Riot Platforms Criticizes Bitfarms' Adoption of Poison Pill

Riot Platforms, Inc. (NASDAQ: RIOT) has expressed significant concerns over the recent adoption of a shareholder rights plan, commonly known as a “poison pill,” by Bitfarms Ltd. (NASDAQ/TSX: BITF). The plan, which became effective immediately, restricts any single shareholder from acquiring 15% or more of Bitfarms' common shares without initiating a formal takeover bid for the entire company, according to Riot Platforms' official statement.

Riot's Response and Concerns

Riot's CEO, Jason Les, criticized the Bitfarms board for implementing the poison pill without engaging in constructive dialogue. Les highlighted that Riot had attempted to engage with Bitfarms privately and had sent two letters proposing the addition of two independent directors to the Bitfarms board. Instead of collaborating, Bitfarms responded with a poison pill that sets the threshold at 15%, lower than the customary 20% threshold recommended by leading proxy advisory firms like Institutional Shareholder Services Inc. and Glass, Lewis & Co.

Les stated, “This action further demonstrates the Bitfarms Board’s entrenchment and disregard for the perspectives of its shareholders, who clearly signaled their discontent less than two weeks ago when they voted out Company co-founder Emiliano Grodzki.” He also called for the resignation of Chairman and interim CEO Nicolas Bonta, who has been leading the Bitfarms board since 2018.

Corporate Governance Issues

Riot Platforms' critique focuses on what it describes as poor corporate governance practices at Bitfarms. The implementation of the poison pill is seen as a move to entrench the current board and management, preventing shareholders from having a significant say in the company's future direction. Riot stressed its commitment to addressing these governance issues to ensure that shareholders' voices are heard.

About Riot Platforms

Riot Platforms, Inc. is a Bitcoin mining and digital infrastructure company. The firm aims to be the world's leading Bitcoin-driven infrastructure platform. Riot’s operations include Bitcoin mining in central Texas and electrical switchgear engineering and fabrication in Denver, Colorado. For more details, visit Riot Platforms.

Non-Binding Proposal

Riot has clarified that its proposal for a business combination transaction with Bitfarms is non-binding and does not constitute a formal offer. There is no assurance that any definitive offer will be made, accepted, or consummated. The company emphasized that it does not undertake any obligation to provide updates on the proposed transaction, except as required by law.

Cautionary Note Regarding Forward-Looking Statements

The statements made by Riot that are not historical facts are considered forward-looking statements within the meaning of applicable U.S. and Canadian securities laws. These statements reflect management’s current expectations but are subject to risks and uncertainties. Actual results may differ materially from those expressed or implied. Factors that could cause such differences are detailed in Riot's filings with the U.S. Securities and Exchange Commission (SEC) and Canadian securities regulatory authorities.