Core Scientific, Inc 8-K, filed Jun 21, 2023

About this 8-K

Items reported

Core Scientific, Inc. (CORZ)

8-K 2023-06-21 For: 2023-06-20

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Added on April 09, 2026

Core Scientific, Inc filed this 8-K on June 21, 2023, reporting on events of June 20, 2023.

Core Scientific, Inc.

Date: June 21, 2023

/s/ Todd M. DuChene

Name: Todd M. DuChene

Title: Chief Legal Officer and Chief Administrative Officer

Item 7.01: Regulation FD disclosure
Item 9.01: Financial statements and exhibits

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Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0001 per share	CORZQ	*
Warrants, exercisable for shares of common stock	CRZWQ	*


Exhibit		Description

99.1		Debtors’ Proposed Joint Chapter 11 Plan of Reorganization of Core Scientific, Inc. and its Debtor Affiliates, dated June 20, 2023

99.2		Debtors’ Proposed Disclosure Statement for Debtors’ Joint Chapter 11 Plan of Reorganization of Core Scientific, Inc. and its Debtor Affiliates, dated June 20, 2023

99.3		Presentation

104		Cover page Interactive Data File (embedded within the Inline XBRL document).


	§
In re:	§	Chapter 11
	§
CORE SCIENTIFIC, INC., *et al.,*	§	Case No. 22-90341 (DRJ)
	§
Debtors¹	§	(Jointly Administered)
	§


WEIL, GOTSHAL & MANGES LLP		WEIL, GOTSHAL & MANGES LLP
Alfredo R. Pérez (15776275) Clifford W. Carlson (24090024) 700 Louisiana Street, Suite 1700 Houston, Texas 77002 Telephone: (713) 546-5000 Facsimile: (713) 224-9511		Ray C. Schrock (admitted pro hac vice) Ronit J. Berkovich (admitted pro hac vice) 767 Fifth Avenue New York, New York 10153 Telephone: (212) 310-8000 Facsimile: (212) 310-8007

Attorneys for the Debtors and Debtors in Possession

Dated: June 20, 2023
Houston, Texas


	Page
ARTICLE I. DEFINITIONS AND INTERPRETATION		1
A. Definitions		1
B. Interpretation; Application of Definitions and Rules of Construction		26
C. Computation of Time		27
D. Reference to Monetary Figures		27
E. Reference to the Debtors or the Reorganized Debtors		27
F. Controlling Document		27

ARTICLE II. ADMINISTRATIVE EXPENSE CLAIMS, PROFESSIONAL FEE CLAIMS, DIP CLAIMS, AND PRIORITY TAX CLAIMS		27
2.1. *Administrative Expense Claims*		27
2.2. *Professional Fee Claims*		28
2.3. *Priority Tax Claims*		28
2.4. *DIP Claims*		28
2.5. *Restructuring Fees and Expenses and Notes Agent Fees and Expenses*		29
2.6. *Professional Fee Escrow*		29
2.7. *Professional Fee Claims Estimate*		29
2.8. *Post-Effective Date Fees and Expenses*		30

ARTICLE III. CLASSIFICATION OF CLAIMS AND INTERESTS		30
3.1. *Classification in General*		30
3.2. *Summary of Classification*		30
3.3. *Special Provision Governing Unimpaired Claims*		31
3.4. *Elimination of Vacant Classes*		31
3.5. *No Waiver*		31
3.6. *Voting Classes; Presumed Acceptance by Non-Voting Classes*		31
3.7. *Confirmation Pursuant to Section 1129(b) of the Bankruptcy Code*		32

ARTICLE IV. TREATMENT OF CLAIMS AND INTERESTS		32
4.1. *April Convertible Notes Secured Claims (Class 1)*		32
4.2. *August Convertible Notes Secured Claims (Class 2)*		32
4.3. *Miner Equipment Lender Secured Claims (Class 3)*		33
4.4. *Other Secured Claims (Class 4)*		34
4.5. *M&M Lien Secured Claims (Class 5)*		34
4.6. *Secured Mortgage Claims (Class 6)*		35
4.7. *Priority Non-Tax Claims (Class 7)*		36
4.8. *General Unsecured Claims (Class 8)*		36
4.9. *Intercompany Claims (Class 9)*		37
4.10. *Intercompany Interests (Class 10)*		37
4.11. *Section 510(b) Claims (Class 11*)		38
4.12. *Existing Common Interests (Class 12)*		38

ARTICLE V. MEANS FOR IMPLEMENTATION		38
5.1. *Compromise and Settlement of Claims, Interests, and Controversies*		38
5.2. *Continued Corporate Existence; Effectuating Documents; Corporate Action; Restructuring Transactions*		39
5.3. *Intercompany Interests; Corporate Reorganization*		40
5.4. *Authorization and Issuance of New April Secured Notes (Option 1)*		40
5.5. *Authorization and Issuance of New August Secured Notes (Option 1)*		41
5.6. *Authorization and Issuance of New April Secured Notes (Option 2)*		42


	Page
5.7. *Authorization and Issuance of New August Secured Notes (Option 2)*		43
5.8. *Authorization and Issuance of the New GUC Takeback Notes*		44
5.9. *New Miner Equipment Lender Debt Facilities*		44
5.10. *Section 1145 Exemption*		45
5.11. *Cancellation of Existing Securities and Agreements*		46
5.12. *Cancellation of Liens*		46
5.13. *Officers and Boards of Directors*		47
5.14. *Management Incentive Plan*		47
5.15. *Authorization, Issuance, and Delivery of New Common Interests; New Listing*		47
5.16. *Nonconsensual Confirmation*		48
5.17. *Closing of the Chapter 11 Cases*		48
5.18. *Notice of Effective Date*		48

ARTICLE VI. DISTRIBUTIONS		48
6.1. *Distributions Generally*		48
6.2. *Distribution Record Date*		49
6.3. *Date of Distributions*		49
6.4. *Disbursing Agent*		50
6.5. *Rights and Powers of Disbursing Agent*		50
6.6. *Expenses of Disbursing Agent*		51
6.7. *No Postpetition Interest on Claims*		51
6.8. *Delivery of Distributions*		51
6.9. *Distributions after Effective Date*		51
6.10. *Unclaimed Propert*y		52
6.11. *Time Bar to Cash Payments*		52
6.12. *Manner of Payment under Plan*		52
6.13. *Satisfaction of Claims*		52
6.14. *Fractional Stock and Notes*		52
6.15. *Minimum Cash Distributions*		53
6.16. *Setoffs and Recoupments*		53
6.17. *Allocation of Distributions between Principal and Interest*		53
6.18. *No Distribution in Excess of Amount of Allowed Claim or Allowed Interest*		53
6.19. *Withholding and Reporting Requirements*		53

ARTICLE VII. PROCEDURES FOR DISPUTED CLAIMS		54
7.1. *Disputed Claims Generally*		54
7.2. *Objections to Claims*		54
7.3. *Estimation of Claims*		55
7.4. *Adjustment to Claims Register Without Objection*		55
7.5. *Disallowance of Claims*		55
7.6. *No Distributions Pending Allowance*		55
7.7. *Distributions after Allowance*		56
7.8. *Claim Resolution Procedures Cumulative*		56
7.9. *Disputed Claims Reserves*		56
7.10. *Single Satisfaction of Claims and Interests*		57
7.11. *Amendments to Claims*		57


	Page
ARTICLE VIII. EXECUTORY CONTRACTS AND UNEXPIRED LEASES		57
8.1. *General Treatment*		57
8.2. *Determination of Assumption and Cure Disputes and Deemed Consent*		58
8.3. *Rejection Claims*		59
8.4. *Survival of the Debtors’ Indemnification Obligations*		60
8.5. *Employee Arrangements and Employee Obligations*		60
8.6. *Insurance Policies/Claims Payable By Third Parties*		61
8.7. *Intellectual Property Licenses and Agreements*		62
8.8. *Assignment*		62
8.9. *Modifications, Amendments, Supplements, Restatements, or Other Agreements*		62
8.10. *Reservation of Rights*		62

ARTICLE IX. CONDITIONS PRECEDENT TO EFFECTIVE DATE		63
9.1. *Conditions Precedent to the Effective Date*		63
9.2. *Timing of Conditions Precedent*		64
9.3. *Waiver of Conditions Precedent*		64
9.4. *Effect of Failure of a Condition*		64

ARTICLE X.EFFECT OF CONFIRMATION OF PLAN		64
10.1. *Vesting of Assets in the Reorganized Debtors*		64
10.2. *Binding Effect*		65
10.3. *Discharge of Claims and Termination of Interests*		65
10.4. *Term of Injunctions or Stays*		65
10.5. *Injunction*		65
10.6. *Releases*		67
10.7. *Exculpation*		68
10.8. *Retention of Causes of Action/Transfer of Causes of Action and Reservation of Rights*		69
10.9. *Ipso Facto and Similar Provisions Ineffective*		69
10.10.Solicitation of Plan		70
10.11.Corporate and Limited Liability Company Action		70

ARTICLE XI. RETENTION OF JURISDICTION		70
11.1. *Retention of Jurisdiction*		70
11.2. *Courts of Competent Jurisdiction*		72

ARTICLE XII. MISCELLANEOUS PROVISIONS		72
12.1. *Payment of Statutory Fees*		72
12.2. *Substantial Consummation of the Plan*		72
12.3. *Request for Expedited Determination of Taxes*		73
12.4. *Exemption from Certain Transfer Taxes*		73
12.5. *Amendments*		73
12.6. *Effectuating Documents and Further Transactions*		73
12.7. *Revocation or Withdrawal of the Plan*		74
12.8. *Severability of Plan Provisions*		74
12.9. *Governing Law*		74


	Page
12.10. Time		74
12.11. Dates of Actions to Implement the Plan		74
12.12. Immediate Binding Effect		75
12.13. Deemed Acts		75
12.14. Successor and Assigns		75
12.15. Entire Agreement		75
12.16. Exhibits to Plan		75
12.17. Dissolution of Creditors’ Committee and Equity Committee		75
12.18. Notices		76


Class	Designation	Treatment	Entitled to Vote

1	April Convertible Notes Secured Claims	Impaired	Yes

2	August Convertible Notes Secured Claims	Impaired	Yes

3	Miner Equipment Lender Secured Claims	Impaired	Yes

4	Other Secured Claims	Unimpaired	No (Presumed to Accept)

5	M&M Lien Secured Claims	Impaired	Yes

6	Secured Mortgage Claims	Impaired	Yes


Respectfully submitted,

By:		/s/ Michael Bros
		Name: Michael Bros
		Title: Authorized Signatory

On behalf of Core Scientific, Inc. and each of its Debtor affiliates


Issuer:		Reorganized Parent (the “Issuer”).

Security Description:		Secured convertible notes (the “New April Secured Notes (Option 1)”).

Guarantors:		Same guarantors that guarantee the pre-petition Convertible Notes (the “April 2021 Convertible Notes”) issued pursuant to the Note Purchase Agreement, dated April 19, 2021 (the “April NPA”).

Principal Amount:		Fifty percent (50%) of the Allowed April Convertible Notes Secured Claims.

Initial Conversion Price:		Calculated based on a 37.5% premium to Plan Value (the “Conversion Price”) assuming for the purposes of such calculation that all of the New Secured Notes have been converted pursuant to the terms thereof as of the Effective Date, subject to adjustment for issuances of New Common Interests to Holders of Disputed Claims pursuant to the Disputed Claims Reserves and as otherwise specified herein.

Interest Rate:		Each New April Secured Note (Option 1) will bear interest at a fixed rate equal to 4.0% for cash interest (“Cash Interest”) or 6.0% for payment-in-kind interest (“PIK Toggle Interest”). The Issuer will elect on each payment interest date whether to pay Cash Interest or the PIK Toggle Interest on the next interest payment date; provided, however, for PIK Toggle Interest, the New April Secured Notes (Option 1) will accrue interest at the rate for PIK Toggle Interest, and be payable in-kind, if the Issuer has not made such election.

Maturity Date:		Seven (7) years from the Effective Date.

Amortization:		None.


Security:		(A) First lien in all perfected collateral securing the April 2021 Convertible Notes as of the Petition Date (the “April 2021 Convertible Notes Collateral”), excluding for the avoidance of doubt, (i) any money and bank accounts, and (ii) any property acquired after the Petition Date that was not constituting proceeds of the disposition of April 2021 Convertible Notes Collateral, including any new contracts executed after the Petition Date and any bitcoin mined after such date or the proceeds of any bitcoin sold after the Petition Date; and (B) any additional collateral to be discussed with the Ad Hoc Noteholder Group.

Ranking:		Same as the April 2021 Convertible Notes.

Conversion at Option of Holders:		Holders may elect to convert their New April Secured Notes (Option 1) into New Common Interests at any time prior to maturity at the then applicable Conversion Price. The Issuer may elect to deliver cash, New Common Interests or a combination of both upon any holder conversion election. No holder drag-along rights.

Conversion at Option of the Company:		From and after the Effective Date, the Company may, at its option, cause outstanding New April Secured Notes (Option 1) (including accrued but unpaid interest) to convert into a number of New Common Interests at the then applicable Conversion Price if the volume weighted average price of the New Common Interests exceeds 150% of the per share Plan Value for at least 20 trading days in a 30 consecutive day period. The Issuer may elect to deliver cash, New Common Interests or a combination of both.

Anti-Dilution Protection:		Customary adjustments to the Conversion Price for stock splits, stock dividends, rights offerings at discount, asset or other distribution on the New Common Interests, tender offers or exchange offers a premium, including customary exceptions.

Repurchase at Option of Holders:		At the option of each holder, for all or part of its New April Secured Notes (Option 1), right to put New April Secured Notes (Option 1) to Issuer in the event of a Fundamental Change (such defined term to be customary for convertible notes issued by other public companies) at the principal amount thereof plus accrued interest to the repurchase date.

Redemption:		Redemption terms to be agreed between the Ad Hoc Noteholder Group and the Company.

Other Covenants:		Covenants to be agreed between the Ad Hoc Noteholder Group and the Company.

Tradability / Liquidity:		The offer, issuance, and distribution of New April Secured Notes (Option 1) (and the issuance of the New Common


		Interests upon conversion thereunder) will be exempt, pursuant to section 1145 of the Bankruptcy Code from registration under the Securities Act and the New April Secured Notes (Option 1) (and the issuance of New Common Interests upon conversion thereunder) will be freely tradable on the Effective Date, subject to any contractual limitations or restrictions for “control securities” under the U.S. securities laws, if applicable.


Security:		(A) Lien (priority to be agreed) on all perfected collateral securing the August 2021 Convertible Notes as of the Petition Date (the “August 2021 Convertible Notes Collateral”), excluding for the avoidance of doubt, (i) any money and bank accounts, and (ii) any property acquired after the Petition Date that was not constituting proceeds of the disposition of August 2021 Convertible Notes Collateral, including any new contracts executed after the Petition Date and any bitcoin mined after such date or the proceeds of any bitcoin sold after the Petition Date; and (B) any additional collateral to be discussed with the Ad Hoc Noteholder Group.

Ranking		Same as the August 2021 Convertible Notes.

Conversion at Option of Holders:		Holders may elect to convert their New August Secured Notes (Option 1) into New Common Interests at any time prior to maturity at the then applicable Conversion Price. The Issuer may elect to deliver cash, New Common Interests or a combination of both upon any holder conversion election. No holder drag-along rights.

Conversion at Option of the Company:		From and after the Effective Date, the Company may, at its option, cause outstanding New August Secured Notes (Option 1) (including accrued but unpaid interest) to convert into a number of New Common Interests at the then applicable Conversion Price if the volume weighted average price of the New Common Interests exceeds 150% of the per share Plan Value for at least 20 trading days in a 30 consecutive day period. The Issuer may elect to deliver cash, New Common Interests or a combination of both.

Anti-Dilution Protection:		Customary adjustments to the Conversion Price for stock splits, stock dividends, rights offerings at discount, asset or other distribution on the New Common Interests, tender offers or exchange offers a premium, including customary exceptions.

Repurchase at Option of Holders:		At the option of each holder, for all or part of its New August Secured Notes (Option 1), right to put New August Secured Notes (Option 1) to Issuer in the event of a Fundamental Change (such defined term to be customary for convertible notes issued by other public companies) at the principal amount thereof plus accrued interest to the repurchase date.

Redemption:		Redemption terms to be agreed between the Ad Hoc Noteholder Group and the Company.

Other Covenants:		Covenants to be agreed between the Ad Hoc Noteholder Group and the Company.

Tradability / Liquidity:		The offer, issuance, and distribution of New August Secured Notes (Option 1) (and the issuance of the New Common


Conditions Precedent:		The Miner Equipment Facility will become effective and the Miner Equipment Loans will be issued upon satisfaction (or waiver) of conditions precedent acceptable to the Miner Equipment Lenders limited to: (i) the Miner Equipment Lender not timely electing Miner Equipment Lender Treatment Election 1 or Miner Equipment Lender Treatment Election 2 pursuant to the Plan, or such Miner Equipment Lender making one of such elections but such elections becoming unavailable pursuant to the terms of the Plan; and (ii) the occurrence of the Effective Date.

Covenants		Usual and customary for an equipment loan, limited to use of Equipment Collateral, no further encumbrance, limitations on sales and dispositions of Equipment Collateral to be agreed, fees and taxes, insurance, and further assurances.

Financial Covenants:		None.

Representations and Warranties		Limited to existence, requisite power and authority, no consents, enforceability and no violation of law.

Reporting:		Customary for an equipment loan.

Events of Default:		Limited to customary events of default including cross-acceleration to material debt.

Governing Law and Submission to Exclusive Jurisdiction:		State of New York.


Borrower:		The Debtor that is party to the applicable Miner Equipment Lender Agreement (as defined in the Plan), a [●] [corporation] (the “New Equipment Borrower”).

Lender:		The Holder of a Miner Equipment Lender Secured Claim (the “Miner Equipment Lender”).

Closing Date:		The Effective Date.

Principal Amount:		The amount listed next to a Miner Equipment Lender’s name under the column “Principal of New Debt – Default Miner Equipment Lender Treatment” on Exhibit K of the Plan (the “Miner Equipment Facility Loan Amount”).

Miner Equipment Facility:		A senior secured U.S. dollar denominated term loan facility in an aggregate principal amount equal to the applicable Miner Equipment Facility Loan Amount (the “Miner Equipment Facility”; the loans made thereunder, the “Miner Equipment Loans”) to be deemed issued in full and final satisfaction of the Miner Equipment Lender Secured Claims upon the Effective Date.

Maturity Date:		The Miner Equipment Loans will mature five (5) years from the Closing Date.

Miner Equipment Facility Agreement Documents:		The Miner Equipment Facility will be documented in a loan and security agreement (the “Miner Equipment Facility Agreement”) and will be secured pursuant thereto. The document referred to in the preceding sentence and documents ancillary or related thereto are referred to as the “Miner Equipment Facility Documents.” The Miner Equipment Facility Documents will be in form and substance satisfactory to the New Equipment Borrower.

Interest Rate:		10.00%. Interest shall be payable in cash on the applicable interest payment date (each, a “Payment Date”) subject to a five (5)-day grace period.

Scheduled Amortization		None.

Optional Prepayments:		No restrictions on optional prepayment, and the Miner Equipment Loans may be prepaid at any time and from time to time without premium or penalty.

Mandatory Prepayments		Limited to net cash proceeds from sales of Equipment Collateral and net cash proceeds of casualty events; provided that, at the New Equipment Borrower’s option, such disposed Equipment Collateral may be replaced by equipment the value of which shall not exceed the reasonably equivalent value of the replaced Equipment Collateral.

Prepayment / Make Whole Premium:		None.

Equipment Collateral:		The Collateral securing the Miner Equipment Lender’s existing equipment loan/lease.


Borrower:		The Debtor that is party to the applicable Miner Equipment Lender Agreement (as defined in the Plan), a [●] [corporation] (the “New Equipment Borrower”).

Lender:		The Holder of a Miner Equipment Lender Secured Claim (the “Miner Equipment Lender”).

Closing Date:		The Effective Date.

Principal Amount:		The amount listed next to a Miner Equipment Lender’s name under the column “Principal of New Debt – Miner Equipment Lender Treatment Election 1” on Exhibit K of the Plan (the “Miner Equipment Facility Loan Amount”).

Miner Equipment Facility:		A senior secured U.S. dollar denominated term loan facility in an aggregate principal amount equal to the applicable Miner Equipment Facility Loan Amount (the “Miner Equipment Facility”; the loans made thereunder, the “Miner Equipment Loans”) to be deemed issued in full and final satisfaction of the Miner Equipment Lender Secured Claims upon the Effective Date.

Maturity Date:		The Miner Equipment Loans will mature twelve (12) years from the Closing Date.

Miner Equipment Facility Agreement Documents:		The Miner Equipment Facility will be documented in a loan and security agreement (the “Miner Equipment Facility Agreement”) and will be secured pursuant thereto. The document referred to in the preceding sentence and documents ancillary or related thereto are referred to as the “Miner Equipment Facility Documents.” The Miner Equipment Facility Documents will be in form and substance satisfactory to the New Equipment Borrower.

Interest Rate:		4.00%. Interest shall be payable in cash on the applicable interest payment date (each, a “Payment Date”) subject to a five (5)-day grace period.

Scheduled Amortization		Commencing with the first full fiscal quarter ending two years after the Effective Date, 2.50 % of the original principal amount of the applicable Miner Equipment Loan, payable quarterly.

Optional Prepayments:		No restrictions on optional prepayment, and the Miner Equipment Loans may be prepaid at any time and from time to time without premium or penalty.

Mandatory Prepayments		Limited to net cash proceeds from sales of Equipment Collateral and net cash proceeds of casualty events; provided that, at the New Equipment Borrower’s option, such disposed Equipment Collateral may be replaced by equipment the value of which shall not exceed the reasonably equivalent value of the replaced Equipment Collateral.

Prepayment / Make Whole Premium:		None.

Equipment Collateral:		The Collateral securing the Miner Equipment Lender’s existing equipment loan/lease.


Issuer:		Reorganized Parent (the “New GUC Issuer”).

Notes Description:		Unsecured notes (the “New GUC Takeback Notes”) issued pursuant to the Plan, to be deemed issued in full and final satisfaction, upon the Effective Date, of the Allowed General Unsecured Claims of Holders electing the GUC Treatment Election.

Guarantors:		None.

Principal Amount:		$75,000,000; provided, however, that such principal amount may be adjusted depending on the number of Holders of General Unsecured Claims that elect the GUC Treatment Election, in accordance with the terms and provisions of section 4.8(b) of the Plan.

Interest Rate:		Each New GUC Takeback Note will bear interest at a fixed rate equal to 7.00% on each interest payment date, payable quarterly.

Maturity Date:		Seven (7) years from the Plan Effective Date.

Amortization		Commencing with the first full fiscal quarter ending two years after the Effective Date, 5.00 % of the original principal amount of the New GUC Takeback Notes, payable quarterly.

Security:		None.

Redemption:		Redemption terms to be agreed between the required Holders of the New GUC Takeback Notes and the New GUC Issuer.

Other Covenants:		Usual and customary based on corresponding provisions in the New Secured Notes, as modified to reflect the unsecured and non-convertible nature of the New GUC Takeback Notes.

Tradability/Liquidity		The offer, issuance, and distribution of the New GUC Takeback Notes will be exempt, pursuant to section 1145 of the Bankruptcy Code from registration under the Securities Act and the New GUC Takeback Notes will be freely tradable on the Effective Date, subject to any contractual limitations or restrictions for “control securities” under the U.S. securities laws, if applicable.

Governing Law and Submission to Exclusive Jurisdiction:		State of New York.


Debt Issuer:		The applicable Debtor that owns or leases the real property encumbered by the M&M Liens which secure the M&M Lien Secured Claim (such Debtor, the “Issuer”), in each case, as set forth on Exhibit J attached to the Plan.

Debt Holder:		The General Contractor which is the Holder of the M&M Lien Secured Claim (the “Debt Holder”), in each case, as set forth on Exhibit J attached to the Plan.

Principal Amount:		The amount of the Debt Holder’s M&M Lien Secured Claim attributable to the applicable real property encumbered by the M&M Liens which secure such Debt Holder’s Allowed M&M Lien Secured Claim (such amount, the “Principal”), in each case, as set forth on Exhibit J attached to the Plan.

Payment Recipient:		With respect to Obligations in respect of M&M Lien Secured Claims attributable to amounts secured by M&M Liens of only the Debt Holder: the Debt Holder. With respect to Obligations in respect of M&M Lien Secured Claims attributable to amounts secured by M&M Liens of the Debt Holder and, in duplication, by M&M Liens of one or more Subcontractors: Issuer shall make payments directly to each Debt Holder and Subcontractor, pro rata in the percentages set forth next to each such Debt Holder and Subcontractor on Exhibit J attached to the Plan; provided, however, that upon delivery to the Issuer of a final and unconditional lien waiver and release duly


		executed by a Subcontractor, in recordable form and substance sufficient to permanently waive and release such Subcontractor’s M&M Liens, the Issuer shall make all further payments on account of such Obligations attributable to such Subcontractor’s pro rata percentages set forth next to such Subcontractor on Exhibit J attached to the Plan directly to the Debt Holder. Each payment made directly to a Subcontractor shall reduce the amount of such Obligation, such Debt Holder’s M&M Secured Lien Claim, such Debt Holder’s M&M Lien, and such Subcontractor’s M&M Lien, in each case on a dollar-for-dollar basis.

Interest Rate:		Interest shall accrue at a rate of five percent (5.00%) per annum.

Payment Date:		The Obligations shall be payable in quarterly installments, payable on the last of each calendar quarter (each such payment date, a “Payment Date”) beginning on the first such date to occur after the Effective Date (e.g., if the Effective Date is on October 1, the first monthly payment date will be December 31) (such initial payment date, the “Initial Payment Date”).

Maturity Date:		The date that is ten (10) years after the Initial Payment Date.

Scheduled Amortization:		Years 1-2: Interest only shall be payable. Years 3-10: The Principal shall be fully amortized and payable in equal monthly installments.

Collateral and Security:		Each Obligation shall be secured by the M&M Liens in favor of the Debt Holder that encumber the applicable property (the “Collateral”).

Voluntary Prepayments:		Each Issuer shall have the right, exercisable at any time and from time to time, to voluntarily prepay the M&M Lien Takeback Debt in whole or in part, without premium or penalty. Any voluntary prepayment of the Obligations shall be applied in inverse or direct order of maturity in the discretion of, and as specified in a notice accompanying such prepayment from, the Issuer.


Automatic Release of Mechanic’s Liens:		Any M&M Lien (i) of a Subcontractor, (ii) of the Debt Holder, or (iii) otherwise securing an Obligation shall be fully and finally extinguished upon the repayment in full of the applicable Obligation. Upon repayment in full of an Obligation, the Issuer is authorized to record (and granted power of attorney to effectuate such recordation) final, unconditional lien waivers, releases of lien, and such other documents or certificates required to fully and unconditionally release any such M&M Lien in the applicable real property records, and each applicable clerk is directed to accept such documentation.

Events of Default:		The occurrence of the following event shall constitute an “Event of Default” by Issuer: Issuer fails to pay any quarterly installment on the Payment Date when such quarterly installment becomes due, and such failure continues for sixty (60) days after the Debt Holder gives written notice thereof to Issuer. With respect to each Obligation, unless and until an Event of Default occurs, each Debt Holder and Subcontractor whose M&M Liens secure amounts attributable to M&M Lien Secured Claims in respect of such Obligation shall be barred from foreclosing or otherwise enforcing such M&M Lien or otherwise taking adverse action against the Issuer of such Obligation with regard to any amounts secured by such M&M Lien.

Governing Law:		With respect of each Obligation, the State in which the real property encumbered by the M&M Liens securing the M&M Lien Secured Claims in respect of such Obligations is situated.

Documentation:		Each M&M Lien Takeback Debt Obligation shall be automatically deemed to be issued upon the Effective Date of the Plan.


Real Property Owned or Leased by Debtors	Lienholder/Claimant	General Contractor or Subcontractor	General Contractor under applicable General Contract which gives rise to the M&M Liens and/or Claims	Proof of Claim Numbers Filed by Lienholder/ Claimant	Unreduced Amount of Allowed M&M Lien Secured Claim²		Allowed Unsecured Claim Amount			Unreduced Amount of Allowed M&M Lien³		Materials and Equipment Held by such General Contractor or Subcontractor		Value of Materials and Equipment Held by such General Contractor or Subcontractor		Amount of Allowed M&M Lien⁴ (equal to Unreduced Allowed M&M Lien Amount *less* Value of Equipment)		Amount of Allowed M&M Lien Secured Claim⁵ (which shall equal the amount of M&M Lien Takeback Debt to be issued to each General Contractor)		Amount of applicable M&M Takeback Debt to be repaid directly to such General Contractor or Subcontractor		Pro Rata Percentage of applicable M&M Lien Takeback Debt to be repaid directly to such General Contractor or Subcontractor
Denton	McCarthy Building Companies, Inc.	General Contractor	McCarthy Building Companies, Inc.	468	$	17,052,583.65		[TBD	]	$	17,052,583.65		N/A		N/A	$	17,052,583.65	$	17,052,583.65	$	5,814,510.32		34.10	%
Denton	Sure Steel – Texas, L.P.	Subcontractor	McCarthy Building Companies, Inc.	110	$	0	$	0		$	695,277.03		N/A		N/A	$	695,277.03	$	0	$	695,277.03		4.08	%
Denton	Way Mechanical	Subcontractor	McCarthy Building Companies, Inc.	N/A	$	0	$	0		$	436,029.00		N/A		N/A	$	436,029.00	$	0	$	436,029.00		2.56	%
Denton	McCorvey Sheet Metal Works, LP	Subcontractor	McCarthy Building Companies, Inc.	N/A	$	0	$	0		$	20,895.50		N/A		N/A	$	20,895.50	$	0	$	20,895.50		0.12	%
Denton	BEAM Concrete Construction, Inc.	Subcontractor	McCarthy Building Companies, Inc.	187	$	0	$	0		$	878,306.82		N/A		N/A	$	878,306.82	$	0	$	878,306.82		5.15	%


Holder	Agreement(s)	Proof of Claim Number		Allowed Secured Claim		Allowed Deficiency Claim (as of Petition Date)		Collateral (# of Miners)		Principal of New Debt
Holder	Agreement(s)	Proof of Claim Number		Allowed Secured Claim				Collateral (# of Miners)		Default Miner Equipment Lender Treatment²		Miner Equipment Lender Treatment Election 1³		Miner Equipment Lender Treatment Election 2⁴
36th Street Capital Partners, LLC	36th Street Miner Agreement		294	$	1,109,730.80	$	2,698,065.07		970	$	1,109,730.80	$	3,807,795.87	$	2,855,846.91
Anchorage Lending CA, LLC	Anchorage Agreements		362	$	5,319,306.20	$	20,611,892.34		5,354	$	5,319,306.20	$	25,931,198.54	$	19,448,398.91
Barings (Consolidated)⁵	Barings (Consolidated)			$	13,982,121.20	$	51,997,229.30		14,181	$	13,982,121.20	$	65,979,350.50	$	49,484,512.88


Holder	Agreement(s)	Proof of Claim Number or Schedule Number			Allowed Secured Claim (as of Petition Date)
Bremer Bank, National Association	Bremer Agreements		307		$	18,387,243.59
36th Street Capital Partners, LLC	36th Street Non-Miner Agreements		294	²	$	63,437.75
Bank of the West	Bank of the West Agreement		12		$	46,144.99
Dell Financial Services LLC	Dell Agreements		Schedule No. 2423869	³	$	162,909.49
Indigo Direct Lending, LLC	Indigo Agreement		226, 227	⁴	$	2,190,086.26


I. INTRODUCTION			1

A.	Background and Overview of the Plan and Restructuring		1

	i.	Overview of Restructuring	2

	ii.	Summary of Plan Treatment	2

B.	Reccommendation		14

C.	Confirmation Timeline		14

D.	Inquiries		15

II. SUMMARY OF PLAN CLASSIFICATION AND TREATMENT OF CLAIMS			15

A.	Voting Classes		15

B.	Treatment of Claims		16

C.	Pro Forma Equity Split		24

III. THE DEBTORS’ BUSINESS			25

A.	General Overview		25

B.	Digital Asset Mining		25

C.	Debtors’ History		26

D.	Business Operations and Properties		27

	i.	Business Model	27

	ii.	Data Centers	28

III. DEBTORS’ CORPORATE AND CAPITAL STRUCTURE			30

A.	Corporate Structure		30

B.	Corporate Governance and Management		31

C.	Prepetition Capital Structure		31

	i.	April Secured Convertible Notes:	31

	ii.	August Convertible Notes:	33

	iii.	Secured Mining Equipment Financings and Leases	34

	iv.	Secured Non-Mining Financings and Leases	35

	v.	M&M Liens:	37

	vi.	Unsecured Bridge Notes:	38

	vii.	General Unsecured Claims:	39

	viii.	Common Stock; New Listing:	40


IV. SIGNIFICANT EVENTS LEADING TO THE CHAPTER 11 FILINGS			41

A.	The Decline in the Price of Bitcoin and Increase in Bitcoin Network Difficulty		41

B.	Increased Energy Costs		42

C.	Celsius’s Chapter 11 Filing and PPT Dispute		43

D.	Prepetition Initiatives		44

E.	Appointment of New Independent Director and Formation of Special Committee to Consider Strategic Options and Engage with Creditors		44

F.	Prepetition Employee Retention Programs		44

V. OVERVIEW OF CHAPTER 11 CASES			46

A.	Commencement of Chapter 11 Cases		46

	i.	First/Second Day Relief	46

	ii.	Other Procedural and Administrative Motions	47

B.	DIP Financing		48

	i.	Original DIP Financing	48

	ii.	Replacement DIP Financing	48

C.	Rejection of Celsius Hosting Contract		50

D.	Appointment of Creditors’ Committee		50

E.	Appointment of Equity Committee		50

F.	Debtors’ Key Employee Retention Programs		51

G.	Sale Process for Certain of the Debtors’ Facilties		52

H.	Sale of Bitmain Coupons		52

I.	Settlements/Agreements with Creditors		52

	i.	NYDIG Stipulation and Agreed Order	52

	ii.	Priority Power Management Settlement	53

	iii.	Atalaya Settlement	53

J.	Claims		54

	i.	Schedules of Assets and Liabilities and Statements of Financial Affairs	54

	ii.	Claims Bar Dates	54

	iii.	Claims Reconcilliation Process	55

K.	Exclusivity		59


L.	Formulation of the Business Plan		60

M.	Postpetition Stakeholder Discussions		60

N.	Exit Capital Marketing Process		61

VI. TRANSFER RESTRICTIONS AND CONSEQUENCES UNDER FEDERAL SECURITIES LAWS			62

VII. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF PLAN			64

A.	Consequences to the Debtors		66

	i.	Limitation of NOL Carryforwardsand Other Tax Attributes	67

	ii.	Potential Limitations on Interest Deductions	69

B.	Consequences to Holders of Certain Allowed Claims		70

	i.	Taxable Exchange	71

	ii.	Distributions in Discharge of Accrued Interest or OID	72

	iii.	Character of Gain or Loss	73

	iv.	Ownership and Disposition of New Debt	73

	v.	Disposition of New Common Interests by U.S. Holders	76

	vi.	Tax Treatment of Disputed Claims Reserve	77

C.	Consequences to Holders of Exisiting Common Interests		78

D.	Information Reporting and Backup Withholding		78

VIII. CERTAIN RISK FACTORS TO BE CONSIDERED			78

A.	Certain Bankruptcy Law Considerations		79

	i.	The Plan Contemplates Multiple Options for Distributions to Certain Classes Consisting of Various Types of Debt Instruments	79

	ii.	Parties in Interest May Object to Plan’s Classification of Claims and Interests	79

	iii.	Distributions to Allowed Existing Common Interests Claims and Allowed Section 510(b) Claims (if any) May Change	80

	iv.	The Plan Provides Certain Classes Multiple Options Regarding the Manner of their Distributions; A Particular Election by One Class Will Affect the Allocation of New Common Interests Received by Other Classes and the Overall Capital Structure of the Reorganized Debtors	80

	v	The Amount of Allowed Claims in the Classes Will Affect the Allocation of New Common Interests	81

	vi	Debtors May Require and May Not Obtain Additional Financing	81


	vii.	Risks Related to Possible Objections to the Plan	81

	viii.	Risk of Non-Confirmation of the Plan	81

	ix.	Non-Consensual Confirmation and Conversion into Chapter 7 Cases	82

	x.	Risk of Non-Occurrence of the Effective Date	82

	xi	DIP Facility	82

	xii.	Releases, Injunctions, and Exculpations Provisions May Not Be Approved	82

B.	Additional Factors Affecting the Value of Reorganized Debtors		83

	i.	Projections and Other Forward-Looking Statements Are Not Assured, and Actual Results May Vary	83

	ii.	Risks Associated with the Debtors’ Business and Industry	83

	iii.	Post-Effective Date Indebtedness	87

C.	Risks Relating to the New Common Interests to be Issued under the Plan		87

	i.	Market for Equity of Reorganized Parent Debtor	87

	ii.	Potential Dilution	87

	iii.	New Common Interests Subordinated to Reorganized Debtors’ Indebtedness	88

	iv.	Valuation of Debtors Not Intended to Represent Trading Value of New Common Interests of Debtors	88

D.	Risks Relating to the New Debt		88

	i.	Insufficient Cash Flow to Meet Debt Obligations	88

	ii.	Rating of New Debt	88

	iii.	Defects in Guarantees and Collateral Securing the New Secured Debt	89

	iv.	Failure to Perfect Security Interests in New Debt Collateral	90

	v.	There May Not be an Active Trading Market for the New Debt	90

	vi.	Risk of Recharacterization of New Secured Notes	90

	vii.	Changes to New Common Interests Affect Holders of New Secured Notes	90

E.	Additional Factors		91

	i.	Debtors Could Withdraw Plan	91

	ii.	Debtors Have No Duty to Update	91


	iii.	No Representations Outside the Disclosure Statement Are Authorized	91

	iv.	No Legal or Tax Advice Is Provided by the Disclosure Statement	91

	v.	No Admission Made	91

	vi.	Certain Tax Consequences	91

IX. VOTING PROCEDURES AND REQUIREMENTS			92

A.	Voting Deadline		92

B.	Voting Procedures		92

C.	Parties Entitled to Vote		93

	i.	Fiduciaries and Other Representatives	94

	ii.	Agreements Upon Furnishing Ballots	94

	iii.	Change of Vote	95

D.	Waivers of Defects, Irregularities, etc.		95

E.	Further Information, Additional Copies		95

X. CONFIRMATION OF PLAN			95

A.	Confirmation Hearing		95

B.	Objections to Confirmation		96

C.	Requirements for Confirmation of Plan		99

	i.	Acceptance of Plan	99

	ii.	Best Interests Test	100

	iii.	Feasibility	100

XI. ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF PLAN			101

A.	Alternative Plan of Reorganization		101

B.	Sale under Section 363 of the Bankruptcy Code		102

C.	Liquidation Under Chapter 7 of Bankruptcy Code		102

XII. CONCLUSION AND RECOMMENDATION			102


EXHIBIT A		Plan

EXHIBIT B		Plan Release, Exculpation, and Injunction Provisions

EXHIBIT C		Liquidation Analysis

EXHIBIT D		Valuation Analysis

EXHIBIT E		Financial Projections

EXHIBIT F		Company Organizational Chart


Hearing on Approval of Disclosure Statement		[•], 2023
Solicitation Begins		[•], 2023
Voting Deadline		[•], 2023
Deadline to Object to Confirmation of Plan		[•], 2023
Confirmation Hearing		[•], 2023
Effective Date		[•], 2023


Class and Designation	Treatment under the Plan	Impairment and Entitlement to Vote	Estimated Allowed Amount⁶	Approx. Percentage Recovery
Class 1 April Convertible Notes Secured Claims	Except to the extent that a Holder of an Allowed April Convertible Notes Secured Claim agrees to a less favorable treatment of such Claim, each such Holder shall receive, in full and final satisfaction, settlement, release, and discharge of such Claim, on the Effective Date or as soon as reasonably practicable thereafter: (i) If Class 1 is an Accepting Class, (a) such Holder’s Pro Rata Share of New April Secured Notes (Option 1) and (b) New Common Interests with a value, based on Plan Value, equal to fifty-percent (50%) of such Holder’s Allowed April Convertible Notes Secured Claim. (ii) If Class 1 is not an Accepting Class, such Holder’s Pro Rata Share of New April Secured Notes (Option 2).	Impaired (Entitled to Vote)	$258.7 million	100%

Class 2 August Convertible Notes Secured Claims	Except to the extent that a Holder of an Allowed August Convertible Notes Secured Claim agrees to a less favorable treatment of such Claim, each such Holder shall receive, in full and final satisfaction, settlement, release, and discharge of such Claim, on the Effective Date or as soon as reasonably practicable thereafter: (i) If Class 2 is an Accepting Class, (a) such Holder’s Pro Rata Share of New August Secured Notes (Option 1) and (b) New Common Interests with a value, based on Plan Value, equal to fifty-percent (50%) of such Holder’s Allowed August Convertible Notes Secured Claim. (ii) If Class 2 is not an Accepting Class, such Holder’s Pro Rata Share of New August Secured Notes (Option 2).	Impaired (Entitled to Vote)	$351.1 million	100%


Class 3 Miner Equipment Lender Secured Claims	Except to the extent that a Holder of an Allowed Miner Equipment Lender Secured Claim (i) agrees to a less favorable treatment of such Claim or (ii) in the event that both Class 1 or Class 2 are an Accepting Class, timely elects the Miner Equipment Lender Treatment Election 1 or Miner Equipment Lender Treatment Election 2 (each as set forth below) on or before the Voting Deadline, each such Holder shall receive, in full and final satisfaction, settlement, release, and discharge of such Claim, on the Effective Date, or as soon as reasonably practicable thereafter, such Holder’s applicable Miner Equipment Lender Takeback Debt and such Holder’s Allowed Miner Equipment Lender Deficiency Claim shall be treated as a General Unsecured Claim in accordance with the terms and provisions set forth in section 4.8 of the Plan. Each Holder of an Allowed Miner Equipment Lender Secured Claim may elect on its Ballot to receive on the Effective Date, or as soon as reasonably practicable thereafter, in lieu of the Default Miner Equipment Lender Treatment, in each case in full and final satisfaction, settlement, release, and discharge of such Holder’s Allowed Miner Equipment Lender Claim, one of the following settlement options; provided, that if either Class 1 or Class 2 is not an Accepting Class, each holder of an Allowed Miner Equipment Lender Secured Claim shall receive the Default Miner Equipment Lender Treatment, and the elections set forth in the Plan shall not be applicable:	Impaired (Entitled to Vote)	$242.1 million⁷	100%

Class 4 Other Secured Claims	On the Effective Date, all Allowed Other Secured Claims shall (i) be reinstated in accordance with section 1124(2) of the Bankruptcy Code and the applicable Other Secured Claims Agreement and continued after the Effective Date in accordance with the terms and provisions of the applicable Other Secured Claims Agreement and (ii) receive Cash in an amount equal to the accrued and unpaid interest through the last interest payment date prior to the Effective Date under the applicable Other Secured Claims Agreement.	Unimpaired No (Presumed to Accept)	$30.4 million	100%


Class 6 Secured Mortgage Claims	Except to the extent that a Holder of an Allowed Secured Mortgage Claim (i) agrees to a less favorable treatment of such Claim or (ii) timely elects the Mortgage Treatment Election (as set forth below) on or before the Voting Deadline, each such Holder shall receive, in full and final satisfaction, settlement, release, and discharge of such Claim, on the Effective Date, or as soon as reasonably practicable thereafter, such Holder’s applicable Mortgage Takeback Debt. The Mortgage Agreements of Holders of Allowed Secured Mortgage Claims receiving the Default Mortgage Treatment shall be deemed amended to include a maturity date of December 31, 2025. The Debtors and Reorganized Debtors, as applicable, are hereby authorized to record (and granted power of attorney to effectuate such recordation) any memorandum or such other documents or certificates required to effectuate such deemed amendment in the applicable real property records, and each applicable clerk is directed to accept such documentation. Each Holder of an Allowed Secured Mortgage Claim may elect on its Ballot to receive, no later than 60 days following the Effective Date, in lieu of the Default Mortgage Treatment, in each case in full and final satisfaction, settlement, release, and discharge of such Holder’s Allowed Secured Mortgage Claim, Cash in an amount equal to ninety-five percent (95%) of such Holder’s Allowed Secured Mortgage Claim.	Impaired (Entitled to Vote)	$0.7 million	100%

Class 7 Priority Non-Tax Claims	The legal, equitable, and contractual rights of the Holders of Priority Non-Tax Claims are unaltered by the Plan. Except to the extent that a Holder of an Allowed Priority Non-Tax Claim agrees to a less favorable treatment, in full and final satisfaction, settlement, release, and discharge of such Allowed Priority Non-Tax Claim, at the option of the Debtors or the Reorganized Debtors, (i) each such Holder shall receive payment in Cash in an amount equal to such Claim, (ii) such Holder’s Allowed Priority Non-Tax Claim shall be Reinstated, or (iii) such Holder shall receive such other treatment so as to render such Holder’s Allowed Priority Non-Tax Claim Unimpaired pursuant to section 1124 of the Bankruptcy Code.	Unimpaired No (Presumed to Accept)		100%


	Claim Amount and the distribution to GUC Claim B shall not reflect the Reduced GUC Claim Amount. Notwithstanding the foregoing, if either Class 1 or Class 2 is not an Accepting Class, each holder of an Allowed General Unsecured Claim shall receive the Default GUC Treatment. For purposes of this section 4.8, the Allowed amount of any General Unsecured Claim shall include all interest accrued from the Petition Date through the date of distribution at the Federal Judgment Rate.

Class 9 Intercompany Claims	On the Effective Date, or as soon as practicable thereafter, all Intercompany Claims shall be adjusted, Reinstated, or discharged (each without any distribution) to the extent reasonably determined to be appropriate by the Debtors or Reorganized Debtors, as applicable.	Unimpaired/Impaired No (Presumed to Accept/Deemed to Reject)		100%

Class 10 Intercompany Interests	On the Effective Date, and without the need for any further corporate or limited liability company action or approval of any board of directors, management, or shareholders of any Debtor or Reorganized Debtor, as applicable, all Intercompany Interests shall be unaffected by the Plan and continue in place following the Effective Date, solely for the administrative convenience of maintaining the existing corporate structure of the Debtors.	Unimpaired/Impaired No (Presumed to Accept/Deemed to Reject)		100%

Class 11 Section 510(b) Claims	Except to the extent that a Holder of an Allowed 510(b) Claim agrees to a less favorable treatment of such Interest, each such Holder shall receive, in full and final satisfaction, settlement, release, and discharge of such Claim, on the Effective Date, or as soon as reasonably practicable thereafter, such Holder’s Pro Rata Share (taking into account Allowed Claims in Classes 11 and 12 and valuing the Allowed Interests in Class 12 as equal to one-hundred percent (100%) of the value of the New Common Interests in the Residual Equity Pool) of the Residual Equity Pool.	Impaired (Entitled to Vote)	$0	[•]

Class 12 Existing Common Interests	Except to the extent that a Holder of an Allowed Existing Common Interest agrees to a less favorable treatment of such Interest, each such Holder shall receive, in full and final satisfaction, settlement, release, and discharge of such Interest, on the Effective Date, or as soon as reasonably practicable thereafter, such Holder’s Pro Rata Share (taking into account Allowed Claims in Classes 11 and 12 and valuing the Allowed Interests in Class 12 as equal to one-hundred percent (100%) of the value of the New Common Interests in the Residual Equity Pool) of the Residual Equity Pool.	Impaired (Entitled to Vote)	n/a	[•]