Core Scientific, Inc. and Celsius Mining LLC Enter into Purchase Agreement for Core Scientific’s Texas Data Center Site, Agree to Settle All Existing Litigation

Rhea-AI Summary

Celsius Mining to acquire Core Scientific's Bitcoin mining data center site for $14 million, settling all existing litigation. The site includes 215 MW of power and buildings under construction. Celsius plans to expand its Texas data centers and remain one of the largest Bitcoin producers in North America. U.S. Bitcoin Corp will manage the construction of the facility. The transaction is subject to bankruptcy court approval.

Positive

• Celsius Mining's acquisition of Core Scientific's Bitcoin mining data center site provides an opportunity for expansion and growth, with plans to become one of the largest Bitcoin producers in North America.

Negative

• The transaction is subject to bankruptcy court approval, which may introduce uncertainty and potential delays.

Celsius Mining LLC to Acquire and Operationalize Core Scientific’s Partially Developed Ward County Bitcoin Mining Data Center Site; Companies Agree to Settle All Existing Litigation

AUSTIN, Texas--(BUSINESS WIRE)-- Core Scientific, Inc. (OTC: CORZQ) ("Core Scientific" or “the Company”), a leader in high-performance blockchain computing data centers and software solutions, and Celsius Mining LLC, Bitcoin mining subsidiary of Celsius Network (“Celsius”), today announced an agreement to sell Core Scientific’s Ward County, Texas (“Cedarvale”) Bitcoin mining data center site to Celsius and to settle all existing litigation between the two parties for total cash consideration of $14 million.

“We are pleased to resolve all existing litigation related to Celsius Mining,” said Adam Sullivan, CEO of Core Scientific. “With unwavering focus, we continue to deliver on our commitment to enhance the operational excellence of the organization and emerge from our restructuring process later this year even stronger. Executing our three-year roadmap to drive growth, we plan to expand our two operational Texas data centers to provide sufficient capacity for us to remain one of the largest and most efficient Bitcoin producers at scale in North America.”

The proposed sale of the partially developed, non-operational Cedarvale data center site includes 215 megawatts of available power, buildings under construction, equipment and designs to enable the completion of the facility. If approved, the parties would reach a settlement and mutual release with respect to all existing litigation.

This purchase sets an early foundation for Celsius to reach a value-maximizing conclusion with Fahrenheit LLC (“Fahrenheit”), Celsius’ previously announced Plan Sponsor. Fahrenheit will provide the capital, management team, and technology required to successfully establish and operate the new company (“NewCo”).

“Securing the Cedarvale site further increases Celsius’ commitment to West Texas, growing our self-mining portfolio to an impressive 300 megawatts,” said Chris Ferraro, Chief Restructuring Officer and Interim Chief Executive Officer of Celsius Network. “This outcome was made possible through the collaboration of Celsius and US Bitcoin Corp, who played a key supporting role in structuring and executing the transaction. We are pleased to settle all existing litigation and look forward to focusing on expanding the Cedarvale capabilities and completing the site.”

U.S. Data Mining Group, Inc. dba US Bitcoin Corp (“USBTC”) will be contracted to manage the construction of the 215 MW Cedarvale facility. As previously announced, USBTC was selected as a member firm of the winning bidder in a bankruptcy auction to manage and operate the mining assets owned by Celsius. In addition to the Cedarvale development project, USBTC has been engaged by Celsius prior to the Plan Effective Date to begin scaling and optimizing the mining business of Celsius.

“We're extremely pleased with the success of this transaction, a milestone that significantly bolsters NewCo’s mining division. It reinforces our confidence in the potential that NewCo will capture through Fahrenheit's leadership,” said Asher Genoot, President and Co-Founder of USBTC. “We are committed to driving further value to the Celsius estate prior to emergence and are eager to lead the development of the Cedarvale assets.”

The Cedarvale site transaction does not affect Core Scientific’s mining fleet and the site is not included in its three-year roadmap, which was filed publicly in June 2023. The mutually agreed value of the site is $45 million, and the total cash consideration paid by Celsius to Core Scientific is $14 million.

As of August 31, 2023, Core Scientific operated approximately 206,000 Bitcoin miners for both self-mining and colocation, representing a total potential hash rate of 22.0 exahashes per second at its data center facilities in Georgia, Kentucky, North Carolina, North Dakota and Texas. Core Scientific’s self-mining operations produced 965 Bitcoin in July, and 9,756 Bitcoin year to date through August 31, more than any other listed Bitcoin miner in North America.

Given that the Company and Celsius have each filed voluntary petitions for Chapter 11 restructuring in the Southern District of Texas and the Southern District of New York, respectively, the proposed agreement is subject to approval in both Bankruptcy Court jurisdictions.

ADDITIONAL INFORMATION

For additional information about Core Scientific’s Chapter 11 cases, please visit https://cases.stretto.com/CoreScientific. Stakeholders with questions may call Stretto at +1 (888) 765-7875 (U.S.) or +1 (949) 404-4152 (international).

Additional information about Celsius’ Chapter 11 filing, including Court documents, can be found online free of charge at https://cases.stretto.com/celsius. Stakeholders with questions may call Stretto at +1 (855) 423-1530 (U.S.) or +1 (949) 669-5873 (international) or email celsiusinquiries@stretto.com.

ABOUT CORE SCIENTIFIC

Core Scientific (OTC: CORZQ) is one of the largest blockchain computing data center providers and miners of digital assets in North America. Core Scientific has operated blockchain computing data centers in North America since 2017, using its facilities and intellectual property portfolio for colocated digital asset mining and self-mining. Core Scientific operates data centers in Georgia, Kentucky, North Carolina, North Dakota and Texas. Core Scientific’s proprietary Minder® fleet management software combines the Company’s colocation expertise with data analytics to deliver maximum uptime, alerting, monitoring and management of all miners in the Company’s network. To learn more, visit http://www.corescientific.com.

ABOUT CELSIUS MINING LLC

Celsius Mining LLC, is a Bitcoin mining subsidiary of Celsius Network, the global cryptocurrency platform and a well-recognized leader in Bitcoin mining. For additional information on Celsius, please visit http://www.celsius.network. For additional information on Celsius’ ongoing chapter 11 cases, please visit http://www.cases.stretto.com/celsius.

FORWARD LOOKING STATEMENTS AND EXPLANATORY NOTES

This press release includes “forward-looking statements'' within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “estimate,” “plan,” “project,” “forecast,” “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. These forward-looking statements include, but are not limited to, those related to Core Scientific The Company’s ability to scale and grow its business, meet its expected operating plan, source clean and renewable energy, the advantages and expected growth of the Company, future estimates of revenue, net income, adjusted EBITDA, total debt, free cash flow, liquidity and future financing availability, future estimates of computing capacity and operating capacity, future demand for colocation capacity, future estimate of hash rate (including mix of self-mining and colocation) and operating gigawatts, future projects in construction or negotiation and future expectations of operation location, orders for miners and critical infrastructure, future estimates of self-mining capacity, the public float of the Company’s shares, future infrastructure additions and their operational capacity, and operating capacity and site features of the Company’s operations and planned operations. These statements are provided for illustrative purposes only and are based on various assumptions, whether or not identified in this press release, and on the current expectations of the Company’s management. These forward-looking statements are not intended to serve, and must not be relied on by any investor, as a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of the Company. These forward-looking statements are subject to a number of risks and uncertainties, including, but not limited to, the Company’s ability to obtain bankruptcy court approval with respect to motions in its Chapter 11 cases, successfully enter into and implement a restructuring plan, emerge from Chapter 11 and achieve significant cash flows from operations; the effects of the Chapter 11 cases on the Company and on the interests of various constituents, bankruptcy court rulings in the Chapter 11 cases and the outcome of the Chapter 11 cases in general, the length of time the Company will operate under the Chapter 11 cases, risks associated with any third-party motions in the Chapter 11 cases, the potential adverse effects of the Chapter 11 cases on the Company’s liquidity or results of operations and increased legal and other professional costs necessary to execute the Company’s reorganization; satisfaction of any conditions to which the Company’s debtor-in-possession financing is subject and the risk that these conditions may not be satisfied for various reasons, including for reasons outside of the Company’s control; the consequences of the acceleration of the Company’s debt obligations; the trading price and volatility of the Company’s common stock as well as other risk factors set forth in the Company’s reports filed with the U.S. Securities & Exchange Commission. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. Accordingly, undue reliance should not be placed upon the forward-looking statements.

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Source: Core Scientific, Inc.