Core Scientific Announces Tranche 2 Warrants Triggering Event

Rhea-AI Summary

Core Scientific (NASDAQ: CORZ) has announced that its tranche 2 warrants (CORZZ) are now exercisable until January 23, 2029. This follows the satisfaction of the “TEV Triggering Event” as per the Warrant Agreement with Computershare. The event occurred after the daily volume weighted average trading price (VWAP) of Core Scientific’s common stock exceeded $8.72 for 20 consecutive trading days, closing on July 11, 2024. There are 81,927,898 tranche 2 warrants outstanding, each exercisable into one share of common stock at an exercise price of $0.01 per share. CEO Adam Sullivan attributed this milestone to the company’s strong operational and trading performance, highlighting their ongoing diversification strategy in HPC hosting and bitcoin mining.

Positive

• Tranche 2 warrants, exercisable at $0.01 per share, present a significant opportunity for investors.
• The company's stock exceeded $8.72 VWAP for 20 consecutive days, indicating strong market performance.
• Extended warrant exercisability until January 23, 2029, provides long-term investment potential.

Negative

• A large number of outstanding warrants (81,927,898) could lead to significant shareholder dilution.

Financial Analyst

Core Scientific's announcement regarding the exercisability of tranche 2 warrants is noteworthy for investors. The key detail here is that the warrants are now exercisable due to the company's strong share price performance. Specifically, the stock's VWAP exceeded $8.72 per share for 20 consecutive trading days. The exercisability of these warrants until January 23, 2029, implies a long-term confidence in the company's stock. This can attract more investors, potentially increasing liquidity and trading volume.

From a financial perspective, the exercisable warrants can lead to potential dilution of existing shares if they are exercised. Since each of the 81,927,898 warrants can be converted into 1 share at an exercise price of $0.01 per share, it could significantly increase the number of outstanding shares. This warrants exercise could affect earnings per share (EPS) and may place downward pressure on the stock price over time. However, the influx of capital from exercised warrants can also be used for strategic investments, debt reduction, or other initiatives aimed at value creation.

In short-term, investors might see increased stock performance due to heightened interest and confidence in the company's stability. In the long-term, watch for potential impacts on share dilution and how the company utilizes the additional capital raised through these warrants.

Market Research Analyst

This announcement can significantly impact Core Scientific's market perception. The satisfaction of the TEV Triggering Event shows that the company has achieved a consistent stock performance, which reflects stability and investor confidence. This milestone might also imply that strategic initiatives undertaken by the company are bearing fruit, especially in the competitive sector of bitcoin mining and HPC hosting services.

For retail investors, the exercisability of warrants may signal that Core Scientific is on a strong growth trajectory. It is worth noting the potential for share dilution when these warrants are eventually exercised. However, this should be weighed against the benefits of increased capital which the company might use to fuel further growth or improve its operational efficiency.

In addition, Core Scientific's progress in the digital infrastructure for bitcoin mining places them in a favorable position within a rapidly evolving industry. The exercisability of these tranche 2 warrants will likely enhance investor sentiment and reinforce the company's market standing.

Strong Share Price Performance Makes Tranche 2 Warrants Exercisable until January 23, 2029

AUSTIN, Texas--(BUSINESS WIRE)-- Core Scientific, Inc. (NASDAQ: CORZ) (“Core Scientific” or the “Company”), one of the largest owners and operators of high-powered digital infrastructure for bitcoin mining and hosting services in North America, today announced the satisfaction of the “TEV Triggering Event” pursuant to the Warrant Agreement among the Company, Computershare, Inc. and its affiliate Computershare Trust Company, N.A., acting as Warrant Agent. As a result, the tranche 2 warrants (CORZZ) are exercisable at the option of the holder until expiration on January 23, 2029.

The tranche 2 warrants became exercisable as of the close of trading on July 11, 2024, when the daily volume weighted average trading price (“VWAP”) of the Company’s common stock exceeded $8.72 per share for 20 consecutive trading days. 81,927,898 tranche 2 warrants, each exercisable into 1 share of Company common stock at an exercise price of $.01 per share, are currently outstanding.

“The continued strength of our operating and trading performance has led to this important milestone,” said Adam Sullivan, Chief Executive Officer. “By executing our diversification strategy for HPC hosting and bitcoin mining, we believe we remain on a path toward even greater value creation.”

Additional Information Regarding Exercise of Tranche 2 Warrants

Tranche 2 warrants (CORZZ, CUSIP 21874A130) can be exercised by brokers on the DTC WARR platform. The CUSIP for Core Scientific Common Stock is 21874A106.

About Core Scientific

Core Scientific is one of the largest owners and operators of high-powered digital infrastructure for bitcoin mining and hosting services in North America. Transforming energy into high value compute with superior efficiency at scale, we employ our own large fleet of computers (“miners”) to earn bitcoin for our own account and provide hosting services for large bitcoin mining and high-performance computing customers at our eight operational data centers in Georgia (2), Kentucky (1), North Carolina (1), North Dakota (1) and Texas (3). We derive the majority of our revenue from earning bitcoin for our own account (“self-mining”). To learn more, visit www.corescientific.com.

FORWARD LOOKING STATEMENTS

This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding projections, estimates and forecasts of revenue and other financial and performance metrics, projections of market opportunity and expectations, the Company’s ability to scale and grow its business, source clean and renewable energy, the advantages and expected growth of the Company and the Company’s ability to source and retain talent. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “aim,” “estimate,” “plan,” “project,” “forecast,” “goal,” “intend,” “will,” “expect,” “anticipate,” “believe,” “seek,” “target” or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. All forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including: our ability to earn digital assets profitably and to attract customers for our hosting capabilities; our ability to maintain our competitive position as digital asset networks experience increases in total network hash rate; our ability to raise additional capital to continue our expansion efforts or other operations; our need for significant electric power and the limited availability of power resources; the potential failure in our critical systems, facilities or services we provide; the physical risks and regulatory changes relating to climate change; potential significant changes to the method of validating blockchain transactions; our vulnerability to physical security breaches, which could disrupt our operations; a potential slowdown in market and economic conditions, particularly those impacting the blockchain industry and the blockchain hosting market; the identification of material weaknesses in our internal control over financial reporting; price volatility of digital assets and bitcoin in particular; the “halving” of rewards available on the Bitcoin network, or the reduction of rewards on other networks, affecting our ability to generate revenue as our customers may not have an adequate incentive to continue mining and customers may cease mining operations altogether; the potential that insufficient awards from digital asset mining could disincentivize transaction processors from expending processing power on a particular network, which could negatively impact the utility of the network and further reduce the value of its digital assets; the requirements of our existing debt agreements for us to sell our digital assets earned from mining as they are received, preventing us from recognizing any gain from appreciation in the value of the digital assets we hold; potential changes in the interpretive positions of the SEC or its staff with respect to digital asset mining firms; the increasing likelihood that U.S. federal and state legislatures and regulatory agencies will enact laws and regulations to regulate digital assets and digital asset intermediaries; increasing scrutiny and changing expectations with respect to our ESG policies; the effectiveness of our compliance and risk management methods; the adequacy of our sources of recovery if the digital assets held by us are lost, stolen or destroyed due to third-party digital asset services; the effects of our emergence from bankruptcy on our financial results, business and business relationships; and our substantial level of indebtedness and our current liquidity constraints affecting our financial condition and ability to service our indebtedness. Any such forward-looking statements represent management’s estimates and beliefs as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.

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View source version on businesswire.com: https://www.businesswire.com/news/home/20240712028215/en/

Investors:

ir@corescientific.com

Media:

press@corescientific.com

Joseph Sala / Mahmoud Siddig

Joele Frank, Wilkinson Brimmer Katcher

(212) 355-4449

Source: Core Scientific, Inc.

FAQ

When can Core Scientific's tranche 2 warrants (CORZZ) be exercised?

The tranche 2 warrants (CORZZ) can be exercised until January 23, 2029.

What triggered the exercisability of Core Scientific's tranche 2 warrants?

The tranche 2 warrants became exercisable after the VWAP of Core Scientific's stock exceeded $8.72 for 20 consecutive trading days, closing on July 11, 2024.

How many tranche 2 warrants are outstanding for Core Scientific?

There are 81,927,898 tranche 2 warrants outstanding.

What is the exercise price for Core Scientific's tranche 2 warrants?

Each tranche 2 warrant is exercisable into one share of common stock at an exercise price of $0.01 per share.

What is the significance of the TEV Triggering Event for Core Scientific (CORZ)?

The TEV Triggering Event signifies that Core Scientific met the criteria for its tranche 2 warrants to become exercisable, reflecting strong operational and trading performance.