used for Bitcoin mining.

8. Exchanges, Trading Venues and Custodians

While the Company mines for cryptocurrency for sale in the ordinary course of business, the Company believes that cryptocurrency represents an attractive, appreciating investment opportunity, and as such the Company has historically held cryptocurrency assets to the extent the Company is not required to sell them to fund its operating expenses. The Company also purchases cryptocurrency when the Company believes market conditions are favourable. When the Company sells its cryptocurrency for fiat currency or purchases cryptocurrency with fiat currency, the Company typically uses OTC trading desks that are registered as money services businesses where necessary.

Rewards earned from mining Zcash and other equihash-based cryptocurrencies through the mining pool owned and operated by Luxor Technology Corp. are converted by Luxor to and paid to the Company in Bitcoin. The Company does not trade on an OTC basis or on decentralized exchanges or liquidity pools. The Company may hedge its Bitcoin holdings by trading Bitcoin for other digital assets, such as stablecoins, among other hedging strategies.

The Company's long-term Bitcoin holdings are held by its custodian, Gemini Trust Company, a trust company regulated by the New York Department of Financial Services. Additionally, the Company may also hold immaterial amounts of cryptocurrencies in its accounts at digital asset trading venues from time to time, or in hardware wallets maintained by the Company. Exchange accounts are generally subject to less stringent regulatory supervision than custodians regulated as banks or trust companies, and may be subject to more security and operational risks than assets held by its Custodian.

9. Mining Pools

The Company currently contributes all of its hash power to mining pools. The Company mines Bitcoin through Poolin.com, which represents approximately 12.9% of the total Bitcoin network hash rate as of 30 June 2021, and mines Zcash through the equihash mining pool owned and operated by Luxor Technology Corp. The Company's decision to contribute hash power to a particular mining pool is based primarily on the net payout per petahash or megasol contributed (depending on the relevant algorithm). The Company conducts regular analysis of its participation in potential mining pools. The Company's most recent pool participation analysis was in February 2021. Fees (and payouts) fluctuate and historically have been less than approximately 1% per reward earned, on average. Mining pools are subject to various risks such as disruption and down time. If a pool experiences down time or is not yielding returns, its results may be impacted. As Terra Pool becomes operational, the Company anticipates shifting a portion of its hash power to Terra Pool.

10. Competition

The Company competes with companies that focus on some or all of the same aspects of its business, including, but not limited to purchasing mining machines, leasing or developing facilities to host its mining machines, accessing low-cost and renewable power and developing blockchains and related technologies. The cryptocurrency industry is dynamic and constantly evolving with new companies and technologies that could impact the way the Company does business. Increased competition has recently been driven by the price increases in Bitcoin and other major cryptocurrencies since late 2020. The Company expects that new and existing competitors may look to build or increase bitcoin mining operations if the price increases in Bitcoin and other cryptocurrencies continue.

The Company competes on the basis of:

• operational efficiency;
• hash rate;
• reliable, low-cost, renewable power;
• innovation; and
• return on investment.

As of the date of this prospectus, information concerning the specific activities of its competitors is not readily available as many participants in this sector do not publish information publicly or the information may be unreliable. The availability and reliability of published sources of information relating to cryptocurrency and bitcoin cannot be assured.

The Company believes that it will maintain and improve its competitive position by continuing its strategy of purchasing new miners at attractive prices, accessing renewable power at low prices, continuing its strategy of developing and improving its hash rate and capacity through the ownership and operation of self-mining facilities and investing in new and innovative technologies. Several public companies (traded in the United States and internationally), such as the following, may be considered to compete with us: Bit Digital, Inc., Bitfarms Technologies Ltd. (formerly Blockchain Mining Ltd), Blockchain Industries, Inc. (formerly Omni Global Technologies, Inc.), Cipher Mining, DMG Blockchain Solutions Inc., Foundry Digital, HashChain Technology Inc., HIVE Blockchain Technologies Ltd, Hut 8 Mining Corp, Layer1 Technologies Inc., Marathon Patent Group, Inc., MGT Capital Investments, Inc., Northern Data AG and Riot Blockchain Inc.

Proof-of-stake networks also compete with the Bitcoin blockchain. Proof-of-stake algorithms do not rely on resource intensive calculations to validate transactions and create new blocks in a blockchain; instead, the validator of the next block is determined by reference to the amount of digital assets a user has "staked" and the amount of time it has been "staked," which typically generates payments to such user in additional digital assets. Should a digital asset network shift from a proof-of-work validation method to a proof-of-stake method, the transaction verification process (i.e., "mining" or "validating") would require less power and may render any company that maintains advantages in the current climate with respect to proof-of-work mining (for example, from lower priced electricity, processing, real estate, or hosting) less competitive.

11. Employees and Human Capital Resources

The Company's team size facilitates direct and frequent communication. The Company focuses on reinforcing a culture that emphasizes teamwork and process improvement. The Company works to identify, attract, and retain employees who are aligned with and will help it progress its business strategy, and the Company seeks to provide competitive compensation. The Company believes it has a good relationship with its employees and its unique, strong culture differentiates the Company and is a key driver of business success. None of its employees are currently covered by collective bargaining agreements or represented by labour unions.

For the years ended 31 December 2020, 2019 and 2018, the Company had an average of six, seven and nine employees (including directors), respectively.

12. Marketing and Research and Development

The Company utilises social media channels for its marketing and communications effort, which are principally focused on keeping its investors and other stakeholders informed and up-to-date regarding its operations. The Company has developed and may continue to research and develop certain proprietary technologies for the purposes of optimizing and enhancing its cryptocurrency mining operations. Marketing research and development have not been significant components of its business and have been immaterial to its financial condition and results of operations, however such activities may become more significant in the future.

13. Intellectual Property

The Company uses third party hardware and software for its mining operations. To the extent that there are license agreements in place governing its use of such hardware and software, the Company intends to adhere to the terms of such license agreements. The Company relies upon trade secret laws to protect proprietary aspects of its blockchain and cryptocurrency-related operations. The Company does not currently own any patents, and does not have any current plans to seek patent protection for any proprietary aspects of its existing and planned blockchain and cryptocurrency-related operations.

14. Cybersecurity

The Company has put in place security measures such as implementing two-factor authentication and secondary confirmation for any changes to its accounts at service providers. Despite these efforts, there is no guarantee that these measures will protect against an actual or alleged cyber threat and security breach. In addition, insurance providers are currently reluctant to provide cybersecurity insurance for cryptocurrency mining operations and digital asset holdings and therefore, in the event of theft or an unauthorized or illegal manipulation of or access to the digital asset networks used in connection with the mining process, such assets may not be fully or partially recoverable.

15. Regulation

The laws and regulations applicable to cryptocurrency are evolving and subject to interpretation and change. Governments around the world have reacted differently to cryptocurrencies; certain governments have deemed them illegal, and others have allowed their use and trade without restriction, while in some jurisdictions, such as in the United States, cryptocurrencies are subject to extensive, and in some cases overlapping, unclear and evolving regulatory requirements.

United Kingdom

Other than in respect of anti-money laundering (as discussed below), cryptocurrencies taking the form of assets designed for the exchange of value (such as Bitcoin) generally remain outside of the financial services regulatory perimeter. Nonetheless, the regulatory treatment of any particular cryptocurrency is highly fact specific. At present, cryptocurrency mining activities are not subject to any regulatory authorization requirements with any UK financial services regulator.

Under the EU's Fifth Money Laundering Directive (MLD5), which the United Kingdom has implemented, custodian wallet providers and providers engaged in exchange services between cryptocurrencies (referred to as virtual currencies) and fiat currencies are subject to registration with the relevant supervisory authority in their jurisdiction and must comply with day-to-day AML and counter-terrorist financing measures, including client due diligence obligations. The EU Fifth Money Laundering Directive has been retained as UK law (subject to certain amendments) following the UK's withdrawal from the EU and its requirements apply to in-scope firms that conduct business in the UK. However, taking account of relevant guidance as to the scope of the UK's AML regime published by the UK Joint Money Laundering Steering Group, the Company does not believe that the Company falls within scope of the UK's anti-money laundering regime as either a custodian wallet provider or a virtual currency exchange provider.

From a consumer protection perspective, in January 2021 the UK's Financial Conduct Authority imposed a ban on the sale of crypto-derivatives and exchange traded notes to retail investors in light of concerns for consumer harm, criminal activity and value fluctuations, following a number of warnings to consumers about the risks of investing in cryptocurrencies.

United States

As cryptocurrencies have grown in both popularity and market value, the U.S. Congress and a number of U.S. federal and state agencies, including FinCEN, SEC, CFTC, Financial Industry Regulatory Authority (FINRA), the Consumer Financial Protection Bureau, the Department of Justice, the Department of Homeland Security, the Federal Bureau of Investigation, the IRS and state financial regulators, have been examining the operations of cryptocurrency networks, cryptocurrency users and cryptocurrency exchange markets, with particular focus on the extent to which cryptocurrencies can be used to launder the proceeds of illegal activities or fund criminal or terrorist enterprises and the safety and soundness and consumer-protective safeguards of exchanges or other serviceproviders that hold, transfer, trade or exchange digital assets for users. Many of these state and federal agencies have issued consumer advisories regarding the risks posed by cryptocurrencies to investors. In addition, federal and state agencies, and other countries have issued rules or guidance about the treatment of cryptocurrency transactions or requirements for businesses engaged in activities related to cryptocurrencies. Depending on the regulatory characterization of the cryptocurrencies the Company mines, the markets for those cryptocurrencies in general, and its activities in particular, may be subject to one or more regulators in the United States and globally. On-going and future regulatory actions may alter, perhaps to a materially adverse extent, the nature of cryptocurrency markets and its cryptocurrency operations. Additionally, U.S. state and federal, and foreign regulators and legislatures have taken action against cryptocurrency businesses or enacted restrictive regimes in response to adverse publicity arising from hacks, consumer harm, or criminal activity stemming from cryptocurrency activity. There is also increasing attention being paid by U.S. federal and state energy regulatory authorities as the total load of crypto-mining grows and potentially alters the supply and dispatch functionality of the wholesale grid and retail distribution systems. Many state legislative bodies are also actively reviewing the impact of crypto-mining in their respective states.

The Company is unable to predict the effect that any future regulatory change, or any overlapping or unclear regulations, may have on it, but such change, overlap or lack of clarity could be substantial and make it difficult for the Company to operate its business or materially impact the market for cryptocurrencies that the Company mines or may mine in the future. FinCEN has issued guidance stating its position that it does not differentiate between fiat currency (which FinCEN calls "real currency") and cryptocurrencies that are convertible into fiat currency or other forms of convertible virtual currencies (which FinCEN calls "virtual currency") for purposes of determining whether a person or entity is engaging in "money transmission services." Persons and entities engaging in virtual currency activities that amount to "money transmission services," or otherwise cause them to be deemed a "money services business" under FinCEN's regulations, must register as a money services business, implement an "effective" anti-money laundering program and comply with FinCEN's reporting and recordkeeping requirements.

In May 2019, FinCEN issued guidance relating to how the U.S. Bank Secrecy Act (BSA) and its implementing regulations relating to money services businesses apply to certain businesses that transact in convertible virtual currencies. Although the guidance generally indicates that certain mining and mining pool operations will not be treated as money transmission, the guidance also addresses when certain activities, including certain services offered in connection with operating mining pools such as hosting convertible virtual currency wallets on behalf of pool members or purchasers of computer mining power, may be subject to regulation. Although the Company believes that its mining activities do not presently trigger FinCEN registration requirements under the BSA, if its activities cause the Company to be deemed a "money transmitter," "money services business" or equivalent designation, under U.S. federal law, the Company may be required to register at the federal level and comply with laws that may include the implementation of anti-money laundering programs, reporting and recordkeeping regimes, and other operational requirements. In such an event, to the extent the Company decides to proceed with some or all of its operations, the required registration and regulatory compliance steps may result in extraordinary, non-recurring expenses to the Company, as well as on-going recurring compliance costs, possibly affecting an investment in the ADSs, operating results or financial condition in a material and adverse manner. Failure to comply with these requirements may expose the Company to fines, penalties and/or interruptions in its operations that could have a material adverse effect on its financial position, results of operations and cash flows.

According to the CFTC, at least some cryptocurrencies, including Bitcoin, fall within the definition of a "commodity" under the U.S. Commodities Exchange Act of 1936, as amended (CEA). Under the CEA, the CFTC has broad enforcement authority to police market manipulation and fraud in spot cryptocurrency markets in which the Company may transact. Beyond instances of fraud or manipulation, the CFTC generally does not oversee cash or spot market exchanges or transactions involving cryptocurrencies that do not utilize margin, leverage, or financing. The National Futures Association (NFA) is the self-regulatory agency for the U.S. futures industry, and as such has jurisdiction over Bitcoin futures contracts and certain other cryptocurrency derivatives. However, the NFA does not have regulatory oversight authority for the cash or spot market for cryptocurrency trading or transactions. In addition, CFTC regulations and CFTC oversight and enforcement authority apply with respect to futures, swaps, other derivative products, and certain retail leveraged commodity transactions involving cryptocurrencies, including the markets on which these products trade.

The SEC has taken the position that many cryptocurrencies may be securities under U.S. federal securities laws. Some senior members of the staff of the SEC have expressed the view that Bitcoin and Ethereum are not securities under U.S. federal securities laws. However, such statements are not official policy statements by the SEC and reflect only the speakers' views, which are not binding on the SEC or any other agency or court and cannot be generalized to any other cryptocurrency. The SEC's Strategic Hub for Innovation and Financial Technology published a framework for analysing whether any given cryptocurrency is a security in April 2019, however this framework is also not a rule, regulation or statement of the SEC and is similarly not binding on the SEC. Notwithstanding that the SEC has not asserted regulatory authority over Bitcoin or trading or ownership of Bitcoin and has not expressed the view that Bitcoin should be classified or treated as a security for purposes of U.S. federal securities laws, the SEC has commented on Bitcoin and Bitcoin-related market developments and has taken action against investment schemes involving Bitcoin. For example, the SEC has charged at least three Bitcoin mining companies in connection with a Ponzi scheme to defraud investors in their mining operation. The SEC has also repeatedly denied proposed rule changes by exchanges to list and trade shares of certain Bitcoin-related investment vehicles on public markets, citing significant investor protection concerns regarding the markets for cryptocurrencies, including the potential for market manipulation and fraud.

Although the SEC has not stated that mining Bitcoin is itself a regulated activity, to the extent any cryptocurrencies the Company mines are deemed to be securities, the offer, sale, and trading of those cryptocurrencies would be subject to the U.S. federal securities laws.

In addition to the SEC, state securities regulators and several foreign governments have also issued warnings that certain cryptocurrencies may be classified as securities in their jurisdictions, and that transactions in such cryptocurrencies may be subject to applicable securities regulations. Furthermore, certain state securities regulators have taken the position that certain cryptocurrency mining operations may involve the offer of securities. For example, the Texas State Securities Board (TSSB) has taken enforcement action against the operator of a cloud mining company, whereby customers could purchase hash rate managed by the cloud mining company in exchange for a share of the mining reward, for offering unregistered securities.

State financial regulators such as the New York State Department of Financial Services (NYDFS) have also implemented licensure regimes, or repurposed pre-existing fiat money transmission licensure regimes, for the supervision, examination and regulation companies that engage in certain cryptocurrency activities. The NYDFS requires that businesses apply for and receive a license, known as the "BitLicense," to participate in a "virtual currency business activity" in New York or with New York customers, and prohibits any person or entity involved in such activity from conducting activities without a license. Louisiana also has enacted a licensure regime for companies engaging in a "virtual currency business activity," and other states are considering proposed laws to establish licensure regimes for certain cryptocurrency businesses as well. Some state legislatures have amended their money transmitter statutes to require businesses engaging in certain cryptocurrency activities to seek licensure as a money transmitter, and some state financial regulators have issued guidance applying existing money transmitter licensure requirements to certain cryptocurrency businesses. The Conference of State Bank Supervisors also has proposed a model statute for state level cryptocurrency regulation. Although the Company believes that its mining activities do not presently trigger these state licensing requirements in any state in which the Company operates or plans to operate, if its activities cause the Company to be deemed a "money transmitter," "money services business" or equivalent designation under the law of any state in which the Company operates or plan to operate, the Company may be required to seek a license or register at the state level and comply with laws that may include the implementation of anti-money laundering programs, reporting and recordkeeping regimes, consumer protective safeguards, and other operational requirements. In such an event, to the extent the Company decides to proceed with some or all of its operations, the required registrations, licensure and regulatory compliance steps may result in extraordinary, non-recurring expenses to us, as well as on-going recurring compliance costs, possibly affecting an investment in the ADSs or its net income in a material and adverse manner. Failure to comply with these requirements may expose the Company to fines, penalties and/or interruptions in its operations that could have a material adverse effect on its financial position, results of operations and cash flows.

Europe

In Europe, at an EU level and in a number of EU member states, other than in respect of anti- money laundering (as discussed below), cryptocurrencies taking the form of assets designed for the exchange of value (such as Bitcoin) generally remain outside of the financial services regulatory perimeter. Nonetheless, the regulatory treatment of any particular cryptocurrency is highly fact specific.

Multiple regulators have highlighted the need for more stringent regulatory scrutiny for all types of cryptocurrencies and have taken legislative action directed at certain cryptocurrencies. In general, where regulatory action has been taken in Europe, it has typically been in response to concerns arising in relation to anti-money laundering (AML) and consumer protection.

Under the EU's Fifth Money Laundering Directive (MLD5), custodian wallet providers and providers engaged in exchange services between cryptocurrencies (referred to as virtual currencies) and fiat currencies are subject to registration with the relevant supervisory authority in their jurisdiction and must comply with day-to-day AML and counter-terrorist financing measures, including client due diligence obligations. Certain EU member states have implemented further measures in addition to the requirements of MLD5, including, (i) an order introduced by several French ministries in December 2020, which aims to ban anonymous crypto accounts and regulate crypto-related transactions in light of concerns relating to terrorism financing and money laundering; and (ii) strengthened antimoney laundering protections introduced by the Dutch regulator in November 2020, which were perceived to be targeting privacy coins as the protections impose client information and verification requirements.

Cryptocurrencies remain a key focus for European regulators and future measures could be introduced that have an impact on firms engaging in cryptocurrency related businesses. In September 2020, the European Commission published a proposal to introduce a "Markets in Crypto Assets Regulation" that would, if enacted, bring substantially all cryptocurrencies within the EU regulatory perimeter and impose authorization requirements on firms providing cryptocurrency services. At present however, the proposals do not extend to cryptocurrency mining activities.

FATF, an independent inter-governmental standard-setting body of which the United States is a member, develops and promotes policies to protect the global financial system against money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction. FATF generally refers to cryptocurrency as a form of "virtual currency," a digital representation of value that does not have legal tender status. In March 2021, the European Supervisory Authorities reissued earlier warnings reminding consumers of the need to be alert to the "high risks" of cryptocurrencies, "including the possibility of losing all their money".

Privacy Coins

The Company primarily mines Bitcoin but also mines Zcash, a decentralized cryptocurrency that also uses a proofof-work consensus algorithm. Regulators, such as FinCEN in its May 2019 guidance, have also addressed anonymity- enhanced cryptocurrencies (also known as "privacy coins"), such as Zcash, highlighting, among other things, that regulated entities transacting in such cryptocurrencies are obligated to implement procedures to track the identities of transmitters and recipients of value represented by such cryptocurrencies. In 2020, the U.S. Department of Justice published guidance called the "Cryptocurrency Enforcement Framework," in which it emphasized enforcement of anti-money laundering and BSA requirements as primary enforcement tools as applied to cryptocurrency businesses, particularly those whose businesses involve anonymity-enhanced cryptocurrencies. As noted above, the Company does not believe that its mining activities presently trigger FinCEN registration and associated regulatory requirements under the BSA.

Law enforcement agencies have often relied on the transparency of blockchains to facilitate investigations. For example, transactions on the Bitcoin blockchain can be tied to the owner of a particular wallet. However, that transparency is inhibited by anonymity-enhanced cryptocurrencies. Europol, the European Union's law enforcement agency, released a report in 2020 observing the increased use of privacy coins in criminal activity on the internet. It noted that Monero, Zcash and Dash are gradually becoming the most established privacy coins for Darkweb transactions and present considerable obstacles for cryptocurrency tracing and law enforcement investigations.

As of March 2021, various privacy coins have been delisted from exchanges across the world due to regulatory pressures or direct regulatory action. For example, privacy coins such as Zcash and Monero have been de-listed from several exchanges such as Bittrex and Shapeshift, the latter of which cited regulatory concerns for their decision. The delisting of privacy-enhancing digital assets has been a particular policy point of interest for regulators in the Asia-Pacific region. In March 2020, South Korea passed a bill to regulate cryptocurrency and exchanges, which will enter into force in September 2021 and impose obligations that include delisting of privacy coins from domestic cryptocurrency exchanges and obligations to report any unusual crypto-transactions. It was also reported in May 2020 and August 2020, that Japan and Australia's regulators, respectively, have pressured their national cryptocurrency exchanges to delist anonymity-enhanced cryptocurrencies.

16. Legal Proceedings

From time to time, the Company may be subject to legal proceedings and claims that arise in the ordinary course of business. The Company is not currently subject to any material pending legal proceedings or claims.

17. Environmental, Health and Safety Matters

The Company's operations and properties are subject to extensive laws and regulations governing occupational health and safety, the discharge of pollutants into the environment or otherwise relating to health, safety and environmental protection requirements in Canada, the United Kingdom, the United States and every other country and locality in which the Company operates. These laws and regulations may impose numerous obligations that are applicable to the Company's operations, including acquisition of a permit or other approval before conducting construction or regulated activities; restrictions on the types, quantities and concentration of materials that can be released into the environment; limitation or prohibition of construction and operating activities in environmentally sensitive areas, such as wetlands; imposing specific health and safety standards addressing worker protection; and imposition of significant liabilities for pollution resulting from its operations, including investigation, remedial and clean-up costs. Failure to comply with these requirements may expose the Company to fines, penalties and/or interruptions in its operations that could have a material adverse effect on its financial position, results of operations and cash flows. Certain environmental laws may impose strict, joint and several liability for costs required to clean up and restore sites where hazardous substances have been disposed or otherwise released into the environment, even under circumstances where the hazardous substances were released by prior owners or operators or the activities conducted and from which a release emanated complied with applicable law. Moreover, it is not uncommon for neighbouring landowners and other third parties to file claims for personal injury and property damage allegedly caused by noise or the release of hazardous substances into the environment.

Concerns have been raised about the electricity required to secure and maintain digital asset networks. Although measuring the electricity consumed by this process is difficult because these operations are performed by various machines with varying levels of efficiency, the process consumes a significant amount of power. Further, in addition to the direct power costs of performing these calculations, there are indirect costs that impact a digital asset network's total power consumption, including the costs of cooling the machines that perform these calculations. Due to these concerns around power consumption, particularly as such concerns relate to public utilities companies, various jurisdictions (including certain cities) have implemented, or are considering implementing, moratoriums on digital asset mining in their jurisdictions. A significant reduction in mining activity as a result of such actions could adversely affect the security of the Bitcoin and Zcash networks by making it easier for a malicious actor or botnet to manipulate the Bitcoin or Zcash blockchains, which may in turn adversely affect the Company's ability to securely mine Bitcoin or Zcash. Changes to the Company's ability to mine Bitcoin or Zcash could have a negative impact on its results of operation, which may in turn adversely affect the value of the ADSs.

The Company believes its operations are in material compliance with existing environmental, health and safety laws and regulations and that its compliance with such regulations will not have a material adverse effect on its financial position, results of operations and cash flows. However, environmental and safety laws and regulations are subject to change. The trend in environmental regulation has been to place more restrictions and limitations on activities that may be perceived to impact the environment, and thus there can be no assurance as to the amount or timing of future expenditures for environmental regulation compliance or remediation. New or revised regulations that result in increased compliance costs or additional operating restrictions could have a material adverse effect on its financial position, results of operations and cash flows.

18. Dividend policy

Since its incorporation, the Company has not declared or paid any dividends on its issued share capital. The Company intends to retain any earnings for use in its business and does not currently intend to pay dividends on its ordinary shares or ADSs. The declaration and payment of any future dividends will be at the discretion of its board of directors and will depend upon its results of operations, cash requirements, financial condition, contractual restrictions, any future debt agreements or applicable laws and other factors that its board of directors may deem relevant.

Under the laws of England and Wales, among other things, the Company may only pay dividends if the Company has sufficient distributable reserves (on a non-consolidated basis), which are its accumulated realized profits that have not been previously distributed or capitalized less its accumulated realized losses, so far as such losses have not been previously written off in a reduction or reorganization of capital.

PART II BLOCKCHAIN BACKGROUND

Blockchain technology first came to public attention in 2008 as the database technology that underpins Bitcoin, the world's first cryptocurrency. Blockchains are generally open-source, peer-to-peer software programs that act as decentralized digital ledgers, each comprising a series of data "blocks" that are linked and secured using cryptography in a "chain." The blockchain program consists of a software protocol with several functions. The software protocol is run by multiple computer systems or "nodes." For many blockchain networks, each node has its own copy of the blockchain ledger, which contains a historical record of every transaction. The digital ledger continuously grows as new blocks are added to it to record the most recent transactions in a linear, chronological order. The same information is stored across a network of computers all over the world, and this record makes it possible to track the ownership and transfer of cryptocurrency from the creation of the blockchain to its current state, and effectively, records of all account balances (as investors can identify what account holds what value through the decentralized ledger).

The blockchain protocol allows users to submit transactions to the network for confirmation. However, a transaction will not be accepted by the protocol if the inputs to the transaction have previously been used in another transaction. This prevention of "double spending" is a key security feature of blockchain networks.

Another key function of the blockchain that protects the integrity of the network is the hashing process, which acts as a tamper-evident seal that confirms the validity of the new block and all earlier blocks. Hashing is the process of a block being posted to the network. Hashing results from miners, who are responsible for receiving broadcast transactions, processing those transactions into new blocks and updating the blockchain with the new blocks through hashing. The hashing process ties every new block to the existing block on the blockchain to ensure each is a continuous record of verified transactions.

The hashing algorithm on a proof-of-work blockchain network is a mathematical transformation function with two key properties. The first important function of hashing is that the algorithm accepts any alphanumeric dataset as an input and produces a unique output code. The smallest change in the dataset results in a significant change in the unique code. Any tampering of the dataset can be detected by re-hashing the data and checking for a change in the unique code. Any user that runs the hash algorithm on the same data will derive the same unique code. Consequently, the data on the distributed ledger can be run through a series of hash algorithms to create a unique code, which would reveal if any changes to the ledger have been made.

Second, whenever a new set or "block" of transactions is added to the ledger, it is appended with the code from the prior state of the ledger before it is hashed. Thus, the hash created from the new block will incorporate the hash from the previous block. An alteration made to an earlier block would make the hashes of all subsequent blocks invalid, as the discrepancy would be easily detected by future miners through the protocols governing the blockchain. If a hacker were to attempt to make a change to an earlier block and broadcast it along with following blocks to the other nodes on the network, that broadcast would be discarded in favour of one from a different node which complied with the requirements of the protocol.

Thus, in addition to creating a new block, miners "vote" with their computer power, expressing their acceptance of valid blocks by working on adding them to the blockchain, and rejecting invalid blocks by refusing to work on them. If a miner's proposed block is added to the blockchain by a majority of the nodes on the network, it is considered part of the blockchain. The nodes on the network synchronize with each other to ensure that once a block is accepted by the majority, the new block will eventually be added to all the nodes. Thus the historical state of the ledger can be changed if control of more than 50% of the network is obtained; however, in the case of widely held cryptocurrencies with non- trivial valuations, it may be economically prohibitive for any actor or group of actors acting in concert to obtain computing power that consists of more than 50% of the network.

Unlike proof-of-work networks, in which miners expend computational resources to compete to validate transactions and are rewarded cryptocurrency in proportion to the amount of computational resources expended, in a proof-of-stake network, miners (sometimes called validators) risk or "stake" assets to compete to be randomly selected to validate transactions and are rewarded cryptocurrency in proportion to the amount of assets staked. Any malicious activity, such as mining multiple blocks, disagreeing with the eventual consensus or otherwise violating protocol rules, results in the forfeiture or "slashing" of a portion of the staked assets. Proof-of-stake is viewed by some as more energy efficient and scalable than proof-of-work.

Blockchain technology enables the secure use and transfer of digital assets. "Digital asset" is a broad term that encompasses additional applications, including ownership, transaction tracking, identity management, and smart contracts. A digital asset can represent physical or virtual assets, a value, or a use right/service (e.g., computer storage space).

Whereas digital assets can take many forms and be used for a variety of functions, cryptocurrencies are a type of digital asset that primarily function as a medium of exchange, a unit of account, and/or a store of value.

Cryptocurrencies allow anyone who holds a compatible wallet, anywhere in the world, to hold and transfer that cryptocurrency without the need for an intermediary or trusted third party. Units of a cryptocurrency may exist only as data on the internet, and often are not issued or controlled by any single institution, authority or government. Whereas most of the world's money currently exists in the form of electronic records managed by central authorities such as banks, units of a non-government cryptocurrency exist as electronic records in a decentralized blockchain database. Because cryptocurrencies have no inherent intrinsic value, the value of cryptocurrencies is determined by the value that various market participants place on them through their transactions. Bitcoin, Zcash, Ethereum and other cryptocurrencies have historically exhibited high price volatility relative to more traditional asset classes.

Private entities also issue digital assets called "stablecoins" that are designed to represent an underlying fiat currency or other physical asset and therefore less susceptible to volatility. Stablecoins can be backed by fiat money, physical assets, or other crypto assets. Government institutions are also reportedly testing and considering issuing CBDCs. While stablecoins or CBDCs may exhibit less price volatility than other cryptocurrencies, both rely on a central authority to establish the value of the asset, and therefore represent an exception to the general discussion of the design of cryptocurrencies herein.

Each cryptocurrency has a source code that comprises the basis for the cryptographic and algorithmic protocols, which govern the blockchain. The source code is commonly open source and therefore can be inspected by anyone, and is maintained on an ongoing basis through contributors proposing amendments to the protocol, which are peer reviewed and adopted by consensus among participants on the blockchain network. These protocols govern the functioning of the network, including the ownership and transfer of the cryptocurrency, and are executed on the decentralized peer-to-peer blockchain infrastructure. The peer-to-peer infrastructure on which a blockchain operates is not owned or operated by a single entity. Instead, the infrastructure is collectively maintained by a decentralized user base. Each peer user is generally known as a "node" or "miner," and each miner processes transactions on the network in accordance with the protocols of the relevant cryptocurrency.

As a result, these cryptocurrencies do not rely on either governmental authorities or financial institutions to create, transmit or determine the value of units of cryptocurrency. Rather:

• 1. the creation of units of cryptocurrency generally is governed by the source code, not a central entity;
• 1. the transmission of a cryptocurrency is governed by the source code and processed by the decentralized peer-to-peer network of nodes or miners; and
• 1. the value of a cryptocurrency is generally determined by the market supply of and demand for the cryptocurrency, with prices set in transfers by mutual agreement or barter, as well as through acceptance directly by merchants in exchange for goods and services.

Cryptocurrencies may be open source projects with no official developer or group of developers that control the network. However, certain networks' development may be overseen informally by a core group of developers that may propose quasi-official releases of updates and other changes to the network's source code. The release of updates to a blockchain network's source code does not guarantee that the updates will be automatically adopted. Users and miners must accept any changes made to the source code by downloading the proposed modification of the network's source code. A modification of the network's source code is effective only with respect to the users and miners that download it. If a modification is accepted by only a percentage of users and miners, a division in the network will occur such that one network will run the pre-modification source code and the other network will run the modified source code. Such a division is known as a "fork." Consequently, a modification to the source code becomes part of a blockchain network only if accepted by participants collectively having most of the processing power on the network.

Each "account" on a blockchain network is identified by its unique public key, and is secured with its associated private key (which the account holder must keep secret, like a password). Cryptocurrencies are treated as bearer assets, because possession of the private key generally determines who controls or owns a cryptocurrency. Protecting private keys from unwarranted access and theft is critically important, as once the private key is taken, in most circumstances, control over the related cryptocurrency is gone. The combination of private and public cryptographic keys constitutes a secure digital identity in the form of a digital signature. As long as the private key is kept private (i.e., confidential to the owner of the account) it provides strong control of ownership.

PART III DIRECTORS AND CORPORATE GOVERNANCE

1. The Board and the Directors

The Board recently considered the requirements and composition of its board in light of the proposed admission to Nasdaq and its future requirements. In light of such review, the Company appointed three new independent nonexecutive directors and promoted Alex Appleton, previously the Company's Finance Director to Chief Financial Officer and to the Company's board.

The Board currently comprises six Directors, who collectively have extensive experience and a proven track record in investment, corporate finance and business acquisition, operation and development in the cryptoasset mining sector and have the necessary skills, experience and expertise to implement the Company's business objective and strategy.

Details of the Directors are set out below:

Peter Wall, Chief Executive Officer (Age 46)

Peter Wall has served as the Company's Chief Executive Officer since January 2020 and interim Chairman since July 2021. Mr. Wall was a member of the management team that founded the Company, and served as Vice President of Operations from January 2017 until his appointment as Chief Executive Officer. Mr. Wall also serves on the Company's board of directors. Mr. Wall brings with him a variety of experience from many different industries. Currently, Mr. Wall serves as the non-Executive Chairman of Cellular Goods Plc, a consumer cannabinoid company based in London. Mr. Wall is also an advisor to NFT Investments Plc, listed on the Aquis exchange in the UK, and is an adviser to Pluto Digital PLC. Prior to his time with the Company, Mr. Wall was a Partner at The Art Department, a design and communications company, the Co-Founder of Hubud, an innovative co-working space in Bali, Indonesia, and a journalist and filmmaker with the Canadian Broadcasting Corporation in Toronto. Mr. Wall holds a B.A. in Philosophy from Bishop's University and an M.J. in Journalism from the University of British Columbia.

Alex Appleton, Chief Financial Officer (Age 42)

Alex Appleton has served as the Company's Finance Director since September 2020 and as Chief Financial Officer and on the Company's board of directors since July 2021. From April 2018 to September 2020, Mr. Appleton carried out various short term assignments through his consultancy company Appleton Business Advisors Limited. From November 2019 until March 2020, Mr. Appleton served as the Finance Director for Lucky King, an online crypto currency casino, and from June 2018 to November 2019 he served as the Interim Financial Director at Portland PR Limited, a political consultancy and public relations firm. From August 2012 to April 2018, Mr. Appleton was on the board of directors of Hudson Sandler Limited, a strategic communications consulting firm. Mr. Appleton is a member of the Institute of Chartered Accountants of Scotland. Mr. Appleton holds a B.A. in Accounting, Financial Management and Economics from Sheffield University.

Matthew Shaw, Non-Executive Director (Age 61)

Matthew Shaw has served on the Company's board of directors since July 2019. Mr. Shaw has over 20 years of experience in finance, including in his role as an Executive Director at UBS Limited, from 1995 to 1998 giving him a depth of experience in capital markets, trading and structured products. Mr. Shaw has served as the Chief Executive Officer, Director and co-founder of Blimp Technologies Inc., an online platform for consumers and real estate professionals to collaborate, since June 2020, as well as Director of Blimp Homes Inc., its US subsidiary. Mr Shaw has also served as the President of POMA Enterprises Ltd, a company focused on investments in financial assets, since October 2013, and the co-founder of Protos Asset Management GmbH, an asset management company in Switzerland founded in 2017, which manages cryptocurrency and DeFi funds. Mr. Shaw serves on the board of directors of Yield Technologies Inc., a DeFi company and Yolo Build Inc., a company which invests in early stage cryptocurrency projects. Mr Shaw also serves as a Director of Dramato Holdings Ltd, a Cyprus company which holds a land asset in Cyprus and as a Director of MAPO Properties Ltd which holds as US real estate asset. Prior to his current positions, Mr. Shaw was the Chief Executive Officer and Co-founder of Fullist Inc., a real estate data company, the co-founder of mCloud Technologies Corp., an AI and data analytics company focused on energy intensive assets, and the co-founder of Industrial Knowledge Inc., an industrial IoT company. Additionally, within the investment banking industry, Mr. Shaw co-founded Depfa Investment Bank, an investment bank focused on emerging markets, where he served as a General Manager and member of the Investment Committee, and also co-headed Carbon Trade & Finance SICAR, a carbon fund in Luxembourg. Mr. Shaw also served on the boards of First Class Ventures Ltd. (incorporated in the Seychelles) and SteviaLife Sweeteners Ltd (incorporated in Rwanda) as part of a project in Africa to promote sustainable farming in Rwanda. Mr. Shaw holds a B.A. in English Language and Literature from Manchester University and an M.B.A. from Bradford University.

Colleen Sullivan, Non-Executive Director (Age 48)

Colleen Sullivan has served on the Company's board of directors since July 2021. Ms. Sullivan co-founded and is currently serving as the Chief Executive Officer of CMT Digital Holdings LLC and has been a partner with the broader CMT Group since 2013. Furthermore, Ms. Sullivan is also a co-founder and Managing Member of Sullivan Wolf Kailus LLC, a boutique law firm based in Chicago that specializes in hedge fund, private equity, venture capital, digital assets, and other alternative investment products. Previously, Ms. Sullivan practiced law in the Investment Funds and Derivatives group at Sidley Austin LLP and has been a licensed attorney in the State of Illinois since 2001. Prior to this, Ms. Sullivan co-founded iOptions Group LLC, which developed hedging and monetization strategies for holders of employee stock options. Ms. Sullivan serves as a director on the board of Silvergate Capital Corporation and Power and Digital Infrastructure Acquisition Corp., and serves as an advisor to the Digital Chamber of Commerce. Ms. Sullivan is also a co-founder of the DeFi Alliance, a decentralized finance accelerator. Ms. Sullivan holds a B.A. in Accounting from the University of St. Francis as well as a Juris Doctor from the DePaul University School of Law.

Maria Perrella, Non-Executive Director (Age 56)

Maria Perrella has served on the Company's board of directors since July 2021. Over the last 25 years, Ms. Perrella has held several senior leadership positions, including, most recently, as the Chief Financial Officer of MDA, a Canadian based international space mission partner. Prior to this, Ms. Perrella served as the Chief Finance Officer of ATS Automation Tooling Systems Inc., a global company focused on innovative, custom designed manufacturing solutions, for over ten years. Prior to ATS, Ms. Perrella held a variety of increasingly senior positions at L-3 Canada and Spar Aerospace. Ms. Perrella is a Chartered Professional Accountant and holds a B.A. in Business Administration degree from the York University Schulich School of Business in Canada.

Sarah Gow, Non-Executive Director (Age 51)

Sarah Gow has served on the Company's board of directors since July 2021. Ms. Gow has over 19 years of banking experience. During her banking career, Ms. Gow served as a Project Manager at HSBC Global Asset Management, as the Director of Global Operations at Citigroup Asset Management as well as the Head of Operations for Citigroup Asset Management in London and as the Head of Operations at Smith Barney Global Capital Management Ltd. Ms. Gow is also the Founder of MyGiftClues Ltd., a company focused on simplifying the gifting process, and serves on the board of directors as the Corporate Secretary.

Further details of Directors' service agreements and letters of appointments (as applicable) are set out in paragraph 10.5 of Part IX: Additional information of this document.

2. Independence of the Board

Four of the Directors, Maria Perrella, Sarah Gow, Colleen Sullivan and Matthew Shaw, are considered to be "independent" (using the definition set out in the FRC Corporate Governance Code). It is intended that an additional director will be appointed in due course to fulfil the role of non-executive Chairman of the Company.

3. Strategic decisions

Members and responsibility

The Board is responsible for the Company's objectives and business strategy and its overall supervision. Acquisition, divestment and other strategic decisions will all be considered and determined by the Board.

The Board will provide leadership within a framework of appropriate and effective controls. The Board will set up, operate and monitor the corporate governance values of the Company, and will have overall responsibility for setting the Company's strategic aims, defining the business objective, managing the financial and operational resources of the Company and reviewing the performance of the officers and management of the Company's business. The Board will take appropriate steps to ensure that the Company complies with Listing Principles 1 and 2 as set out in Chapter 7 of the Listing Rules and (notwithstanding that they only apply to companies with a Premium Listing) the Premium Listing Principles as set out in Chapter 7 of the Listing Rules.

4. Corporate governance

As a company with a Standard Listing, the Company is not required to comply with the provisions of the Corporate Governance Code published by the Financial Reporting Council (FRC Corporate Governance Code).

However, in the interests of observing best practice on corporate governance, the Company intends to comply with the provisions of the Corporate Governance Code published by the Quoted Companies Alliance (QCA Corporate Governance Code) insofar as is appropriate having regard to the size and nature of the Company and the size and composition of the Board.

The Company's Standard Listing means that it is also not required to comply with those provisions of the Listing Rules, which only apply to companies on the Premium List. The FCA will not have the authority to (and will not) monitor the Company's compliance with any of the Listing Rules which the Company has indicated that it intends to comply with on a voluntary basis, nor to impose sanctions in respect of any failure by the Company so to comply. However, the FCA would be able to impose sanctions for non-compliance where the statements in this Prospectus are themselves misleading, false or deceptive.

The Company intends to adopt a Code of Business Conduct and Ethics, which covers a broad range of matters including the handling of conflicts of interest, compliance issues and other corporate policies such as equal opportunity and non- discrimination standards. This Code of Business Conduct and Ethics will apply to all of its executive officers, board members and employees.

As a "foreign private issuer," as defined by the SEC, the Company will be permitted to follow home country corporate governance practices instead of certain corporate governance practices required by Nasdaq applicable to U.S. domestic issuers. For example, the Company is exempt from Nasdaq regulations that require a listed U.S. company to:

• have a majority of the board of directors consist of independent directors;
• require non-management directors to meet on a regular basis without management present;
• promptly disclose any waivers of the code for directors or executive officers that should address certain specified items;
• have an independent nominating committee;
• solicit proxies and provide proxy statements for all shareholder meetings; and
• seek shareholder approval for the implementation of certain equity compensation plans and issuances of ordinary shares.

The Company intends to voluntarily follow certain Nasdaq corporate governance rules. However, the Company intends to follow UK corporate governance practices in lieu of the Nasdaq corporate governance rules as follows:

• The Company does not intend to follow Nasdaq Rule 5620(c) regarding quorum requirements applicable to meetings of shareholders. Such quorum requirements are not required under English law. In accordance with generally accepted business practice, the Company's Articles provide for alternative quorum requirements that are generally applicable to meetings of shareholders.
• The Company does not intend to follow Nasdaq Rule 5605(b)(2), which requires that independent directors regularly meet in executive session, where only independent directors are present. The Company's independent directors may choose to meet in executive session at their discretion.

The Company may in the future decide to use other foreign private issuer exemptions with respect to some or all of the other Nasdaq corporate governance rules.

Although the Company may rely on certain home country corporate governance practices, the Company will be required to comply with the Notification of Noncompliance requirement (Nasdaq Rule 5625) and the Voting Rights requirement (Nasdaq Rule 5640). Further, the Company will be required to have an audit committee that satisfies Nasdaq Rule 5605(c)(3), which addresses audit committee responsibilities and authority, and consists of committee members that meet the independence requirements of Nasdaq Rule 5605(c)(2)(A)(ii).

In accordance with the Company's Nasdaq listing, the Company's Audit Committee is required to comply with the provisions of Section 301 of the Sarbanes-Oxley Act of 2002 and Rule 10A-3 of the Exchange Act, both of which are also applicable to Nasdaq-listed U.S. companies.

To the extent the Company determines to follow UK corporate governance practices instead of Nasdaq governance requirements, potential investors may not have the same protections afforded to shareholders of companies that are subject to these Nasdaq requirements.

If the Company ceases to be a "foreign private issuer" under the Nasdaq rules and the Exchange Act, as applicable, the Company will take all action necessary to comply with applicable Nasdaq corporate governance rules.

Because the Company is a foreign private issuer, the Company's directors and senior management are not subject to short-swing profit and insider trading reporting obligations under Section 16 of the Exchange Act. The directors and senior management will, however, be subject to the obligations to report changes in share ownership under Section 13 of the Exchange Act and related SEC rules.

5. Conflicts of interest

General

Potential areas for Directors' conflicts of interest in relation to the Company include:

• the Directors are required to commit a limited amount of time to the Company's affairs and, accordingly, they may have conflicts of interest in allocating management time among various business activities;
• in the course of their other business activities, the Directors may become aware of investment and business opportunities which may be appropriate for presentation to the Company as well as the other entities with which they are affiliated. They may have conflicts of interest in determining to which entity a particular business opportunity should be presented;
• the Directors are or may in the future become affiliated with entities, including other special purpose acquisition vehicles, engaged in business activities similar to those intended to be conducted by the Company, which may include entities with a focus on target companies or businesses similar to those being sought by the Company; and
• the Directors may have a conflict of interest with respect to evaluating a particular acquisition opportunity if the retention or resignation of any of the Directors were included by a target company or business as a condition to any agreement with respect to the acquisition.

Accordingly, as a result of these multiple business affiliations, each of the Directors may have similar legal obligations to present business opportunities to multiple entities. In addition, conflicts of interest may arise when the Board evaluates a particular business opportunity.

The Directors have, or may come to have, other fiduciary obligations, including to other companies on whose board of directors they presently sit or to other companies whose board of directors they may join in the future. To the extent that they identify business opportunities that may be suitable for the Company or other companies on whose board of directors they may sit, the Directors will honour any pre-existing fiduciary obligations ahead of their obligations to the Company. Accordingly, they may refrain from presenting certain opportunities to the Company that come to their attention in the performance of their duties as directors of such other entities unless the other companies have declined to accept such opportunities or clearly lack the resources to take advantage of such opportunities.

Additionally, the Directors may become aware of business opportunities that may be appropriate for presentation to the Company as well as the other entities with which they are or may be affiliated.

6. Board Committees

The Company's board of directors will have three standing committees: an audit committee, a remuneration committee and a nomination committee. Each of these committees will be governed by terms of reference consistent with applicable English law and SEC and Nasdaq corporate governance rules, effective upon closing of the Fundraising.

Audit Committee

The Company's Audit Committee consists of Maria Perrella, Matthew Shaw and Sarah Gow. Maria Perrella serves as the chairman of the Audit Committee. The Company expects its board to determine that all members of its Audit Committee meet the requirements for financial literacy under the applicable rules and regulations of the SEC and the Nasdaq corporate governance rules. The Company expects its board to determine that Maria Perrella is an audit committee financial expert as defined by the SEC rules and has the requisite financial experience as defined by the Nasdaq corporate governance rules.

The Company expects its board to determine that each member of its audit committee is "independent" as such term is defined in Rule 10A-3(b)(1) under the Exchange Act, which is different from the general test for independence of board and committee members.

The Audit Committee will be responsible for, among other things:

• the appointment, compensation, retention and oversight of the work and termination of any independent auditor engaged for the purpose of preparing or issuing an audit report or performing other audit services;
• pre-approving the audit services and non-audit services to be provided by its independent auditor before the auditor is engaged to render such services;
• evaluating the independent auditor's qualifications, performance and independence, and presenting its conclusions to the full board on at least an annual basis;
• reviewing and discussing with the executive officers, the board and the independent auditor its financial statements and its financial reporting process;
• approving or ratifying any related person transaction (as defined in its related person transaction policy) in accordance with its related person transaction policy;
• reviewing and overseeing the adequacy and effectiveness of its financial reporting and internal control policies and systems; and
• reviewing and recommending amendments to the Code of Business Conduct and Ethics.

The Audit Committee will meet with such frequency and at such intervals as it determines necessary to carry out its duties and responsibilities and at such other times as the chairman of the Audit Committee shall think fit. The Audit Committee will meet at least once per year with its independent auditor, without its management being present.

Remuneration committee

The Company's Remuneration Committee consists of Matthew Shaw, Maria Perrella and Sarah Gow. Sarah Gow serves as chairman of the committee.

The Remuneration Committee will be responsible for:

• identifying, reviewing and proposing policies relevant to executive officer compensation;
• evaluating each executive officer's performance in light of such policies and reporting to the board;
• determining any equity long-term incentive component of each executive officer's compensation in line with the remuneration policy and reviewing its executive officer compensation and benefits policies generally; and
• reviewing and assessing risks arising from the Company's compensation policies and practices.

Nominating and Corporate Governance Committee

The Company's Nominating and Corporate Governance Committee consists of Sarah Gow, Matthew Shaw and Maria Perella. Matthew Shaw serves as chairman of the committee The Company's board intends to adopt a Nominating and Corporate Governance Committee charter setting forth the responsibilities of the committee, which include:

• drawing up selection criteria and appointment procedures for board members;
• recommending nominees for election to its board and its corresponding committees; and
• assessing the functioning of individual members of board and executive officers and reporting the results of such assessment to the board.

7. Market Abuse Regulation

The Company has adopted policies and procedures so as to manage and control inside information, and to avoid the unlawful disclosure of inside information. The Company, the Directors and senior management are aware of their obligations under the Market Abuse Regulation, and the Company has adopted a share dealing code consistent with the provisions of the Market Abuse Regulation and a social media policy.

The Company has included confidentiality obligations within its contracts with its Directors, Senior Managers and employees, and has ensured that each person is aware of their responsibilities under the Market Abuse Regulation. In addition, the Company has taken practical steps to prevent the unauthorised access to information, primarily through restricting access to inside information to those required to have knowledge of it and by seeking to ensure the security of its information technology systems. Where the Company deals with a third party and such third party will have access to inside information, the Company will require the third party to adhere to confidentiality obligations in relation to inside information, and will make such party aware of their obligations under the Market Abuse Regulation.

The Company has retained professional advisors to assist it with marketing and communications, and all marketing and communications will be approved by the Company prior to its release. Where inside information is to be disclosed, the Company will seek such professional advice as it considers is required in all the circumstances to ensure that inside information is correctly managed and released to the market.

The Company is aware that, in the course of their duties, those individuals engaged by the Company may come to possess inside information. Where such individuals are no longer engaged by the Company, the inside information to which they are or have been privy remains confidential under the terms of their engagement, in addition to their obligations under the Market Abuse Regulation. In order to manage inside information, the Company will seek to make such announcements as is appropriate so as to disclose to the market inside information, and considers the publication of this document to release to the market such inside information as may have been known to parties formerly engaged by the Company prior to its publication.

8. Lock-in agreements

Each of the Directors have undertaken to the Company and the Underwriters that they will not, and will procure that any associated party will not, dispose of any interest they hold in the 5,631,197 Ordinary Shares held by them (representing, in aggregate, 1.20% of the Enlarged Share Capital) for a period of 90 days following Admission subject to certain limited exceptions. Further details are set out in paragraph 12.8 of Part IX.

9. Share Option Schemes

On 25 July 2018 the Company adopted the Share Option Schemes. As at the date of this document, the Company had Options outstanding over 17,223,076 Ordinary Shares, which are exercisable for the periods ending, and at the prices specified, in paragraph 5.14 of Part IX. The Share Option Schemes are described in paragraph 11 of Part IX of this document.

Assuming exercise of all of the outstanding Options in full, the Options represent an additional 3.68 per cent. over the Enlarged Share Capital. The Company retains the ability to make further awards under the Share Option Schemes, and anticipates that the Company will make further awards in the future.

PART IV THE FUNDRAISING

In order to facilitate the Fundraising, the Company has entered into arrangements with the Depositary to create ADSs which reference the Company's Ordinary Shares, and which will be denominated in US Dollars. This arrangement will come into effect as part of the Fundraising.

Timing of the ADS Offering

The Company entered into an Underwriting Agreement with its Underwriters and a deposit agreement with the Depositary on 22 September 2021 and announced the results of the Fundraising on 23 September 2021.

Underwriting Arrangements

Subject to the terms and conditions set out in the Underwriting Agreement, entered into between the Company, Jefferies LLC and Barclays Capital Inc., as the representatives of the Underwriters and the joint book- running managers of the offering, the Company has agreed to sell to the Underwriters, and each of the underwriters named below has agreed, severally and not jointly, to purchase from the Company, their proportion of the Firm ADSs as follows:

Name	Number of Firm ADSs
Jefferies LLC	3,000,000
Barclays Capital Inc.	2,250,000
Canaccord Genuity LLC	562,500
Stifel Nicolaus Canada Inc.	562,500
Compass Point Research & Trading, LLC	225,000
D.A. Davidson & Co.	225,000
Ladenburg Thalmann & Co. Inc.	225,000
Roth Capital Partners, LLC	225,000
finnCap Ltd	112,500
Tennyson Securities, a trading name of Shard Capital LLP	112,500
TOTAL	7,500,000

The Underwriters are contractually obliged to purchase all of the Firm ADSs. They cannot purchase less than the full amount. The Underwriters can choose to purchase all, or any portion of, the Optional ADSs (referred to below).

The Underwriting Agreement provides that the obligations of the several Underwriters are subject to certain conditions precedent such as the receipt by the Underwriters of officers' certificates and legal opinions and approval of certain legal matters by their counsel. The Underwriting Agreement provides that the Underwriters will purchase all of the ADSs if any of them are purchased. If an underwriter defaults, the Underwriting Agreement provides that the purchase commitments of the non-defaulting Underwriters may be increased or the Underwriting Agreement may be terminated. The Company has agreed to indemnify the Underwriters and certain of their controlling persons against certain liabilities, including liabilities under the Securities Act, and to contribute to payments that the Underwriters may be required to make in respect of those liabilities. If the Underwriting Agreement does not become unconditional or is terminated for any reason, the Fundraising will not complete and no New Ordinary Shares will be issued. Further details of the Underwriting Agreement are set out at paragraph 12.2 of Part IX of this document.

Issue of Ordinary Shares

In order to create the American Depositary Shares that are the subject of the Fundraising, the Company will issue the New Ordinary Shares to the Depositary, who, in turn, will create and deliver the American Depositary Shares. These American Depositary Shares will be packaged into American Depositary Receipts (each representing one American Depositary Share).

In order for the Company to comply with its obligations under the Listing Rules, the entire class of Ordinary Shares must be admitted to the Standard Segment of the Official List and to trading on the London Stock Exchange's Main Market. Before and in order for Admission to take place, the Company is required to issue this prospectus.

Commission and Expenses

The following table shows the public offering price, the underwriting discounts and commissions that the Company are to pay the Underwriters and the proceeds, before expenses, due to the Company in connection with the offering. Such amounts are shown assuming both no exercise and full exercise of the Underwriters' option to purchase additional ADSs.

				Per ADS		Total
				Without option to purchase additional ADS	With option to purchase additional ADS	Without option to purchase additional ADS	With option to purchase additional ADS
Public offering price		£10.86	£10.86	£10.86	£10.86
Underwriting commissions Company	discounts paid	by	and the	0.05%	0.05%	0.05%	0.05%
Proceeds to before expenses	the		Company,	£10.82	£10.82	£10.82	£10.82

The Company estimates expenses payable by it in connection with the offering, other than the underwriting discounts and commissions referred to above, will be approximately £3,114,588.

XMS Capital Partners, LLC ("XMS Capital") is acting as the Company's financial advisor pursuant to an engagement letter, including in connection with the offering. Apart from XMS Capital's role as financial advisor under the engagement letter, the Company has had no other relationships with XMS Capital. XMS Capital is not acting as an underwriter or syndicate of offering group member in connection with the offering and will not sell or offer to sell any securities in this offering and will not identify, solicit or engage directly with potential investors in this offering. In addition, XMS Capital will not purchase any of the offered ADSs.

Over-allotment Option to purchase additional ADSs

The Company has granted to the Underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase, from time to time, in whole or in part, up to an aggregate of 1,125,000 ADSs from the Company at the public offering price, less underwriting discounts and commissions (Optional ADSs). If the Underwriters exercise this option, each underwriter will be obligated, subject to specified conditions, to purchase a number of additional ADSs proportionate to that underwriter's initial purchase commitment as indicated in the table above. The Underwriters can choose to purchase all, or any portion of, the Optional ADSs.

PART V

SHARE CAPITAL, LIQUIDITY AND CAPITAL RESOURCES AND ACCOUNTING POLICIES

1. Share capital

The Company was incorporated on 5 December 2017 in England and Wales under CA 2006 as a private limited company and re-registered as a public limited company on 21 December 2017.

Details of the current issued share capital of the Company are out in paragraph 5 of Part IX: Additional Information. Following Admission, the share capital of the Company is expected to be £462,082.34 divided into 468,082,335 issued Ordinary Shares of £0.001 each (assuming exercise of the Over-allotment Option in full).

All of the issued Ordinary Shares will be in registered form, and capable of being held in certificated or uncertificated form. The Registrar will be responsible for maintaining the share register. Temporary documents of title will not be issued. The ISIN of the Ordinary Shares is GB00BZ15CS02. The SEDOL number of the Ordinary Shares is BZ15CS0.

2. Liquidity and capital resources

Overview

Since its inception, the Company has financed its operations primarily through cash generated by sales of cryptocurrency and sales of Ordinary Shares. The Company's primary requirements for liquidity and capital are to finance working capital, capital expenditures and general corporate purposes. The Company believes that its sources of liquidity and capital resources will be sufficient to meet its existing business needs for at least the next 12 months. From time to time, the Company may raise additional capital through the issuance of debt or equity securities or additional borrowings to the extent required, or to the extent that the Company believes such capital is available on favourable terms. The Company's primary sources of liquidity are its cash and cash equivalents and cryptocurrency held in treasury.

During 2020, the average period of time the Company held Bitcoin in treasury once mined before converting to fiat currency for working capital and capital expenditures was 32 days. To control and manage the volatility in cryptocurrency pricing, the Company engages in planned selling of cryptocurrency over an extended period in advance of forecasted fiat cash requirements. In the future, as with any business which mines a commodity, the Company expects to sell Bitcoin to satisfy its fiat cash requirements, at least until Bitcoin is accepted more broadly as a medium of exchange.

Historically, the Company's capital expenditures have consisted primarily of purchasing mining machines and computer equipment and improvements to the data centres from which the Company operates. Beginning in 2021, its capital expenditures have expanded to acquiring and building data centres that the Company will own and operate. The Company's capital expenditures during the year ended 31 December 2020 were £1,807,971 to purchase mining machines. The Company expects significantly higher capital expenditures in 2021, as the Company executes its capital integration strategy.

In March 2021, the Group acquired DPN LLC and, as a result, acquired 160 acres of land in western Texas, with an option to purchase an adjacent 157 acres of land. The purchase also affords the Company access to up to 800 MW of electrical power. The consideration for the acquisition was an initial payment of approximately 3.5 million Ordinary Shares, valued at \$5 million. The Company also agreed to pay up to an additional approximately 8.8 million Ordinary Shares, valued at \$12.5 million, payable if certain contractual milestones related to the facility are fulfilled. The Company is developing a 200 MW mining facility on the newly acquired land. Phase 1 of this development is expected to be completed in the first half of 2022, and includes facilities that are expected to support 100 MW of power capacity at an estimated cost of \$50 million. Phase 2 of this development, which the Company expects to be completed in the second half of 2022, is expected to support an additional 100 MW of power capacity, at an estimated cost of \$30 million. These estimates do not include the cost of the mining machines that the Company will operate at the new mining facility.

In June 2021, the Company entered into a \$20 million term loan agreement with Galaxy Digital LP to finance the continued build out of its new cryptocurrency mining facility in Texas and other general corporate operations. The term of the loan is six months and the borrowing fee on the loan is 12.5% per annum. A portion of the Company's

holdings in Bitcoin are being used to collateralize the Galaxy Term Loan. The Galaxy Term Loan will terminate at the end of the six month term or in certain other cases as specified in the agreement. Under the agreement, the Company will be considered in default if it fails to repay any borrowed amount or borrowing fees when due, if any bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors or dissolution proceedings shall be instituted by or against the Company, if it fails to pay Galaxy Digital LP in the event of a Hard Fork or Airdrop, as defined in the Galaxy Term Loan, or in certain other cases as specified in the agreement. The Galaxy Term Loan was subsumed into a new term loan prior to maturity, as described below.

On 9 September 2021, the Company entered into an additional \$25 million term loan agreement with Galaxy Digital LP (New Galaxy Term Loan) to finance the continued build out of its new cryptocurrency mining facility in Texas and other general corporate operations. The outstanding principal of the Galaxy Term Loan, in the amount of \$20 million, was subsumed into the New Galaxy Term Loan, resulting in total borrowings of \$45 million under the New Galaxy Term Loan. The New Galaxy Term Loan will mature on 29 October 2021 and the borrowing fee on the loan is 4.5% per annum. A portion of the Company's holdings in Bitcoin are being used to collateralise the New Galaxy Term Loan. The New Galaxy Term Loan will terminate on 29 October 2021 or in certain other cases as specified in the agreement. Under the new agreement, the Company will be considered in default if it fails to repay any borrowed amount or borrowing fees when due, if any bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors or dissolution proceedings shall be instituted by or against the Company, if it fails to pay Galaxy Digital LP in the event of a Hard Fork or Airdrop, as defined in the New Galaxy Term Loan, or in certain other cases as specified in the agreement with Galaxy Digital LP. The Company expects to repay £18 million (\$25 million) of the principal of this loan with the proceeds of this offering and convert up to £14.5 million (\$20 million) of the principal of this loan into mining machine financing upon receipt of machines and satisfaction of other conditions, with the repayment date for such financing extended beyond 29 October 2021 to a date to be agreed.

During the period from 1 January 2018 to 31 December 2020 (being the period covered by the financial information incorporated into this document by reference), the Company did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Cash Flows

The table below summarises the cash flows of the Company during the period from 1 January 2018 to 31 December 2020 (being the period covered by the financial information incorporated into this document by reference):

	6 months ended	Year/Period Ended 31 December
	30 June 2020	2020 (£)	2019 (£)	2018 (£)
Net cash flow from / (used in) operating activities	(£32,392,922)	2,409,830	3,292,310	(887,852)
Net cash (used in) investing activities	(£15,432,992)	(1,102,300)	(1,505,962)	(16,424,467)
Net cash generated from financing activities	£61,822,761	581,889	794,976	1,084,218
Net increase / (decrease) in cash and cash equivalents	£13,996,847	1,889,419	2,581,324	(16,228,101)

Operating Activities

Net cash used in operating activities of £2,372,843 in the six months ended 30 June 2021 was comprised of the Company's operating profit of £11,280,187, adjusted by £6,462,333 net in non-cash items, and reduced by changes in working capital accounts of £11,013,054, consisting principally of a £34,758,295 increase in digital assets as the Company did not sell any Bitcoin mined during the period.

The increase in digital assets was partially offset by a £15,245,263 increase in trade and other payables due to amounts payable for machines due to be delivered after the period end and a £6,407,446 fair value change in digital assets as a result of the reduction in average Bitcoin price during the period.

Net cash provided by operating activities of £3,696,386 in the six months ended 30 June 2020 was comprised of the Company's operating profit of £649,962, adjusted by £2,580,716 net in non-cash items. In addition, changes in working capital accounts produced £465,708, consisting principally of a £534,947 decrease in trade and other receivables due to a reduction in machine prepayments and a £203,045 decrease in digital assets due to the loss on futures entered into, partially offset by a decrease of 167,503 in trade payables due to year-end bonuses and a £104,781 fair value change in digital assets increasing in value.

Net cash provided by operating activities of £2,409,830 in the year ended 31 December 2020 was comprised of the Company's operating profit of £1,598,530, adjusted by £6,586,089 net in non-cash items. In addition, changes in working capital accounts used £5,774,789, consisting principally of a £3,578,381 increase in digital assets as receivables resulting from the timing of receipt of rewards from mining pools and a £2,106,799 decrease in trade payables, reflecting large mining equipment purchases made at the end of 2019 not paid until 2020.

Net cash used in operating activities of £887,852 in the year ended 31 December 2019 was comprised of the Company's operating loss of £833,815, adjusted by £2,399,441 net in non-cash items. In addition, changes in working capital accounts used £2,684,300, consisting principally of a £4,058,043 increase in trade receivables due to a deposit to GPU.one in an amount equal to 4 months of hosting costs and a £1,038,882 increase in digital assets as receivable resulting from the timing of receipt of rewards from mining pools, partially offset by a £2,684,300 increase in trade payables, reflecting the machines purchases toward the end of 2019.

Investing Activities

Net cash used in investing activities in the six months ended 30 June 2021 was £61,822,761, which was comprised principally of £35,471,499 investment in machine purchases, £7,352,970 for investment in associates and £6,883,195 for the purchase of land and building improvements at the Company's Texas facility.

Net cash used in investing activities in the six months ended 30 June 2020 was £1,619,997, which was comprised principally of £1,617,024 for the purchase of mining machines.

Net cash used in investing activities in the year ended 31 December 2020 was £1,102,300, which was comprised principally of £1,807,971 for the purchase mining machines, net of disposals.

Net cash used in investing activities in the year ended 31 December, 2019 was £16,424,467 which was comprised primarily of £15,025,708 principally for the purchase of mining machines, and a £1,346,236 convertible loan note to the host of its mining sites, which they have used to finance the building of their hosting sites.

Financing Activities

Net cash generated from financing activities in the six months ended 30 June 2021 was £61,822,761, which was comprised principally of £49,592,641 of proceeds from shares issued.

Net cash used in financing activities in the six months ended 30 June 2020 was £924,369, which was comprised of debt service on the Company's borrowings, as well as reduction of principal balances.

Net cash generated from financing activities in the year ended 31 December 2020 was £581,889, comprised of loan losses of £968,294, partially offset by £1,550,183 in net proceeds from sale of equity. Net cash generated from financing activities in the year ended 31 December 2019 was £1,084,218 of loan proceeds.

Sources of cash and liquidity

The Company's sources of cash will be the gross proceeds of the Fundraising and the revenue associated with its trading activities. It will initially use such cash to fund the expenses of Admission and the Fundraising, including but not limited to listing fees, legal, registration, printing, advertising and distribution costs and any other applicable expenses. The Company projects these costs to be approximately £9,439,963 (including irrevocable VAT). The remaining Net Proceeds will be used to fund the development of the Company's Texas facility and other incremental growth, including investments in DeFi projects and other initiatives, repaying a portion of the outstanding amount of the Company's New Galaxy Term Loan upon termination, and for working capital and general corporate purposes, including for possible acquisitions that may be identified following the date of this prospectus. However, the Company does not currently have any definitive or preliminary plans with respect to the use of proceeds for such purposes.

The Company may raise additional capital from time to time. This may include capital to be raised in connection with acquisitions by the Company of future equipment and/or premises. Such capital is expected to be raised through share issues (such as rights issues, open offers or private Fundraisings) or borrowings. As at the date of this prospectus, the Company has loan and asset based financing. The forms of debt financing to be used by the Company in due course are expected to be a mixture of bank financing and asset financing, with the following arrangements in place at Admission:

If further debt financing is utilised, there will be additional servicing costs. Furthermore, while the terms of any such financing cannot be predicted, such terms may subject the Company to financial and operating covenants or other restrictions, including restrictions that might limit the Company's ability to make distributions to Shareholders.

As substantially all of the cash raised by the Company (including cash from subsequent share offers) will (or is expected to) be used in connection with the development and expansion of the Company's business, the Company's future liquidity will depend in the medium to longer term primarily on: (i) the Company's implementation of its Business Plan, (ii) the Company's management of available cash; (iii) the use of borrowings, if any, to fund short-term liquidity needs; and (iv) dividends or distributions made by Argo Labs.

Ongoing costs and expenses

The Company's principal use of the Net Proceeds will be to fund the development of its Texas facility and other incremental growth and for working capital and general corporate purposes, including the repayment of part of the New Galaxy Term Loan and for possible acquisitions that may be identified following the date of this prospectus. However, the Company does not currentlyhaveany definitiveor preliminaryplans with respect to the use of proceeds for such possible acquisitions.

The Company anticipates the Net Proceeds being used, in the following order of priority, as follows:

Use	Amount
Partial repayment of the New Galaxy Term Loan	£18,108,069
Development of Texas facility	£60,000,000
General working capital working capital and general corporate purposes (including for the purchase of new machines), possible acquisitions that may be identified following the date of this prospectus and other incremental growth, including investments in DeFi projects and other initiatives	£6,161,225

The Company anticipates the above net proceeds will be deployed as to the partial repayment of the New Galaxy Term Loan by 29 October 2021 and as to the balance within 12 months of the date of this document.

The Directors expect that it may be necessary to raise further funds in the future to enable the Company to increase the pace at which it develops its business, including but not limited to, an acquisition of a suitable complementary business, and to pay the fees of financial, tax, legal, accounting, technical and other advisers.

Since its incorporation, the Company has not declared or paid any dividends on its issued share capital. The Company intends to retain any earnings for use in its business and does not currently intend to pay dividends on its ordinary shares or ADSs. The declaration and payment of any future dividends will be at the discretion of its board of directors and will depend upon the Company's results of operations, cash requirements, financial condition, contractual restrictions, any future debt agreements or applicable laws and other factors that its board of directors may deem relevant.

Under the laws of England and Wales, among other things, the Company may only pay dividends if the Company has sufficient distributable reserves (on a non-consolidated basis), which are its accumulated realized profits that have not been previously distributed or capitalized less its accumulated realized losses, so far as such losses have not been previously written off in a reduction or reorganization of capital.

The Company's day-to-day expenses will be paid from the Net Proceeds and revenue attributable to the Company's operations and, if the Company considers it appropriate or desirable for flexibility, through short-term borrowings (to the extent that it is able to effect such borrowings).

Capitalisation and indebtedness

The following table shows the Group's capitalisation and indebtedness as at 30 June 2021.

Total Current Debt	30 June 2021
	(£)
Guaranteed	-
Secured	£15,383,111
Unguaranteed/Unsecured	-
Total Non-Current Debt
Guaranteed	-
Secured	£4,032,364
Unguaranteed/Unsecured	-
Shareholder Equity	30 June 2021
	(£)
Share Capital	£381,832
Share Premium	£55,317,447
Legal reserves	£1,074,147
Other reserves	£29,178,867
Total	£85,952,295

Since 30 June 2021 the only change in the capitalisation of the Group was the taking of the New Galaxy Term Loan as described above.

Accounting policies and financial reporting

The Company's financial year end is 31 December. The Company's annual report and accounts for the financial years ended 31 December 2020, 31 December 2019 and 31 December 2018 are incorporated by reference into this document. The Company has presented its financial statements in accordance with International Financial Reporting Standards as adopted by the European Union.

PART VI OPERATING AND FINANCIAL REVIEW

Investors should read the discussion below in conjunction with the Group's audited consolidated financial statements for the financial years ended 31 December 2020, 2019 and 2019, the auditor's reports contained in the 2020, 2019 and 2018 Annual Report and Accounts, the Group's unaudited consolidated interim financial statements for the six months ended 30 June 2021, and the other information incorporated by reference into this document and should not rely solely on key and summarised information.

Some of the information referred to below or included elsewhere in this document or in the information incorporated by reference into this document includes forward-looking statements that involve risks and uncertainties. The Group's actual results may differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this document, including under "Risk Factors" and "Forward-Looking Statements".

1. Information incorporated by reference

The discussion of the Company's operating and financial performance, or operating and financial reviews, included in the sections of the Annual Report and Accounts for each of the years ending 31 December 2020, 31 December 2019 and 31 December 2018 and the 2021 Interim Statement referred to in paragraph 2 below are incorporated by reference into this document.

2. Cross-reference list

The following list is intended to enable Shareholders to identify easily the items of information which have been incorporated by reference into this document, for purposes of providing a review of the Group's operating and financial performance for the financial years ended 31 December 2020, 2019 and 2018 and for the six months ended 30 June 2021.

2.1	2020 Annual Report and Accounts
	Chairman's Statement	5-6
	Strategic Report	8-12
	Directors' Report	13-16
2.2	2019 Annual Report and Accounts
	Chairman's Statement	5
	Strategic Report	7-10
	Directors' Report	11-14
2.3	2018 Annual Report and Accounts
	Chairman's Statement	1-2
	Strategic Report	4-5
	Directors' Report	6-10
2.4	2021 Interim Statement
	Interim Management Report	2
	Outlook	2-3
	Notes to the Condensed Consolidated Financial Statements	6-12

3. Financing Arrangements

For a summary of the Group's material financing arrangements, see paragraph 12 of Part IX of this document.

PART VII UK TAXATION

1. United Kingdom Taxation

The comments set out below are based on the current UK tax law and what is understood to be current HMRC practice which are subject to change at any time (potentially with retrospective effect). They are intended as a general guide only and apply only to Shareholders who are resident and domiciled (in the case of individuals) and resident (in the case of companies) for tax purposes in (and only in) the UK (except to the extent that specific reference is made to Shareholders resident outside the UK), who hold their Ordinary Shares as investments (other than under an individual savings account or pension arrangement) and who are the absolute beneficial owners of those Ordinary Shares and any dividends paid thereon. They are written on the basis that the Company does not (and will not) directly or indirectly derive 75% or more of its qualifying asset value from UK land.

It is not intended to be, nor should it be construed as legal or tax advice.

The comments set out below do not deal with the position of certain classes of Shareholders, such as dealers in securities, broker dealers, insurance companies, collective investment schemes or Shareholders who have or are deemed to have acquired their Ordinary Shares by virtue of an office or employment. Shareholders who are in doubt as to their position or who are subject to tax in any jurisdiction other than the UK should consult their own professional advisers immediately.

The tax legislation of the investor's jurisdiction of residence and of the issuer's country of incorporation, being the United Kingdom, may have an impact on the income received from the Ordinary Shares. Prospective investors should consult their own independent professional advisers on the potential tax consequences of subscribing for, purchasing, holding or selling Ordinary Shares under the laws of their country and/or state of citizenship, domicile or residence.

2. Taxation of dividends

The Company is not required to withhold tax at source on any dividends it pays to its Shareholders.

Dividends paid on the Ordinary Shares to individuals resident in the UK for taxation purposes or who carry on a trade, profession or vocation in the UK and who hold Ordinary Shares for the purposes of such trade, profession or vocation, may be liable to income tax. Each individual has a tax-free dividend allowance which exempts the first £2,000 (Nil Rate Amount) of dividend income. Dividend income in excess of the tax-free allowance will be liable to income tax in the hands of individuals at the rate of 7.5% to the extent that it is within the basic-rate band, 32.5% to the extent that it is within the higher-rate band and 38.1% to the extent it is within the additional-rate band.

Dividend income that is within the Nil Rate Amount counts towards an individual's basic or higher rate limits - and will therefore impact on the level of savings allowance to which they are entitled, and the rate of tax that is due on any dividend income in excess of the Nil Rate Amount. In calculating into which tax band any dividend income over the Nil Rate Amount falls, savings and dividend income are treated as the highest part of an individual's income. Where an individual has both savings and dividend income, the dividend income is treated as the top slice.

Dividends paid on the Ordinary Shares to UK resident corporate Shareholders will generally (subject to antiavoidance rules) fall within one or more of the classes of dividend qualifying for exemption from corporation tax. Shareholders within the charge to corporation tax are advised to consult their independent professional tax advisers in relation to the implications of the legislation.

Non-UK resident corporate Shareholders should not be chargeable to UK corporation tax on dividends received from the Company unless they carry on (whether solely or in partnership) a trade in the United Kingdom through a permanent establishment to which the Ordinary Shares are attributable. Non-UK resident Shareholders may also be subject to tax on dividend income under any law to which they are subject outside the UK. Such Shareholders should consult their own tax advisers concerning their tax liabilities.

3. Disposals of Ordinary Shares

A disposal or deemed disposal of Ordinary Shares by a Shareholder (other than those holding shares as dealing stock, who are subject to separate rules) who is resident in the UK for tax purposes or who is not so resident in the UK but carries on business in the UK through a branch or agency (or in the case of a corporate Shareholder, a permanent establishment) with which their investment in the Company is connected may give rise to a chargeable gain or an allowable loss for the purposes of UK taxation, depending on the Shareholder's circumstances and subject to any available exemption or relief.

Such an individual Shareholder who is subject to UK income tax at the higher or additional rate will be liable to UK capital gains tax on the amount of any chargeable gain realised by a disposal of Ordinary Shares at the rate of 20%.

Such an individual Shareholder who is subject to income tax at the basic rate should only be liable to capital gains tax on the chargeable gain (up to any unused amount of the Shareholder's basic rate band) at the rate of 10% and at a rate of 20% on the gains above the basic rate band.

Individuals may benefit from certain reliefs and allowances (including a personal annual exemption allowance, which presently exempts the first £12,300 of gains from tax for the tax year 2021-22).

An individual shareholder who has ceased to be resident for tax purposes in the United Kingdom for a period of less than five years and who disposes of Ordinary Shares during that period may be liable on his or her return to the United Kingdom to UK tax on any capital gain realised (subject to any available exemption or relief).

For such Shareholders that are bodies corporate they will generally be subject to corporation tax (rather than capital gains tax) at a rate of 19% on any chargeable gain realised on a disposal of Ordinary Shares. This rate is scheduled to rise to 25% for disposals after March 2023.

4. Inheritance Tax

The Ordinary Shares will be assets situated in the UK for the purposes of UK inheritance tax. A gift of such assets by, or the death of, an individual holder of such assets may (subject to certain exemptions and reliefs) give rise to a liability to UK inheritance tax, even if the holder is neither domiciled in the UK nor deemed to be domiciled there (under certain rules relating to long residence or previous domicile). Generally, UK inheritance tax is not chargeable on gifts to individuals if the transfer is made more than seven complete years prior to death of the donor. For inheritance tax purposes, a transfer of assets at less than full market value may be treated as a gift and particular rules apply to gifts where the donor reserves or retains some benefit. Special rules also apply to close companies and to trustees of settlements who hold shares in the Company bringing them within the charge to inheritance tax. Holders of shares in the Company should consult an appropriate professional adviser if they make a gift of any kind or intend to hold any shares in the Company through such a company or trust arrangement. They should also seek professional advice in a situation where there is potential for a double charge to UK inheritance tax and an equivalent tax in another country or if they are in any doubt about their UK inheritance tax position.

5. Stamp Duty and Stamp Duty Reserve Tax (SDRT)

The statements below summarise the current position and are intended as a general guide only to Stamp Duty and SDRT. Certain categories of person are not liable to Stamp Duty or SDRT, and special rules apply to agreements made by broker dealers and market makers in the ordinary course of their business.

No UK Stamp Duty or SDRT will be payable on the issue of Ordinary Shares, other than as explained below.

The transfer on sale of Ordinary Shares will generally be liable to ad valorem Stamp Duty at the rate of 0.5% (rounded up to the nearest multiple of £5) of the amount or value of the consideration paid. An exemption from Stamp Duty will be available on an instrument transferring Ordinary Shares where the amount or value of the consideration is £1,000 or less, and it is certified on the instrument that the transaction effected by the instrument does not form part of a larger transaction or series of transactions for which the aggregate consideration exceeds £1,000. The purchaser normally pays the Stamp Duty. An unconditional agreement to transfer such shares will be generally liable to SDRT, at the rate of 0.5% of amount or value of the consideration paid, but such liability will be cancelled or a right to a repayment in respect of the SDRT liability will arise if the agreement is completed by a duly stamped transfer within six years of the agreement having become unconditional. SDRT is the liability of the purchaser.

Paperless transfers of shares within the CREST system are generally liable to SDRT (at a rate of 0.5% of the amount or value of the consideration payable) rather than Stamp Duty, and SDRT on relevant transactions settled within the system or reported through it for regulatory purposes will be collected by CREST. Deposits of shares into CREST will not generally be subject to SDRT unless the transfer into CREST is itself for consideration.

The statements in this section relating to Stamp Duty and SDRT apply to any Shareholders irrespective of their residence, summarise the current position and are intended as a general guide only. Special rules apply to agreements made by, amongst others, intermediaries.

PART VIII (A) UNAUDITED PRO FORMA STATEMENT OF NET ASSETS

Set out below is an unaudited pro forma statement of net assets, which has been prepared on the basis of the notes set out below, in accordance with Annex 1, Section 18, Item 18.4.1 of Commission Delegated Regulation (EU) 2019/980, and in a manner consistent with the accounting policies applied by the Group in its financial information for the period from 1 January 2020 to 31 December 2020, to illustrate the effect on the Group of the Fundraising as if it took place on 30 June 2021.

The purpose of the unaudited pro forma statement of net assets is to illustrate how the Fundraising might have affected the net assets of the Group as if it occurred on 30 June 2021. The pro forma information has been prepared for illustrative purposes only and, because of its nature, addresses a hypothetical situation and, therefore, does not reflect the actual financial position or results of the Company post Admission. Such information may not, therefore, give a true picture of the Company's financial position or results nor is it indicative of the results that may or may not be expected to be achieved in the future. The unaudited pro forma information does not constitute financial statements within the meaning of section 434 of the Companies Act. Users should read the whole of this document and not rely solely on the summarised financial information contained in this Part VIII (A) (Unaudited pro forma statement of net assets).

The report on the Pro Forma Financial Information is set out in Part VIII (B) (Report on the Unaudited Pro Forma Statement of Net Assets).

	As at	Note 1
	30 June	US Equity
	2021	Raise	Total
	£		£
ASSETS
Total non-current assets	51,105,908	-	51,105,908
Total current assets	88,601,755	84,269,294	172,871,049
Total assets	139,707,663	-	223,976,957
EQUITY AND LIABILITIES
Total equity	85,952,293	84,269,294	170,221,587
Total liabilities	53,755,370	-	53,755,370
Total equity and liabilities	139,707,663	-	223,976,957

Unaudited pro forma statement of net assets of the Group at 30 June 2021

NOTES TO THE UNAUDITED PRO FORMA STATEMENT OF NET ASSETS

Notes:

Note 1: Offering of American Depositary Receipts (amounts denominated in U.S. Dollars have been translated to pounds sterling assuming the noon buying rate of the Federal Reserve Bank of New York on June 30, 2021, which was £1.00 to \$1.3806).

The pro forma statement of net assets has been prepared on the following basis:

1. The unaudited net assets of the Group as at 30 June 2021 have been extracted without adjustment from the Historic Financial Information to which is incorporated by reference into this document.

2. 1. No adjustments have been made to reflect trading or other transactions of the Group, other than those described above since 30 June 2021 and the pro forma statement of net assets assumes the draw down and subsequent repayment of the New Galaxy Term Loan.
3. 1. The pro forma statement of net assets does not constitute financial statements.

(B) REPORT ON THE UNAUDITED PRO FORMA STATEMENT OF NET ASSETS

PKF Littlejohn LLP

The Directors Argo Blockchain PLC 9th Floor 16 Great Queen Street London WC2B 5DG

Dear Sirs

Introduction

We report on the unaudited pro forma statement of net assets at 30 June 2021 (the "Pro Forma Financial Information") set out in Part VIII(A) of the Company's Prospectus dated 23 September 2021, which has been prepared on the basis described in Part VIII(A) of this document, for illustrative purposes only, to provide information about how the Fundraising and Admission might have affected the net assets presented on the basis of the accounting policies adopted by the Company in preparing the audited financial information for the period ended 31 December 2020. This report is required by Annex 1, Section 18, Item 18.4.1 of Commission Delegated Regulation (EU) 2019/980 and is given for the purpose of complying with that requirement and for no other purpose.

Responsibilities

It is the responsibility of the Directors of the Company to prepare the Pro Forma Financial Information in accordance with Annex 20, Section 1 and 2, Commission Delegated Regulation (EU) 2019/980.

It is our responsibility to form an opinion as to the proper compilation of the Pro Forma Financial Information and to report that opinion to you in accordance with Annex 20, Section 3 of Commission Delegated Regulation (EU) 2019/980.

Save for any responsibility arising under Prospectus Regulation Rule 5.3.2R(2)(f) to any person as and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with Annex 1, Section 1, Item 1.3 of Commission Delegated Regulation (EU) 2019/980, consenting to its inclusion in the Prospectus.

In providing this opinion we are not updating or refreshing any reports or opinions previously made by us on any financial information used in the compilation of the Pro Forma Financial Information, nor do we accept responsibility for such reports or opinions beyond that owed to those to whom those reports or opinions were addressed by us at the dates of their issue.

Basis of opinion

We conducted our work in accordance with Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. The work that we have performed for the purpose of making this report, which involved no independent examination of any of the underlying financial information, consisted primarily of comparing the unadjusted financial information with the source documents, considering the evidence supporting the adjustments and discussing the Pro Forma Financial Information with the Directors.

We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with reasonable assurance that the Pro Forma Financial Information has been properly compiled on the basis stated and that such basis is consistent with the accounting policies of the Company.

Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in jurisdictions outside the United Kingdom, including the United States of America, and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices.

Opinion

In our opinion:

• 1. the Pro Forma Financial Information has been properly compiled on the basis stated; and
• 1. such basis is consistent with the accounting policies of the Company.

Declaration

For the purposes of Prospectus Regulation Rule 5.3.2R(2)(f) we are responsible for this report as part of the Prospectus and declare that the information contained in this report is, to the best of our knowledge, in accordance with the facts and this report makes no omission likely to affect its import. This declaration is included in the Prospectus in compliance with Annex 1, Section 1, Item 1.2 of Commission Delegated Regulation (EU) 2019/980.

Yours faithfully

PKF Littlejohn LLP 15 Westferry Circus Reporting Accountant Canary Wharf

London E14 4HD

23 September 2021

PART IX ADDITIONAL INFORMATION

1. Responsibility

The Company and each of the Directors whose names appear on page 58 of this document accept responsibility for the information contained in this document. To the best of the knowledge of the Company and the Directors the information contained in this document is in accordance with the facts and contains no omission likely to affect its import.

2. Competent Authority Approval

This prospectus has been approved by the Financial Conduct Authority, as competent authority under Regulation (EU) 2017/1129. The Financial Conduct Authority only approves this prospectus as meeting the standards of completeness, comprehensibility and consistency imposed by Regulation (EU) 2017/1129 and such approval should not be considered as an endorsement of the issuer or the quality of the securities that are the subject of this prospectus. Investors should make their own assessment as to the suitability of investing in the securities.

3. The Company

• 3.1 The Company's legal and commercial name is Argo Blockchain plc.
• 3.2 The Company was incorporated in England and Wales on 5 December 2017 under the name GoSun Blockchain Limited with registered number 11097258 as a private limited company under CA 2006. On 21 December 2017 the Company changed its name to Argo Blockchain Limited, and on 21 December 2017, the Company was re-registered as a public limited company with the name Argo Blockchain plc. The domicile of the Company is the United Kingdom.
• 3.3 The principal legislation under which the Company operates is CA 2006. The liability of the members is limited to the amount, if any, unpaid on the shares respectively held by them.
• 3.4 The Company's registered office is at 9th Floor, 16 Great Queen Street, London, WC2B 5DG and the telephone number is 0203 5531 276.

4. The Group

• 4.1 Argo Blockchain plc is the parent holding company of the Group. The Group consists of Argo Blockchain plc and the following subsidiaries (each of which is wholly owned):
  • (a) Argo Innovation Labs Inc.;
  • (b) Argo Innovation Labs Limited; and
  • (c) Argo Innovation Facilities (US), Inc.

5. Share Capital

• 5.1 In accordance with CA 2006, the Company has no limit on its authorised share capital.
• 5.2 As at 22 September 2021 (being the latest practicable date prior to the date of this document), the issued share capital of the Company was £381,832.34 comprising 381,832,335 Ordinary Shares, all of which were fully paid or credited as fully paid. The Ordinary Shares have a nominal value of £0.001 each and are admitted to the standard listing segment of the Official List and to trading on the London Stock Exchange's main market for listed securities.
• 5.3 As at 1 January 2018 (being the first date covered by the historical financial statements incorporated by reference into this document) 90,000,000 Ordinary Shares were in issue. Such shares are fully paid or credited as fully paid. There have been the following changes in the share capital of the Company between 1 January 2018 and 22 September 2021 (being the latest practicable date prior to the date of this document):

	Financial years ended 31 December		1 January 2021
	2018	2019	2020	to 22 September 2021
Founder share issue	10,000,000
Pre-IPO fundraising	32,000,000
Pre-IPO fundraising	5,500,000
Placing on IPO	156,250,000
Exercise of warrants			14,155,000
Exercise of options				1,135,997
Exercise of warrants and options				8,609,528
Exercise of warrants and options				5,464,888
Exercise of warrants and options				4,163,043
Exercise of warrants				550,000
Placing				28,000,000
Exercise of options and warrants				3,276,666
Exercise of options and warrants				239,836
Exercise of options				625,000
Exercise of warrants				1,350,000
Exercise of options and warrants				3,543,915
Consideration of Shares				3,497,817
Placing, subscription and retail offer				13,399,599
Exercise of Warrants				71,046

• 5.4 The Company reduced its share premium account, confirmed by an Order of the High Court of Justice, Chancery Division dated 10 November 2020. £25,252,288 standing to the credit of the Company's share premium account was cancelled pursuant to a special resolution of the Company's members, passed at the Company's annual general meeting on 25 June 2020. The Order was registered by the Registrar of Companies House on 16 November 2020.
• 5.5 The table set out below shows the issued share capital of the Company as at 22 September 2021 (being the latest practicable date prior to the date of this document) and as it is expected to be on Admission:

	Number of Ordinary Shares allotted	Aggregate nominal value of Ordinary Shares
Current	381,832,335	£381,832.34
On Admission (assuming exercise of the over-allotment option in full)	468,082,335	£468,082.34

• 5.6 As at the date of this document, the Company does not hold any Ordinary Shares in treasury.
• 5.7 Pursuant to resolutions passed on 6 September 2021, the Company resolved that:
  • (a) the Directors be generally authorised in accordance with the Articles to exercise all powers of the Company to allot Ordinary Shares, or grant rights to subscribe for, or concert any security into, Ordinary Shares, up to a maximum aggregate nominal value of £381,832.34; and
  • (b) the Directors may allot equity securities up to a maximum nominal value of £381,832.34 as if section 561 of the Companies Act and any pre-emption rights in the Articles did not apply.
• 5.8 The provisions of section 561(1) CA 2006 (to the extent not disapplied pursuant to sections 570-571 CA 2006) confer on shareholders certain rights of pre-emption in respect of the allotment of equity securities (as defined in section 560 CA 2006) which are, or are to be, paid up in cash and will apply to the unissued share capital of the Company, except to the extent disapplied by the resolution referred to in paragraph 5.7 above.
• 5.9 Each Fundraising Share will rank in full for all dividends and distributions declared made or paid after their issue and otherwise pari passu in all respects with each Existing Ordinary Share and will have the same rights (including voting and dividend rights and rights on a return of capital).
• 5.10 Except for the Company's obligations to issue and allot Ordinary Shares pursuant to the Fundraising and pursuant to the Warrants and Options, there are no rights and/or obligations over the Company's unissued share or loan capital nor do there exist any undertakings to increase the Company's share or loan capital.
• 5.11 No share of the Company or any subsidiary is under option or has been agreed conditionally or unconditionally to be put under option.
• 5.12 Except for the Warrants and Options, the Company does not have in issue any securities not representing share capital nor any shares which are held by or on behalf of the Company itself or by its subsidiaries, and there are no outstanding convertible securities, exchangeable securities or securities with warrants issued by the Company.
• 5.13 The Company has Warrants outstanding over 535,821 Ordinary Shares as follows:

Number of Ordinary Shares under warrant	Lapse date	Exercise price per share - £
240,000	2 March 2031	£1.25
223,821	1 March 2024	£1.35
50,000	1 January 2026	£0.87
22,000	1 March 2024	£1.50

5.14 The Company has Options outstanding over 17,223,076 Ordinary Shares as follows:

Number of Ordinary Shares under option	Lapse date	Exercise price per share - £
1,000,000	25 July 2024	£0.16
537,037	25 July 2024	£0.16
1,000,000	25 July 2024	£0.07
1,162,500	25 July 2024	£0.07
294,048	25 July 2024	£0.07
3,700,000	04 February 2030	£0.07
797,500	25 July 2024	£0.07
73,093	02 February 2031	£0.94
500,000	26 June 2031	£1.35
1,000,000	23 June 2031	£1.26
158,898	2 February 2031	£0.94
500,000	1 July 2031	£1.16
1,000,000	13 July 2031	£1.00

5.15 The participation (as a percentage) in share capital and voting rights for existing shareholders before and after the capital increase resulting from the Fundraising, on the basis that existing Shareholders do not participate in the Fundraising, and the maximum number of New Ordinary Shares are issued, are as follows:

	Immediately prior to Admission	Immediately following Admission
Share Capital	100%	82%
Voting	100%	82%

• 5.16 Shareholders do not have any entitlements to participate in the Fundraising.
• 5.17 The net asset value per Ordinary Share is as follows:

	Immediately prior to Admission	Immediately following Admission
Net asset value per Ordinary	£0.22	£0.44
Share (on a fully diluted basis)

5.18 The Ordinary Shares may be held in either certificated form or in uncertificated form under the CREST system.

• 5.19 Except as disclosed in this paragraph and as referred to in paragraph 12 below, since 1 January 2018 (being the first date covered by the historical financial statements incorporated by reference into this document): (i) there has been no change in the amount of the issued share or loan capital of the Company; and (ii) no commissions, discounts, brokerages or other special terms have been granted by the Company in connection with the issue or sale of any share capital of the Company.
• 5.20 To the best of the Directors' knowledge, no-one, directly or indirectly, acting jointly, exercise or could exercise control over the Company.
• 5.21 The ISIN number in respect of the Ordinary Shares is GB00BZ15CS02. The Ordinary Shares are and will be created and issued under CA 2006 and are denominated in pounds sterling.
• 5.22 The registrars of the Company are Computershare Investor Services PLC. They will be responsible for maintaining the register of members of the Company.

6. Objects and Purposes of the Company

The Company's objects and purposes are unrestricted.

7. Articles of association

The rights attaching to the Ordinary Shares, as set out in the Articles contain, amongst others, the following provisions:

Votes of members

• 7.1 Pursuant to the Company's Articles, a resolution put to the vote shall be decided by a poll. Subject to any special rights or restrictions as to voting attached to any share, on a poll every member has one vote for every share of which he is the holder.
• 7.2 A member of the Company is not entitled in respect of any shares held by him to vote at any general meeting of the Company if any amounts payable by him in respect of those shares have not been paid or if the member has a holding of at least 0.25% of any class of shares of the Company and has failed to comply with a notice under section 793 CA 2006.

Variation of rights

7.3 The Articles do not contain provisions relating to the variation of rights as these matters are dealt with in section 630 CA 2006. If at any time the capital of the Company is divided into different classes of shares, the rights attached to any class may be varied or abrogated with the consent in writing of the holders of at least three fourths in nominal value of that class or with the sanction of a special resolution passed at a separate meeting of the holders of that class but not otherwise.

Transfer of shares

• 7.4 Subject to the provisions of the Articles relating to CREST, all transfers of shares will be effected in any usual form or in such other form as the board approves and must be signed by or on behalf of the transferor and, in the case of a partly paid share, by or on behalf of the transferee. The transferor is deemed to remain the holder of the share until the name of the transferee is entered in the register of members in respect of it.
• 7.5 Under the Articles, if a person defaults in supplying it with the required particulars in relation to the shares in question (Default Shares), within the prescribed period, the directors may by notice direct that where the default shares represent at least 0.25% in nominal value of the issued shares of their class no transfers by the relevant shareholder of any default shares may be registered (unless the shareholder himself is not in default and the shareholder provides a certificate, in a form satisfactory to the directors, to the effect that after due and careful enquiry the shareholder is satisfied that none of the shares to be transferred are Default Shares).
• 7.6 The Board shall not refuse to register any transfer or renunciation of partly paid shares which are admitted to, or for which Depositary Shares are admitted to, Nasdaq on the grounds that they are partly paid shares

in circumstances where such refusal would prevent dealings in such shares from taking place on an open and proper basis.

7.7 The Articles contain no restrictions on the free transferability of fully paid Ordinary Shares provided that the transfers are in favour of not more than four joint transferees, the transfers are in respect of only one class of share and the provisions in the Articles, if any, relating to registration of transfers have been complied with.

Payment of dividends

7.8 Subject to the provisions of CA 2006 and to any special rights attaching to any shares, the Shareholders are to distribute amongst themselves the profits of the Company according to the amounts paid up on the shares held by them, provided that no dividend will be declared in excess of the amount recommended by the directors. A member will not be entitled to receive any dividend if he has a holding of at least 0.25% of any class of shares of the Company and has failed to comply with a notice under section 793 CA 2006. Interim dividends may be paid if profits are available for distribution and if the directors so resolve. Dividends may be declared or paid in any currency and the Board may decide the rate of exchange for any currency conversions that may be required, and how any costs involved are to be met.

Unclaimed dividends

7.9 Any dividend unclaimed after a period of 12 years from the date of its declaration will be forfeited and will revert to the Company.

Untraced Shareholders

7.10 The Company may sell any share if, during a period of 12 years, at least three dividends in respect of such shares have been paid, no cheque or warrant in respect of any such dividend has been cashed and no communication has been received by the Company from the relevant member. The Company must advertise its intention to sell any such share in both a national daily newspaper and in a newspaper circulating in the area of the last known address to which cheques or warrants were sent. Notice of the intention to sell must also be given to the FCA.

Return of capital

7.11 On a winding-up of the Company, the balance of the assets available for distribution will, subject to any sanction required by CA 2006, be divided amongst the members.

Borrowing powers

7.12 Subject to the provisions of CA 2006, the directors may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and assets, including its uncalled or unpaid capital, and to issue debentures and other securities and to give guarantees.

Directors

• 7.13 No shareholding qualification is required by a director.
• 7.14 The directors are entitled to fees, in addition to salaries, at the rate decided by them, subject to an aggregate limit of £500,000 per annum or such additional sums as the Company may by ordinary resolution determine. The Company may by ordinary resolution also vote extra fees to the directors which, unless otherwise directed by the resolution by which it is voted, will be divided amongst the directors as they agree, or failing agreement, equally. The directors are also entitled to be repaid all travelling, hotel and other expenses incurred by them in connection with the business of the Company.
• 7.15 At the third (or next subsequent) annual general meeting after an annual general meeting or general meeting at which a director was appointed, such director will retire from office. A retiring director is eligible for reappointment.
• 7.16 The directors may from time to time appoint one or more of their body to be the holder of an executive office on such terms as they think fit.
• 7.17 Except as provided in paragraphs 7.18 and 7.19 below, a director may not vote or be counted in the quorum present on any motion in regard to any contract, transaction, arrangement or any other proposal in which he has any material interest, which includes the interest of any person connected with him, otherwise than by virtue of his interests in shares or debentures or other securities of or otherwise in or through the Company. Subject to CA 2006, the Company may by ordinary resolution suspend or relax this provision to any extent or ratify any transaction not duly authorised by reason of a contravention of it.
• 7.18 In the absence of some other material interest than is indicated below, a director is entitled to vote and be counted in the quorum in respect of any resolution concerning any of the following matters:
  • (a) the giving of any security, guarantee or indemnity to him in respect of money lent or obligations incurred by him or by any other person at the request of or for the benefit of the Company or any of its subsidiaries;
  • (b) the giving of any security, guarantee or indemnity to a third party in respect of a debt or obligation of the Company or any of its subsidiaries for which he himself has assumed responsibility in whole or in part under a guarantee or indemnity or by the giving of security;
  • (c) any proposal concerning an offer of shares or debentures or other securities of or by the Company or any of its subsidiaries for subscription or purchase in which offer he is or is to be interested as a participant in its underwriting or sub-underwriting;
  • (d) any contract, arrangement, transaction or other proposal concerning any other company in which he is interested provided that he is not the holder of or beneficially interested in 1% or more of any class of the equity share capital of such company, or of a third company through which his interest is derived, or of the voting rights available to members of the relevant company, any such interest being deemed to be a material interest, as provided in paragraph 7.17 above, in all circumstances;
  • (e) any contract, arrangement, transaction or other proposal concerning the adoption, modification or operation of a superannuation fund or retirement, death or disability benefits scheme under which he may benefit and which has been approved by or is subject to and conditional upon approval by HMRC;
  • (f) any contract, arrangement, transaction or other proposal concerning the adoption, modification or operation of an employee share scheme which includes full time executive directors of the Company and/or any subsidiary or any arrangement for the benefit of employees of the Company or any of its subsidiaries and which does not award to any director any privilege or advantage not generally accorded to the employees to whom such a scheme relates; and
  • (g) any contract, arrangement, transaction or proposal concerning insurance which the Company proposed to maintain or purchase for the benefit of directors or for the benefit or persons including the directors.
• 7.19 If any question arises at any meeting as to the materiality of a director's interest or as to the entitlement of any director to vote and such question is not resolved by his voluntarily agreeing to abstain from voting, such question must be referred to the chairman of the meeting and his ruling in relation to any other director will be final and conclusive except in a case where the nature or extent of the interest of such director has not been fully disclosed.
• 7.20 The directors may provide or pay pensions, annuities, gratuities and superannuation or other allowances or benefits to any director, ex-director, employee or ex-employee of the Company or any of its subsidiaries or to the spouse, civil partner, children and dependants of any such director, ex-director, employee or exemployee.

CREST

7.21 The directors may implement such arrangements as they think fit in order for any class of shares to be held in uncertificated form and for title to those shares to be transferred by means of a system such as CREST in accordance with the Uncertificated Securities Regulations 2001 and the Company will not be required to issue a certificate to any person holding such shares in uncertificated form.

Disclosure notice

• 7.22 The Company may by notice in writing require any person appearing to be, or to have been interested in shares comprised in the Company's relevant share capital:
  • (a) to confirm that fact or (as the case may be) to indicate whether or not it is the case; and
  • (b) where he holds or has during that time held an interest in shares so comprised, to give such further information as may be required in the notice.
• 7.23 Failure to provide the information requested could result in the loss or restriction of rights attaching to the shares, including prohibitions on certain transfers of the shares, withholding of dividends and loss of voting rights.

General meetings

• 7.24 An annual general meeting must be called by at least 21 days' notice, and all other general meetings must be called by at least 14 days' notice.
• 7.25 Notices must be given in the manner stated in the Articles to the members, other than those who under the provisions of the Articles or under the rights attached to the shares held by them are not entitled to receive the notice, and to the auditors.
• 7.26 No business may be transacted at any general meeting unless a quorum is present which will be constituted by two persons entitled to vote at the meeting each being a member or a proxy for a member or a representative of a corporation which is a member. If within half an hour from the time appointed for the meeting a quorum is not present, the meeting, if convened on the requisition of, or by, members, will be dissolved.
• 7.27 Customary amendments have been made to the Articles to provide for hybrid and electronic meetings of the members at which members can participate from more than one location.
• 7.28 At a general meeting a resolution put to the vote will be decided on a poll. A poll will be taken in such manner as the chairman may direct, including the use of ballot or voting papers or tickets, and the result of a poll will be deemed to be the resolution of the meeting. The chairman may appoint scrutinisers, who need not be members, and may fix some place and time for the purpose of declaring the result of the poll.
• 7.29 No member is entitled to vote at any general meeting either personally or by proxy or to exercise any privilege as a member, unless all calls or other sums presently payable to him in respect of shares in the Company have been paid.
• 7.30 The appointment of a proxy must be in any usual form, or such other form as may be approved by the directors, and must be signed by the appointor or by his agent duly authorised in writing or if the appointor is a corporation, must be either under its common seal or signed by an officer or agent so authorised. The directors may, but will not be bound to, require evidence of authority of such officer or agent. An instrument of proxy need not be witnessed.
• 7.31 The proxy will be deemed to include the right generally to act at the meeting for the member giving the proxy.
• 7.32 The directors may direct that members or proxies wishing to attend any general meeting must submit to such searches or other security arrangements or restrictions as the directors consider appropriate in the circumstances and may, in their absolute discretion, refuse entry to, or eject from, such general meeting any member or proxy who fails to submit to such searches or otherwise to comply with such security arrangements or restrictions.

8. Substantial Shareholders

8.1 Except for the interests of those persons set out in this paragraph, the Directors are not aware of any interests (other than interests of the Directors) which, at the date of this document and immediately following Admission, would amount to 3% or more of the Company's issued share capital:

Name	Ordinary Shares as at the date of this document	Percentage of Existing Ordinary Shares	Ordinary Shares on Admission	Percentage of Enlarged Share Capital
Amplify Transformational Data Sharing ETF	20,446,985	5.36%	20,446,985	4.48%

• 8.2 No major holder of Ordinary Shares, either as listed above, or as set out in paragraph 10 of this Part IX, has voting rights different from other holders of Ordinary Shares.
• 8.3 So far as the Company is aware, there are no arrangements in place the operation of which may at a subsequent date result in a change of control of the Company.

9. The Directors

9.1 The Directors and their respective functions are as follows:

Peter Wall (Chief Executive Officer & Interim Chairman)

Alex Appleton (Chief Financial Officer)

Matthew Shaw (Non-Executive Director)

Colleen Sullivan (Non-Executive Director)

Maria Perrella (Non-Executive Director)

Sarah Gow (Non-Executive Director)

9.2 The business address of each of the Directors is 9th Floor, 16 Great Queen Street, London, WC2B 5DG.

10. Directors' interests in the Company including service agreements

10.1 The interests of the Directors and persons connected with them, within the meaning of sections 252 and 253 CA 2006, in the share capital of the Company, at the date of this document and immediately following Admission, all of which are beneficial, are:

Name	Ordinary Shares as at the date of this document	Percentage of Existing Ordinary Shares	Ordinary Shares on Admission	Percentage of Enlarged Share Capital
Peter Wall	1,045,000	0.27%	1,045,000	0.22%
Alex Appleton	Nil	Nil	Nil	Nil
Matthew Shaw	137,289	0.04%	137,289	0.03%
Colleen Sullivan	Nil	Nil	Nil	Nil
Maria Perrella	Nil	Nil	Nil	Nil
Sarah Gow	2,700,000	0.70%	2,700,000	0.58%

10.2 The Directors and persons connected with them hold, or are upon Admission intended to hold, the following options over Ordinary Shares pursuant to the Share Option Schemes:

Name	Aggregate number of outstanding options granted	Exercise Price	Vesting Conditions	Lapse Date
Peter Wall	5,700,000	£0.07	1/21/mth starting on 4th mth	4 February 2030
Alex Appleton	158,898	£0.94	1/21/mth starting on 4th mth	2 February 2031
	1,250,000	£1.57	1/36/mth starting on 6th mth	23 September 2031
Matthew Shaw	294,048	£0.07	1/21/mth starting on 4th mth	25 July 2024
	537,037	£0.16	1/21/mth starting on 4th mth	16 July 2025
	250,000	£1.57	1/36/mth starting on 6th mth	23 September 2031
Colleen Sullivan	500,000	£1.57	1/36/mth starting on 6th mth	23 September 2031
Maria Perrella	500,000	£1.57	1/36/mth starting on 6th mth	23 September 2031
Sarah Gow	500,000	£1.57	1/36mth starting on 6th mth	23 September 2031

• 10.3 Except as disclosed in paragraphs 10.1 and 10.2, none of the Directors nor any person connected with them, within the meaning of sections 252 and 253 CA 2006, is interested in the share capital of the Company, or in any related financial products referenced to the Ordinary Shares.
• 10.4 Except as disclosed in paragraphs 10.1 and 10.2, there are no outstanding loans or options granted by the Company to any Director, nor has any guarantee been provided by the Company for their benefit.
• 10.5 The Company has entered into the following agreements and letters of appointment with Directors:
  • (a) a consultancy agreement with Vernon Blockchain Inc. effective 30 December 2019, as well as a side letter agreement with Mr. Wall dated as of 14 January 2020, pursuant to which Mr. Wall serves as its Chief Executive Officer (Wall Agreement). Under the terms of the Wall Agreement, Mr. Wall is entitled to receive a fee of \$270,720 pa (which will be increased to \$335,360 pa on Admission and to \$400,000 pa six months after Admission), and has the opportunity to earn a bonus as determined by the board of directors. Mr. Wall may join any registered pension scheme that the Company establish in the future. Additionally, the Wall Agreement entitles Mr. Wall to certain enumerated employee benefits. The Company does not at this time maintain or provide any such benefits to employees or consultants. Accordingly, the parties have agreed that Mr. Wall will receive a temporary taxable stipend of an amount equal to 10% of his monthly fee in lieu of the Company providing any employee benefits. Either party may terminate Mr. Wall's engagement by giving the other party not less than 52 weeks' written notice, provided that the Company may terminate the services of Mr. Wall at any time with immediate effect for certain reasons including misconduct, criminal offense, disability, Mr. Wall's bankruptcy, and the winding up of Vernon Blockchain Inc. The Wall Agreement

also contains restrictive covenants pursuant to which Mr. Wall has agreed to refrain from competing with the Company or soliciting any persons who could materially damage its interests if involved in a competing business, for a period of six months following his termination of services.

• (b) a consultancy agreement with Appleton Business Advisors Limited effective 4 September 2020, pursuant to which Mr. Appleton serves as its Principal Financial Officer (Appleton Agreement). The Appleton Agreement entitles Mr. Appleton to receive a fee of \$169,200 pa (which will increase to \$209,600 pa on Admission and to \$250,000 pa six months after Admission). Either party may terminate the Appleton Agreement by giving the other party not less than four weeks' written notice, provided that the Company may terminate the services of Mr. Appleton at any time with immediate effect for certain reasons including misconduct, criminal offense, disability, Mr. Appleton's bankruptcy, and the winding up of Appleton Business Advisors Limited. The Appleton Agreement also contains restrictive covenants pursuant to which Mr. Appleton has agreed to refrain from competing with the Company or soliciting any persons who could materially damage its interests if involved in a competing business, for a period of six months following his termination of employment.
• (c) a letter of appointment dated 7 September 2019 pursuant to which Matthew Shaw was appointed as a non-executive director of the Company for an annual fee of £36,532, payable monthly in arrears. Mr Shaw will be expected to devote at least four days a month to perform his duties to the Company. The appointment is for an initial term of three years and is terminable on three months' written notice on either side. No compensation is payable for loss of office and the appointment may be terminated immediately if, among other things, Mr Shaw is in material breach of the terms of the appointment.
• (d) a letter of appointment dated 29 July 2021 pursuant to which Colleen Sullivan was appointed as a non-executive director of the Company for an annual fee of US\$52,000, payable monthly in arrears. Ms Sullivan will be expected to devote at least two days a month to perform her duties to the Company. The appointment is for an initial term of three year and is terminable on three months' written notice on either side. No compensation is payable for loss of office and the appointment may be terminated immediately if, among other things, Ms Sullivan is in material breach of the terms of the appointment.
• (e) a letter of appointment dated 21 July 2021 pursuant to which Maria Perrella was appointed as a nonexecutive director of the Company for an annual fee of US\$52,000, payable monthly in arrears. Ms Perrella will be expected to devote at least three days a month to perform her duties to the Company. The appointment is for an initial term of three years and is terminable on three months' written notice on either side. No compensation is payable for loss of office and the appointment may be terminated immediately if, among other things, Ms Perrella is in material breach of the terms of the appointment.
• (f) a letter of appointment dated 21 July 2021 pursuant to which Sarah Gow was appointed as a nonexecutive director of the Company for an annual fee of US\$52,000, payable monthly in arrears. Ms Gow will be expected to devote at least four days a month to perform her duties to the Company. The appointment is for an initial term of three years and is terminable on three months' written notice on either side. No compensation is payable for loss of office and the appointment may be terminated immediately if, among other things, Ms Gow is in material breach of the terms of the appointment.
• 10.6 The aggregate remuneration paid and benefits in kind granted to the Directors for the period from 1 January 2021 to Admission, under the arrangements in force at the date of this document, amount to £276,676. It is estimated that the aggregate remuneration payable to the Directors from the date of Admission to 31 December 2021 under arrangements that are in force and that will come into effect on Admission will amount to £440,642.
• 10.7 Except as set out above, there are no liquidated damages or other compensation payable by the Company upon early termination of the contracts of the Directors. None of the Directors has any commission or profit sharing arrangements with the Company.
• 10.8 Except as provided for in paragraph 10.5 above, the total emoluments of the Directors will not be varied as a result of Admission.
• 10.9 Except as disclosed in this paragraph 10, there are no existing or proposed service contracts between the Company and any of the Directors which are not terminable on less than 12 months' notice, nor have any of their letters of appointment or service contracts been amended in the six months prior to the date of this document.
• 10.10 Except as disclosed in this paragraph 10, there are no pension, retirement or similar benefit established by the Company, nor are any such arrangements proposed.
• 10.11 In addition to their directorships of the Company, the Directors are or have been members of the administrative, management or supervisory bodies or partners of the following companies or partnerships (which, unless otherwise stated, are incorporated in the UK) within the five years prior to the publication of this document:

Director/Senior Manager	Current Appointments	Previous Appointments
Peter Wall	Cellular Goods plc Vernon Blockchain Inc. (Canada)	The Art Department (Canada) Hubud (Indonesia)
Alex Appleton	Appleton Business Advisors Limited	Hudson Sandler LLP Snappleton Holdings Limited Alexander Business Consulting LLP
Matthew Shaw	Blimp Technologies, Inc. (US) Blimp Homes, Inc. (US) POMA Enterprises Ltd (Canada) Protos Asset Management GmbH (Switzerland) DeFi Yield Technologies Inc. (Canada) Yolo Build Inc. (Canada) Dramato Holdings Ltd (Cyprus) MAPO Properties Ltd (Canada)	SteviaLife Sweeteners Ltd (Rwanda) First Class Ventures Ltd (Seychelles) Fullist Inc. (US) mCloud Technologies Corp. (US) Depfa Investment Bank (Cyprus) Industrial Knowledge Inc. (US)
Colleen Sullivan	CMT Digital Holdings LLC (US) Sullivan Wolf Kailus LLC (US) Chamber of Digital Commerce (US) Silvergate Capital Corporation and Power and Digital Infrastructure Acquisition Corp. (US)	iOptions Group LLC (US)
Maria Perrella	-	MDA (Canada) ATS Automation Tooling Systems Inc., (US) L-3 Canada and Spar Aerospace (Canada)
Sarah Gow	MyGiftClues Ltd	-

10.12 In 2008, Maria Perrella was appointed as President of Photowatt International S.A.S (PWF). On 8 November 2011, PWF was placed by a French bankruptcy court into a 'recovery' proceeding under the supervision of a court appointed trustee. On 27 February 2012, a new operator (being a subsidiary of EDF, the French utility company) was selected by the French bankruptcy court to purchase the assets of PWF. Control was assumed on 1 March 2012, and the entire workforce transferred.

• 10.13 Except as set out in paragraph 10.12, no Director has:
  • (a) had any convictions in relation to fraudulent offences or unspent convictions in relation to indictable offences;
  • (b) had a bankruptcy order made against him or entered into an individual voluntary arrangement;
  • (c) been a director of any company or been a member of the administrative, management or supervisory body of an issuer or a senior manager of an issuer which has been placed in receivership, compulsory liquidation, creditors' voluntary liquidation, administration, or company voluntary arrangement or which entered into any composition or arrangement with its creditors generally or any class of its creditors whilst he was acting in that capacity for that company or within the 12 months after he ceased to so act;
  • (d) been a partner in any partnership placed into compulsory liquidation, administration or partnership voluntary arrangement where such director was a partner at the time of or within the 12 months preceding such event;
  • (e) been subject to receivership in respect of any asset of such Director or of a partnership of which the Director was a partner at the time of or within 12 months preceding such event; or
  • (f) been subject to any official public criticisms by any statutory or regulatory authority (including designated professional bodies) nor has such Director been disqualified by a court from acting as a director of a company or from acting as a member of the administrative, management or supervisory bodies of an issuer or from acting in the management or conduct of the affairs of any issuer.
• 10.14 No Director has been interested in any transaction with the Company which was unusual in its nature or conditions or significant to the business of the Company during the current financial year which remains outstanding or unperformed.
• 10.15 In the case of those Directors who have roles as directors of companies other than the Company or are otherwise interested in other companies or businesses, although there are no current conflicts of interest, it is possible that the general duties under chapter 2 of part 10 CA 2006 and fiduciary duties owed by those Directors to companies or other businesses of which they are directors or otherwise interested in from time to time may give rise to conflicts of interest with the duties owed to the Company. Except as mentioned above and in paragraph 5 of Part III: Directors and Corporate Governance, there are no potential conflicts of interest between the duties owed by the Directors to the Company and their private duties or duties to third parties.
• 10.16 Except for the Directors, the Board does not believe that there are any other senior managers who are relevant in establishing that the Company has the appropriate expertise and experience for the management of the Company's business.

11. Share Option Schemes

11.1 The Company has adopted the Share Option Schemes. A summary of the rules of the schemes is set out below.

Grant of Options

• 11.2 Options may be granted by the Company (or other grantors with the consent of the Board).
• 11.3 Options may not be granted at any time when that grant would be prohibited by, or in breach of, the Market Abuse Regulation or any other law, regulation with the force of law or the Listing Rules.
• 11.4 No options may be granted after the tenth anniversary of the date the Share Option Schemes are adopted. Exercise Conditions
• 11.5 Grants may be made subject to exercise conditions.

11.6 The Board may vary or waive such exercise conditions, provided that if the performance conditions are varied then new conditions must not be more onerous than the original conditions.

Overall Grant Limits

11.7 The Company may not grant options if that grant would result in the total number of shares put under option in the last 10 years (together with any shares that have been issued in the last 10 years to fulfil options) exceeding 10% of the issued share capital of the Company. Shares granted pursuant to options that can no longer be exercised are excluded when calculated this limit.

Termination of Employment

• 11.8 If an option holder dies, his estate may exercise a proportion of his option for a period that cannot extend beyond the first anniversary of the death. The proportion capable of exercise is determined by the Board; however it cannot be less than the proportion already capable of exercise at the date of death but they Board has the discretion to specify a higher proportion.
• 11.9 If an option holder leaves employment for "good leaver" reasons (including, but not limited to, as a result of ill health, disability, redundancy or retirement), he can exercise a proportion of his option during the period of 90 days following the cessation of employment. That proportion cannot be less than the proportion already capable of exercise at the date employment ceases but the Board can specify a higher proportion. The Board also has the discretion to permit the option holder to retain his options, or a proportion of them, longer than 90 days.
• 11.10 If an option holder leaves employment for any other reason (a "bad leaver") then the option will lapse immediately. However the Board has power to allow the option holder to retain his option at its discretion.

Relationship with employment/consultancy contract

• 11.11 Options are not intended to form any contract of employment or consultancy and individuals who participate will not have any rights to damages for any loss, or potential loss of benefit, in the event of termination of office.
• 11.12 Benefits under the Share Option Schemes are not pensionable.

Takeovers and Liquidation

• 11.13 If the Board considers that a change of control is likely to occur, the Board can allow option holders to exercise all or a proportion of their options before the acquirer obtains control.
• 11.14 If a change of control occurs, then the option holders have 90 days to exercise their options in respect of the options capable of exercise at that point (or such higher proportion as the Board may, in its absolute discretion, determine). If they do not exercise their options in 90 days, they will lapse.
• 11.15 If an acquirer offers option holders an opportunity to exchange their options for new options over shares in the acquirer then options will stay in existence long enough to allow the option holders to accept the exchange, and will lapse if they are not exchanged.
• 11.16 If the Shareholders receive notice of a resolution for the voluntary winding up of the Company, any option holder may exercise the proportion of the option already capable of exercise when notice is received at any time before the resolution is passed, conditional upon the passing of that resolution, and if the option holder does not exercise the option, it shall lapse when the winding up begins.

Variation of Share Capital

11.17 If there is any variation of the share capital of the Company (e.g. a rights issue, consolidation, subdivision or reduction of capital) that affects the value of the options, the Board shall adjust the number and description of shares subject to each option or the exercise price, in a manner that the Board, in its reasonable opinion, considers fair and appropriate (provided that the total amount payable on the exercise of any option in full shall not be increased).

Administration and Amendment

• 11.18 The Share Option Schemes shall be administered by the Board.
• 11.19 The cost of establishing and operating the Share Option Schemes shall be borne by the Group in proportions determined by the Board.
• 11.20 The Board may amend the plan from time to time at its discretion however no amendment may apply to any option granted before an amendment is made if the proposed amendment materially adversely affects the interest of an option holder, except where the option holder consents to the application to his option of such an amendment.

12. Material Contracts

The following material contracts (not being contracts entered into in the ordinary course of business) have been entered into by the Company in the two year period prior to the date of this document or are other contracts that contain provisions under which the Company has an obligation or entitlement, which is material to the Company as at the date of this document.

12.1 Core Scientific, Inc.

On 29 October 2020, Argo Labs entered into a master services agreement (MSA) with Core Scientific, Inc. (Core), under which Core provides services including colocation, hosting, rack space, security, monitoring, maintenance, utilities, client equipment maintenance and repair, facility management, account management, network and data access, technical support and heat and thermal management services to Argo Labs in a data centre owned or operated by Core. Core invoice Argo Labs in advance for all applicable fees in relation to the data centre and services provided. Each order has the initial term set out in that order and thereafter, unless otherwise specified, automatically renews for any additional periods set out in that order or otherwise one year periods, unless terminated by Argo Labs on not less than 90 calendar days' notice. Either party may terminate an order upon written notice to the other party if the other party breaches the agreement or order and fails to cure that breach within 30 calendar days (or 5 days in relation to an unpaid balance). Either party may terminate the MSA upon written notice to the other party if there have been no orders for 12 consecutive months.

Argo Labs provided warranties to Core in relation to capacity, condition of the equipment and applicable law, together with other customary warranties. Argo Labs agreed to maintain specific insurance, such as PLI and general liability, at its own expense. Core's liability under the MSA is capped to one months' fee payable to Core pursuant to the applicable order. Argo Labs indemnified Core (and related parties) arising from liabilities related to death, personal injury, bodily injury or property damage caused by Argo Labs (or its customers or equipment), a breach of warranties, covenants or representations, fraud, bad faith, negligence or wilful or reckless conduct of or by Argo Labs.

12.2 Underwriting Agreement

On 22 September 2021, the Company entered into the Underwriting Agreement with Jefferies LLC and Barclays Capital Inc., as the representatives of the Underwriters and the joint book-running managers of the offering, under which the Company has agreed to sell to the Underwriters, and each of the Underwriters has agreed, severally and not jointly, to purchase from the Company, their proportion of the Firm ADSs.

The Underwriting Agreement provides that the obligations of the several Underwriters are subject to certain conditions precedent such as the receipt by the Underwriters of officers' certificates and legal opinions and approval of certain legal matters by their counsel. The Underwriting Agreement provides that the Underwriters will purchase all of the ADSs if any of them are purchased. If an underwriter defaults, the Underwriting Agreement will provide that the purchase commitments of the non-defaulting Underwriters may be increased or the Underwriting Agreement may be terminated. The Company has agreed to indemnify the Underwriters and certain of their controlling persons against certain liabilities, including liabilities under the Securities Act, and to contribute to payments that the Underwriters may be required to make in respect of those liabilities. The Underwriting Agreement provides that the Underwriters will indemnify, under certain conditions, the Company's board of directors and its officers against certain liabilities arising in connection with this offering.

12.3 Celsius Master Lease Agreement

In November 2020, Argo Labs entered into a lease agreement with Celsius Networks Lending LLC for the lease of Bitmain S19 mining machines and Antminer S19 Pro mining machines for approximately \$11.4 million, including interest. Under the Celsius lease agreement, Argo Labs has the option to purchase the leased machines at expiration for \$1.00 plus any other amount remaining due under the lease. Argo Labs will be deemed to have exercised this option to purchase unless Argo Labs notifies Celsius in writing of its election not to exercise the option at least 90 days prior to expiration. The Celsius lease agreement will expire on 31 December 2022, provided that if Argo Labs elects not to purchase the leased machines, Celsius has the option to extend the lease term for an additional three months. Argo Labs may terminate the lease agreement with notice upon payment of all amounts due under the agreement through the expiration date plus any applicable breakfunding charges. Celsius may terminate the agreement if Argo Labs fails to meet its payment obligations or comply with the terms of the agreement, fail to comply with any material term of or default under any loan or credit agreement, there is a judgment default, certain insolvency events occur or there is a material adverse change in its financial condition, business or operations. If any of these events occur, Celsius may also increase rent payments or demand the return of, repossess, sell or otherwise dispose of, the mining machines, or demand the payment of any amount remaining under the agreement plus an amount based on the present value of the remaining rent payments to be made under the agreement and the fair market value of the equipment on the expiration date. The obligations of Argo Labs were guaranteed by the Company.

12.4 DPN Agreement and Plan of Merger

In March 2021, the Company acquired DPN LLC (by way of a merger with the Company's wholly owned subsidiary, Argo Innovation Facilities (US) Inc.) pursuant to which the Company acquired 160 acres of land in western Texas, along with an option to purchase an adjacent 157 acre parcel. The consideration for the acquisition was an initial payment of approximately 3.5 million Ordinary Shares, valued at \$5 million. The Company also agreed to pay up to an additional approximately 8.8 million Ordinary Shares, valued at \$12.5 million, payable if certain contractual milestones related to the facility are fulfilled. If the Company does not have a sufficient number of Ordinary Shares authorized for issuance at the time a milestone payment is due, the former owners of DPN LLC have the right to require the Company to make the payment in U.S. dollars within ten business days of the written request.

12.5 GPU.One Share Purchase Agreement

In May 2021, Argo Labs purchased 9366-5230 Quebec Inc. and 9377-2556 Quebec Inc. from GPU.One Holding Inc. and GPU.One Enterprises Inc. for an aggregate purchase price of approximately \$10.7 million, including the assumption of existing bank facilities. Through this transaction, the Group acquired two cryptocurrency mining facilities located in Mirabel, QC, and Baie-Comeau, QC.

12.6 Registrar Agreement

The Company and the Registrar have entered into an agreement with the Registrar dated 17 January 2018 (Registrar Agreement), pursuant to which the Registrar has agreed to act as registrar to the Company and to provide transfer agency services and certain other administrative services to the Company in relation to its business and affairs. The Registrar is entitled to receive an annual fee for the provision of its services under the Registrar Agreement. The annual fee will be calculated on the basis of the number of holders of shares in the Company and the number of transfers of such shares.

The Registrar Agreement will continue for an initial period of three years and thereafter may be terminated upon the expiry of six months' written notice given by either party. In addition, the agreement may be terminated immediately if either party commits a material breach of the agreement which has not been remedied within 30 days of a notice requesting the same, or upon an insolvency event in respect of either party. The Company has agreed to indemnify the Registrar against, and hold it harmless from, any damages, losses, costs, claims or expenses incurred by the Registrar in connection with or arising out of the Registrar's performance of its obligations in accordance with the terms of the Registrar Agreement, save to the extent that the same arises from some act of fraud or wilful default on the part of the Registrar. The Registrar may delegate the carrying out of certain matters which the Registrar considers appropriate without giving prior written notice to the Company.

The Registrar Agreement is governed by English law.

12.7 Agreement with the Depositary

The Company, JPMorgan Chase Bank, N.A (JP Morgan) and all holders and beneficial owners of ADRs, have entered into an agreement dated 22 September 2021 (Deposit Agreement) pursuant to which JP Morgan has agreed to act as depositary of the Ordinary Shares and to issue ADRs representing ADSs. The Deposit Agreement governs, among other things, the deposit of Ordinary Shares, the creation of ADRs and ADSs, the withdrawal of the underlying Ordinary Shares and surrender of the ADRs, and the management of voting and distributions in relation to the Ordinary Shares held by JP Morgan. JP Morgan is entitled to charge and collect from holders of ADRs fees for the provision of its services, part of the proceeds of which will be reimbursed to the Company to cover the Company's expenses of establishing, operating and maintaining the ADR facility.

The Deposit Agreement will continue in force until such time as a replacement depositary is appointed, such replacement having been triggered by either the resignation of JP Morgan as depositary or written notice being served by the Company to terminate the Deposit Agreement.

The Company has agreed to indemnify JP Morgan against, and hold it harmless from, any loss, liability or expense (including reasonable fees and expenses of counsel) incurred by JP Morgan in connection with or arising out of its performance of its obligations in accordance with the terms of the Deposit Agreement, save to the extent that the same directly arises out of the negligence or wilful misconduct on the part of the Depositary or a custodian, or their respective directors, officers or affiliates.

The Deposit Agreement is governed by the internal laws of the State of New York, and incudes a waiver of the right to a jury trial.

12.8 Lock up agreements

The Directors and the Company's employees that own Ordinary Shares have agreed, subject to specified exceptions, not to directly or indirectly: (i) sell, offer, contract or grant any option to sell (including any short sale), pledge, transfer, establish an open "put equivalent position"; (ii) otherwise dispose of any shares of common stock, options or warrants to acquire ordinary shares or ADSs or securities exchangeable or exercisable for or convertible into ordinary shares or ADSs currently or hereafter owned either of record or beneficially; (iii) publicly announce an intention to do any of the foregoing for a period of 90 days after Admission without the prior written consent of the Underwriters. The Underwriters may, in their sole discretion and at any time or from time to time before the termination of the 90 day period release all or any portion of the securities subject to lock-up agreements.

12.9 Galaxy Term Loan

The agreements with Galaxy Digital LP described in paragraph 2 of Part V.

13. Founders

The founders of the Company were Jonathan Bixby and Mike Edwards both of 401 W Georgia St #700, Vancouver, BC V6B 5A1, Canada. Mr Bixby and Mr Edwards are serial entrepreneurs who seek out opportunities in highgrowth, novel sectors. While previously directors of the Company, neither Mr Bixby nor Mr Edwards have any ongoing day-to-day function within the Company.

14. Working capital

The Company is of the opinion that the working capital available to the Group, taking into account the Net Proceeds, is sufficient for the Group's present requirements, that is, for at least the next 12 months from the date of this document. If the Underwriting Agreement is terminated or otherwise fails to become unconditional, the Fundraising will not take place and no New Ordinary Shares will be admitted.

15. Litigation

There are no, and have not been, any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened so far as the Company and the Group is aware) in the last 12 months which may have, or have had in the recent past, significant effects on the Company or the Group's financial position or profitability.

16. Intellectual property

The Company is not dependent on any patents or licences, industrial, commercial or financial contracts, or new manufacturing processes, where such are of fundamental importance to the Company's business or profitability.

17. Premises

The Group owns premises in Mirabel, Quebec, Canada and Baie-Comeau, Quebec, Canada at which certain of its machines are housed. The Group has acquired 160 acres of land in western Texas, with an option to purchase an adjacent 157 acres of land, and access to up to 800 MW of electrical power. The Company uses a third party hosting provider to provide space for its machines. Details of the agreement governing this hosting arrangement are set out in paragraph 12.3 of this Part IX.

18. Employees

18.1 Between 1 January 2018 and 22 September 2021 (being the latest practicable date prior to the date of this document), the number of employees (including the directors) of the Group at the end of each of the financial years for which the financial statements were prepared was as follows:

		Financial years ended 31 December
	2018	2019	2020	to 22 September 2021
Employees	9	7	6	11

19. Related Party Transactions

• 19.1 The Company has been party to the following related party transactions for the period covered by the financial information incorporated into this document by reference up to 22 September 2021 (being the latest practicable date prior to the publication of this document).
• 19.2 Certain of these related party transactions relate to the following former directors during their time as directors of the Company:

Director	Appointed	Resigned
Jonathan Bixby	2 February 2018	16 May 2019
Mike Edwards	2 February 2018	27 January 2020
Timothy Le Druillenec	5 December 2017	25 June 2020

19.3 Certain of these related party transactions relate to a member of the management team, Inderpreet Hothi, the Company's Chief Technology Officer.

19.4 Founder Agreement

On 8 February 2018, the Company entered into an agreement with Durban Holdings, Inc., a company under the joint ownership and control of Jonathan Bixby and Mike Edwards, at the time each a director of the Company, August First Ventures, White Umbrella Consulting Inc., IronPort Blockchain Financial Inc., Second Wave Capital LP, Plum Capital, Adrian Beeston and Andrew Frangos, a director and shareholder in Cornhill Capital Limited, which was previously appointed as the Company's financial broker (together, the Founder Shareholders) pursuant to which the Company agreed to pay the Founder Shareholders a total amount of £95,000, allocated between the Founder Shareholders pro rata to their respective percentage shareholdings in the Company in consideration for their efforts to enable the Company to enter into (x) certain memoranda of understanding and (y) a media buying contract with Flatiron Collective, Inc.

19.5 Share Based Payment

In 2018, the Company issued shares with a total value of £35,000 at the time of issuance to Timothy Le Druillenec, who was a director of the Company at the time, in lieu of payment for professional services provided to the Company in excess of the services required by his directorship, including services in connection with the establishment of the Company, the facilitation of the Company's initial public offering process, managing related legal work and management of shareholder relationships.

19.6 Fixed Assets

In 2018, the Company paid £93,323 in respect of equipment bought for, and expenses incurred on behalf of, the Company by Vernon Blockchain Inc., of which Peter Wall is the sole shareholder and a director.

19.7 Advertising Services

In 2018, the Company paid £83,780 for advertising services to Stanley Park Ventures, of which Jonathan Bixby, at the time a director of the Company, was a director.

19.8 Rental Agreements

The Company rented office space in London, England from Dukemount Capital plc, of which Timothy Le Druillenec, at the time a director of the Company, was previously a director, for £4,620, £3,300 and £275 respectively in 2018, 2019 and 2020. The agreement has been terminated.

The Company rented office space in Quebec, Canada from Vernon Blockchain Inc., of which Peter Wall is the sole shareholder and a director, for £30,471, £9,314 and £20,876 in 2018, 2019 and 2020, respectively.

Each of these agreements was negotiated on an arm's length basis and the agreements do not contain long-term commitments.

19.9 Protos Asset Management

In 2019 and 2020, the Company obtained services related to crypto portfolio management from Protos Asset Management, a company founded by Matthew Shaw. The Company paid Protos Asset Management a monthly management fee based on a prescribed formula in the agreement, which amounted to \$5,000 per month. In addition, the Company paid Protos Asset Management a percentage performance fee equal to 20% of the increase in net asset value. In 2019, for the period in which Mr. Shaw was a director of the Company, the Company paid £83,553 in management fees and percentage performance fees. In 2020, the Company paid £22,715 in management fees and percentage performance fees. This service agreement was terminated in 2020.

In 2019, the Company entered into a short-term loan agreement with Protos Cryptocurrency Master Fund II, a fund managed by Protos Asset Management, providing for a loan to the Company with an aggregate principal amount of \$1 million and an interest rate of 2% per month. This loan was fully repaid in June 2020.

19.10 Agreements with Directors and Management

The Company has paid certain amounts to corporate entities connected with the directors of the Company, as set out below:

Entity / Person Connected / Reason for payment	Year ended 31 December
	2020 (£)	2019 (£)	2018 (£)
Possibilities Training Group Ltd in respect of the fees, including termination payments paid in lieu of notice, of Jonathan Bixby	Nil	£413,340	£208,612

MSE Management Inc. in respect of the fees, including termination payments paid in lieu of notice, of Mike Edwards	Nil	£343,555	£208,982
Blockchain Consulting in respect of fees of Inderpreet Hothi	Nil	£250,218	£134,706
POMA Enterprises Limited in respect of fees of Matthew Shaw	£36,532	£17,086	Nil
Vernon Blockchain in respect of fees of Peter Wall	£240,921	£250,218	Nil
Tenuous Holdings in respect of fees of Ian MacLeod	£164,983	Nil	Nil
Appleton Business Advisors Limited in respect of fees of Alex Appleton	£45,400	Nil	Nil

20. Trend Information

• 20.1 Since incorporation, the Company's activities have consisted in establishing and operating a large-scale cryptoasset mining business.
• 20.2 The most significant trends in production, sales and inventory, costs and selling prices since 31 December 2020 are set out in paragraph 2 of Part V of this document.

21. No significant change and narrative statement

• 21.1 At the date of this document, there has been no significant change in the financial position or performance of the Company since 30 June 2021, being the date to which the financial information on the Group (which is incorporated by reference) has been prepared (being the last financial period for which financial statements or interim financial statements have been published), except for the following matter, which the Directors consider has caused a significant change in the financial position of the Company and the Group: the taking of the New Galaxy Term Loan, as further described in paragraph 2 of Part V of this document.
• 21.2 Had the Fundraising occurred on 30 June 2021, the date to which the financial historical information has been prepared, then the Company's assets would have been increased by an amount equal to the Net Proceeds.

22. Mandatory bids and compulsory acquisition rules relating to ordinary shares

• 22.1 Other than as provided by the City Code and Chapter 28 CA 2006, there are no rules or provisions relating to mandatory bids and/or squeeze-out and sell-out rules that apply to the Ordinary Shares.
• 22.2 The City Code is issued and administered by the Takeover Panel.
• 22.3 The City Code applies to the Company and the Shareholders will be entitled to the protection afforded by the City Code.
• 22.4 There have been no public takeover bids for the Company's shares.

Mandatory bid provisions

22.5 Under Rule 9 of the City Code, when: (i) any person acquires, whether by a series of transactions over a period of time or not, an interest in shares which (taken together with shares in which persons in which he is already interested and in which persons acting in concert with him are interested) carry 30% or more of the voting rights of a company subject to the City Code; or (ii) any person, together with persons acting in concert with him, is interested in shares which in the aggregate carry not less than 30% but not more than 50% of the voting rights of such a company, and such person or any person acting in concert with him, acquires an interest in any other shares which increases the percentage of shares carrying voting rights in which he is interested, then, except with the consent of the Takeover Panel, that person, and any person acting in concert with him, must make a general offer in cash to the holders of any class of equity share capital whether voting or non-voting and also to the holders of any other class of transferable securities carrying voting rights to acquire the balance of the shares not held by him and his concert party.

22.6 Except where the Takeover Panel permits otherwise, an offer under Rule 9 of the City Code must be in cash and at the highest price paid within the 12 months prior to the announcement of the offer for any shares in the company by the person required to make the offer or any person acting in concert with him. Offers for different classes of equity share capital must be comparable; the Takeover Panel should be consulted in advance in such cases.

Squeeze-out

22.7 Under CA 2006, if a "takeover offer" (as defined in section 974 CA 2006) is made for the Ordinary Shares and the offeror were to acquire, or unconditionally contract to acquire, not less than 90% in value of the Ordinary Shares to which the offer relates and not less than 90% of the voting rights carried by the Ordinary Shares to which the offer relates, it could, within three months of the last day on which its takeover offer can be accepted, compulsorily acquire the remaining 10%. The offeror would do so by sending a notice to outstanding members telling them that it will compulsorily acquire their Ordinary Shares and then, six weeks later, it would execute a transfer of the outstanding Ordinary Shares in its favour and pay the consideration for the outstanding Ordinary Shares to the Company, which would hold the consideration on trust for outstanding members. The consideration offered to the minority shareholder whose shares are compulsorily acquired must, in general, be the same as the consideration that was available under the original offer unless a member can show that the offer value is unfair.

Sell-out

22.8 CA 2006 also gives minority members a right to be bought out in certain circumstances by an offeror who has made a takeover offer. If a takeover offer related to all the Ordinary Shares and, at any time before the end of the period within which the offer could be accepted, the offeror held or had agreed to acquire not less than 90% in value of the Ordinary Shares and not less than 90% of the voting rights carried by the Ordinary Shares, any holder of Ordinary Shares to which the offer related who had not accepted the offer could by a written communication to the offeror require it to acquire those Ordinary Shares. The offeror is required to give any member notice of its right to be bought out within one month of that right arising. The offeror may impose a time limit on the rights of minority members to be bought out, but that period cannot end less than three months after the end of the acceptance period or, if later, three months from the date on which notice is served on members notifying them of their sell-out rights. If a member exercises its rights, the offeror is entitled and bound to acquire those Ordinary Shares on the terms of the offer or on such other terms as may be agreed.

23. General

• 23.1 PKF Littlejohn LLP were appointed as the auditors of the Company on 24 January 2018. PKF Littlejohn LLP are registered to carry out audit work by the Institute of Chartered Accountants in England and Wales at the address of 1 Westferry Circus, Canary Wharf, London E14 4HD.
• 23.2 PKF Littlejohn LLP which has no material interest in the Company, has given and has not withdrawn its written consent to (1) the issue of this document with the inclusion of the references to its name in the form and context in which it appears and (2) the inclusion of its Accountant's Report on the Unaudited Pro Forma Statement of Net Assets, and has authorised the contents of those reports for the purposes of Rule 5.5.3R(2)(f) of the Prospectus Regulation Rules.
• 23.3 The total costs and expenses of or incidental to the Fundraising and Admission payable by the Company are expected to be approximately £9,439,963 (including irrevocable VAT).
• 23.4 The Company is cognisant of the energy usage associated with mining cryptocurrency. The Company's operations, have, where practicable, been arranged to rely on clean power and the Company has spent significant time developing its ESG programme, including developing its own Climate Action Plan, joining the Crypto Climate Accord and Bitcoin Mining Council, and developing (in conjunction with DMG Blockchain) Terra Pool, a bitcoin mining pool to be powered by clean energy. As a result of these programmes, and the choices made in developing the Company's operations, the Company has sought to reduce the carbon emissions and mitigate the environmental impact of its operations. However, the Directors are not aware of any environmental issues which may affect the Company's utilisation of its tangible fixed assets (if any).
• 23.5 The Company's accounting reference date is 31 December.
• 23.6 Since incorporation, the Company has not made up any financial statements or published any financial information save for the information incorporated by reference into this document.
• 23.7 The New Ordinary Shares will be issued and allotted under the laws of England and their currency will be pounds sterling.

24. Documents available for inspection

Copies of the following documents may be inspected at the offices of Fladgate LLP, 16 Great Queen Street, London WC2B 5DG during normal business hours of any weekday (Saturdays, Sundays and public holidays excepted) from the date of this document until a date one month following Admission:

• 24.1 the Articles;
• 24.2 the consent letter of PKF Littlejohn LLP;
• 24.3 this document;
• 24.4 the letters of appointment of Directors referred to above in paragraph 10.5 of this section; and
• 24.5 the material contracts referred to above in paragraph 12.

PART X DEFINITIONS

The following definitions apply throughout this document unless the context requires otherwise:

2018 Annual Report & Accounts	the annual report and accounts prepared by the Company for the financial year ended 31 December 2018.
2019 Annual Report & Accounts	the annual report and accounts prepared by the Company for the financial year ended 31 December 2019.
2020 Annual Report & Accounts	the annual report and accounts prepared by the Company for the financial year ended 31 December 2020.
2021 Interim Statement	unaudited consolidated interim financial statements of the Company for the six months ended 30 June 2021.
Admission	the effective admission of the Ordinary Shares to listing on the Official List and trading on the London Stock Exchange's main market for listed securities.
American Depositary Receipt or ADR	the American Depositary Receipts each referencing one ADS.
American Depositary Shares or ADS	the American Depositary Shares each referencing ten Ordinary Shares.
Argo Labs	Argo Innovation Labs, Inc., a subsidiary of the Company.
Articles	the articles of association of the Company.
Board or Directors	the directors of the Company whose names are set out on page 58 of this document.
City Code	the City Code on Takeovers and Mergers published by the Takeover Panel.
CA 2006	the Companies Act 2006.
Company or Argo	Argo Blockchain plc, incorporated in England and Wales with registered number 11097258.
CREST	the paperless share settlement system and system for the holding and transfer of shares in uncertified form in respect of which Euroclear UK & Ireland Limited is the Operator (as defined in the CREST Regulations).
CREST Regulations	the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755), as amended.
Disclosure and Transparency Rules	the disclosure guidance and transparency rules of the FCA.
EBITDA	earnings before interest taxation depreciation and amortisation.

Enlarged Share Capital	the issued ordinary share capital of the Company on Admission and immediately following completion of the Fundraising, comprising the Existing Ordinary Shares and the New Ordinary Shares.
European Economic Area or EEA	territories comprising the European Union together with Norway, Iceland and Liechtenstein.
Existing Ordinary Shares	the 381,832,335 Ordinary Shares in issue at the date of this document.
FCA or Financial Conduct Authority	the Financial Conduct Authority of the United Kingdom Authority. acting in its capacity as the competent authority for the purposes of Part VI of FSMA in the exercise of its functions in respect of, among other things, the admission to the Official List.
Firm ADSs	the number of ADSs that the Underwriters agree to subscribe for in the Underwriting Agreement, as announced by the Company on or around 22 September 2021.
FRC Corporate Governance Code	the Corporate Governance Code, published by the Financial Reporting Council.
FSMA	the Financial Services and Markets Act 2000.
Fundraising	the proposed conditional issue of New Ordinary Shares by or on behalf of the Company.
HMRC	HM Revenue & Customs.
Listing Rules	the Listing Rules of the FCA.
London Stock Exchange	London Stock Exchange plc.
Market Abuse Regulation	Regulation (EU) no 596/2014 of the European Parliament and of the Council of 16 April 2014 on Market Abuse.
MW	one megawatt, equal to one million watts.
Net Proceeds	the funds received by the Company under the Fundraising less any expenses paid or payable in connection with Admission and the Fundraising.
New Ordinary Shares	75,000,000 new Ordinary Shares which are proposed to be issued pursuant to the Fundraising, together with a further 11,250,000 new Ordinary Shares if the Over-allotment Option is exercised.
Official List	the Official List maintained by the FCA.
Options	options granted under the Share Option Schemes, details of which are set out in paragraph 5.14 of Part IX.
Optional ADSs	up to 1,125,000 ADSs.

Ordinary Shares	ordinary shares of £0.001 each in the capital of the Company, including, where the context requires, the New Ordinary Shares.
Over-allotment Option	the option of the Underwriters to purchase the Optional ADSs.
Overseas Shareholders	holders of Ordinary Shares who have registered addresses in, or who are resident or ordinarily resident in, or citizens of, or which are corporations, partnerships or other entities created or organised under the laws of countries other than the UK or persons who are nominees or custodians, trustees or guardians for citizens, residents in or nationals of, countries other than the UK which may be affected by the laws or regulatory requirements of the relevant jurisdictions.
Premium Listing	a Premium Listing on the Official List under Chapter 6 of the Listing Rules.
Pro Forma Financial Information	the unaudited pro forma statement of net assets of the Company as set out in Part VIII(A): Unaudited Pro Forma Statement of Net Assets.
Prospectus Regulation or PR Regulation	the Regulation of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market (no. 2017/1129), which forms part of domestic law pursuant to the European Union (Withdrawal) Act 2018).
Prospectus Regulation Rules	the Prospectus Regulation Rules of the FCA.
QCA Corporate Governance Code	the QCA Corporate Governance Code 2018, published by the Quoted Companies Alliance.
Registrar	Computershare Investor Services PLC of The Pavilions, Bridgwater Road, Bristol BS13 8AE.
Regulation S	Regulation S promulgated under the Securities Act.
Regulated Information Service or RIS	one of the regulated information services authorised by the RIS or FCA to receive, process and disseminate regulator information in respect of listed companies.
Reverse Takeover	a transaction defined as a reverse takeover in Listing Rule 5.6.4R.
Securities Act	the United States Securities Act of 1933, as amended.
Shareholders	holders of Ordinary Shares.
Share Option Schemes	the schemes governing the issue of options to a) directors and employees of the Company and the Group and b) non-executive directors and consultants to the Company and the Group, as described in paragraph 11 of Part IX.

Standard Listing	a standard listing on the Official List under Chapter 14 of the Listing Rules.
subsidiary	has the meaning given to it by section 1159 CA 2006.
Takeover Panel	the Panel on Takeovers and Mergers.
UK or United Kingdom	the United Kingdom of Great Britain and Northern Ireland.
Underwriters	Jefferies LLC and Barclays Capital, Inc, as representatives of several underwriters.
Underwriting Agreement	the agreement entered into between the Company and the Underwriters, as described in paragraph 12.2 of Part IX.
United States, US or USA	the United States of America, its territories and possessions.
Warrants	warrants to subscribe for Ordinary Shares, details of which are set out in paragraph 5.13 of Part IX.

PART XI GLOSSARY

Throughout this prospectus, the Company use a number of industry terms and concepts which are defined as follows:

application-specific integrated circuits or ASICs	computer microchips designed for a particular use, in this case, mining cryptocurrency. ASICs are considered far superior in terms of performance and efficiency to the central processing units and graphics processing units found inside personal computers.
Bitcoin	the first implementation of cryptocurrency, a form of digital money that uses blockchain technology, initially introduced in a white paper titled Bitcoin: A Peer-to-Peer Electronic Cash System by Satoshi Nakamoto.
Bitcoin Equivalent	the Company's method of reflecting the Company's digital assets is presented in units of Bitcoin. When the Company reference Bitcoin Equivalent the Company hold, the conversion rate to Bitcoin is based on the price quoted for such cryptocurrency compared to Bitcoin on CoinTracker.io on the referenced date. When the Company reference Bitcoin Equivalent the Company mine, the conversion rate to Bitcoin is based on the price quoted for such cryptocurrency compared to Bitcoin on CoinGecko.com at 11:59 UTC on the date it was mined.
block	synonymous with digital pages in a ledger. Blocks are added to an existing blockchain as transactions occur on the network. Miners are rewarded for "mining" a new block.
blockchain	a cryptographically secure digital ledger that maintains a record of all transactions that occur on the network and follows a consensus protocol for confirming new blocks to be added to the blockchain.
CBDC	central bank digital currency, a form of government-backed stablecoin.
cold storage	the storage of private keys in any fashion that is disconnected from the internet. Common cold storage examples include offline computers, USB drives, or paper records.
consensus	the protocol that allows a blockchain network to secure by governing how transactions are processed and new blocks are added to the blockchain.
cryptocurrency	digital assets that are designed to work as a medium of exchange, unit of account, and/or store of value.
digital asset	a broad term for anything that can be stored and transmitted electronically, and has associated ownership or use rights. As used in this prospectus, the term "digital assets" refers to assets that are created and maintained with software (code), and exist as data on a blockchain network.

digital asset ecosystem	the broad ecosystem of individuals, organizations, platforms, networks and other elements that use and support the use of digital assets and related technologies, across any number of industries and use cases.
DeFi	short for Decentralized Finance. Peer-to-peer software-based network of protocols that can be used to facilitate traditional financial services like borrowing, lending, trading derivatives, insurance, and more through smart contracts.
Ethereum	Ethereum is a peer-to-peer blockchain network that was originally described in a 2013 white paper by Vitalik Buterin, a programmer involved with Bitcoin. The Ethereum network allows people to exchange digital assets, called Ether (ETH), which can be used to pay for goods and services, including computational power on the Ethereum network. Ethereum also allows users to write and implement smart contracts that are used to create digital assets other than ETH on the Ethereum network, move digital assets in accordance with conditional instructions and create markets, among other things. Smart contract operations are executed on the Ethereum network in exchange for payment of ETH. Ethereum has recently been popularly used for DeFi applications.
fork	a fundamental change to the software underlying a blockchain which results in two different blockchains: the original version and the new version. In some instances, the fork results in the creation of a new digital asset.
hash	a function that takes an input, and then outputs an alphanumeric string known as the "hash value." Each block in a blockchain contains the hash value that validated the transaction before it followed by its own hash value. Hashes are used in confirming transactions on a blockchain.
hash rate	a measure of the computing power in use on a blockchain network.
hot wallet	a wallet that is connected to the internet, enabling it to broadcast transactions to a blockchain network.
miner	individuals or entities who operate a computer or group of computers that add new transactions to blocks, and verify blocks created by other miners. Miners collect transaction fees and are rewarded with new digital assets for their services.
mining	the process by which new blocks are created, and thus new transactions are added to the blockchain.
mining difficulty	in a proof-of-work network, difficulty is the measure of how difficult it is to mine a new block by solving the hashing algorithm. On the Bitcoin network, the network programmatically adjusts the difficulty every 2,016 blocks so that the average time it takes to add a new block remains approximately 10 minutes.

mining machines	any ASIC- or GPU-based machines that are mining cryptocurrency.
mining pools	mining pools are groups of miners that combine their computing resources over a network to increase the probability they will solve the next block more quickly than any other miner (or other mining pool).
network	the collection of all miners that use computing power to maintain the ledger and add new blocks to the blockchain. Most networks are decentralized, reducing the risk of a single point of failure.
privacy coin	an anonymity-enhanced cryptocurrency.
protocol	a type of algorithm or software that governs how a blockchain network operates.
proof-of-work	a protocol for establishing consensus across a system that ties mining capability to computational power. Hashing a block, which is in itself an easy computational process, now requires each miner to solve for a set, difficult variable. In effect, the process of hashing each block becomes a competition. This addition of solving for a target increases the difficulty of successfully hashing each block. For each hashed block, the overall process of hashing will have taken some time and computational effort.
proof-of-stake	an alternative consensus protocol, in which a "validator" uses their own digital assets to validate transactions or blocks. Validators "stake" their digital assets on whichever transactions they choose to validate. If a validator validates a block (group of transactions) correctly, it will receive a reward. Typically, if a validator verifies an incorrect transaction, it will lose the digital assets that it staked. Proof-of-stake generally requires a negligible amount of computing power compared to proof-of-work.
public key or private key	each public address on a blockchain network has a corresponding public key and private key that are cryptographically generated. A private key allows the recipient to access any digital assets belonging to the address, similar to a bank account password. A public key helps validate transactions that are broadcasted to and from the address. Addresses are shortened versions of public keys, which are derived from private keys.
smart contract	blockchain-based software that executes automatically upon the occurrence of defined conditions and can digitally facilitate or enforce a rules-based agreement or terms between transacting parties.
stablecoin	digital assets designed to minimize price volatility by tracking the price of an underlying asset such as fiat money or an exchange traded commodity (such as precious metals or industrial metals). Stablecoins may attempt to maintain a stable value by being backed by physical reserves of the underlying asset, or may rely on other methods, such as algorithmically controlled supply.

wallet	a place to store public and private keys for digital assets. Wallets are typically software, hardware, or paper-based.
Zcash	a cryptocurrency launched on October 28, 2016 by a privately held company known today as the Electric Coin Company, led by founder and CEO Zooko Wilcox

PART XII INFORMATION INCORPORATED BY REFERENCE

The following documentation, which was sent to Shareholders at the relevant time and/or is available as described below, contains information relevant to the Fundraising:

1. The 2020, 2019 and 2018 Annual Report and Accounts

These contain the audited consolidated financial statements of Company for the financial years ended 31 December 2020, 2019 and 2018, prepared in accordance with IFRS, together with audit reports in respect of each such year.

2. Other

The table below sets out the various sections of the documents referred to above which are incorporated by reference into this document, so as to provide the information required pursuant to Annex 1 and Annex 11 to the Prospectus Regulation Rules and to ensure that Shareholders and others are aware of all information which, according to the particular nature of the Company and the New Ordinary Shares is necessary to enable Shareholders and others to make an informed assessment of the assets and liabilities, financial position, profit and losses and prospects of the Company and of the Group and of the rights attaching to the New Ordinary Shares:

Document	Information incorporated by reference	Page numbers in document
2020 Annual Report	Independent Auditors' Report	25-30
& Accounts	Strategic Report	8-12
	Group Statement of Comprehensive Income	31
	Group Statement of Financial Position	32
	Group Statement of Changes in Equity	34
	Group Statement of Cash Flows	36
	Notes to the Financial Statements	38-61
2019 Annual Report	Independent Auditors' Report	22-25
& Accounts	Strategic Report	7-10
	Group Statement of Comprehensive Income	27
	Group Statement of Financial Position	28
	Group Statement of Changes in Equity	30
	Group Statement of Cash Flows	32
	Notes to the Financial Statements	34-52
2018 Annual Report	Independent Auditors' Report	16-19
& Accounts	Strategic Report	4-5
	Group Statement of Comprehensive Income	20
	Group Statement of Financial Position	21
	Group Statement of Changes in Equity	23
	Group Statement of Cash Flows	25
	Notes to the Financial Statements	27-49
2021 Interim	Interim Management Report	2
Statement	Outlook	2-3
	Condensed Consolidated Statement of Comprehensive Income	3-4
	Condensed Consolidated Statement of Financial Position	4
	Condensed Consolidated Statement of Changes in Equity	4-5
	Condensed Consolidated Statement of Cash Flows	5-6
	Notes to the Condensed Consolidated Financial Statements	6-12

Parts of the documents from which the information incorporated by reference have been incorporated are not set out above because they are either not relevant or are covered elsewhere in this document. No part of the 2021 Interim Statement, 2020 Annual Report and Accounts, the 2019 Annual Report and Accounts and the 2018 Annual Report and Accounts is incorporated herein expect as expressly stated above. The 2021 Interim Statement, 2020 Annual Report and Accounts, the 2019 Annual Report and Accounts and the 2018 Annual Report and Accounts are available for inspection in accordance with paragraph 24 of Part IX of this document. These documents are also available on the Company's website at www.argoblockchain.com

Where the information incorporated by reference makes reference to other documents, such other documents are not incorporated into, and do not form part of, this document.