UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 13)*
| Bitfarms
Ltd. |
| (Name
of Issuer) |
| |
| Common
Shares |
| (Title
of Class of Securities) |
| |
| 09173B107 |
| (CUSIP
Number) |
Riot Platforms, Inc.
3855
Ambrosia Street, Suite 301
Castle Rock, CO 80109
Telephone: (303)
794-2000 |
Attention to:
William Jackman
Executive Vice
President, General Counsel and Secretary |
(Name,
Address and Telephone Number of Person
Authorized to Receive Notices and Communications) |
| |
| September 23,
2024 |
| (Date
of Event Which Requires Filing of This Statement) |
If the filing person has previously filed a statement
on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§
240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ¨
* The remainder of this cover page shall be filled
out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent
amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of
this cover page shall not be deemed to be “filed” for the purpose of section 18 of the Securities Exchange Act of 1934 (“Act”)
or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
| CUSIP No. 09173B107 |
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SCHEDULE 13D
| 1 |
NAME
OF REPORTING PERSON
Riot Platforms,
Inc. |
| 2 |
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP |
(a)
¨
(b)
¨ |
| 3 |
SEC
USE ONLY
|
| 4 |
SOURCE
OF FUNDS
WC |
| 5 |
CHECK BOX IF DISCLOSURE OF
LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
|
¨ |
| 6 |
CITIZENSHIP
OR PLACE OF ORGANIZATION
Nevada |
NUMBER
OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH |
7 |
SOLE
VOTING POWER
90,110,912 |
| 8 |
SHARED
VOTING POWER
0 |
| 9 |
SOLE
DISPOSITIVE POWER
90,110,912 |
| 10 |
SHARED
DISPOSITIVE POWER
0 |
| 11 |
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
90,110,912 |
| 12 |
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES:
|
¨ |
| 13 |
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.9% |
| 14 |
TYPE
OF REPORTING PERSON
CO |
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SCHEDULE 13D
Item 1. Security and Issuer.
This Amendment No. 13 to Schedule 13D (“Amendment
No. 13”) relates to the Schedule 13D filed on May 28, 2024 (as amended by Amendment No. 1, dated May 29,
2024, Amendment No. 2, dated June 4, 2024, Amendment No. 3 dated June 5, 2024, Amendment No. 4 dated June 12,
2024, Amendment No. 5 dated June 13, 2024, Amendment No. 6 dated June 24, 2024, Amendment No. 7 dated July 31,
2024, Amendment No. 8 dated August 5, 2024, Amendment No. 9 dated August 9, 2024, Amendment No. 10 dated August 14,
2024, Amendment No. 11 dated August 21, 2024 and Amendment No. 12 dated September 5, 2024, the “Schedule
13D”) by Riot Platforms, Inc., a Nevada corporation (the “Reporting Person”), relating to the Common
Shares, no par value per share (the “Common Shares”), of Bitfarms Ltd., a corporation incorporated under the Canada
Business Corporations Act and continued under the Business Corporations Act (Ontario) (the “Company”), whose principal
executive offices are located at 110 Yonge Street, Suite 1601, Toronto, Ontario, M5C 1T4.
Except as specifically amended by this Amendment
No. 13, the Schedule 13D is unchanged.
Item 4. Purpose of Transaction.
Item 4 of the Schedule 13D is hereby amended
and supplemented by adding the following information:
On
September 23, 2024, the Reporting Person and the Company entered into a settlement agreement (the “Agreement”),
pursuant to which (i) Andrés Finkielsztain resigned from the board of directors of the Company (the “Board”);
(ii) Amy Freedman was appointed to the Board, the Governance and Nominating Committee and the Compensation Committee of the Board,
and will be appointed to each “special committee” of independent directors of the Board that is currently constituted
or may be constituted from time to time provided that she is independent for purposes of the mandate of the “special committee”; and (iii) the Reporting Person has withdrawn its
requisition for a special meeting of shareholders of the Company.
The Agreement
provides that the Company will hold a special meeting of shareholders no later than November 20, 2024, at which shareholders of
the Company will be asked to approve an expansion of the Board to six members, to elect a new independent director nominated by the Board, and to ratify the shareholder rights plan adopted by the Board on July 24, 2024. The Reporting Person
has agreed to vote in favor of these matters at the special meeting.
Under
the terms of the Agreement, the Company has agreed that if, prior to the expiration of the Term (as defined below), Ms. Freedman
ceases to serve as a director of the Company, the Reporting Person shall be entitled to nominate an individual to replace Ms. Freedman
as a director, provided such individual, among other things, satisfies applicable corporate, securities and stock exchange laws and rules,
and is “independent” under such laws and rules. The Reporting Person also agreed that if, prior to the expiration
of the Term, the directors/nominees proposed by the Board to be elected include Ms. Freedman or any replacement nominated by the
Reporting Person, the Reporting Person will vote all Common Shares it beneficially owns in favor of the election of each member of the
Board. As used in the Agreement, “Term” means the period from the date of the Agreement
until the earlier of (i) June 1, 2026; and (ii) the business day following the Company’s 2026 annual meeting of shareholders;
provided that the Agreement shall not be enforceable if at any time during the Term the Reporting Person ceases to beneficially own at least 7.5% of the issued and outstanding Common Shares.
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SCHEDULE 13D
The Company
has also agreed in the Agreement to provide the Reporting Person with certain rights to purchase Common Shares, provided that the Reporting
Person holds 15% or more of the outstanding Common Shares, subject to certain exceptions.
Under
the terms of the Agreement, the Reporting Person has agreed to standstill provisions that will be in effect until the expiration of the
Term, unless earlier terminated, which restrict the Reporting Person from, among other things, (i) acquiring or proposing to acquire
20% or more of the outstanding Common Shares other than for the sole purpose of, or in connection with making, a take-over bid that is
not exempt from the provisions of National Instrument 62-104 – Take-over Bids and Issuer Bids pursuant to Part 4 thereof;
(ii) voting its Common Shares in a manner inconsistent with the Agreement; (iii) taking certain actions to remove any director
of the Company; (iv) acquiring or disposing of derivatives related to the Company or the Common Shares, other than for the purpose of reducing the Reporting
Person’s economic or voting exposure to the Common Shares; and (v) instituting litigation against the Company or its current or former affiliates, with certain exceptions.
Nothing in the standstill provisions prohibits the Reporting Person from providing its views privately to the Company, including
making any confidential proposal to the Board that would not reasonably be expected to be required to be made public by either the Reporting
Person or the Company. The standstill provisions will automatically terminate if: (i) the
Company is in material breach of the Agreement and such breach is not cured as specified in the Agreement; (ii) the Company enters
into an agreement with another person or group pursuant to which such other person or group would acquire at least 50% of the
Common Shares or assets having an aggregate value exceeding 50% of the aggregate enterprise value of the Company; or (iii) a third
party commences a take-over bid to acquire more than 50% of the Common Shares and the Board does not recommend that the Company’s shareholders
reject such take-over bid.
The Agreement
also includes a customary mutual non-disparagement provision.
The foregoing
summary of the Agreement is not intended to be complete and is qualified in its entirety by reference to the full text of the Agreement,
which is filed as Exhibit 1 hereto and is incorporated herein by reference.
On September 23,
2024, the Reporting Person and the Company also issued a joint press release (the “Joint Press Release”) announcing
that they had entered into the Agreement. The foregoing summary of the Joint Press Release is not intended to be complete and is qualified
in its entirety by reference to the full text of the Joint Press Release, which is filed as Exhibit 2 hereto and is incorporated
herein by reference.
In addition,
on September 23, 2024, the Reporting Person issued a separate press release in accordance with applicable Canadian securities laws
announcing that it had entered into the Agreement with the Company. The foregoing summary of such press release is not intended to be
complete and is qualified in its entirety by reference to the full text of the press release, which is filed as Exhibit 3
hereto and is incorporated herein by reference.
Item 5. Interest in Securities of the Issuer.
Item 5(a) and
(b) of the Schedule 13D is hereby amended and restated to read in full as follows:
(a) and
(b) The aggregate number and percentage of the Common Shares that are beneficially owned by the Reporting Person and as to which
the Reporting Person has sole voting power, shared voting power, sole dispositive power and shared dispositive power are set forth on
the cover page of this Statement, and such information is incorporated herein by reference. The percentage used herein is calculated
based on an aggregate of 452,860,321 Common Shares outstanding, based on information provided by the Company.
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SCHEDULE 13D
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer.
As described
in Item 4, the Reporting Person and the Company have entered into the Agreement, a copy of which is filed as Exhibit 1 hereto.
The Agreement and the description thereof set forth in Item 4 are incorporated herein by reference.
Item 7. Material to Be Filed as Exhibits.
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SCHEDULE 13D
SIGNATURE
After reasonable inquiry
and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this Statement is true, complete
and correct.
Dated: September 23, 2024
| |
Riot Platforms, Inc. |
| |
|
| |
By: |
/s/ Colin Yee |
| |
|
Name: |
Colin Yee |
| |
|
Title: |
Chief Financial Officer |
Exhibit 1
SETTLEMENT AGREEMENT
This settlement agreement is made as of September 23,
2024 (the “Agreement”) by and between Bitfarms Ltd. (“Bitfarms” or the “Company”)
and Riot Platforms, Inc. (“Riot”), who have each agreed to be bound by this Agreement (together, the “Parties”
and each a “Party”).
WHEREAS
Riot has requisitioned a special meeting of holders of common shares (the “Shareholders”) in the capital of the Company
(the “Common Shares”) for the purpose of replacing certain directors of the Company (the “Requisition”)
with its nominees, and the Company has in response thereto scheduled a special meeting of the Shareholders to be held on November 6,
2024 (the “Requisitioned Meeting”);
AND
WHEREAS the Parties wish to fully resolve the Requisition;
AND
WHEREAS it is agreed that Riot, as a significant Shareholder, should be entitled to nominate a properly qualified individual
to be elected to the board of directors of Bitfarms (the “Board”), subject to the terms and conditions of this Agreement.
NOW
THEREFORE THIS AGREEMENT WITNESSES that in consideration of the respective covenants and agreements of the Parties herein contained
and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged by each party), the Parties
hereto agree as follows:
| 1. | AUTHORITY; REPRESENTATIONS AND WARRANTIES |
1.1 Riot
represents and warrants that it owns, has the exclusive right to exercise control or direction over, or has the exclusive right to direct
to vote 90,110,912 Common Shares, and that it does not currently have any interest in any other securities of the Company, including any
swaps or hedging transactions or other derivative arrangements designed to produce economic benefits and risks that correspond to the
ownership of Common Shares, whether or not any of the foregoing would give rise to beneficial ownership, and whether or not to be settled
by delivery of Common Shares, payment of cash or by other consideration, and without regard to any short position under any such contract
or arrangement; and, for purposes of this Agreement, “Subject Securities” means Common Shares and any other securities
of the Company entitled to vote for the election of directors of the Company from time to time owned legally or beneficially, either directly
or indirectly, by Riot or over which Riot, directly or indirectly, exercises control or direction in respect of voting or over which it
otherwise has the authority to vote. For purposes of this Agreement, Riot shall be considered to have beneficial ownership of, or beneficially
own, a security if it is the beneficial owner of a security convertible into the said security or has a right or obligation permitting
or requiring the person, whether or not on conditions, to acquire beneficial ownership of the said security by a single transaction or
a series of linked transactions. For purposes of this Agreement, “person” shall be interpreted broadly to include,
among others, any individual, general or limited partnership, corporation, limited liability or unlimited liability company, joint venture,
estate, trust, group, association or other entity of any kind or structure.
1.2 Riot
has not (directly or indirectly) previously granted or agreed to grant to any person any power of attorney or attorney in fact, proxy
or other right to vote in respect of any of the Subject Securities or entered into with any person any voting trust, vote pooling or other
agreement with respect to the right to vote, call meetings of the Shareholders or give consents or approvals of any kind with respect
to the Subject Securities. Neither Riot nor any of its affiliates and associates has formed or become part of, or has any present intent
to form or become part of, a “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act (as defined
below)) with any other person in relation to the Company or the Common Shares.
1.3 Riot
has not, and it will not, directly or indirectly, compensate or agree to compensate the Riot Nominee (as defined below) for his or her
service as a director of the Company with any cash, cryptocurrency or other form of digital assets, securities (including, without limitation,
any rights or options convertible into or exercisable for or exchangeable into securities or any profit-sharing agreement or arrangement)
or any other form of compensation.
1.4 The
Company represents and warrants to Riot that Andrés Finkielsztain has tendered his resignation from the Board on or prior to the
date hereof and that the Board has accepted such resignation, such that a vacancy on the Board currently exists.
1.5 Each
Party represents and warrants to the other Party (and acknowledges that the other Party is relying upon such representations and warranties)
that:
| (a) | this Agreement has been duly executed and delivered by it and, assuming the due execution and delivery of this Agreement by the other
Party, this Agreement constitutes a legal, valid and binding obligation of it, enforceable in accordance with its terms, subject to laws
of general application and bankruptcy, insolvency and other similar laws affecting creditors’ rights generally and general principles
of equity; |
| (b) | it has the necessary legal capacity and authority to enter into this Agreement and to carry out its obligations hereunder; |
| (c) | neither the execution and delivery of this Agreement by it nor the performance by it of its obligations hereunder will: |
| (i) | result in any breach of, or constitute a default (or an event which with notice or lapse of time or both would become a default) under,
any of the terms, conditions or provisions of any agreement to which it is a party or by which it (or, in the case of Riot, the Subject
Securities) may be bound, which breach or default could reasonably be expected to have a material adverse effect on its ability to comply
with its obligations under this Agreement; or |
| (ii) | violate or conflict with (A) its organizational documents or (B) any judgment, order, notice, decree, statute, law, ordinance,
rule or regulation applicable to it or any of its properties or assets, including, in the case of Riot, the Subject Securities. |
| 2.1 | (a) The Board shall immediately appoint Amy Freedman
(the “Riot Nominee”) to the Board. |
| (b) | The Riot Nominee shall be appointed to (i) the Governance and Nominating Committee of the Board, (ii) the Compensation Committee
of the Board and (iii) each “special committee” of independent directors of the Board that is currently constituted or
may be constituted from time to time provided that the Riot Nominee shall be independent for purposes of the mandate of the “special
committee”. For the avoidance of doubt, the Board has determined that Amy Freedman is independent of both Bitfarms and Riot. |
| (c) | Promptly following the appointment of the Riot Nominee,
the Board shall, as promptly as reasonably practicable (and in any event prior to the mailing of the Company’s circular for the
Requisitioned Meeting), nominate a new member to the Board (the “New Director”) for election to the Board at
the Requisitioned Meeting, which nomination shall have been approved by the Board. |
2.2 Subject
to Section 2.1 and Section 3, the Company shall take any and all commercially reasonable steps so that, following the conclusion
of the Requisitioned Meeting and during the Term (as defined below), the Board shall be comprised of, and only of, Ben Gagnon, Edith Hofmeister,
Brian Howlett, Fanny Philip, the Riot Nominee and the New Director (the “New Board”). In this regard, subject
to Section 3, in respect of any meeting of Shareholders at which directors are to be elected, the Company shall take all actions
necessary and advisable to ensure that (a) proxies are solicited by or on behalf of the Company in favour of the election of the
members of the New Board and (b) the members of the New Board are endorsed and recommended in the applicable management information
circular and other proxy solicitation materials provided by or on behalf of the Company to Shareholders.
| 3. | REQUISITIONED MEETING AND ELECTION OF DIRECTORS |
3.1 The
Requisitioned Meeting shall be held on November 6, 2024 (or such later date as agreed to by the Board but in any event not later
than November 20, 2024) and the record date for such meeting shall continue to be September 26, 2024, unless otherwise mutually
agreed in writing by Riot and Bitfarms. Nevertheless, Riot agrees that automatically and without any additional action by the Company,
upon the execution of this Agreement, it will be deemed to have irrevocably withdrawn the Requisition and its various requests for Shareholder
and securityholder lists and non-objecting beneficial owner lists.
3.2 The
Requisitioned Meeting shall be called solely for the purpose of considering and voting on resolutions approving the following matters
(collectively, the “Resolutions”):
| (a) | setting the number of directors at six (6); |
| (b) | electing the New Director to the Board; and |
| (c) | ratifying and approving the Company’s shareholder rights plan adopted by the Company on July 24, 2024 (the “Rights
Plan”). |
3.3 At
the Requisitioned Meeting, Riot shall vote (or cause to be voted) the Subject Securities in favour of each of the Resolutions. Furthermore,
Riot hereby covenants and agrees that at any meeting of the Shareholders at which directors are to be elected, if the directors/nominees
proposed by the Board to be elected includes the Riot Nominee, it shall cause the Subject Securities to be counted as present for purposes
of establishing quorum and vote (or cause to be voted) such Subject Securities in favour of the election of each member of the New Board
or his or her replacement as determined in accordance with this Agreement.
3.4 During
the Term, the Board shall be comprised of not more than six (6) members.
3.5 In
the event that the Riot Nominee ceases to hold office as a director of the Company for any reason, Riot shall be entitled to nominate
an individual to replace the Riot Nominee and any such individual so nominated shall for all purposes herein be a Riot Nominee; provided,
however, that in no circumstances shall a Riot Nominee be a person who (a) fails to meet the requirements of applicable corporate,
securities and other laws and the rules of the Toronto Stock Exchange and The Nasdaq Stock Market (collectively, the “Exchanges”)
or (b) is not “independent” of either Riot or the Company for the purposes of: (i) National Instrument 52-110 –
Audit Committees, (ii) the rules of the Exchanges and (iii) Rule 10A-3 under the United States Securities Exchange
Act of 1934, as amended (the “Exchange Act”) (clauses (a) and (b), collectively, the “Director Qualifications”).
In addition, each Riot Nominee shall agree to comply with all policies, procedures, processes, codes, rules, standards and guidelines
applicable to Board members, including, without limitation, the Company’s code of business conduct and ethics, disclosure and confidentiality
policy and securities trading policy (the “Company Policies”).
3.6 In
the event that any of the members of the New Board, other than the Riot Nominee, ceases to hold office as a director of the Company for
any reason, the other members of the Board (including the Riot Nominee) shall be entitled to nominate, by a majority vote, an individual
to replace such nominee and any such individual so nominated shall for all purposes herein be a member of the New Board.
3.7 Neither
the Board nor the Company will be entitled to remove the Riot Nominee from the Board unless the Riot Nominee was previously removed by
a resolution of the Shareholders of the Company, was not elected by the Shareholders of the Company in accordance with the Company’s
majority voting policy, is otherwise ineligible under applicable law to serve as a director, does not comply with the Company Policies,
or does not meet the Director Qualifications.
3.8 The
Company covenants and agrees that (a) the Riot Nominee nominated or appointed pursuant to this Agreement shall be covered by the
Company’s existing directors’ and officers’ insurance policy (as amended from time to time) to the same degree, and
subject to the same conditions, that any other member of the Board is covered by and subject to, and (b) it shall enter into an indemnity
agreement with the Riot Nominee in substantially the same form and containing substantially the same terms as those agreements the Company
has entered into with any other member of the Board.
Riot
acknowledges that, once appointed to the Board, a Riot Nominee shall owe a fiduciary duty and duty of loyalty to the Company, which includes
a duty of confidentiality to the Company (collectively, “Duties”). No Company Policies, as currently in effect
or as may be amended or adopted, shall in any way inhibit any Board member (including the Riot Nominee) from engaging in dialogue with
Riot, its affiliates or its and their representatives so long as such Board member complies with his or her Duties and the Company Policies.
In addition, the Parties acknowledge and agree that (i) Riot, its affiliates or its and their representatives may communicate privately
with any of the Company’s directors, officers or advisors, so long as such private communications (x) would not reasonably
be expected to require any public disclosure thereof by the Company, Riot or such persons and (y) have complied with Section 6,
and (ii) such persons may engage in discussions with Riot, its affiliates or its and their representatives subject to, and in accordance
with, the terms of their Duties and the Company Policies.
5.1 In
connection with the issuance of Equity Securities (as defined below) for cash consideration (the “Issuance”), and provided
Riot beneficially owns at least fifteen percent (15%) of the then issued and outstanding Common Shares, Riot shall have the right to purchase
all or a portion of its Pro Rata Share (as defined below) of all Equity Securities, other than the Equity Securities excluded by Section 5.4,
that the Company may, from time to time, propose to sell and issue (the “Offered Securities”). Unless otherwise agreed
to by Riot and the Company in writing, such purchase shall be made by way of private placement (a “Pre-Emptive Right Closing”).
For purposes of this Section 5, the “Pro Rata Share” is equal to the ratio of (i) the number of Common Shares
held by Riot (assuming the conversion of any Equity Securities held by Riot that are convertible into Common Shares and otherwise on a
non-diluted basis) immediately prior to the Issuance to (ii) the aggregate of all Common Shares issued and outstanding immediately
prior to the Issuance (assuming the conversion of any Equity Securities held by Riot that are convertible into Common Shares and otherwise
on a non-diluted basis). The term “Equity Securities” shall mean (A) Common Shares, (B) any security (including
debt instruments) convertible, with or without consideration and whether or not on contingency or otherwise, into any Common Shares (including
any option to purchase such a convertible security), (C) any security carrying any warrant or right to subscribe for or purchase
any Common Shares and (D) any such warrant or right. For purposes of calculating whether Riot beneficially owns at least fifteen
percent (15%) of the then issued and outstanding Common Shares pursuant to this Section 5.1, Riot shall be deemed to not own such
Common Shares represented by any agreement reached to reduce Riot’s economic or voting exposure to Common Shares.
5.2 If
the Company proposes to sell and issue any Offered Securities, it shall, as soon as reasonably practicable after the public announcement
of the proposed sale of the Offered Securities, but in any event at least ten (10) business days prior to the expected completion
date of the Issuance (or in the case of a Bought Deal (as defined below), then as soon as reasonably practicable after the Company is
seriously considering such a Bought Deal offering or is in advanced discussions with underwriter(s) in connection thereto, but in
any event at least five (5) business days prior to the expected completion date of the Issuance ), give Riot a written notice
of such intention describing the Offered Securities, the price and the terms and conditions upon which the Company proposes to issue the
same. Riot shall have five (5) days from the receipt of any such written notice to agree to purchase all or a portion of its Pro
Rata Share of the Offered Securities for the price and upon the terms and conditions specified in the notice by giving written notice
to the Company and stating therein the quantity of Equity Securities to be purchased; provided that if the Company provides a written
notice with respect to a Bought Deal, Riot shall have such time as is reasonably practicable in the circumstances having regard to the
time provided to the Company to determine to accept such Bought Deal but in no case less than two (2) business days from the time
the Company advises Riot that the Company is intending to proceed with such a Bought Deal, together with the price range within which
the Company is prepared to undertake such Bought Deal. Notwithstanding the foregoing, if the Company is not able to comply with, or it
would be commercially impracticable to comply with, the time periods above prior to the closing of an Issuance, the Company shall comply
with its obligations to Riot under this Section 5.2 as promptly as reasonably practicable following the closing of such Issuance.
For purposes of this Section 5.2, “Bought Deal” means a fully underwritten offering on a bought deal basis pursuant
to which an underwriter has committed to purchase securities of the Company pursuant to a “bought deal” letter prior to the
filing of a prospectus.
5.3 If
Riot fails to exercise in full its pre-emptive rights as set forth in this Section 5, Riot shall be deemed to have not exercised
such right, which right shall be deemed to have expired. The obligation of the Company to consummate the sale of Offered Securities to
Riot under this Section 5 is subject to the fulfilment, prior to or at the closing of such sale, of each of the following conditions,
any of which may be waived by the Company in writing:
| (a) | there shall not be in effect any injunction or restraining order issued by a court of competent jurisdiction which prohibits the consummation
of the sale of Offered Securities to Riot under this Section 5 nor shall there be any investigation or proceeding pending before
any court or governmental authority seeking to prohibit the consummation of the sale of Offered Securities to Riot under this Section 5
(excluding any action by the Company or its affiliates that is inconsistent with the purpose of this Section 5); |
| (b) | no applicable law shall have been enacted by any governmental authority which prohibits the consummation of the sale of Offered Securities
to Riot under this Section 5 or makes such consummation illegal; |
| (c) | the closing of the issue and sale of the Offered Securities to any person other than Riot (if applicable) shall have occurred prior
to, or shall occur concurrently with, the Pre-Emptive Right Closing; |
| (d) | Riot shall execute such agreements in a form satisfactory to the Company, acting reasonably, as are legally required in the circumstances
to document the exercise of the rights hereunder, which, for greater certainty, shall include confirmation that Riot is eligible to purchase
the relevant securities pursuant to an exemption from applicable prospectus or registration requirements; |
(e) approval
of the Shareholders shall not be required; and
| (f) | any stock exchange upon which the Common Shares are then listed, any securities regulator and any other governmental authority having
jurisdiction and whose approval is required, shall have approved the issue and sale of the Offered Securities to Riot. |
5.4 The
pre-emptive rights established by this Section 5 shall not apply in respect of the issuance of Equity Securities in any of the following
circumstances:
| (a) | securities issued under the Rights Plan if Riot or any of its affiliates is an “Acquiring Person” (as such term is defined
in the Rights Plan); |
| (b) | Equity Securities issued in connection with bona fide bank debt or non-equity interim financing transactions with commercial bank
lenders to the Company; |
| (c) | Equity Securities issued, directly or indirectly, as consideration to a person who is at arm’s-length to the Company in a joint
venture, merger, consolidation, acquisition or similar business combination (and if the Equity Securities are issued to securityholders
of a reporting issuer or other public company in connection with such a business combination, such securityholders will be deemed to be
arm’s length for the purpose of this clause if such public company is arm’s length to the Company), including, for greater
certainty, the Equity Securities to be issued in connection with the acquisition of Stronghold Digital Mining, Inc. by the Company; |
| (d) | Equity Securities issued to managers, officers, directors and employees of the Company or any of its subsidiaries in accordance with
the terms of an employee or management incentive plan approved by the Board or Common Shares issued pursuant to the exercise or settlement
of such securities; |
| (e) | Equity Securities issued upon the conversion, exchange or the exercise of any then outstanding convertible, exchangeable or derivative
Equity Securities so long as the applicable convertible, exchangeable or derivative Equity Security was issued in compliance with this
Section 5 or prior to the date hereof; |
| (f) | Equity Securities issued in connection with an at-the-market offering of the Company; |
| (g) | Equity Securities of a subsidiary of the Company issued to the Company; |
| (h) | Equity Securities issued on a pro rata basis to all holders of a class of Equity Securities in connection with any reclassification,
recapitalization, distribution or similar event with respect to any equity interests in the Company; |
| (i) | Equity Securities issued pursuant to a rights offering that is open to all Shareholders, including Riot; and |
| (j) | Equity Securities issued on a pro rata basis to all of a class of Equity Securities as a dividend or other distribution on
equity interests in the Company or equity interests in the Company resulting from any subdivision or combination of equity interests in
the Company so excluded or on all equity interests in the Company then outstanding. |
5.5 Except
as otherwise specifically provided in this Section 5, each of Riot and the Company shall bear its own expenses incurred in connection
with this Section 5 and in connection with all obligations required to be performed by each of them under this Section 5. To
the extent that Riot has properly exercised its pre-emptive right under Section 5.2, subject to Sections 5.3, 5.4 and 5.6, the Company
shall use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary,
proper or advisable under applicable law to consummate and make effective the sale of Offered Securities to Riot under this Section 5,
including obtaining any governmental, regulatory, Exchange or other consents, transfers, orders, qualifications, waivers, authorizations,
exemptions and approvals, providing all notices and making all registrations, filings and applications necessary or desirable for the
consummation of the sale of Offered Securities to Riot under this Section 5, and shall keep Riot fully informed and, to the extent
permitted by law and applicable governmental authorities, allow Riot to participate in any communications with such governmental authorities
regarding the exercise of Riot’s rights hereunder.
5.6 Notwithstanding
the foregoing, the rights of Riot pursuant to this Section 5 shall terminate automatically if there is any material breach of this
Agreement by Riot (including, without limitation, a failure to comply with the restrictions under Section 6) or if such breach is
curable, upon five (5) days’ written notice by the Company to Riot if such breach has not been cured within such notice period,
provided that the Company is not in material breach of this Agreement at the time of the breach if the breach is not curable, or if curable
when such notice is given or prior to the end of the notice period.
Riot agrees that, during the Term, it will not,
and it will direct its affiliates and its and their respective representatives acting on its and their behalf not to, directly or indirectly:
| (a) | without the approval of the Board, acquire or agree to acquire, or make any proposal or offer to acquire, directly or indirectly or
in any manner whatsoever, any securities of the Company or any of its affiliates if as a result thereof it would beneficially own or exercise
control or direction over 20% or more of the outstanding Common Shares, or take any steps or action that would lead to it becoming an
Acquiring Person (as such term is defined in the Rights Plan), other than for the sole purpose of or in connection with making a take-over
bid that is not exempt from the provisions of National Instrument 62-104 – Take-over Bids and Issuer Bids pursuant to Part 4
thereof or otherwise (such a take-over bid made by Riot or an affiliate thereof is referred to herein as a “Formal Bid”); |
| (b) | acquire or dispose, or agree to acquire or dispose, of any related financial instrument (as defined in National Instrument 55-104
– Insider Reporting Requirements and Exemptions) of the Company or any of its affiliates, or relating to any Common Shares,
other than for the purposes of reducing Riot’s economic or voting exposure to the Subject Securities; |
| (c) | deposit any Subject Securities in any voting trust or subject any such securities to any arrangement or agreement with respect to
the voting of any such shares, other than for the purposes of reducing Riot’s economic or voting exposure to the Subject Securities; |
| (d) | vote any Subject Securities in a manner inconsistent with the provisions of this Agreement; |
| (e) | either alone or with any other Shareholders, requisition a meeting of the Shareholders or put forward a shareholder proposal for the
purpose of replacing or removing any director of the Company or otherwise altering the composition of the Board (including through any
“withhold” or similar campaign) or for any other purpose inconsistent with the provisions of this Agreement; |
| (f) | make or in any way participate in any solicitation of proxies to vote, or seek to advise or influence any other person with respect
to the voting of, any securities of the Company inconsistent with the provisions of this Agreement; |
| (g) | otherwise act alone or in concert with others to seek to control the management, Board or corporate policies
of the Company or alter the corporate or governance structure of the Board or the Company, except as expressly permitted under this Agreement; |
| (h) | solicit, initiate or engage in any discussions or negotiations regarding, or enter into any agreement,
commitment or understanding regarding, or otherwise act jointly or in concert with any person in order to propose or effect, any take-over
bid, tender or exchange offer, amalgamation, merger, arrangement or other business combination involving the Company or any of its affiliates
or any other acquisition of securities or assets of the Company or any of its affiliates, other than for the sole purpose of Riot making
a Formal Bid; |
| (i) | institute, solicit or join as a party any litigation, arbitration, complaint or other proceeding against or involving the Company
or any of its affiliates or any of its or their respective current or former directors or officers (including derivative actions), other
than in connection with a Formal Bid, to enforce its rights under this Agreement or in direct response to any litigation, arbitration,
complaint or other proceeding threatened or initiated by the Company or any of its affiliates or any of its or their respective current
or former directors or officers; |
| (j) | make any public disclosure of any consideration, desire, intention, plan or arrangement in connection with any of the foregoing, other
than in connection with a Formal Bid; or |
| (k) | enter into any arrangement, agreement or understanding (whether written or oral) with, or advise, assist, encourage or negotiate with,
any other person to do any of the foregoing, including, without limitation, by providing financing for such purpose, or otherwise take
or cause to be taken any action inconsistent with any provision of this Section 6; |
provided, that the restrictions in this Section 6 shall terminate
automatically upon the earliest of the following: (i) any material breach of this Agreement by the Company (including, without limitation,
a failure to appoint the Riot Nominee in accordance with Section 2.1, a failure to appoint a replacement Riot Nominee in accordance
with Section 3.5, or a failure to issue the Press Release (as defined below) in accordance with Section 8) upon five (5) days’
written notice by Riot to the Company if such breach has not been cured within such notice period, provided that Riot is not in material
breach of this Agreement at the time such notice is given or prior to the end of the notice period; (ii) the Company’s entry
into a definitive written agreement with respect to any take-over bid, arrangement, amalgamation, merger, consolidation, acquisition,
sale of all or substantially all assets, business combination, recapitalization, restructuring, liquidation, dissolution or similar extraordinary
transaction involving the Company (including its subsidiaries and joint ventures or any of their respective securities or assets) that,
if consummated, would result in the acquisition by any person or group of persons of more than 50% of the Common Shares or assets having
an aggregate value exceeding 50% of the aggregate enterprise value of the Company (each, an “Extraordinary Transaction”);
and (iii) the commencement of any take-over bid (by any person or group other than Riot and its affiliates) which, if consummated,
would constitute an Extraordinary Transaction that would result in the acquisition by any person or group of more than 50% of the Common
Shares of the Company, where the Board does not recommend that the Shareholders reject such take-over bid (it being understood that nothing
herein will prevent the Company from issuing a “stop, look and listen” communication in response to the commencement of any
take-over bid). Notwithstanding anything to the contrary in this Agreement, nothing in this Agreement (including but not limited to the
restrictions in this Section 6) will prohibit or restrict Riot, its affiliates or its and their representatives from (A) making
any public or private statement or announcement with respect to any Extraordinary Transaction that is publicly announced by the Company
or a third party, (B) making any factual statement to comply with any subpoena or other legal process or respond to a request for
information from any governmental authority with jurisdiction over such person from whom information is sought (so long as such process
or request did not arise as a result of discretionary acts by any such person), (C) granting any liens or encumbrances on any claims
or interests in favor of a bank or broker-dealer or prime broker holding such claims or interests in custody or prime brokerage in the
ordinary course of business, which lien or encumbrance is released upon the transfer of such claims or interests in accordance with the
terms of the custody or prime brokerage agreement(s), as applicable, (D) providing its views privately to the Company in accordance
with Section 4, including making any confidential proposal to the Board that would not reasonably be expected to be required to be
made public by either Riot or the Company or (E) voting, or soliciting votes, against any Extraordinary Transaction.
This
Agreement is effective on the date hereof and shall terminate on the earlier of: (i) one business day following the conclusion of
the annual meeting of Shareholders held in 2026 and (ii) June 1, 2026 (the “Term”). Notwithstanding
the foregoing or any other provision herein, both parties agree that no provisions of this Agreement shall be enforceable during such
period of the Term that Riot ceases to own legally or beneficially, directly or indirectly, at least 7.5% of the issued and outstanding
Common Shares (it being understood that, for the avoidance of doubt, if and when the Common Shares legally or beneficially, directly or
indirectly, owned by Riot increase to 7.5% or more of the issued and outstanding Common Shares, this Agreement shall continue to be enforceable
during the Term).
Immediately following execution of this Agreement,
a joint press release (the “Press Release”), in the form attached hereto as Schedule “A”, shall be issued
by the Company and Riot announcing the matters set forth herein. Neither Party nor its directors or officers shall (a) make any public
statements (including in any filing with securities regulators or any other regulatory or governmental agency, including an Exchange)
that are inconsistent with, or otherwise contrary to, the statements in the Press Release or (b) except as required by law or the
rules of any Exchange (in which case such Party must provide written notice (to the extent legally permissible) to the other at least
two business days prior to making any such statement or disclosure required under securities laws or other applicable laws that would
otherwise be prohibited by the provisions of this Section 8, and reasonably consider any comments of such other Party), issue or
cause the publication of any press release or other public announcement with respect to the matters that are the subject of this Agreement,
without the prior written consent of the Company and Riot. The signatories hereto acknowledge that a copy of this Agreement may be filed
on SEDAR+ and EDGAR.
| 9. | MUTUAL NON-DISPARAGEMENT |
9.1 During
the Term, the Company and Riot shall each refrain from making, and shall cause their respective affiliates and its and their respective
directors, officers and employees not to make or cause to be made any statement or announcement including in any document or report filed
with or furnished to securities regulatory authorities, an Exchange or through the press, media, analysts or other persons, that constitutes
an ad hominem attack on, or that otherwise disparages, defames, slanders or is reasonably likely to damage the reputation of, (a) in
the case of statements or announcements by Riot: the Company or any of its affiliates, subsidiaries or advisors, or any of its or their
respective current or former officers, partners, directors or employees, and (b) in the case of statements or announcements by the
Company: Riot and its advisors, their respective employees or any person who has served as an employee of Riot and its advisors. For
greater certainty, prior to or contemporaneously with the execution of this Agreement, Riot shall shut down the website at http://www.abetterbitfarms.com/,
and Riot shall not restore such website during the Term.
9.2 Notwithstanding
the foregoing, nothing in this Section 9 or elsewhere in this Agreement shall prohibit Riot or the Company from (a) complying
with any subpoena or other legal process or responding to a request for information from any governmental authority with jurisdiction
over such person (so long as such process or request was not initiated by Riot or the Company, as applicable, on or after the date hereof)
or (b) making any statement or disclosure required under securities laws or other applicable laws; provided that such Party must
provide written notice (to the extent legally permissible) to the other at least one (1) business day prior to making any such statement
or disclosure required under securities laws or other applicable laws that would otherwise be prohibited by the provisions of this Section 9,
and reasonably consider any comments of such other Party.
9.3 Nothing
shall prevent a Party or its representatives from responding without restriction to the other Party’s breach of this Agreement,
in addition to the other remedies available in connection with such breach.
10.1 Each
signatory hereto hereby acknowledges and agrees, on behalf of itself and its affiliates, that irreparable harm would occur in the event
any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly
agreed that Riot and the Company will be entitled to specific relief hereunder, including, without limitation, an injunction(s) to
prevent and enjoin breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof in the Courts
of Ontario, in addition to any other remedy to which they may be entitled at law or in equity. Any requirements for the securing or posting
of any bond with such remedy are hereby waived.
10.2 All
notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be sufficiently given if
delivered by delivery in person or if transmitted by email to the respective Parties at the following addresses (or at such other address
for a Party as shall be specified in a notice given in accordance with this Section 10.2):
Bitfarms Ltd.
110 Yonge Street, Suite 1601
Toronto, Ontario, Canada M5C 1T4
Attention: Ben
Gagnon, Chief Executive Officer
Email: bgagnon@bitfarms.com
with a copy (which shall not constitute notice) to:
McMillan LLP
Brookfield Place, Suite 4400
181 Bay Street
Toronto, ON M5J 2T3
Attention: Paul
Davis
Email: paul.davis@mcmillan.ca
and to
Skadden, Arps, Slate, Meagher & Flop LLP
One Manhattan West
New York, NY 10001
Attention: Christopher Barlow
Email: christopher.barlow@skadden.com
and to
Peterson McVicar LLP
18 King St E Suite 902
Toronto, ON M5C 1C4
Attention: Dennis Peterson
Email: dhp@petelaw.com
Riot Platforms, Inc.
3855 Ambrosia Street, Suite 301
Castle Rock, CO 80109
Attention: Jason Les, Chief
Executive Officer
Email: jles@riot.inc
with a copy (which shall not constitute notice) to:
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019-6064
Attention: Adam Givertz
Email: agivertz@paulweiss.com
and to
Davies Ward Phillips & Vineberg LLP
155 Wellington Street West
Toronto, ON M5V 3J7
Attention: Vincent Mercier
Email: vmercier@dwpv.com
10.3 This
Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable
therein. The signatories hereto hereby irrevocably agree to submit any dispute or proceeding in connection with this Agreement to the
exclusive jurisdiction of the Commercial List of the Ontario Superior Court of Justice, and further agrees that service of any process,
petition, application, notice or document by registered mail to the respective addresses set forth in Section 10.2 will be effective
service of process for any such action, suit or proceeding brought against any signatory hereto in any such court. Each signatory hereto,
on behalf of itself and its affiliates, irrevocably and unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated hereby, in the Commercial List of the Ontario Superior Court
of Justice, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such
action, suit or proceeding brought in any such court has been brought in an improper or inconvenient forum.
10.4 This
Agreement constitutes the entire agreement between the signatories hereto and supersedes and replaces any and all other agreements, arrangements
or understandings between or among them.
10.5 Each
signatory hereto agrees to execute and deliver all such documents and to do all such other acts and things as may be reasonably necessary
from time to time to give full effect to the provisions and intent of this Agreement.
10.6 This
Agreement and the rights of the parties hereto may not be assigned by any Party without the prior written consent of the other Party.
All the terms and provisions of this Agreement shall be binding upon and shall enure to the benefit of the signatories hereto and their
respective successors and permitted assigns.
10.7 Each
Party will pay for its or his own costs and expenses incurred in connection with the negotiation, preparation, execution and performance
of this Agreement, including the fees and expenses of legal counsel, financial advisors, accountants, consultants and other professional
advisors.
10.8 This
Agreement may be executed in counterparts, each of which shall be deemed to be an original and all of which shall constitute one and the
same document. Each signatory hereto shall be entitled to rely on delivery of an electronic copy of this Agreement, and acceptance by
any Party of an electronic copy of this Agreement shall create a legal, valid and binding agreement between and among the signatories
hereto in accordance with the terms hereof.
10.9 Time
shall be of the essence hereof.
10.10 Each
signatory hereto acknowledges that it has been advised to seek independent legal advice with respect to this Agreement and the signatory
has either obtained such advice or consciously determined that it does not need such advice and that, in either case, it is entering into
this Agreement of its own free will, under no compulsion or duress and that it understands and is aware of the terms and conditions hereof.
[Signature page follows]
IN
WITNESS WHEREOF the Parties have executed this agreement as of the 23rd day of September, 2024.
| |
BITFARMS LTD. |
| |
|
| |
By: |
/s/ Brian Howlett |
| |
|
Name: Brian Howlett |
| |
|
Title: Chair |
| |
RIOT PLATFORMS, INC. |
| |
|
| |
By: |
/s/ Jason Les |
| |
|
Name: Jason Les |
| |
|
Title: Chief Executive Officer |
SCHEDULE “A”
See attached.
Bitfarms and
Riot Announce Settlement
- Andrés Finkielsztain Steps Down from Board
-
- Bitfarms Appoints Amy Freedman to Board of Directors
-
- Board to Nominate an Independent Director for
Election at Special Meeting -
- Standstill Agreement Through 2026 Annual Meeting
-
This news release constitutes a “designated
news release” for the purposes of the Company’s prospectus supplement dated March 8, 2024, to its short form base shelf
prospectus dated November 10, 2023.
Toronto,
Ontario and Brossard, Québec and Castle Rock, Colorado, (September 23, 2024) - Bitfarms Ltd. (NASDAQ/TSX: BITF)
(“Bitfarms” or the “Company”), a global leader in vertically integrated Bitcoin data center operations, and Riot
Platforms Inc. (NASDAQ: RIOT) (“Riot”), an industry leader in vertically integrated Bitcoin (“BTC”) mining, today
announced that Bitfarms and Riot have entered into a settlement agreement (the “Agreement”) in advance of the Special Meeting
of Bitfarms Shareholders (the “Special Meeting”) currently scheduled for November 6, 2024, which will now be held virtually.
Under the terms
of the Agreement:
| |
· |
Andrés Finkielsztain has stepped down from Bitfarms’ Board of Directors (the “Board”). |
| |
· |
Bitfarms has appointed Amy Freedman to its Board and the Governance and Nominating Committee and Compensation Committee of the Board, effective immediately. |
| |
· |
Riot has agreed to withdraw its June 24, 2024 requisition, as amended, and to accept customary standstill provisions through the Bitfarms 2026 Annual Meeting, with certain exceptions. |
| |
· |
At the Special Meeting, shareholders will be asked to approve an expansion of the Board from five members to six members, to elect an independent director nominated by the Board to serve as the sixth member of the Board, and to ratify the Company’s July 24, 2024, shareholder rights plan. Riot has agreed to vote in favour of these matters. |
| |
· |
The Company has provided Riot with certain rights (subject to certain exceptions) to purchase shares of the Company provided Riot holds 15% or more of the outstanding common shares of the Company. |
As a result of the agreement to nominate an additional
director for election at the Special Meeting, the Special Meeting may be delayed, but in no event will it be held later than November 20,
2024. The Company will update its shareholders on the timing of the Special Meeting as soon as it can.
Brian Howlett, Independent Chairman of the
Board, said “The Bitfarms Board is committed to effectively overseeing the execution of the Company’s strategic plan as we
work to position Bitfarms to capitalize on the opportunities ahead. Additionally, we recognize the importance of refreshment and having
the right mix of skills, experience and diversity, and we are always open to adding qualified candidates with valuable insights and perspectives
to strengthen our Board. We are pleased to reach this agreement with Riot, which we believe is in the best interests of all Bitfarms shareholders.”
Mr. Howlett continued, “On behalf of
the Board and the entire company, I thank Andrés for his invaluable contributions to Bitfarms over the last four years. He
brought great insights to the boardroom with his extensive knowledge of the financial and crypto industry. We wish him well in his future
endeavors. We look forward to leveraging Amy’s extensive experience advising public companies as the Board works together to enhance
shareholder value.”
Ben Gagnon, Chief Executive Officer of Bitfarms,
said, “We are pleased to reach this agreement with Riot and look forward to turning our full attention to executing our growth strategy.
We remain focused on diversifying the business beyond Bitcoin mining into exciting and synergistic new areas like energy generation, energy
trading, heat recycling and other high value revenue streams like HPC/AI.”
Jason Les, Chief Executive Officer of Riot, said,
“This agreement represents a significant step to advance shareholder value creation at our respective companies and we are pleased
to have reached this constructive resolution with Bitfarms. As Bitfarms’ largest shareholder, we look forward to supporting a reconstituted
Bitfarms Board and continued engagement with management.”
A
copy of the Agreement will be filed on Form 6-K with the U.S. Securities and Exchange Commission (“SEC”) and will be
posted to the Company’s SEDAR+ profile at www.sedarplus.ca.
About Amy
Freedman
Amy is a corporate governance and public capital
markets expert with over 25 years of experience. She is currently an advisor to Ewing Morris and Co. Investment Partners, an alternative
asset manager with both equity and credit strategies. In her role, Amy spearheads the fund’s engagement investment opportunities.
Previously, she was CEO of Kingsdale Advisors, a leading shareholder services and advisory firm specializing in strategic and defensive
advisory, governance advisory, proxy and voting analytics and investor communications. Ms. Freedman has spent over 15 years in capital
markets as an investment banker with global firms including Stifel Financial Corp. (NYSE: SF) and Morgan Stanley (NYSE: MS).
Ms. Freedman is currently a director on the
boards of Mandalay Resources Corporation (TSX: MND, OTCQB: MNDJF), Irish Residential Properties REIT plc (ISE: IRES) and American
Hotel Income Properties REIT (TSX: HOT.UN, HOT.U). She holds an MBA and a JD from the University of Toronto.
About Bitfarms
Ltd.
Founded in 2017, Bitfarms is a global vertically
integrated Bitcoin mining data center company that contributes its computational power to one or more mining pools from which it receives
payment in Bitcoin. Bitfarms develops, owns, and operates vertically integrated mining facilities with in-house management and company-owned
electrical engineering, installation service, and multiple onsite technical repair centers. The Company’s proprietary data analytics
system delivers best-in-class operational performance and uptime.
Bitfarms currently has 12 operating Bitcoin data
centers and two under development situated in four countries: Canada, the United States, Paraguay, and Argentina. Powered predominantly
by environmentally friendly hydro-electric and long-term power contracts, Bitfarms is committed to using sustainable and often underutilized
energy infrastructure.
To
learn more about Bitfarms’ events, developments, and online communities:
www.bitfarms.com
https://www.facebook.com/bitfarms/
https://twitter.com/Bitfarms io
https://www.instagram.com/bitfarms/
https://www.linkedin.com/company/bitfarms/
About Riot
Platforms, Inc.
Riot’s (NASDAQ:
RIOT) vision is to be the world’s leading Bitcoin-driven infrastructure platform. Our mission is to positively impact the sectors,
networks and communities that we touch. We believe that the combination of an innovative spirit and strong community partnership allows
Riot to achieve best-in-class execution and create successful outcomes.
Riot, a Nevada corporation,
is a Bitcoin mining and digital infrastructure company focused on a vertically integrated strategy. Riot has Bitcoin mining operations
in central Texas and electrical switchgear engineering and fabrication operations in Denver, Colorado.
For more information,
visit www.riotplatforms.com.
Cautionary Statement
Trading in the securities
of the Company should be considered highly speculative. No stock exchange, securities commission or other regulatory authority has approved
or disapproved the information contained herein. Neither the Toronto Stock Exchange, Nasdaq, or any other securities exchange or regulatory
authority accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking
Statements
This news release contains certain “forward-looking information” and “forward-looking statements”
(collectively, “forward-looking information”) that are based on expectations, estimates and projections as at the date of
this news release and are covered by safe harbors under Canadian and United States securities laws. The statements and information in
this release regarding the strength and positive outcome of board of director renewal, the date of the Special Meeting, the merits and
potential of the Company’s growth plan and diversification strategy, other growth opportunities and prospects, statements regarding
future growth, plans and objectives of the Company and the maximization of shareholder value, are forward-looking information. Any statements
that involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events
or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”,
“anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”,
“estimates”, “prospects”, “believes” or “intends” or variations of such words and phrases
or stating that certain actions, events or results “may” or “could”, “would”, “might”
or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking information.
This
forward-looking information is based on assumptions and estimates of management of the Company and Riot, as applicable, at the time they
were made, and involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements
of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking
information. Such factors include, among others, various risks relating to the operations and business of the Company, the future performance,
liquidity and financial position of the Company and Riot, and uncertainties as to timing of the Special Meeting or the outcome. For further
information concerning these and other risks and uncertainties, refer to (i) the Company’s filings on www.sedarplus.ca (which
are also available on the website of the SEC at www.sec.gov), including the MD&A for the year-ended December 31, 2023, filed
on March 7, 2024 and the MD&A for the three and six months ended June 30, 2024 filed on August 8, 2024, and (ii) Riot’s
filings with the SEC, including the risks, uncertainties and other factors discussed under the sections entitled “Risk Factors”
and “Cautionary Note Regarding Forward-Looking Statements” of Riot’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2023, filed with the SEC on February 23, 2024, and the other filings Riot has made or will make with
the SEC after such date, copies of which may be obtained from the SEC’s website at www.sec.gov. Although the Company
and Riot have attempted to identify important factors that could cause actual results to differ materially from those expressed in forward-looking
statements, there may be other factors that cause results not to be as anticipated, estimated or intended, including factors that are
currently unknown to or deemed immaterial by the Company. There can be no assurance that such statements will prove to be accurate as
actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place
undue reliance on any forward-looking information. The Company undertakes no obligation to revise or update any forward-looking information
other than as required by law.
Investor Relations
Contacts:
For Bitfarms:
Bitfarms
Tracy Krumme
SVP, Head of IR &
Corp. Comms.
+1 786-671-5638
tkrumme@bitfarms.com
Innisfree M&A
Incorporated
Gabrielle Wolf / Scott
Winter
+1 212-750-5833
Laurel Hill Advisory
Group
1-877-452-7184
+1 416-304-0211
assistance@laurelhill.com
For Riot:
Phil McPherson
303-794-2000 ext. 110
IR@Riot.Inc
Media Contacts:
For Bitfarms:
U.S.: Joele Frank, Wilkinson Brimmer
Katcher
Dan Katcher or Joseph Sala
+1 212-355-4449
Québec: Tact
Louis-Martin Leclerc
+1 418-693-2425
lmleclerc@tactconseil.ca
For Riot:
Longacre Square Partners
Joe Germani / Dan Zacchei
jgermani@longacresquare.com
/ dzacchei@longacresquare.com
Exhibit 2
Bitfarms and
Riot Announce Settlement
- Andrés Finkielsztain Steps Down from
Board -
- Bitfarms Appoints Amy Freedman to Board of Directors
-
- Board to Nominate an Independent Director for
Election at Special Meeting -
- Standstill Agreement Through 2026 Annual Meeting
-
This news release constitutes a “designated
news release” for the purposes of the Company’s prospectus supplement dated March 8, 2024, to its short form base shelf
prospectus dated November 10, 2023.
Toronto,
Ontario and Brossard, Québec and Castle Rock, Colorado, (September 23, 2024) - Bitfarms Ltd. (NASDAQ/TSX: BITF)
(“Bitfarms” or the “Company”), a global leader in vertically integrated Bitcoin data center operations, and Riot
Platforms Inc. (NASDAQ: RIOT) (“Riot”), an industry leader in vertically integrated Bitcoin (“BTC”) mining, today
announced that Bitfarms and Riot have entered into a settlement agreement (the “Agreement”) in advance of the Special Meeting
of Bitfarms Shareholders (the “Special Meeting”) currently scheduled for November 6, 2024, which will now be held virtually.
Under the terms
of the Agreement:
| · | Andrés Finkielsztain has stepped down from Bitfarms’ Board of Directors (the “Board”). |
| · | Bitfarms has appointed Amy Freedman to its Board and the Governance and Nominating Committee and Compensation Committee of the Board,
effective immediately. |
| · | Riot has agreed to withdraw its June 24, 2024 requisition, as amended, and to accept customary standstill provisions through
the Bitfarms 2026 Annual Meeting, with certain exceptions. |
| · | At the Special Meeting, shareholders will be asked to approve an expansion of the Board from five members to six members, to elect
an independent director nominated by the Board to serve as the sixth member of the Board, and to ratify the Company’s July 24,
2024, shareholder rights plan. Riot has agreed to vote in favour of these matters. |
| · | The Company has provided Riot with certain rights (subject to certain exceptions) to purchase shares of the Company provided Riot
holds 15% or more of the outstanding common shares of the Company. |
As a result of
the agreement to nominate an additional director for election at the Special Meeting, the Special Meeting may be delayed, but in no event
will it be held later than November 20, 2024. The Company will update its shareholders on the timing of the Special Meeting as soon
as it can.
Brian Howlett, Independent
Chairman of the Board, said “The Bitfarms Board is committed to effectively overseeing the execution of the Company’s strategic
plan as we work to position Bitfarms to capitalize on the opportunities ahead. Additionally, we recognize the importance of refreshment
and having the right mix of skills, experience and diversity, and we are always open to adding qualified candidates with valuable insights
and perspectives to strengthen our Board. We are pleased to reach this agreement with Riot, which we believe is in the best interests
of all Bitfarms shareholders.”
Mr. Howlett
continued, “On behalf of the Board and the entire company, I thank Andrés for his invaluable contributions to Bitfarms
over the last four years. He brought great insights to the boardroom with his extensive knowledge of the financial and crypto industry.
We wish him well in his future endeavors. We look forward to leveraging Amy’s extensive experience advising public companies as
the Board works together to enhance shareholder value.”
Ben Gagnon, Chief
Executive Officer of Bitfarms, said, “We are pleased to reach this agreement with Riot and look forward to turning our full attention
to executing our growth strategy. We remain focused on diversifying the business beyond Bitcoin mining into exciting and synergistic new
areas like energy generation, energy trading, heat recycling and other high value revenue streams like HPC/AI.”
Jason Les, Chief
Executive Officer of Riot, said, “This agreement represents a significant step to advance shareholder value creation at our respective
companies and we are pleased to have reached this constructive resolution with Bitfarms. As Bitfarms’ largest shareholder, we look
forward to supporting a reconstituted Bitfarms Board and continued engagement with management.”
A
copy of the Agreement will be filed on Form 6-K with the U.S. Securities and Exchange Commission (“SEC”) and will be
posted to the Company’s SEDAR+ profile at www.sedarplus.ca.
About Amy
Freedman
Amy is a corporate
governance and public capital markets expert with over 25 years of experience. She is currently an advisor to Ewing Morris and Co. Investment
Partners, an alternative asset manager with both equity and credit strategies. In her role, Amy spearheads the fund’s engagement
investment opportunities. Previously, she was CEO of Kingsdale Advisors, a leading shareholder services and advisory firm specializing
in strategic and defensive advisory, governance advisory, proxy and voting analytics and investor communications. Ms. Freedman has
spent over 15 years in capital markets as an investment banker with global firms including Stifel Financial Corp. (NYSE: SF) and Morgan
Stanley (NYSE: MS).
Ms. Freedman
is currently a director on the boards of Mandalay Resources Corporation (TSX: MND, OTCQB: MNDJF), Irish Residential Properties REIT
plc (ISE: IRES) and American Hotel Income Properties REIT (TSX: HOT.UN, HOT.U). She holds an MBA and a JD from the University of Toronto.
About Bitfarms
Ltd.
Founded
in 2017, Bitfarms is a global vertically integrated Bitcoin mining data center company that contributes its computational power to one
or more mining pools from which it receives payment in Bitcoin. Bitfarms develops, owns, and operates vertically integrated mining facilities
with in-house management and company-owned electrical engineering, installation service, and multiple onsite technical repair centers.
The Company’s proprietary data analytics system delivers best-in-class operational performance and uptime.
Bitfarms
currently has 12 operating Bitcoin data centers and two under development situated in four countries: Canada, the United States, Paraguay,
and Argentina. Powered predominantly by environmentally friendly hydro-electric and long-term power contracts, Bitfarms is committed to
using sustainable and often underutilized energy infrastructure.
To
learn more about Bitfarms’ events, developments, and online communities:
www.bitfarms.com
https://www.facebook.com/bitfarms/
https://twitter.com/Bitfarms io
https://www.instagram.com/bitfarms/
https://www.linkedin.com/company/bitfarms/
About Riot
Platforms, Inc.
Riot’s (NASDAQ:
RIOT) vision is to be the world’s leading Bitcoin-driven infrastructure platform. Our mission is to positively impact the sectors,
networks and communities that we touch. We believe that the combination of an innovative spirit and strong community partnership allows
Riot to achieve best-in-class execution and create successful outcomes.
Riot, a Nevada corporation,
is a Bitcoin mining and digital infrastructure company focused on a vertically integrated strategy. Riot has Bitcoin mining operations
in central Texas and electrical switchgear engineering and fabrication operations in Denver, Colorado.
For more information,
visit www.riotplatforms.com.
Cautionary Statement
Trading in the securities
of the Company should be considered highly speculative. No stock exchange, securities commission or other regulatory authority has approved
or disapproved the information contained herein. Neither the Toronto Stock Exchange, Nasdaq, or any other securities exchange or regulatory
authority accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking
Statements
This news release contains certain “forward-looking
information” and “forward-looking statements” (collectively, “forward-looking information”) that are based
on expectations, estimates and projections as at the date of this news release and are covered by safe harbors under Canadian and United
States securities laws. The statements and information in this release regarding the strength and positive outcome of board of director
renewal, the date of the Special Meeting, the merits and potential of the Company’s growth plan and diversification strategy, other
growth opportunities and prospects, statements regarding future growth, plans and objectives of the Company and the maximization of shareholder
value, are forward-looking information. Any statements that involve discussions with respect to predictions, expectations, beliefs, plans,
projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”,
or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”,
“budget”, “scheduled”, “forecasts”, “estimates”, “prospects”, “believes”
or “intends” or variations of such words and phrases or stating that certain actions, events or results “may”
or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements
of historical fact and may be forward-looking information.
This
forward-looking information is based on assumptions and estimates of management of the Company and Riot, as applicable, at the time they
were made, and involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements
of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking
information. Such factors include, among others, various risks relating to the operations and business of the Company, the future performance,
liquidity and financial position of the Company and Riot, and uncertainties as to timing of the Special Meeting or the outcome. For further
information concerning these and other risks and uncertainties, refer to (i) the Company’s filings on www.sedarplus.ca (which
are also available on the website of the SEC at www.sec.gov), including the MD&A for the year-ended December 31, 2023, filed
on March 7, 2024 and the MD&A for the three and six months ended June 30, 2024 filed on August 8, 2024, and (ii) Riot’s
filings with the SEC, including the risks, uncertainties and other factors discussed under the sections entitled “Risk Factors”
and “Cautionary Note Regarding Forward-Looking Statements” of Riot’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2023, filed with the SEC on February 23, 2024, and the other filings Riot has made or will make with
the SEC after such date, copies of which may be obtained from the SEC’s website at www.sec.gov. Although the Company
and Riot have attempted to identify important factors that could cause actual results to differ materially from those expressed in forward-looking
statements, there may be other factors that cause results not to be as anticipated, estimated or intended, including factors that are
currently unknown to or deemed immaterial by the Company. There can be no assurance that such statements will prove to be accurate as
actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place
undue reliance on any forward-looking information. The Company undertakes no obligation to revise or update any forward-looking information
other than as required by law.
Investor Relations
Contacts:
For Bitfarms:
Bitfarms
Tracy Krumme
SVP, Head of IR &
Corp. Comms.
+1 786-671-5638
tkrumme@bitfarms.com
Innisfree M&A
Incorporated
Gabrielle Wolf / Scott
Winter
+1 212-750-5833
Laurel Hill Advisory
Group
1-877-452-7184
+1 416-304-0211
assistance@laurelhill.com
For Riot:
Phil McPherson
303-794-2000 ext.
110
IR@Riot.Inc
Media Contacts:
For Bitfarms:
U.S.: Joele Frank, Wilkinson Brimmer
Katcher
Dan Katcher or Joseph Sala
+1 212-355-4449
Québec:
Tact
Louis-Martin Leclerc
+1 418-693-2425
lmleclerc@tactconseil.ca
For Riot:
Longacre Square Partners
Joe Germani / Dan
Zacchei
jgermani@longacresquare.com
/ dzacchei@longacresquare.com
Exhibit 3
riot
platforms, inc.
EARLY WARNING REPORT Press Release
REGARDING SETTLEMENT AGREEMENT WITH BITFARMS LTD.
CASTLE ROCK, CO, September 23, 2024
– Riot Platforms, Inc. (NASDAQ: RIOT) (“Riot”) issues this press release pursuant to Part 3 of Canadian
National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues and Part 5
of Canadian National Instrument 62-104 – Take-Over Bids and Issuer Bids in respect of Bitfarms Ltd. (NASDAQ/TSX: BITF) (“Bitfarms”
or the “Company”).
On September 23, 2024, Riot and the Company
entered into a settlement agreement (the “Agreement”), pursuant to which (i) Andrés Finkielsztain resigned
from the Company’s Board of Directors (the “Board”); (ii) Amy Freedman was appointed to the Board, the Governance
and Nominating Committee and the Compensation Committee of the Board, and will be appointed to each “special committee” of
independent directors of the Board that is currently constituted or may be constituted from time to time provided that she is independent
for purposes of the mandate of the “special committee”; and (iii) Riot has withdrawn its requisition for a special meeting
of shareholders of the Company. For additional details regarding the Agreement, see the joint press release filed by Riot and Bitfarms
on September 23, 2024, the full text of the Agreement which is or will be made available under the Company’s profile on SEDAR+,
and Riot’s early warning report that will be filed in accordance with applicable Canadian securities laws.
Immediately prior to, and immediately after, the
entering into of the Agreement, Riot beneficially owned 90,110,912 common shares (the “Common Shares”) of Bitfarms,
representing approximately 19.9% of the issued and outstanding Common Shares (as calculated based on information provided by the Company).
Riot intends to review its investment in the Company
on a continuing basis and, subject to the terms of the Agreement, and depending upon various factors, including without limitation, any
discussion between Riot, the Company and/or the Board and its advisors regarding, among other things, the Company’s financial position
and strategic direction, overall market conditions, other investment opportunities available to Riot, and the availability of securities
of the Company at prices that would make the purchase or sale of such securities desirable, Riot may (i) increase or decrease its
position in the Company through, among other things, the purchase or sale of securities of the Company, including through transactions
involving the Common Shares and/or other equity, debt, notes, other securities, or derivative or other instruments that are based upon
or relate to the value of securities of the Company in the open market or otherwise, (ii) enter into transactions that increase or
hedge its economic exposure to the Common Shares without affecting its beneficial ownership of the Common Shares or (iii) consider
or propose one or more of the actions described in subparagraphs (a) - (k) of Item 5 of Riot’s early warning report filed
in accordance with applicable Canadian securities laws, including submitting a revised proposal to acquire the Company.
This press release is not meant to be, nor should
it be construed as, an offer (or an intention to make an offer) to buy or the solicitation of an offer to sell any of the Company’s
securities.
Riot will file the Early Warning Report in accordance
with applicable securities laws, which will be available under the Company’s profile at www.sedarplus.ca.
The head office of the Company is 110 Yonge Street, Suite 1601 Toronto, Ontario M5C 1T4. The address of Riot is 3855 Ambrosia Street,
Suite 301, Castle Rock, CO 80109.
For
More Information
For further information and to obtain a copy of
the Early Warning Report, please see the Company’s profile on the SEDAR+ website (www.sedarplus.ca)
or contact Phil McPherson, Vice President, Capital Markets & Investor Relations, at (303) 794-2000 ext. 110.
About Riot Platforms, Inc.
Riot’s (NASDAQ: RIOT) vision is to be the
world’s leading Bitcoin-driven infrastructure platform. Our mission is to positively impact the sectors, networks, and communities
that we touch. We believe that the combination of an innovative spirit and strong community partnership allows the Company to achieve
best-in-class execution and create successful outcomes.
Riot, a Nevada corporation, is a Bitcoin mining
and digital infrastructure company focused on a vertically integrated strategy. Riot has Bitcoin mining operations in central Texas and
electrical switchgear engineering and fabrication operations in Denver, Colorado.
For more information, visit www.riotplatforms.com.
Cautionary Note Regarding Forward Looking Statements
Statements contained herein that are not historical facts constitute
“forward-looking statements” and “forward-looking information” (together, “forward-looking statements”)
within the meaning of applicable U.S. and Canadian securities laws that reflect management’s current expectations, assumptions,
and estimates of future events, performance and economic conditions. Such forward-looking statements rely on the safe harbor provisions
of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934 and the safe harbor
provisions of applicable Canadian securities laws. Because such statements are subject to risks and uncertainties, actual results may
differ materially from those expressed or implied by such forward-looking statements. Words and phrases such as “anticipate,”
“believe,” “combined company,” “create,” “drive,” “expect,” “forecast,”
“future,” “growth,” “intend,” “hope,” “opportunity,” “plan,” “potential,”
“proposal,” “synergies,” “unlock,” “upside,” “will,” “would,”
and similar words and phrases are intended to identify forward-looking statements. These forward-looking statements may include, but are
not limited to, statements concerning: uncertainties as to whether the Company will enter into discussions with Riot regarding a proposed
combination of Riot and the Company; the outcome of any such discussions, including the terms and conditions of any such potential combination;
the future performance, liquidity and financial position of the combined company, and its ability to achieve expected synergies; and uncertainties
as to timing of the special meeting of Bitfarms shareholders to be held on November 6, 2024 or the outcome. Such forward-looking
statements are not guarantees of future performance or actual results, and readers should not place undue reliance on any forward-looking
statement as actual results may differ materially and adversely from forward-looking statements. Detailed information regarding the factors
identified by the management of Riot, which they believe may cause actual results to differ materially from those expressed or implied
by such forward-looking statements in this press release, may be found in Riot’s filings with the U.S. Securities and Exchange Commission
(the “SEC”), including the risks, uncertainties and other factors discussed under the sections entitled “Risk
Factors” and “Cautionary Note Regarding Forward-Looking Statements” of Riot’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2023, filed with the SEC on February 23, 2024, and the other filings Riot has made or
will make with the SEC after such date, copies of which may be obtained from the SEC’s website at www.sec.gov. All forward-looking
statements contained herein are made only as of the date hereof, and Riot disclaims any intention or obligation to update or revise any
such forward-looking statements to reflect events or circumstances that subsequently occur, or of which Riot hereafter becomes aware,
except as required by applicable law.
No Offer to Purchase or Sell Securities
This press release is for informational purposes
only and is not intended to and does not constitute an offer to sell or the solicitation of an offer, or an intention to offer, to subscribe
for or buy or an invitation to purchase or subscribe for any securities, nor shall there be any sale, issuance or transfer of securities
in any jurisdiction in contravention of applicable law. Such an offer to purchase securities would only be made pursuant to a registration
statement, prospectus, tender offer, takeover bid circular, management information circular or other regulatory filing filed by Riot with
the SEC and available at www.sec.gov or filed with applicable Canadian securities regulatory authorities
on SEDAR+ and available at www.sedarplus.ca.
Contacts
Investor Contacts:
Phil McPherson
303-794-2000 ext. 110
IR@Riot.Inc
Okapi Partners
Bruce Goldfarb / Chuck Garske, (877) 285-5990
info@okapipartners.com
Media Contact:
Longacre Square Partners
Joe Germani / Dan Zacchei
jgermani@longacresquare.com / dzacchei@longacresquare.com
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