SCHEDULE 13D/A: Riot Platforms Cedes Voting Control Over Majority of Bitfarms Stake, Waives Key Settlement Rights

Riot Platforms, Inc. has significantly altered its investment in Bitfarms Ltd. by waiving certain governance rights and granting an irrevocable proxy to Bitfarms for shares exceeding a 9.9% voting threshold, effectively reducing Riot's voting power to 9.9% while maintaining a 16.3% beneficial ownership.

Summary

• Riot Platforms, Inc. (Riot) filed Amendment No. 14 to its Schedule 13D regarding its investment in Bitfarms Ltd. (Bitfarms).
• On April 7, 2025, Riot delivered a Waiver and Irrevocable Proxy to Bitfarms.
• Riot irrevocably waived and relinquished its rights under several sections of a prior Settlement Agreement dated September 23, 2024.
• These waived rights included Riot's ability to have a nominee on Bitfarms' Board of Directors, control over Board size, the right to replace its nominee, protection against nominee removal, and certain pre-emptive rights.
• Riot also granted Bitfarms an irrevocable proxy to vote or act by written consent for any "Excess Subject Securities," defined as shares whose voting power exceeds 9.9% of Bitfarms' total voting power for director election.
• As a result of this proxy, Riot now exercises voting power over approximately 54,810,793 shares, representing about 9.9% of Bitfarms' outstanding Common Shares.
• Riot continues to beneficially own 90,110,912 Common Shares, which represents approximately 16.3% of Bitfarms' outstanding shares, based on 553,644,380 shares outstanding as of December 31, 2024.
• The irrevocable proxy will automatically terminate if Riot's Subject Securities represent 9.9% or less of the total voting power.
• Riot issued a press release on April 8, 2025, to announce these changes.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive for Bitfarms as it gains more control over its governance by reducing Riot's voting influence. For Riot, it represents a concession of certain rights, but it maintains a significant beneficial ownership and retains the option for future strategic moves, including a potential acquisition proposal. The overall tone is factual and formal, typical of an SEC filing.

Positives

• For Bitfarms: The waiver and proxy grant provide Bitfarms with greater control over its corporate governance by removing Riot's influence on board composition and pre-emptive rights, potentially leading to more stable management.

Negatives

• For Riot: Riot has relinquished significant governance rights and voting power over a substantial portion of its beneficial ownership in Bitfarms.

Risks

• Forward-looking statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied.
• Factors that may cause actual results to differ are detailed in Riot's SEC filings, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Future Outlook

Riot Platforms, Inc. intends to continuously review its investment in Bitfarms Ltd. and may, depending on various factors including market conditions and other investment opportunities, increase or decrease its position, engage in transactions to adjust economic exposure, or propose a revised acquisition of Bitfarms.

Management Comments

• "Riot hereby irrevocably waives and relinquishes its rights under Section 2.2, Section 3.4, Section 3.5, Section 3.7 and Section 5 of the Settlement Agreement and irrevocably releases the Company from all of its obligations thereunder, and such rights and obligations shall immediately and forever be void and of no further force and effect." (Paraphrased from Waiver and Irrevocable Proxy signed by Jason Les, CEO of Riot Platforms)
• "Riot intends to review its investment in the Company on a continuing basis and, subject to the terms of the Settlement Agreement, and depending upon various factors... Riot may (i) increase or decrease its position in the Company... (ii) enter into transactions that increase or hedge its economic exposure... or (iii) consider or propose one or more of the actions described in subparagraphs (a) (k) of Item 5 of Riots early warning report filed in accordance with applicable Canadian securities laws, including submitting a revised proposal to acquire the Company." (Paraphrased from Riot Platforms Press Release)

Industry Context

This filing reflects a significant shift in the relationship between two major players in the Bitcoin mining industry, Riot Platforms and Bitfarms. It suggests a resolution or re-negotiation of prior agreements, potentially impacting corporate control and strategic direction within the competitive digital asset mining sector.

Comparison to Industry Standards

• The document does not provide specific financial or operational results that can be directly compared to global industry benchmarks or specific comparable companies/projects. It focuses on changes in shareholder rights and corporate governance related to a specific investment.

Corporate Governance

Stakeholder Impact

• Shareholders (Bitfarms): May benefit from increased corporate governance stability and reduced uncertainty regarding Riot's influence on the board.
• Shareholders (Riot Platforms): Riot retains significant beneficial ownership but has relinquished direct voting control over a portion of its stake and certain governance rights, which could be viewed as a strategic concession or a step towards a different future engagement.
• Management (Bitfarms): Gains more autonomy in decision-making without Riot's direct board influence or pre-emptive rights.

Next Steps

• Riot Platforms will continue to review its investment in Bitfarms Ltd.
• Riot may increase or decrease its position in Bitfarms through purchases or sales of securities.
• Riot may enter into transactions to increase or hedge its economic exposure to Bitfarms Common Shares.
• Riot may consider or propose actions, including submitting a revised proposal to acquire Bitfarms.
• Riot will file an Early Warning Report in accordance with applicable Canadian securities laws.

Key Dates

Keywords

Riot Platforms, Bitfarms, SEC Filing, Schedule 13D, Corporate Governance, Shareholder Rights, Irrevocable Proxy, Settlement Agreement, Voting Power, Beneficial Ownership, Bitcoin Mining, Investment Strategy