BMNR 8-K
Bitmine Immersion Technologies, Inc. (BMNR)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
|
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(IRS Employer Identification No.) |
(Address of principal executive office) (Zip Code)
(Registrants’ telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| None | None | None |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)
Emerging
Growth Company
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Section 1 – Registrant’s Business and Operations
Item 1.01 Entry into a Material Definitive Agreement.
On November 4, 2024, Bitmine Immersion Technologies, Inc. (the “Company”) entered into an amendment to its Line of Credit Agreement (the “LOC”) with Innovative Digital Investors Emerging Technology, L.P. (“IDI”). Prior to the amendment, the LOC provided for a maximum amount of $1,750,000, and the full amount was due and payable on December 1, 2024. Pursuant to the amendment, the maximum amount has been increased to $2,300,000. In addition, the Company has the right to extend the maturity for six monthly periods in consideration for an extension fee of $25,000 for each extension, which will be added to the balance due under the LOC. In addition, IDI was granted the right to convert 11,500,000 shares of common stock it owns into 2,300 shares of Series B Convertible Preferred Stock (See Item 3.02 herein). In consideration for the above the amendments, IDI agreed to approve a new draw under the LOC of $250,000 and to purchase an additional 200 shares of Series B Convertible Preferred Stock for $200,000, for net new financing to the Company of $450,000.
Section 3 – Securities and Trading Markets
Item 3.02 Unregistered Sales of Equity Securities.
On November 4, 2024, the Company agreed to issue IDI 2,500 shares of Series B Convertible Preferred Stock in consideration for $200,000 cash and the 11,500,000 shares of common stock owned by IDI. The issuance was exempt from the registration requirements of the Securities Act of 1933 by virtue of the exemption contained in Section 4(a)(2) therein.
Item 3.03 Material Modification to Rights of Security Holders.
On November 4, 2024, the Company approved a Certificate of Designation to authorize its Series B Convertible Preferred Stock. The Certificate of Designation may be deemed to modify the rights of the Company’s common stock. See Item 5.03 for a more complete description of the terms of the Certificate of Designation. As a result of the issuance of 2,500 shares of Series B Convertible Preferred Stock, the conversion price of the Series A Convertible Preferred Stock was reset to $0.20 per share, from $0.575 per share pursuant to the anti-dilution provisions of the Series A Convertible Preferred Stock.
Section 5 – Corporate Governance and Management
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change of Fiscal Year.
(a) On November 4, 2024, the Company approved a Certificate of Designations, Rights and Preferences of Series B Convertible Preferred Stock (the “Certificate of Designation”) with the Delaware Secretary of State, which authorized the creation and issuance of up to 3,000 shares of Series B Convertible Preferred Stock (the “Series B Preferred”). Under the Certificate of Designation, the Series B Preferred has the following rights:
Dividends: Each share of Series B Preferred is entitled to receive non-cumulative dividends equal to the amount of dividends that the holder of such share would have received if such share of Series B Preferred were converted into shares of common stock immediately prior to the record date of the dividend declared on the common stock.
Liquidation Preference: The Series B Preferred Stock is entitled to receive, prior to any distribution to any junior class of securities, an amount equal to $1,000 per share, plus any accrued but unpaid dividends, as a liquidation preference before any distribution may be made to the holders of any junior security, including the common stock.
Voting Rights: Each holder of Series B Preferred Stock shall vote with holders of the common stock upon any matter submitted to a vote of shareholders, in which event it shall have the number of votes equal to the number of shares of common stock into which such share of Series B Preferred Stock would be convertible on the record date for the vote or consent of shareholders. Each holder of Series B Preferred Stock shall also be entitled to one vote per share on each submitted to a class vote of the holders of Series B Preferred Stock.
Voluntary Conversion Rights: Each share of Series B Preferred Stock is convertible into that number of shares of common stock equal to the liquidation preference of the Series B Preferred divided by a conversion price of $0.20 per share.
| 2 |
Rank: The Series B Preferred ranks senior to the common stock and any other class or series of preferred stock that may be authorized, but ranks junior to the Series A Convertible Preferred Stock.
Redemption by Company: The Company may redeem all of the Series B Preferred at any time on twenty days notice by payment of the liquidation preference of the Series B Preferred.
Redemption by the Holders: The holders of the Series B Preferred shall not have the right to compel the Company to redeem their Series B Preferred unless the Company is in default under the terms of the Certificate of Designation.
Redemption on Fundamental Transaction: In the event the Company engages in a fundamental transaction, the Company shall be obligated to redeem all of the Series B Preferred at the closing of the transaction, provided that holders of the Series B Preferred shall be entitled to convert their shares of Series B Preferred into common stock in lieu of having them redeemed.
Right to Participate in Future Fundings: Each holder of Series B Preferred has the right to participate in future capital-raising transactions to the extent of its proportionate ownership of the Company on an as converted basis. The right extents to any issuance of common or preferred stock or debt securities convertible into common or preferred stock, except for certain exempted transactions.
Anti-Dilution Protection: The conversion price of the Series B Preferred is subject to reduction to the extent the company issues shares of common stock at a purchase price less than the then current conversion price, (ii) debt or equity securities convertible into common stock at a conversion price less than the then current conversion price, (iii) options or warrants exercisable for common stock at an exercise price less than the then current conversion price, or (iv) options or warrants to purchase convertible debt or equity securities, where the combined exercise and conversion prices would enable the holder to acquire shares of common stock for less than the then current conversion price.
The foregoing description of the Series B Preferred is only a summary. Reference is made the Certificate of Designation filed herewith as an Exhibit for the complete terms of the Series B Preferred.
Section 9 – Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Item No. | Description | |||
| 4.1 | Certificate of Designations, Rights and Preferences of Series B Convertible Preferred Stock of Bitmine Immersion Technologies, Inc. | |||
| 10.1 | Amendment of Line of Credit Agreement between Bitmine Immersion Technologies, Inc. and Innovative Digital Investors Emerging Technology, L.P. | |||
| 104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL | |||
| 3 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Bitmine Immersion Technologies, Inc. | ||
| Dated: November 7, 2024 | By: | /s/ Jonathan Bates |
| Name: | Jonathan Bates | |
| Title: | Chief Executive Officer | |
| 4 |
Exhibit 4.1
CERTIFICATE OF DESIGNATIONS, RIGHTS AND PREFERENCES
OF
SERIES B CONVERTIBLE PREFERRED STOCK
OF
BITMINE IMMERSION TECHNOLOGIES, INC.
Pursuant to Section 151 of the Delaware General Corporation Law, Bitmine Immersion Technologies, Inc., a Delaware corporation (the “Corporation”), DOES HEREBY CERTIFY:
The Amended and Restated Certificate of Incorporation of the Corporation (the “Charter”) confers upon the Board of Directors of the Corporation (the “Board of Directors”) the authority to provide for the issuance of shares of preferred stock in series and to establish the number of shares to be included in each such series and to fix the powers, designations, preferences and rights of the shares of each such series and any qualifications, limitations or restrictions thereof. On October 30, 2024, the Board of Directors duly adopted the following resolution creating a series of preferred stock designated as the Series B Convertible Preferred Stock, comprised initially of 3,000 shares and such resolution has not been modified and is in full force and effect on the date hereof:
RESOLVED that, pursuant to the authority vested in the Board of Directors in accordance with the provisions of the Charter, a series of the class of authorized preferred stock, par value $0.0001 per share, of the Corporation is hereby created and that the designation and number of shares thereof and the powers, preferences and rights of the shares of such series, and the qualifications, limitations and restrictions thereof are as follows:
TERMS OF SERIES B PREFERRED STOCK
Section 1. Designation and Number of Shares. There is hereby created out of the authorized and unissued shares of Series B Preferred Stock of the Corporation a series of Series B Preferred Stock designated as the “Series B Convertible Series B Preferred Stock” (hereinafter, the “Series B Preferred Stock”) The number of shares constituting the Series B Preferred Stock shall be Three Thousand (3,000). Any holder of a share of Series B Preferred Stock shall be referred to as a “Holder.”
Section 2. Rank. The Series B Preferred Stock shall rank: senior (i) to the Corporation’s Common Stock, $0.0001 par value per share (“Common Stock”) and (ii) any subsequent series of Preferred Stock which is designated by the Corporation (with the Common Stock, a “Junior Security”), as to distributions of assets upon liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary (all such distributions being referred to collectively as “Distributions”). The Series B Preferred Stock shall rank junior (i) to the Corporation’s Series A Convertible Preferred Stock, $0.0001 par value per share (“Series A Preferred”) as to Distributions. In the event of any voluntary or involuntary Liquidation (as hereinafter defined) of the Corporation, before any distribution of assets of the Corporation shall be made to or set apart for the holders of any Junior Security, the Holders of Series B Preferred Stock shall be entitled to receive payment out of such assets of the Corporation in an amount equal to One Thousand Dollars ($1,000) per share of Series B Preferred Stock, plus any unpaid dividends (if declared) on the Series B Preferred Stock (such amount being referred to as the “Liquidation Preference”).
Section 3. Dividends. Other than a distribution in connection with a Liquidation, each share of Series B Preferred Stock shall be entitled to receive, when, if and as declared by the Board, out of funds legally available therefore, non-cumulative dividends, distributions of assets in kind, or distributions of indebtedness by the Corporation equal to the amount of dividends, distributions and evidences of indebtedness that the Holder of such share would have received if such share were converted into shares of Common Stock under the circumstances described in Section 5 hereof immediately prior to the record date of the dividend or distribution declared on the Common Stock.
Section 4. Voting Rights. Except as set forth specifically below, the Holder of each share of the Series B Preferred Stock shall be entitled to the number of votes equal to the number of shares of Common Stock into which such share of Series B Preferred Stock would be convertible under the circumstances described in Section 5 hereof on the record date for the vote or consent of shareholders. Each Holder of a share of the Series B Preferred Stock shall be entitled to receive the same prior notice of any shareholders’ meeting as provided to the holders of Common Stock in accordance with the Bylaws of the Corporation, as well as prior notice of all shareholder actions to be taken by legally available means in lieu of meeting, and shall vote with holders of the Common Stock upon any matter submitted to a vote of shareholders, except those matters required by law, or by the terms hereof, to be submitted to a class vote of the Holders of Series B Preferred Stock.
| 1 |
Section 5. Conversion of Preferred Shares to Common. The Series B Preferred Stock shall be convertible into shares of Common Stock as follows:
(a) Voluntary Conversion. Each share of Series B Preferred Stock shall be convertible at any time by the Holder thereof at the office of the transfer agent for the Common Stock (the “Transfer Agent”), and at such other place or places, if any, as the board of directors of the Corporation may designate, into that number of fully paid and non-assessable shares (calculated as to each conversion to the nearest l/100th of a share) of Common Stock equal to the Liquidation Preference of the share of Series B Preferred Stock divided by the Conversion Price. The “Conversion Price” shall initially be $0.20 per share, provided that the Conversion Price shall be subject to adjustment from time to time in certain instances as hereinafter provided.
(b) Delivery of Certificates. Before any Holder of shares of the Series B Preferred Stock shall be entitled to convert the same into Common Stock, the Holder shall surrender the certificate or certificates therefor, duly endorsed to the Corporation or in blank, at the office of the Transfer Agent or at such other place or places, if any, as the board of directors of the Corporation has designated, and shall give written notice to the Corporation at said office or place on the form of Notice of Conversion attached hereto as Exhibit I that it elects to convey the same and shall state in writing therein the name or names (with addresses) in which it wishes the certificate or certificates for Common Stock to be issued. The Corporation will, as soon as practicable thereafter, issue and deliver at said office or place to such Holder, or to its nominee or nominees, certificates for the number of full shares of Common Stock to which it shall be entitled as aforesaid. Shares of the Series B Preferred Stock shall be deemed to have been converted as of the close of business on the date of the surrender of such shares for conversion as provided above, and the person or persons entitled to receive the Common Stock issuable upon conversion shall be treated for all purposes as the record holder or holders of such Common Stock as of the close of business on such date.
(c) No Fractional Shares. If any conversion of the Series B Preferred Stock would create a fractional share of Common Stock or a right to acquire a fractional share of Common Stock, such fractional share shall be disregarded and the number of shares of Common Stock issuable upon conversion, in the aggregate, shall be rounded up to the nearest whole share.
(d) Adjustment to Conversion Price. The Conversion Price in effect at any time shall be subject to adjustment as follows:
(i) In case the Corporation shall (A) declare a dividend on its Common Stock in shares of its capital stock, (B) subdivide its outstanding shares of Common Stock, (C) combine its outstanding shares of Common Stock into a smaller number of shares, or (D) issue by reclassification of its Common Stock (including any such reclassification in connection with a consolidation or merger in which the Corporation is the continuing corporation) any shares of its capital stock, the Conversion Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification shall be proportionately adjusted so that the Holder of any share of the Series B Preferred Stock surrendered for conversion after such time shall be entitled to receive the kind and amount of shares which it would have owned or have been entitled to receive had such share of the Series B Preferred Stock been converted immediately prior to such time. Such adjustment shall be made successively whenever any event listed above shall occur.
(ii) For the purpose of any computation under this Certificate of Designation, the “Current Market Price” on any date shall be deemed to be the average of the daily closing prices per share of Common Stock for 20 consecutive business days selected by the Corporation commencing 35 business days before such date. The closing price for each day shall be the last sale price or, in case no such sale takes place on such day, the average of the closing bid and asked prices, in either case as quoted on the on the principal national securities exchange on which the Common Stock is listed or admitted to trading or, if it is not listed or admitted to trading on any national securities exchange, the average of the closing bid and asked prices as reported by the service on which the Common Stock is quoted.
(iii) All calculations under this Section 5(d) shall be made to the nearest one-hundredth of a cent or the nearest l/100th of a share, as the case may be.
| 2 |
(iv) In case of any consolidation or merger of the Corporation with or into any other corporation (other than a consolidation or merger in which the Corporation is the continuing corporation and which does not result in any reclassification, conversion, or change of the outstanding shares of Common Stock), lawful provision shall be made so that Holders of Series B Preferred Stock shall thereafter have the right to convert each share of Series B Preferred Stock into the kind and amount of shares of stock and/or other securities or property receivable upon such merger by a holder of the number of shares of Common Stock into which such shares of Series B Preferred Stock might have been converted immediately prior to such consolidation or merger. Such provision shall also provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 5(d).
(v) the Holder of each share of Series B Preferred Stock shall after such consolidation, merger, sale or transfer have the right to convert such share of the Series B Preferred Stock into the kind and amount of shares of stock and other securities and property which such Holder would have been entitled to receive upon such consolidation, merger, sale or transfer if he had held the Common Stock issuable upon the conversion of such share of the Series B Preferred Stock immediately prior to such consolidation, merger, sale or transfer.
(vi) In the event that at any time, as a result of an adjustment made pursuant to paragraph (i) above, the Holder of any share of Series B Preferred Stock surrendered for conversion shall become entitled to receive any securities other than shares of Common Stock, thereafter the amount of such other securities so receivable upon conversion of any share of the Series B Preferred Stock shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Stock contained in paragraphs (i) to (iv), inclusive, above, and the provisions of this Section 5(d) with respect to the Common Stock shall apply on like terms to any such other securities.
(vii) No adjustment in the Conversion Price shall be required unless such adjustment would require a change of at least l% in the Conversion Price; provided, however, that any adjustments which by reason of this paragraph (vi) are not required to be made shall be carried forward and taken into account in any subsequent adjustment.
(e) Notice of Adjustment. Whenever the Conversion Price is adjustable as herein provided:
(i) the Corporation shall promptly file with the Transfer Agent for the Series B Preferred Stock a certificate of the treasurer of the Corporation setting forth the adjusted Conversion Price and showing in reasonable detail the facts upon which such adjustment is based, including a statement of the consideration received or to be received by the Corporation for any shares of Common Stock issued or deemed to have been issued; and
(ii) a notice stating that the Conversion Price has been adjusted and setting forth the adjusted Conversion Price, and within ten (10) business days after it is required, said notice shall be mailed to all Holders of Series B Preferred Stock determined as of the date the notice was first required, and upon the mailing of such notice no other notice need be given of that adjustment in the Conversion Price.
(f) Reservation of Shares. The Corporation shall at all times reserve and keep available or make provision to increase, reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all then outstanding Series B Preferred Stock into Common Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, the Corporation will take such corporate action as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose.
(g) Taxes. The issue of the stock certificates upon conversion of the Series B Preferred Stock shall be made without charge to the converting Holder for any transfer tax in respect of such issue; provide, however, that the Corporation shall be entitled to withhold any applicable withholding taxes with respect to such issue, if any. The Corporation shall not however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares in any name other than that of the Holder of any of the Series B Preferred Stock converted, and the Corporation shall not be required to issue or deliver any such stock certificated unless and until the person on persons requesting the issue thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid.
| 3 |
Section 6. Redemption.
(a) Redemption by Corporation. The Corporation may, at any time on twenty (20) days prior written notice to the Holder, redeem all, and not less than all, shares of Series B Preferred Stock which are outstanding for the Liquidation Preference of such shares.
(b) Redemption by Holders Upon a Default. Holders owning a majority of the outstanding shares of Series B Preferred Stock may, any time on thirty (30) days prior written notice to the Corporation, require that the Corporation redeem all shares of Series B Preferred at a price equal to the Liquidation Preference for such shares in the event the Corporation is in default under any representation, warranty or covenant made for the benefit of the Series B Preferred, and fails to cure such default within thirty (30) days after written notice from the Holders of a majority of the outstanding shares of Series B Preferred Stock, unless the default is of a nature that it cannot be cured, in which event the notice of default shall be effective on the date of receipt by the Corporation.
(c) Redemption in the Event of Fundamental Transaction.
(i) At least twenty (20) days prior to consummating in a Fundamental Transaction, the Corporation shall send each Holder of Series B Preferred Stock a notice of the proposed Fundamental Transaction (a “Fundamental Transaction Notice”). The Corporation shall also be entitled to send each Holder of Series B Preferred Stock a new Fundamental Transaction Notice at least twenty (20) days prior to consummation of a Fundamental Transaction in the event a material change occurs in the terms of a previously noticed Fundamental Transaction.
(ii) The Corporation shall be obligated to redeem all, and not less than all, shares of Series B Preferred Stock which are outstanding for the Liquidation Preference of such shares at the consummation of the Fundamental Transaction, provided that upon receipt of a Fundamental Transaction Notice, each Holder of Series B Preferred Stock shall be entitled to send the Corporation a conditional Notice of Conversion, under which the Holder’s shares of Series B Preferred Stock shall be converted into Common Stock pursuant to Section 5 herein immediately prior to the closing of the Fundamental Transaction, but shall not be converted in the event the proposed Fundamental Transactions is not consummated.
(iii) A “Fundamental Transaction” shall include any of the following: (x) the merger or consolidation of the Corporation into or with another corporation or entity, reorganization or sale of the Corporation, or sale of capital stock by the Corporation, in which the shareholders of the Corporation immediately preceding such merger, consolidation, or reorganization (solely by virtue of their shares or other securities of the Corporation) shall own less than fifty percent (50%) of the voting securities of the surviving corporation; (y) the sale, transfer or lease (but not including a permitted transfer or lease by pledge or mortgage to a bona fide lender), whether in a single transaction or pursuant to a series of related transactions or plan, of 50% or more of the assets of the Corporation, based on the fair market value of the Corporation’s assets as mutually determined by the Corporation and the Holders of at least a majority of the voting power of all then outstanding shares of the Series B Preferred Stock, which assets shall include for these purposes fifty percent (50%) or more of the outstanding voting capital stock of any subsidiaries of the Corporation, the assets of which constitute all or substantially all of the assets of the Corporation and its subsidiaries taken as a whole; or (z) the sale, transfer or lease (but not including a permitted transfer or lease by pledge or mortgage to a bona fide lender), whether in a single transaction or pursuant to a series of related transactions, of all or substantially all of the assets of the subsidiaries of the Corporation, the assets of which constitute all or substantially all of the assets of the Corporation and such subsidiaries taken as a whole.
(d) Payment of Redemption Amount. Any redemption by the Corporation shall be effective on the twentieth (20th) day after notice of redemption is sent by the Corporation to the Holder pursuant to Section 6(a) or the dates described in Sections 6(b) or 6(c) for a redemption thereunder (a “Redemption Date”). After the Redemption Date, all shares of Series B Preferred Stock that are redeemed shall no longer be considered issued and outstanding, and shall have no right to vote on any matter upon which shares would be entitled to vote if still issued and outstanding. Nothing shall prohibit any Holder from exercising any right to convert the Series B Preferred Stock into Common Stock between the date a notice of redemption is sent and the Redemption Date. On or before the date of a scheduled Redemption Date and in connection therewith, each holder of shares of Series B Preferred Stock shall surrender the certificate representing such shares to the Corporation and shall receive payment of the Redemption Price in cash on the Redemption Date. If less than all the shares represented by a surrendered certificate are redeemed, the Corporation shall issue a new certificate representing the unredeemed shares.
| 4 |
Section 7. Liquidation Rights.
(a) In the event of any liquidation, dissolution or winding up of the Corporation (a “Liquidation”), either voluntary or involuntary, the Holders of the Series B Preferred Stock shall, by reason of their ownership thereof, be entitled to receive, prior and in preference to any distribution of any of the assets of the Corporation to the holders of Common Stock and any other series of Preferred Stock an amount per share equal to the Liquidation Preference of the Series B Preferred Stock as of the record date for distribution, provided that the record date for the distribution may be no more than twenty (20) calendar days prior to the date of the distribution. If upon the occurrence of such event, the assets and funds thus distributed among the Holders of the Series B Preferred Stock shall be insufficient to permit the payment to such Holders of the full aforesaid preferential amounts, then the entire assets and funds of the Corporation legally available for distribution shall be distributed ratably among the Holders of the Series B Preferred Stock in proportion to the preferential amount each such Holder is otherwise entitled to receive.
(b) Upon the completion of the distribution required by subparagraph (a) of this Section 7, the remaining assets of the Corporation available for distribution to shareholders shall be distributed among the holders of any junior series of Preferred Stock, if any, and the Common Stock in accordance with the terms of such junior series of Preferred Stock.
Section 8. Protective Provisions.
(a) Actions Requiring Majority Approval of Series B Preferred Stock. In addition to any other rights provided by law, so long as any shares of Series B Preferred Stock are then outstanding, except where the vote or written consent of the holders of a greater number of shares is required by law or by another provision of the Certificate of Incorporation, without first obtaining the affirmative vote or written consent of the holders of at least a majority of the total number of shares of the Series B Preferred Stock outstanding, voting as a separate class, the Corporation shall not:
(i) voluntarily or involuntarily liquidate, dissolve or wind up the Corporation or its business;
(ii) create or increase, or authorize the creation or increase of the authorized amount of any additional class or series of shares of stock, unless the same ranks junior to the Series B Preferred Stock as to dividends, redemption and the distribution of assets on the liquidation, dissolution or winding up of the Corporation, or create or authorize any obligation or security convertible into shares of Common Stock, Series B Preferred Stock or any other class or series of stock, whether voting or non-voting, unless an adequate number of shares have been reserved for the issuance of such shares of Common Stock, Series B Preferred Stock or other class or series of stock upon such conversion, regardless of whether any such creation, authorization or increase shall be by means of amendment to the Certificate of Incorporation, or by merger, consolidation or otherwise;
(iii) increase the size of the Corporation’s Board of Directors;
(iv) amend or repeal any provision of, or add any provision to, the Corporation’s Certificate of Incorporation or Bylaws, or file any articles of amendment designating the preferences, limitations and relative rights of any new series of Series B Preferred Stock, or engage in any other action, that would alter or change the preferences, rights, privileges or powers of, or restrictions provided for the benefit of the Series B Preferred Stock;
(v) increase or decrease the authorized number of shares of Common Stock, the Series A Preferred Stock or Series B Preferred Stock or any series thereof;
(vi) purchase, redeem or otherwise acquire for value any shares of any class of its capital stock, other than Common Stock purchased at the current market value from service providers of the Corporation upon termination of employment and other than the exercise by the Corporation of contractual rights of first refusal over such Common Stock;
(vii) merge or consolidate into or with any other corporation or sell, assign, lease, pledge, encumber or otherwise dispose (including by exclusive license or otherwise) of all or substantially all of its assets or those of any subsidiary;
| 5 |
(viii) pay or declare dividends on any capital stock other than the Series B Preferred Stock, unless the Series B Preferred Stock share ratably in such dividend and all accrued dividends payable with respect to the Series B Preferred Stock have been paid prior to the payment or declaration of such dividend;
(ix) create or hold capital stock in any subsidiary that is not a wholly-owned subsidiary or dispose of any subsidiary stock or all or substantially all of any subsidiary assets;
(x) create or commit the Corporation to enter into a joint venture, licensing agreement or exclusive marketing or other distribution agreement with respect to the Corporation’s products, other than in the ordinary course of business;
(xi) enter into, create, incur, assume, guarantee or suffer to exist any indebtedness of any kind for borrowed money of any kind (other than indebtedness to financial institutions) in excess of $1,000,000, or allow indebtedness in excess of $100,000 to be in default for more than thirty (30) days;
(xii) cease to engage in a business that is substantially similar to the business engaged in, or contemplated to be engaged in, as of the date of execution of this Certificate of Designation;
(xiii) amend the provisions of this Subsection 8(a).
(b) Information Rights of Major Investors. Any investor holding more than 25% of the Series B Preferred Stock (a “Major Investor”) will be granted access to Corporation facilities and personnel during normal business hours and with reasonable advance notification. The Corporation will deliver to each Major Investor (i) annual, quarterly and monthly financial statements, in each case prepared in accordance with generally accepted accounting principles as soon as practicable but not less than 120 days following the end of the fiscal year, 45 days following the end of a fiscal quarter and 15 days following the end of the month, respectively, and annual financial statements shall be audited by an independent nationally recognized accounting firm, provided that the Corporation shall satisfy its obligation to delivery annual and quarterly financial statements to the extent such financial statements are included in reports filed with the Securities and Exchange Commission (“SEC”) which are publicly available on its EDGAR system; (ii) 30 days prior to the end of each fiscal year, a comprehensive operating budget forecasting the Corporation’s revenues, expenses and cash position on a month to month basis for the upcoming fiscal year; and (iii) promptly following the end of each quarter, an up-to-date capitalization table. Furthermore, Major Investor(s) shall have the right to convene the Corporation’s management to no less than 3 meetings and per year, within reasonable bounds.
(c) Anti-Dilution Protection. In the event that the Corporation issues (i) shares of Common Stock at a purchase price less than the then current Conversion Price, (ii) debt or equity securities convertible into Common Stock at a conversion price less than the then current Conversion Price, (iii) options or warrants exercisable for Common Stock at an exercise price less than the then current Conversion Price, or (iv) options or warrants to purchase convertible debt or equity securities, where the combined exercise and conversion prices would enable the holder to acquire shares of Common Stock for less than the then current Conversion Price, then the Conversion Price shall be adjusted down to the lowest price at which the recipient of any such securities acquires or may be entitled to purchase Common Stock. For purposes of this adjustment, the issuance of any security carrying the right to convert such security directly or indirectly into shares of Common Stock or of any warrant, right or option to purchase Common Stock shall result in an adjustment to the Conversion Price upon the issuance of the above-described security and again upon the issuance of shares of Common Stock upon exercise of such conversion or purchase rights if such issuance is at a price lower than the then applicable Conversion Price. Notwithstanding the foregoing, the following issuances (an “Exempt Issuance”) shall not trigger adjustment to the Conversion Price:
(i) Securities issuable upon conversion of any shares of Series B Preferred Stock;
(ii) Securities issued upon the conversion of any debenture, warrant, option, or other convertible security that is outstanding on the date of issuance of the Series B Preferred Stock, including the Series A Preferred;
(iii) Common Stock issuable upon a stock split, stock dividend, or any subdivision of shares of Common Stock that results in a proportionate adjustment to the Conversion Price;
(iv) Shares of Common Stock (or options or warrants to purchase such shares of Common Stock) issued or issuable to employees or directors of, or consultants to, the Corporation pursuant to any plan approved by the Corporation’s Board of Directors.
| 6 |
(d) Right to Participate in Future Fundings. All Holders of the Series B Preferred Stock shall have a pro rata right, based on their percentage ownership of the Common Stock, assuming the conversion of all outstanding Series B Preferred Stock into Common Stock (a “Pro Rata Share”), to participate in subsequent issuances of Junior Securities or any debt security convertible into a Junior Security, but excluding any Exempt Issuance (a “Future Offering”). Prior to issuing any security in a Future Offering, the Corporation shall first notify all Holders of Series B Preferred Stock of the Future Offering at least ten (10) business days prior to the consummation of the Future Offering, which notice must contain all offering documents provided to the purchasers in the Future Offering and all documents in substantially final form that the purchasers in the Future Offering will be required to execute to participate in the Future Offering (a “ROFR Notice”). Holders shall have five (5) business days after receipt of a ROFR Notice to elect in writing to purchase their Pro Rata Share of the Future Offering. To the extent that at least one Holder, but less than all Holders, elects to purchase its Pro Rata Share in the Future Offering, the Corporation shall immediately send a second notice to such electing Holders (a “Second ROFR Notice”), who shall have two (2) business days thereafter to elect in writing to purchase any Pro Rata Share that a different Holder elected not to purchase, provided that if the total amount that electing Holders request to purchase pursuant to a Second ROFR Notice exceeds the total amount offered pursuant to the Second ROFR Notice, then the amount offered pursuant to the Second ROFR Notice shall be apportioned between the electing Holders in proportion to the number of shares of Series B Preferred Stock held by each.
(e) Right to Injunctive Relief. The Corporation agrees that its breach of this Section 8 will result in irreparable harm to the Holders, and therefore the Holder shall be entitled to obtain injunctive relief against the Corporation to preclude any such transaction that would be in violation of this Section, for which the Corporation expressly waives any requirement that the Holder post bond, which remedy shall be in addition to all remedies available to it at law or in equity.
Section 9. Miscellaneous.
(a) Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, by e-mail or sent by a nationally recognized overnight courier service, addressed to the Corporation, at its principal executive offices, as reflected in the most recent report filed with the SEC pursuant to Section 13 or 15 of the Securities Exchange Act of 1934 or, if the Corporation is not then required to file reports pursuant to Sections 13 or 15 of the Securities Exchange Act of 1934, at its principal executive offices as reflected by its last annual report filed with the Delaware Secretary of State, or at such other address, facsimile number or electronic mail address as the Corporation may specify for such purposes by notice to the Holders delivered in accordance with this Section. Any and all notices or other communications or deliveries to be provided by the Corporation hereunder shall be in writing and delivered personally, by e-mail, sent by a nationally recognized overnight courier service addressed to each Holder at the e-mail address or address of such Holder appearing on the books of the Corporation, or if no such e-mail address or address appears, at the principal place of business of the Holder. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission (accompanied by confirmation of such transmission), if such notice or communication is delivered via e-mail at the e-mail address, as applicable, specified in this Section prior to 5:30 p.m. (Atlanta, Georgia time), (ii) the date after the date of transmission (accompanied by confirmation of such transmission), if such notice or communication is delivered via e-mail at the e-mail address, as applicable, specified in this Section later than 5:30 p.m. (Atlanta, Georgia time) on any date and earlier than 11:59 p.m. (Atlanta, Georgia time) on such date, (iii) the first business day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.
(b) Lost or Mutilated Series B Preferred Stock Certificate. If a Holder’s Series B Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of Series B Preferred Stock so mutilated, lost, stolen or destroyed but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership hereof, and indemnity, if requested, all reasonably satisfactory to the Corporation.
| 7 |
(c) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Certificate of Designation shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of this Certificate of Designation (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in Delaware. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the Delaware courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or such Delaware courts are an improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Certificate of Designation and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Certificate of Designation or the transactions contemplated hereby. If either party shall commence an action or proceeding to enforce any provisions of this Certificate of Designation, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
(d) Waiver. Any waiver by the Corporation or the Holder of a breach of any provision of this Certificate of Designation shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate of Designation. The failure of the Corporation or the Holder to insist upon strict adherence to any term of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Certificate of Designation. Any waiver must be in writing.
(e) Severability. If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of this Certificate of Designation shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest.
(f) Next Trading Day. Whenever any payment or other obligation hereunder shall be due on a day other than a business day, such payment shall be made on the next succeeding business day.
(g) Headings. The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designation and shall not be deemed to limit or affect any of the provisions hereof.
(h) Status of Converted Series B Preferred Stock. In the event any shares of Series B Preferred Stock shall be converted pursuant to Section 5 hereof, the shares so converted shall be cancelled, and shall return to the status of authorized but unissued Preferred Stock of no designated series, and shall not be issuable by the Corporation as Series B Preferred Stock.
IN WITNESS WHEROF, the undersigned being a duly authorized officer of the Corporation, does file this Certificate of Designation, Rights and Preferences, hereby declaring and certifying that the facts stated herein are true and accordingly has hereunto set his hand this 4th day of November, 2024.
BITMINE IMMERSION TECHNOLOGIES, INC.
| By: | |||
| Name: | Jonathan Bates | ||
| Title: | Chief Executive Officer | ||
| 8 |
EXHIBIT 1
FORM OF CONVERSION NOTICE
(To be executed by the registered holder in order to convert shares of Series B Preferred Stock)
The undersigned hereby irrevocably elects to convert the number of shares of Series B Convertible Series B Preferred Stock (the “Series B Preferred Stock”) indicated below into shares of common stock, par value $0.0001 per share (the “Common Stock”), of Bitmine Immersion Technologies, Inc., a Delaware corporation (the “Corporation”), according to the Certificate of Designations, Rights and Preferences of the Series B Preferred Stock and the conditions hereof, as of the date written below. The undersigned hereby requests that certificates for the shares of Common Stock to be issued to the undersigned. The undersigned will pay all transfer taxes and fees payable with respect thereto. A copy of the certificate representing the Series B Preferred Stock being converted is attached hereto, the original of which will be delivered to the Corporation promptly following the date hereof.
| Date of Conversion (Date of Notice) |
| Number of shares of Series B Preferred Stock owned prior to Conversion |
| Number of shares of Series B Preferred Stock to be Converted |
| Stated Value of Series B Preferred Stock to be Converted |
| Amount of unpaid dividends (if any) on shares of Series B Preferred Stock to be Converted |
| Number of shares of Common Stock to be Issued (including conversion of unpaid dividends on shares of Series B Preferred Stock to be Converted) |
| Applicable Conversion Value |
| Number of shares of Series B Preferred Stock owned subsequent to Conversion |
Conversion Information: [NAME OF HOLDER]
| Address of Holder: | |
| Name of Holder |
| By: | |||
| Name: | |||
| Title: | |||
| 9 |
Exhibit 10.1
AMENDMENT OF LINE OF CREDIT AGREEMENT BETWEEN BITMINE IMMERSION TECHNOLOGIES, INC.
AND INNOVATIVE DIGITAL INVESTORS EMERGING TECHNOLOGY, L.P.
THIS AGREEMENT (the “Agreement”) dated November 4, 2024 (the “Agreement Date”) is made and entered into by and between Bitmine Immersion Technologies, Inc., a Delaware corporation (“Bitmine”), and Innovative Digital Investors Emerging Technology, L.P., a Delaware limited partnership (“IDI”). Bitmine and IDI may also be referred to as a “Party” and collectively as the “Parties.”
WHEREAS, on October 19,2022, Bitmine and IDI entered into a Line of Credit Agreement (the “LOC Agreement”), which was amended on May 13, 2023;
WHEREAS, the Parties desire to further amendment the LOC Agreement to increase the amount that Bitmine may borrow thereunder and to provide for Bitmine’s right to extend the maturity date of the LOC.
NOW, THEREFORE, in consideration for the mutual covenants and agreements set forth herein and for other good and valuable consideration set forth herein, the receipt and sufficiency of which are hereby acknowledged, the undersigned agrees as follows:
1. Increase in Availability. The Parties hereby agree to amend the LOC Agreement to increase the amount that Bitmine may borrow thereunder to $2,300,000, and to extend the date by which Bitmine may request draws thereunder to November 15, 2024. In connection therewith, IDI hereby approves a draw request of $250,000.
2. Extension of Maturity Date. The Parties agree that Bitmine shall have the right to extend the maturity date of amounts due under the LOC Agreement for up to six extensions of one month each. Bitmine may request an extension in writing before the maturity date, but if it does not pay the balance of the amounts due under the LOC Agreement by the maturity date, then Bitmine shall be deemed to have made an extension request and the LOC Agreement shall be extended for an additional month. Bitmine shall be obligated to pay an extension fee of $25,000 for each extension of the maturity date, which amount shall be added to the amount due under the LOC Agreement on the maturity date if it is not paid in full on that date.
3. Existing LOC Agreement. Nothing herein shall alter, amend or modify the LOC Agreement except to the extent specifically addressed herein. All terms used herein shall have the same meaning that they have in the LOC Agreement unless defined otherwise herein.
4. Miscellaneous.
(a) Further Assurances. At any time if any further actions are reasonably necessary to carry out the purposes of this Agreement, each of the parties will take such further actions, including the execution and delivery of agreements, instruments or other documents, as any other party may reasonably request.
(b) Third Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their permitted assigns and nothing herein expressed or implied shall give or be construed to give to any person, other than the parties hereto and such assigns, any legal or equitable rights hereunder.
(c) Severability. If any provision hereof (or any portion thereof) or the application of any such provision (or any portion thereof) to any person or circumstance shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision hereof (or the remaining portion thereof) or the application of such provision to any other persons or circumstances.
(d) Successors in Interest. This Agreement and all of the provisions hereof shall be binding upon the parties hereto and shall inure to the benefit of their successors and permitted assigns.
(e) Amendments. This Agreement may be amended only with consent of the parties hereto. No amendment shall be effective unless it shall be in writing and signed by the parties.
| 1 |
(f) Entire Agreement. This Agreement encompasses the entire agreement between the parties, with respect to the subject matter covered hereby, and there are no other agreements, oral or written not set forth herein.
(g) Governing Law. This Agreement shall be interpreted in accordance with the laws of the State of Georgia, without regard to Georgia’s conflict of law principles.
(h) Counterparts. This Agreement may be executed in one or more counterparts (including by means of facsimile, electronic signature, pdf or electronic scan, each of which shall be deemed an original), all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the parties and delivered to the other parties.
WITNESS the execution hereof under seal as of the Effective Date.
Bitmine:
Bitmine Immersion Technologies, Inc., a Delaware corporation
__________________________________
By: Raymond Mow, Chief Financial Officer
IDI:
Innovative Digital Investors Emerging Technology, LP,
a
Delaware limited partnership
By: Innovative Digital Investors, LLC, its general partner
__________________________________
By: Jonathan Bates, Managing Member
| 2 |