☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware |
86-1243837 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
210 Barton Springs Rd. Austin, Texas |
78704 | |
(Address of principal executive offices) |
(Zip Code) |
Title of Each Class: |
Trading Symbol: |
Name of Each Exchange on Which Registered: | ||
Common stock, par value $0.0001 per share |
CORZ |
The Nasdaq Stock Market LLC | ||
Redeemable warrants, each whole warrant exercisable for one share of common stock |
CORZW |
The Nasdaq Stock Market LLC |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
PAGE |
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ii |
||||||
iii |
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PART I |
||||||
Item 1. |
1 |
|||||
Item 1A. |
13 |
|||||
Item 1B. |
61 |
|||||
Item 2. |
61 |
|||||
Item 3. |
61 |
|||||
Item 4. |
61 |
|||||
PART II |
||||||
Item 5. |
62 |
|||||
Item 6. |
63 |
|||||
Item 7. |
63 |
|||||
Item 7A. |
76 |
|||||
Item 8. |
76 |
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Item 9. |
76 |
|||||
Item 9A. |
76 |
|||||
Item 9B. |
77 |
|||||
Item 9C. |
77 |
|||||
PART III |
||||||
Item 10. |
78 |
|||||
Item 11. |
78 |
|||||
Item 12. |
78 |
|||||
Item 13. |
78 |
|||||
Item 14. |
78 |
|||||
PART IV |
||||||
Item 15. |
79 |
|||||
Item 16. |
84 |
• | Our business is highly dependent on a small number of digital asset mining equipment suppliers. |
• | Our business is capital intensive, and failure to obtain the necessary capital when needed may force us to delay, limit or terminate our expansion efforts or other operations, which could have a material adverse effect on our business, financial condition and results of operations. |
• | We may not be able to obtain new hosting and transaction processing hardware or purchase such hardware at competitive prices during times of high demand, which could have a material adverse effect on our business, financial condition and results of operations. |
• | Our business is heavily impacted by social, political, economic and other events and circumstances in countries outside of the United States, most particularly China and other non-Western countries. China’s shifting position on mining activity within its borders could reduce our revenue and profitability. |
• | A significant portion of our assets are pledged to our senior secured noteholders, and our miners are pledged to certain other lenders. This obligation may limit our ability to obtain additional capital to grow our business and failure to repay obligations to our noteholders or other lenders when due will have a material adverse effect on our business and could result in foreclosure on our assets. |
• | We are subject to risks associated with our need for significant electric power and the limited availability of power resources, which could have a material adverse effect on our business, financial condition and results of operations. An inability to purchase and develop additional sources of low-cost renewable sources of energy effectively will have a material adverse effect on our business, financial condition and results of operations. |
• | We plan to continue to acquire other businesses or receive offers to be acquired, which could require significant management attention, disrupt our business or dilute stockholder value. |
• | We generate significant revenue from a limited number of hosting facilities in Kentucky, Georgia, North Carolina and North Dakota and a significant disruption to operations in this region could have a material adverse effect our business, financial condition and results of operations. |
• | Our future success depends on our ability to keep pace with rapid technological changes that could make our current or future technologies less competitive or obsolete. |
• | The further development and acceptance of cryptographic and algorithmic protocols governing transaction validation and the issuance of, and transactions in, digital assets are subject to a variety of factors that are difficult to evaluate. The slowing or stoppage of development or acceptance of blockchain networks and digital assets would have an adverse material effect on the successful development of the mining operation and value of mined digital assets. |
• | Our ability to use net operating losses to offset future taxable income may be subject to limitations. |
• | We operate in a rapidly developing industry and have an evolving business model with a limited history of generating revenue from our services. In addition, our evolving business model increases the complexity of our business, which makes it difficult to evaluate our future business prospects and could have a material adverse effect on our business, financial condition and results of operations. |
• | We have experienced difficulties in establishing relationships with banks, leasing companies, insurance companies and other financial institutions that are willing to provide us with customary financial |
products and services, which could have a material adverse effect on our business, financial condition and results of operations. |
• | Digital assets exchanges and other trading venues are relatively new and, in some cases, partially unregulated and may therefore be more exposed to fraud and failure. |
• | We may not have adequate sources of recovery if the digital assets held by us are lost, stolen or destroyed due to third-party digital asset services, which could have a material adverse effect on our business, financial condition and results of operations. |
• | Losses relating to our business may be uninsured, or insurance may be limited. |
• | Diversification of our business by investing in additional digital assets, financial instruments and businesses could require significant investment or expose us to trading risks. |
• | As more processing power is added to a network, our relative percentage of total processing power on that network is expected to decline absent significant capital investment, which has an adverse impact on our ability to generate revenue from processing transactions on that network and could have a material adverse effect on our business, financial condition and results of operations. |
• | Our reliance on third-party mining pool service providers for our mining revenue payouts may have a negative impact on our operations. |
• | Malicious actors or botnet may obtain control of more than 50% of the processing power on the Bitcoin or other network. |
• | Digital assets are subject to extreme price volatility. The value of digital assets is dependent on a number of factors, any of which could have a material adverse effect on our business, financial condition and results of operations. |
• | Any loss or destruction of a private key required to access a digital asset of ours is irreversible. We also may temporarily lose access to our digital assets. |
• | The digital assets held by us are not subject to FDIC or SIPC protections. |
• | Our interactions with a blockchain may expose us to SDN or blocked persons or cause us to violate provisions of law that did not contemplate distribute ledger technology. |
• | Legacy Core identified material weaknesses in its internal control over financial reporting. Such material weaknesses may result in material misstatements of Core’s financial statements or cause it to fail to meet its periodic reporting obligations. Core may also identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal control. |
• | XPDI identified a material weakness its internal control over financial reporting. This material weakness could continue to adversely affect Core’s ability to report its results of operations and financial condition accurately and in a timely manner. |
• | Digital assets have been viewed by the user community to offer several advantages over traditional (also known as ‘fiat’) currency, including: |
• | Acting as a fraud deterrent, as digital assets recorded on a blockchain are virtually impossible to counterfeit, reverse, or modify; |
• | Immediate settlement; |
• | Elimination of counterparty risk; |
• | No requirement for a trusted intermediary; |
• | Lower transaction fees; |
• | Identity theft prevention; |
• | Universal accessibility; |
• | Transaction verification and confirmation processes that prevent double spending; |
• | Decentralized transaction processing at any time of day without any central authority (governments or financial institutions); and |
• | Universal value free from currency exchange rates. |
• | Argo Blockchain PLC; |
• | Bit Digital, Inc.; |
• | Bitcoin Investment Trust; |
• | Bitfarms Technologies Ltd. (formerly Blockchain Mining Ltd); |
• | Blockchain Industries, Inc. (formerly Omni Global Technologies, Inc.); |
• | Cipher Mining Inc.; |
• | Coinbase, Inc.; |
• | Digihost International, Inc.; |
• | DMG Blockchain Solutions Inc.; |
• | DPW Holdings, Inc. (through its ownership of Digital Farms Inc.); |
• | Greenidge Generation Holdings Inc.; |
• | HashChain Technology, Inc.; |
• | Hive Blockchain Technologies Inc.; |
• | Hut 8 Mining Corp.; |
• | Layer1 Technologies, Inc.; |
• | Marathon Digital Holdings, Inc.; |
• | MGT Capital Investments, Inc.; |
• | Northern Data AG; |
• | Overstock.com Inc.; and |
• | Riot Blockchain, Inc. |
• | there is a reduction in the demand for our services due to macroeconomic factors in the markets in which we operate; |
• | we fail to provide competitive pricing terms or effectively market them to potential customers; |
• | we provide hosting services that are deemed by existing and potential customers or suppliers to be inferior to those of our competitors, or that fail to meet customers’ or suppliers’ ongoing and evolving program qualification standards, based on a range of factors, including available power, preferred design features, security considerations and connectivity; |
• | businesses decide to host internally as an alternative to the use of our services; |
• | we fail to successfully communicate the benefits of our services to potential customers; |
• | we are unable to strengthen awareness of our brand; |
• | we are unable to provide services that our existing and potential customers desire; or |
• | our customers are unable to secure an adequate supply of new generation digital asset mining equipment to host with us. |
• | Adverse developments in the blockchain industry, and in the blockchain hosting market could lead to a decrease in the demand for hosting resources, which could have a material adverse effect on our business, financial condition and results of operations. We face risks including those related to: |
• | a decline in the adoption and use of bitcoin and other similar digital assets within the technology industry or a decline in value of digital assets; |
• | increased costs of complying with existing or new government regulations applicable to digital assets and other factors; |
• | a downturn in the market for blockchain hosting space generally, which could be caused by an oversupply of or reduced demand for blockchain space; |
• | any transition by our customers of blockchain hosting from third-party providers like us to customer-owned and operated facilities; |
• | the rapid development of new technologies or the adoption of new industry standards that render our or our customers’ current products and services obsolete or unmarketable and, in the case of our customers, that contribute to a downturn in their businesses, increasing the likelihood of a default under their service agreements or their becoming insolvent; |
• | a slowdown in the growth of the Internet generally as a medium for commerce and communication; |
• | availability of an adequate supply of new generation digital asset mining equipment to enable us to mine digital assets at scale and for customers who want to host with us to be able to do so; and |
• | the degree of difficulty in mining digital assets and the trading price of such assets. |
• | inability or difficulty integrating and benefiting from acquired technologies or solutions in a profitable manner, including as a result of reductions in operating income, increases in expenses, failure to achieve synergies or otherwise; |
• | unanticipated costs or liabilities associated with Blockcap and RADAR or another acquisition or strategic partnership; |
• | difficulty integrating the accounting systems, operations and personnel of Blockcap and RADAR; |
• | adverse effects to our existing business relationships and clients or to Blockcap’s business relationships and clients as a result of the acquisition; |
• | loss of key employees, particularly those of Blockcap and RADAR; |
• | assumption of potential liabilities of Blockcap and RADAR, including regulatory noncompliance or acquired litigation, and expenses relating to contractual disputes of the acquired business for, infringement of intellectual property rights, data privacy violations or other claims; |
• | difficulty in acquiring suitable businesses, including challenges in predicting the value an acquisition will ultimately contribute to our business; and |
• | use of substantial portions of our available cash or assumption of additional indebtedness to consummate an acquisition. |
• | power loss; |
• | equipment failure; |
• | human error or accidents; |
• | theft, sabotage and vandalism; |
• | failure by us or our suppliers to provide adequate service or maintain our equipment; |
• | network connectivity downtime and fiber cuts; |
• | service interruptions resulting from server relocation; |
• | security breaches of our infrastructure; |
• | improper building maintenance by us; |
• | physical, electronic and cybersecurity breaches; |
• | animal incursions; |
• | fire, earthquake, hurricane, tornado, flood and other natural disasters; |
• | extreme temperatures; |
• | water damage; |
• | public health emergencies; and |
• | terrorism. |
• | continued worldwide growth in the adoption and use of digital assets and blockchain technologies; |
• | government and quasi-government regulation of digital assets and their use, or restrictions on or regulation of access to and operations of digital asset transaction processing; |
• | changes in consumer demographics and public tastes and preferences; |
• | the maintenance and development of the open-source software protocols or similar digital asset systems; |
• | the availability and popularity of other forms or methods of buying and selling goods and services, or trading assets including new means of using fiat currencies; |
• | general economic conditions and the regulatory environment relating to digital assets; and |
• | negative consumer perception of digital assets, including digital assets specifically and digital assets generally. |
• | identify and acquire desirable properties that we are interested in from developers; |
• | offer hosting services at prices below current market rates or below the prices we currently charge our customers; |
• | bundle colocation services with other services or equipment they provide at reduced prices; |
• | develop superior products or services, gain greater market acceptance and expand their service offerings more efficiently or rapidly; |
• | adapt to new or emerging technologies and changes in customer requirements more quickly; |
• | take advantage of acquisition and other opportunities more readily; and |
• | adopt more aggressive pricing policies and devote greater resources to the promotion, marketing and sales of their services. |
• | global digital asset supply; |
• | global digital asset demand, which can be influenced by the growth of retail merchants’ and commercial businesses’ acceptance of digital assets as payment for goods and services, the security of online digital asset exchanges and digital wallets that hold digital assets, the perception that the use and holding of digital assets is safe and secure, and the regulatory restrictions on their use; |
• | investors’ expectations with respect to the rate of inflation of fiat currencies; |
• | investors’ expectations with respect to the rate of deflation of digital assets; |
• | cyber theft of digital assets from online wallet providers, or news of such theft from such providers or from individuals’ online wallets; |
• | the availability and popularity of businesses that provide digital asset-related services; |
• | fees associated with processing a digital asset transaction; |
• | changes in the software, software requirements or hardware requirements underlying digital assets; |
• | changes in the rights, obligations, incentives, or rewards for the various participants in digital asset mining; |
• | interest rates; |
• | currency exchange rates, including the rates at which digital assets may be exchanged for fiat currencies; |
• | fiat currency withdrawal and deposit policies on digital asset exchanges and liquidity on such exchanges; |
• | interruptions in service or failures of major digital asset exchanges; |
• | investment and trading activities of large investors, including private and registered funds, that may directly or indirectly invest in digital assets; |
• | momentum pricing; |
• | monetary policies of governments, trade restrictions, currency devaluations and revaluations; |
• | regulatory measures, if any, that affect the use of digital assets, restrict digital assets as a form of payment, or limit the purchase of digital assets; |
• | global or regional political, economic or financial events and conditions; |
• | expectations that the value of digital assets will change in the near or long term. A decrease in the price of a single digital asset may cause volatility in the entire digital asset industry and may affect other digital assets. For example, a security breach that affects investor or user confidence in bitcoin, ethereum, litecoin or another digital asset may affect the industry as a whole and may also cause the price of other digital assets to fluctuate; or |
• | with respect to bitcoin, increased competition from other forms of digital assets or payments services. |
• | price and volume fluctuations in the overall stock market from time to time; |
• | volatility in the trading prices and trading volumes of technology stocks; |
• | volatility in the price of bitcoin and other digital assets; |
• | changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; |
• | sales of shares of our Common Stock by us or our stockholders, including any sales as a result of the waiver of lock-up restrictions that went into effect in March 2022; |
• | failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; |
• | the financial projections we may provide to the public, any changes in those projections, or our failure to meet those projections; |
• | announcements by us or our competitors of new products, features, or services; |
• | the public’s reaction to our press releases, other public announcements and filings with the SEC; |
• | rumors and market speculation involving us or other companies in our industry; |
• | actual or anticipated changes in our results of operations or fluctuations in our results of operations; |
• | actual or anticipated developments in our business, our competitors’ businesses or the competitive landscape generally; |
• | litigation involving us, our industry, or both, or investigations by regulators into our operations or those of our competitors; |
• | developments or disputes concerning our intellectual property or other proprietary rights; |
• | announced or completed acquisitions of businesses, products, services or technologies by us or our competitors; |
• | new laws or regulations or new interpretations of existing laws or regulations applicable to our business; |
• | changes in accounting standards, policies, guidelines, interpretations or principles; |
• | any significant change in our management; and |
• | general economic conditions and slow or negative growth of our markets. |
• | the ability of our board of directors to issue one or more series of preferred stock; |
• | advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings; |
• | certain limitations on convening special stockholder meetings; |
• | limiting the persons who may call special meetings of stockholders; |
• | limiting the ability of stockholders to act by written consent; and |
• | Our board of directors have the express authority to make, alter or repeal the Bylaws. |
Impact to Revenue | ||||
Driver |
Increase in Driver |
Decrease in Driver | ||
Market Price of Bitcoin |
Favorable | Unfavorable | ||
Difficulty |
Unfavorable | Favorable | ||
Core Scientific Hash Rate |
Favorable | Unfavorable |
(a) | The following documents are filed as part of this Annual Report: |
(1) | Financial Statements |
(2) | Exhibits |
Exhibit Number |
Description |
Schedule/ Form |
File No. |
Exhibit |
Filing Date | |||||
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||||
104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* | Filed herewith |
** | Furnished herewith |
+ | Indicates a management contract or compensatory plan, contract or arrangement. |
† | Schedules and exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request. |
# | Portions of this Exhibit (indicated with [***]) have been omitted as the Registrant has determined that (i) the omitted information is not material and (ii) the omitted information would likely cause competitive harm to the Registrant if publicly disclosed. |
CORE SCIENTIFIC, INC. |
/s/ Michael Levitt |
Name: Michael Levitt |
Title: Chief Executive Officer and Co-Chair of the Board of Directors |
(Principal Executive Officer) |
Name |
Position |
Date | ||
/s/ Michael Levitt Michael Levitt |
Chief Executive Officer and Co-Chair of the Board (Principal Executive Officer |
March 30, 2022 | ||
/s/ Michael Trzupek Michael Trzupek |
Executive Vice President and Chief Financial Officer ( Principal Financial Officer |
March 30, 2022 | ||
/s/ Brian Neville Brian Neville |
Chief Accounting Officer ( Principal Accounting Officer |
March 30, 2022 | ||
/s/ Darin Feinstein Darin Feinstein |
Chief Vision Officer and Co-Chair of the Board |
March 30, 2022 | ||
/s/ Jarvis Hollingsworth Jarvis Hollingsworth |
Director | March 30, 2022 |
Name |
Position |
Date | ||
/s/ Matt Minnis Matt Minnis |
Director | March 30, 2022 | ||
/s/ Stacie Olivares Stacie Olivares |
Director | March 30, 2022 | ||
/s/ Kneeland Youngblood Kneeland Youngblood |
Director | March 30, 2022 |
Page No. |
||||
F- 2 |
||||
Financial Statements: |
||||
F- 3 |
||||
F- 4 |
||||
F- 5 |
||||
F- 6 |
||||
F- 7 |
December 31, 2021 |
December 31, 2020 |
|||||||
Assets: |
||||||||
Current assets: |
||||||||
Cash |
$ | 970,876 | $ | — | ||||
Prepaid expenses |
363,105 | — | ||||||
|
|
|
|
|||||
Total current assets |
1,333,981 | — | ||||||
Investments held in Trust Account |
345,034,536 | — | ||||||
Deferred offering costs |
— | 15,000 | ||||||
|
|
|
|
|||||
Total Assets |
$ |
346,368,517 |
$ |
15,000 |
||||
|
|
|
|
|||||
Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit: |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 263,119 | $ | — | ||||
Accrued expenses |
3,748,930 | 400 | ||||||
Franchise tax payable |
200,000 | — | ||||||
|
|
|
|
|||||
Total current liabilities |
4,212,049 | 400 | ||||||
Derivative warrant liabilities |
49,291,420 | — | ||||||
Deferred underwriting commissions |
12,075,000 | — | ||||||
|
|
|
|
|||||
Total liabilities |
65,578,469 | 400 | ||||||
Commitments and Contingencies |
||||||||
Class A common stock subject to possible redemption, $0.0001 par value; 34,500,000 shares at $10.00 per share |
345,000,000 | — | ||||||
Stockholders’ Equity (Deficit): |
||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding |
— | — | ||||||
Class A common stock, $0.0001 par value; 500,000,000 shares authorized |
— | — | ||||||
Class B common stock, $0.0001 par value; 50,000,000 shares authorized; 8,625,000 shares issued and outstanding as of December 31, 2021 and December 31, 2020 |
863 | 863 | ||||||
Additional paid-in capital |
— | 24,137 | ||||||
Accumulated deficit |
(64,210,815 | ) | (10,400 | ) | ||||
|
|
|
|
|||||
Total stockholders’ equity (deficit) |
(64,209,952 | ) | 14,600 | |||||
|
|
|
|
|||||
Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Equity (Deficit) |
$ |
346,368,517 |
$ |
15,000 |
||||
|
|
|
|
For the Year Ended December 31, 2021 |
For The Period From December 29, 2020 (inception) through December 31, 2020 |
|||||||
General and administrative expenses |
$ | 4,793,992 | $ | 10,400 | ||||
General and administrative expenses—related party |
220,000 | — | ||||||
Franchise tax expenses |
199,600 | — | ||||||
|
|
|
|
|||||
Loss from operations |
(5,213,592 | ) | (10,400 | ) | ||||
Change in fair value of derivative warrant liabilities |
(26,263,920 | ) | — | |||||
Offering costs associated with derivative warrant liabilities |
(1,055,577 | ) | — | |||||
Income from investments held in Trust Account |
34,536 | — | ||||||
|
|
|
|
|||||
Net loss |
$ | (32,498,553 | ) | $ | (10,400 | ) | ||
|
|
|
|
|||||
Weighted average shares outstanding of Class A common stock, basic and diluted |
30,530,137 | — | ||||||
|
|
|
|
|||||
Basic and diluted net loss per share, Class A common stock |
$ | (0.83 | ) | $ | — | |||
|
|
|
|
|||||
Weighted average shares outstanding of Class B common stock, basic and diluted |
8,495,548 | 7,500,000 | (1) | |||||
|
|
|
|
|||||
Basic and diluted net loss per share, Class B common stock |
$ | (0.83 | ) | $ | (0.00 | ) | ||
|
|
|
|
For the Year Ended December 31, 2021 |
||||||||||||||||||||||||||||
Common Stock |
Total |
|||||||||||||||||||||||||||
Class A |
Class B |
Additional Paid-In |
Accumulated |
Stockholders’ |
||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Capital |
Deficit |
Equity (Deficit) |
||||||||||||||||||||||
Balance— December 31, 2020 |
— |
$ |
— |
8,625,000 |
$ |
863 |
$ |
24,137 |
$ |
(10,400 |
) |
$ |
14,600 |
|||||||||||||||
Deemed capital contribution from Sponsor |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6,763,302 |
|
|
|
— |
|
|
|
6,763,302 |
|
Remeasurement of Class A common stock subject to possible redemption amount |
— | — | — | — | (6,787,439 | ) | (31,701,862 | ) | (38,489,301 | ) | ||||||||||||||||||
Net loss |
— | — | — | — | — | (32,498,553 | ) | (32,498,553 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance— December 31, 2021 |
— |
$ |
— |
8,625,000 |
$ |
863 |
$ |
— |
$ |
(64,210,815 |
) |
$ |
(64,209,952 |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Period from December 29, 2020 (inception) through December 31, 2020 |
||||||||||||||||||||||||||||
Common Stock |
Total |
|||||||||||||||||||||||||||
Class A |
Class B |
Additional Paid-In |
Accumulated |
Stockholders’ |
||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Capital |
Deficit |
Equity (Deficit) |
||||||||||||||||||||||
Balance— December 29, 2020 (inception) |
— |
$ |
— |
— |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
||||||||||||||||
Issuance of Class B common stock to Sponsor |
— | — | 8,625,000 | 863 | 24,137 | — | 25,000 | |||||||||||||||||||||
Net loss |
— | — | — | — | — | (10,400 | ) | (10,400 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance— December 31, 2020 |
— |
$ |
— |
8,625,000 |
$ |
863 |
$ |
24,137 |
$ |
(10,400 |
) |
$ |
14,600 |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31, 2021 |
For The Period From December 29, 2020 (inception) through December 31, 2020 |
|||||||
Cash Flows from Operating Activities: |
||||||||
Net loss |
$ | (32,498,553 | ) | $ | (10,400 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Change in fair value of derivative warrant liabilities |
26,263,920 | — | ||||||
Offering costs associated with derivative warrant liabilities |
1,055,577 | — | ||||||
Income from investments held in Trust Account |
(34,536 | ) | — | |||||
General and administrative expenses paid by related party under promissory note |
144 | 10,000 | ||||||
Changes in operating assets and liabilities: |
||||||||
Prepaid expenses |
(363,105 | ) | — | |||||
Accrued expenses |
3,242,380 | 400 | ||||||
Accounts payable |
263,119 | — | ||||||
Franchise tax payable |
199,600 | — | ||||||
|
|
|
|
|||||
Net cash used in operating activities |
(1,871,454 | ) | — | |||||
|
|
|
|
|||||
Cash Flows from Investing Activities |
||||||||
Cash deposited in Trust Account |
(345,000,000 | ) | — | |||||
|
|
|
|
|||||
Net cash used in investing activities |
(345,000,000 | ) | — | |||||
|
|
|
|
|||||
Cash Flows from Financing Activities: |
||||||||
Proceeds received from initial public offering, gross |
345,000,000 | — | ||||||
Proceeds received from private placement |
9,400,000 | — | ||||||
Repayment of note payable to related party |
(90,035 | ) | — | |||||
Offering costs paid |
(6,467,635 | ) | — | |||||
|
|
|
|
|||||
Net cash provided by financing activities |
347,842,330 | — |
||||||
|
|
|
|
|||||
Net change in cash |
970,876 | — | ||||||
Cash—beginning of the period |
— | — | ||||||
|
|
|
|
|||||
Cash—end of the period |
$ |
970,876 |
$ |
— |
||||
|
|
|
|
|||||
Supplemental disclosure of noncash activities: |
||||||||
Offering costs included in accrued expenses |
$ | 506,550 | $ | — | ||||
Offering costs paid by related party under promissory note |
$ | 89,891 | $ | — | ||||
Deferred underwriting commissions in connection with the initial public |
$ | 12,075,000 | $ | — | ||||
Deferred offering costs paid by Sponsor in exchange for issuance of Class B |
$ | — | $ | 15,000 |
• | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
• | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
• | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
For the Year Ended December 31, 2021 |
||||||||
Class A |
Class B |
|||||||
Basic and diluted net loss per common stock: |
||||||||
Numerator: |
||||||||
Allocation of net loss |
$ | (25,423,904 | ) | $ | (7,074,649 | ) | ||
Denominator: |
||||||||
Basic and diluted weighted average common stock outstanding |
30,530,137 | 8,495,548 | ||||||
|
|
|
|
|||||
Basic and diluted net loss per common stock |
$ | (0.83 | ) | $ | (0.83 | ) | ||
|
|
|
|
For The Period From December 29, 2020 (inception) through December 31, 2020 |
||||||||
Class A |
Class B |
|||||||
Basic and diluted net loss per common stock: |
||||||||
Numerator: |
||||||||
Allocation of net loss |
$ | — | $ | (10,400 | ) | |||
Denominator: |
||||||||
Basic and diluted weighted average common stock outstanding (1) |
0 | 7,500,000 | ||||||
|
|
|
|
|||||
Basic and diluted net loss per common stock |
$ | — | $ | (0.00 | ) | |||
|
|
|
|
(1) This number excludes an aggregate of up to 1,125,000 Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters. (see Note 4). |
|
Gross proceeds |
$ | 345,000,000 | ||
Less: |
||||
Fair value of Public Warrants at issuance |
(13,627,500 | ) | ||
Offering costs allocated to Class A common stock subject to possible redemption |
(24,861,801 | ) | ||
Plus: |
||||
Remeasurement on Class A common stock subject to possible redemption amount |
38,489,301 | |||
Class A common stock subject to possible redemption |
$ | 345,000,000 | ||
• |
in whole and not in part; |
• |
at a price of $0.01 per warrant; |
• |
upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and |
• |
if, and only if, the last reported sale price of Class A common stock for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders (the “Reference Value”) equals or exceeds $18.00 per share (as adjusted). |
• |
in whole and not in part; |
• |
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to an agreed table based on the redemption date and the “fair market value” (as defined below) of Class A common stock; |
• |
if, and only if, the Reference Value equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described herein under the heading “Description of Securities—Warrants—Public Stockholders’ Warrants—Anti-dilution Adjustments”); and |
• |
if the Reference Value is less than $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described herein under the heading “Description of Securities—Warrants—Public Stockholders’ Warrants—Anti-dilution Adjustments”), the Private Placement Warrants must also concurrently be called for redemption on the same terms as the outstanding Public Warrants, as described above. |
Description |
Quoted Prices in Active Markets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Other Unobservable Inputs (Level 3) |
|||||||||
Assets: |
||||||||||||
Investments held in Trust Account—Money market fund |
$ | 345,034,536 | $ | — | $ | — | ||||||
Liabilities: |
||||||||||||
Derivative warrant liabilities—Public warrants |
$ | 28,548,750 | $ | — | $ | — | ||||||
Derivative warrant liabilities—Private placement warrants |
$ | — | $ | — | $ | 20,742,670 |
February 12, 2021 |
December 31, 2021 |
|||||||
Exercise price |
$ | 11.50 | $ | 11.50 | ||||
Stock price |
$ | 10.87 | $ | 10.95 | ||||
Volatility |
20.0 | % | 33.9 | % | ||||
Term |
5.0 | 5.05 | ||||||
Risk-free rate |
0.50 | % | 1.26 | % |
Derivative warrant liabilities at December 31, 2020 |
$ | — | ||
Issuance of Public and Private Warrants |
23,027,500 | |||
Transfer of Public Warrants to Level 1 |
(9,660,000 | ) | ||
Change in fair value of derivative warrant liabilities |
7,375,170 | |||
Derivative warrant liabilities at December 31, 2021 |
$ | 20,742,670 | ||
December 31, 2021 |
For The Period From December 29, 2020 (inception) through December 31, 2020 |
|||||||
Current |
||||||||
Federal |
$ | — | $ | — | ||||
State |
— | — | ||||||
Deferred |
||||||||
Federal |
(680,791 | ) | (2,184 | ) | ||||
State |
— | — | ||||||
Change in valuation allowance |
680,791 | 2,184 | ||||||
Income tax provision |
$ | — | $ | — | ||||
December 31, 2021 |
For The Period From December 29, 2020 (inception) through December 31, 2020 |
|||||||
Deferred tax assets: |
||||||||
Start-up/Organization costs |
$ | 648,312 | $ | 2,184 | ||||
Net operating loss carryforwards |
34,663 | — | ||||||
Total deferred tax assets |
682,975 | 2,184 | ||||||
Valuation allowance |
(682,975 | ) | (2,184 | ) | ||||
Deferred tax asset, net of allowance |
$ | — | $ | — | ||||
December 31, 2021 |
For The Period From December 29, 2020 (inception) through December 31, 2020 |
|||||||
Statutory federal income tax rate |
21.0 | % | 21.0 | % | ||||
Change in fair value of derivative warrant liabilities |
(17.0 | )% | 0.0 | % | ||||
Transaction costs allocated to derivative warrant liabilities |
(0.7 | )% | 0.0 | % | ||||
Merger costs |
(1.3 | )% | 0.0 | % | ||||
Change in valuation allowance |
(2.1 | )% | (21.0 | )% | ||||
Income Taxes Benefit |
0.0 | % | 0.0 | % | ||||
Exhibit 4.4
FULLY-PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK OF CORE SCIENTIFIC, INC. (hereinafter called the Company), transferable
on the books of the Company in person or by duly authorized attorney, upon surrender of this Certificate properly endorsed. This Certificate and the shares represented hereby, are issued and shall be held subject to all of the provisions of the
Certificate of Incorporation, as amended, and the Bylaws, as amended, of the Company (copies of which are on file with the Company and with the Transfer Agent), to all of which each holder, by acceptance hereof, assents. This Certificate is not
valid unless countersigned and registered by the Transfer Agent and Registrar. Witness the facsimile seal of the Company and the facsimile signatures of its duly authorized officers. COMMON STOCK PAR VALUE $0.0001 COMMON STOCK CORE SCIENTIFIC, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE ** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample ****
Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David
Sample **** Mr. Alexander David Sample **** Mr. MR. Alexander David SAMPLE Sample **** Mr. Alexander David &Sample MRS. **** Mr. Alexander SAMPLE David Sample **** Mr. Alexander & David Sample **** Mr. Alexander David Sample **** Mr.
Alexander David Sample **** Mr. Alexander David Sample **** Mr Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample
**** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander MR. David Sample SAMPLE **** Mr.
Alexander David Sample **** &Mr. Alexander MRS. David Sample SAMPLE **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr.
Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample
CORE SCIENTIFIC, INC. THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS, A SUMMARY OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OF THE COMPANY AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND RIGHTS, AND THE VARIATIONS IN RIGHTS, PREFERENCES AND LIMITATIONS DETERMINED FOR EACH SERIES, WHICH ARE FIXED BY THE CERTIFICATE OF INCORPORATION OF THE COMPANY, AS AMENDED, AND THE RESOLUTIONS OF THE BOARD OF DIRECTORS OF THE COMPANY, AND THE AUTHORITY OF THE BOARD OF DIRECTORS TO DETERMINE VARIATIONS FOR FUTURE SERIES. SUCH REQUEST MAY BE MADE TO THE OFFICE OF THE SECRETARY OF THE COMPANY OR TO THE TRANSFER AGENT. THE aqBOARD OF DIRECTORS MAY REQUIRE THE OWNER OF A LOST OR DESTROYED STOCK CERTIFICATE, OR HIS LEGAL REPRESENTATIVES, TO GIVE THE COMPANY A BOND TO INDEMNIFY IT AND ITS TRANSFER AGENTS AND REGISTRARS AGAINST ANY CLAIM THAT MAY BE MADE AGAINST THEM ON ACCOUNT OF THE ALLEGED LOSS OR DESTRUCTION OF ANY SUCH CERTIFICATE. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian (Cust) (Minor) TEN ENT - as tenants by the entireties under Uniform Gifts to Minors Act (State) JT TEN - as joint tenants with right of survivorship UNIF TRF MIN ACT -Custodian (until age) and not as tenants in common (Cust) under Uniform Transfers to Minors Act (Minor) (State) Additional abbreviations may also be used though not in the above list. PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE For value received, hereby sell, assign and transfer unto (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE) Shares of the common stock represented by the within Certificate, and do hereby irrevocably constitute and appoint Attorney to transfer the said stock on the books of the within-named Company with full power of substitution in the premises. Dated: 20 Signature: Signature: Notice: The signature to this assignment must correspond with the name as written upon the face of the certificate, in every particular, without alteration or enlargement, or any change whatever. Signature(s) Guaranteed: Medallion Guarantee Stamp THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15.
EXHIBIT 4.13
DESCRIPTION OF SECURITIES REGISTERED
PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
Core Scientific, Inc. (Core, we, our, us, or the Company) has two classes of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the Exchange Act): common stock, par value $0.0001 par value per share (Core Common Stock), and public warrants, each whole public warrant exercisable for one share of Core Common Stock at an exercise price of $11.50 per share (the Public Warrants).
The following summary of the material terms of the Core Common Stock and Public Warrants is not intended to be a complete summary of the rights and preferences of such securities, and is qualified by reference to our Second Amended and Restated Certificate of Incorporation (our certificate of incorporation), our Second Amended and Restated Bylaws (our bylaws) and the Public Warrant-related documents, each of which is filed as an exhibit to our Annual Report on Form 10-K. We urge you to read each of our certificate of incorporation, bylaws, the Public Warrant-related documents and the applicable provisions of the Delaware General Corporation Law (the DGCL) for more information.
General
Our certificate of incorporation authorizes us to issue up to 10,000,000,000 shares of Core Common Stock, and 2,000,000,000 shares of preferred stock, par value $0.0001 per share.
Common Stock
Voting Power
Except as otherwise required by law or as otherwise provided in any certificate of designation for any series of preferred stock, the holders of Core Common Stock possess all voting power for the election of our directors and all other matters requiring stockholder action. Holders of Core Common Stock are entitled to one vote per share on matters to be voted on by stockholders.
Dividends
Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of Core Common Stock may be entitled to receive dividends out of funds legally available if the board of directors of Core, in its discretion, determines to issue dividends and then only at the times and in the amounts that the board of directors of Core may determine.
Liquidation, Dissolution and Winding Up
In the event of our voluntary or involuntary liquidation, dissolution, distribution of assets or winding-up, the holders of Core Common Stock will be entitled to receive an equal amount per share of all of our assets of whatever kind available for distribution to stockholders, after the rights of the holders of the preferred stock, if any, have been satisfied.
Preemptive or Other Rights
Our stockholders have no preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to Core Common Stock.
1
Preferred Stock
Under our certificate of incorporation, our board of directors may, without further action by our stockholders, fix the rights, preferences, privileges and restrictions of up to an aggregate of 2,000,000,000 shares of preferred stock in one or more series and authorize their issuance. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of common stock. Any issuance of preferred stock could adversely affect the voting power of holders of common stock and the likelihood that such holders would receive dividend payments and payments on liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deterring or preventing a change of control or other corporate action. We have no present plans to issue any shares of preferred stock.
Public Warrants
Unless otherwise indicated, references to warrant or warrants under this Public Warrants heading are to the Public Warrants.
The warrants were originally issued in registered form under the Warrant Agreement between Continental Stock Transfer & Trust Company, as warrant agent, and our predecessor registrant, Power & Digital Infrastructure Acquisition Corp. (XPDI). The Warrant Agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of the then-outstanding Public Warrants to make any change that adversely affects the interests of the registered holders of the Public Warrants.
The warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price (or on a cashless basis, if applicable), by certified or official bank check payable to Core, for the number of warrants being exercised. The warrantholders do not have the rights or privileges of holders of Core Common Stock or any voting rights until they exercise their warrants and receive shares of Core Common Stock. After the issuance of shares of Core Common Stock upon exercise of the warrants, each holder will be entitled to one (1) vote for each share held of record on all matters to be voted on by stockholders.
Each whole warrant entitles the registered holder to purchase one (1) whole share of Core Common Stock at a price of $11.50 per share, subject to adjustment as discussed below, at any time after February 18, 2022, provided in each case that Core has an effective registration statement under the Securities Act of 1933, as amended (the Securities Act) covering the shares of Core Common Stock issuable upon exercise of the warrants and a current prospectus relating to them is available (or Core permits holders to exercise their warrants on a cashless basis under the circumstances specified in the Warrant Agreement) and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder. Pursuant to the Warrant Agreement, a warrantholder may exercise its warrants only for a whole number of shares of Core Common Stock.
Only whole warrants trade, and no fractional shares of Core Common Stock will be issued upon exercise of a warrant. This means that only a whole warrant may be exercised at any given time by a warrantholder. If, upon exercise, a holder would be entitled to receive a fractional interest in a share, Core will round down to the nearest whole number of the number of shares of Core Common Stock to be issued to the holder. The warrants will expire on January 19, 2027 at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
Core is not obligated to deliver any shares of Core Common Stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the shares of Core Common Stock underlying the warrants is then-effective and a prospectus relating thereto is current, subject to Cores satisfying Cores obligations described below with respect to registration, or a valid exemption from registration is available. No warrant is exercisable and Core will not be obligated to issue shares of Core Common Stock upon exercise of a warrant unless Core Common Stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In no event will Core be required to net cash settle any warrant. In the event that a registration statement is not effective for the exercised warrants, the purchaser of a unit containing such warrant will have paid the full purchase price for the unit solely for the share of Core common stock underlying such unit.
2
A holder of a warrant may notify Core in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such warrant, to the extent that after giving effect to such exercise, such person (together with such persons affiliates), to the warrant agents actual knowledge, would beneficially own in excess of 4.9% or 9.8% (as specified by the holder) of Core Common Stock issued and outstanding immediately after giving effect to such exercise.
Core has agreed that as soon as practicable, but in no event later than 20 business days after the closing of the merger, which occurred on January 19, 2022, it will use its commercially reasonable efforts to (i) file with the SEC a registration statement for the registration, under the Securities Act, of the Core Common Stock issuable upon exercise of the warrants; (ii) cause such registration statement to become effective within 60 business days after the closing of the merger; and (iii) maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration or redemption of the warrants in accordance with the provisions of the Warrant Agreement. If a registration statement covering the issuance of the Core Common Stock issuable upon exercise of the warrants is not effective by the 60th business day after the closing of the merger, warrantholders may, until such time as there is an effective registration statement and during any period when Core will have failed to maintain an effective registration statement, exercise warrants on a cashless basis in accordance with Section 3(a)(9) of the Securities Act, provided that such exemption is available, or another exemption. In addition, if Cores Common Stock are at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a covered security under Section 18(b)(1) of the Securities Act, Core may, at its option, require holders of the Public Warrants who exercise their warrants to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act and, in the event Core elects to do so, Core will not be required to file or maintain in effect a registration statement, but Core will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In such event, each holder would pay the exercise price by surrendering warrants in exchange for a number of shares of Core Common Stock equal to the lesser of (A) the quotient obtained by dividing (x) the product of (a) the number of shares of Core Common Stock underlying the warrants and (b) the excess of the fair market value over the exercise price of the warrants by (y) such fair market value and (B) the product of the number of warrants surrendered and 0.361, subject to adjustment. The fair market value shall mean the volume weighted average price of the shares of Core Common Stock for the 10 trading days ending on the trading day prior to the date on which the notice of exercise is received by the warrant agent.
Redemption of Warrants When the Price per Share of Core Common Stock Equals or Exceeds $18.00.
Once the warrants become exercisable, Core may call the warrants for redemption:
| in whole and not in part; |
| at a price of $0.01 per warrant; |
| upon not less than 30 days prior written notice of redemption to each warrantholder; and |
| if, and only if, the last reported sale price of the Core Common Stock for any 20 trading days within a 30-trading day period ending three (3) business days before Core sends the notice of redemption to the warrantholders (the Reference Value) equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading Public WarrantsAnti-dilution Adjustments). |
If and when the warrants become redeemable, Core may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. However, Core will not redeem the warrants unless an effective registration statement under the Securities Act covering the shares of Core Common Stock issuable upon exercise of the warrants is effective and a current prospectus relating to those shares of Core Common Stock is available throughout the 30-day redemption period.
3
Core established the last of the redemption criteria discussed above to prevent a redemption call unless there is, at the time of the call, a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and Core issues a notice of redemption of the warrants, each warrantholder will be entitled to exercise its warrant prior to the scheduled redemption date. Any such exercise would not be done on a cashless basis and would require the exercising warrantholder to pay the exercise price for each warrant being exercised. However, the price of the Core Common Stock may fall below the $18.00 redemption trigger price (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading Anti-dilution Adjustments) as well as the $11.50 (for whole shares) warrant exercise price after the redemption notice is issued.
Redemption of Warrants When the Price per Share of Core Common Stock Equals or Exceeds $10.00.
Once the warrants become exercisable, Core may redeem the outstanding warrants:
| in whole and not in part; |
| at $0.10 per warrant; |
| upon a minimum of 30 days prior written notice of redemption, provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table below, based on the redemption date and the fair market value of Core Common Stock except as otherwise described below; |
| if, and only if, the Reference Value equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading Public WarrantsAnti-dilution Adjustments); and |
| if the Reference Value is less than $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading Public WarrantsAnti-dilution Adjustments) the Private Placement Warrants must also be concurrently called for redemption on the same terms (except as described above with respect to a holders ability to exercise its warrants on a cashless basis) as the outstanding Public Warrants, as described above. |
Beginning on the date the notice of redemption is given until the warrants are redeemed or exercised, holders may elect to exercise their warrants on a cashless basis. The numbers in the table below represent the number of shares of Core Common Stock that a warrantholder will receive upon such cashless exercise in connection with a redemption by Core pursuant to this redemption feature, based on the fair market value of Core Common Stock on the corresponding redemption date (assuming holders elect to exercise their warrants and such warrants are not redeemed for $0.10 per warrant), determined for these purposes based on volume-weighted average price of Core Common Stock as reported during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants, and the number of months that the corresponding redemption date precedes the expiration date of the warrants, each as set forth in the table below. Core will provide the warrantholders with the final fair market value no later than one business day after the 10-trading day period described above ends.
The stock prices set forth in the column headings of the table below will be adjusted as of any date on which the number of shares issuable upon exercise of a warrant or the exercise price of a warrant is adjusted as set forth under the heading Anti-dilution Adjustments below. If the number of shares issuable upon exercise of a warrant is adjusted, the adjusted share prices in the column headings will equal the share prices immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the number of shares deliverable upon exercise of a warrant immediately prior to such adjustment and the denominator of which is the number of shares deliverable upon exercise of a warrant as so adjusted. The number of shares in the table below shall be adjusted in the same manner and at the same time as the number of shares issuable upon exercise of a warrant. If the exercise price of a warrant is adjusted (a) in the case of an adjustment pursuant to the fifth paragraph under the heading Anti-dilution Adjustments below, the adjusted share prices in the column headings will equal the unadjusted share price multiplied by a fraction, the numerator of which is the higher of the Market Value and the Newly Issued Price (as defined below) as set forth under the heading Anti-dilution Adjustments and the denominator of which is $10.00 and (b) in the case of in the case of an adjustment pursuant to the second paragraph under the heading Anti-dilution Adjustments below, the adjusted share prices in the column headings will equal the unadjusted share price less the decrease in the exercise price of a warrant pursuant to such exercise price adjustment.
4
Redemption Date (period to expiration of warrants) |
Fair Market Value of Core Common Stock | |||||||||||||||||||||||||||||||||||
≤ $10.00 |
$11.00 | $12.00 | $13.00 | $14.00 | $15.00 | $16.00 | $17.00 | ≥ $18.00 |
||||||||||||||||||||||||||||
60 months |
0.261 | 0.281 | 0.297 | 0.311 | 0.324 | 0.337 | 0.348 | 0.358 | 0.361 | |||||||||||||||||||||||||||
57 months |
0.257 | 0.277 | 0.294 | 0.310 | 0.324 | 0.337 | 0.348 | 0.358 | 0.361 | |||||||||||||||||||||||||||
54 months |
0.252 | 0.272 | 0.291 | 0.307 | 0.322 | 0.335 | 0.347 | 0.357 | 0.361 | |||||||||||||||||||||||||||
51 months |
0.246 | 0.268 | 0.287 | 0.304 | 0.320 | 0.333 | 0.346 | 0.357 | 0.361 | |||||||||||||||||||||||||||
48 months |
0.241 | 0.263 | 0.283 | 0.301 | 0.317 | 0.332 | 0.344 | 0.356 | 0.361 | |||||||||||||||||||||||||||
45 months |
0.235 | 0.258 | 0.279 | 0.298 | 0.315 | 0.330 | 0.343 | 0.356 | 0.361 | |||||||||||||||||||||||||||
42 months |
0.228 | 0.252 | 0.274 | 0.294 | 0.312 | 0.328 | 0.342 | 0.355 | 0.361 | |||||||||||||||||||||||||||
39 months |
0.221 | 0.246 | 0.269 | 0.290 | 0.309 | 0.325 | 0.340 | 0.354 | 0.361 | |||||||||||||||||||||||||||
36 months |
0.213 | 0.239 | 0.263 | 0.285 | 0.305 | 0.323 | 0.339 | 0.353 | 0.361 | |||||||||||||||||||||||||||
33 months |
0.205 | 0.232 | 0.257 | 0.280 | 0.301 | 0.320 | 0.337 | 0.352 | 0.361 | |||||||||||||||||||||||||||
30 months |
0.196 | 0.224 | 0.250 | 0.274 | 0.297 | 0.316 | 0.335 | 0.351 | 0.361 | |||||||||||||||||||||||||||
27 months |
0.185 | 0.214 | 0.242 | 0.268 | 0.291 | 0.313 | 0.332 | 0.350 | 0.361 | |||||||||||||||||||||||||||
24 months |
0.173 | 0.204 | 0.233 | 0.260 | 0.285 | 0.308 | 0.329 | 0.348 | 0.361 | |||||||||||||||||||||||||||
21 months |
0.161 | 0.193 | 0.223 | 0.252 | 0.279 | 0.304 | 0.326 | 0.347 | 0.361 | |||||||||||||||||||||||||||
18 months |
0.146 | 0.179 | 0.211 | 0.242 | 0.271 | 0.298 | 0.322 | 0.345 | 0.361 | |||||||||||||||||||||||||||
15 months |
0.130 | 0.164 | 0.197 | 0.230 | 0.262 | 0.291 | 0.317 | 0.342 | 0.361 | |||||||||||||||||||||||||||
12 months |
0.111 | 0.146 | 0.181 | 0.216 | 0.250 | 0.282 | 0.312 | 0.339 | 0.361 | |||||||||||||||||||||||||||
9 months |
0.090 | 0.125 | 0.162 | 0.199 | 0.237 | 0.272 | 0.305 | 0.336 | 0.361 | |||||||||||||||||||||||||||
6 months |
0.065 | 0.099 | 0.137 | 0.178 | 0.219 | 0.259 | 0.296 | 0.331 | 0.361 | |||||||||||||||||||||||||||
3 months |
0.034 | 0.065 | 0.104 | 0.150 | 0.197 | 0.243 | 0.286 | 0.326 | 0.361 | |||||||||||||||||||||||||||
0 months |
| | 0.042 | 0.115 | 0.179 | 0.233 | 0.281 | 0.323 | 0.361 |
The exact fair market value and redemption date may not be set forth in the table above, in which case, if the fair market value is between two values in the table or the redemption date is between two redemption dates in the table, the number of shares of Core Common Stock to be issued for each warrant exercised will be determined by a straight-line interpolation between the number of shares set forth for the higher and lower fair market values and the earlier and later redemption dates, as applicable, based on a 365 or 366-day year, as applicable. For example, if the volume-weighted average price of Core Common Stock as reported during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of the warrants is $11.00 per share, and at such time there are 57 months until the expiration of the warrants, holders may choose to, in connection with this redemption feature, exercise their warrants for 0.277 shares of Core Common Stock for each whole warrant. For an example where the exact fair market value and redemption date are not as set forth in the table above, if the volume-weighted average price of Core Common Stock as reported during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of the warrants is $13.50 per share, and at such time there are 38 months until the expiration of the warrants, holders may choose to, in connection with this redemption feature, exercise their warrants for 0.298 shares of Core Common Stock for each whole warrant. In no event will the warrants be exercisable in connection with this redemption feature for more than 0.361 shares of Core Common Stock per warrant (subject to adjustment). Finally, as reflected in the table above, if the warrants are out of the money and about to expire, they cannot be exercised on a cashless basis in connection with a redemption by Core pursuant to this redemption feature, since they will not be exercisable for any shares of Core Common Stock.
This redemption feature is structured to allow for all of the outstanding warrants to be redeemed when the Core Common Stock is trading at or above $10.00 per share, which may be at a time when the trading price of the Core Common Stock is below the exercise price of the warrants. This redemption feature has been established to provide Core with the flexibility to redeem the warrants without the warrants having to reach the $18.00 per share threshold set forth above under Redemption of Warrants When the Price per Share of Core Common Stock Equals or Exceeds $18.00. Holders choosing to exercise their warrants in connection with a redemption pursuant to this feature will, in effect, receive a number of shares for their warrants based on an option pricing model with a fixed volatility input as of the date the prospectus forming a part of the registration statement filed in connection with XPDIs IPO. This
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redemption right provides Core with an additional mechanism by which to redeem all of the outstanding warrants, and therefore provides certainty as to Cores capital structure as the warrants would no longer be outstanding and would have been exercised or redeemed. Core will be required to pay the applicable redemption price to warrantholders if it chooses to exercise this redemption right, which will allow Core to quickly proceed with a redemption of the warrants if it determines doing so is in Cores best interest. As such, Core would redeem the warrants in this manner when it believe it is in Cores best interest to update its capital structure to remove the warrants and pay the redemption price to the warrantholders.
Anti-dilution Adjustments.
As stated above, Core can redeem the warrants when the Core Common Stock is trading at a price starting at $10.00, which is below the exercise price of $11.50, because it will provide certainty with respect to Cores capital structure and cash position while providing warrantholders with the opportunity to exercise their warrants on a cashless basis for the applicable number of shares. If Core chooses to redeem the warrants when the Core Common Stock is trading at a price below the exercise price of the warrants, this could result in the warrantholders receiving fewer shares of Core Common Stock than they would have received if they had chosen to wait to exercise their warrants for Core Common Stock if and when such shares of Core Common Stock were trading at a price higher than the exercise price of $11.50.
A holder of a warrant may notify Core in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such warrant, to the extent that, to the warrant agents actual knowledge, after giving effect to such exercise, such person (together with such persons affiliates) would beneficially own in excess of 4.9% or 9.8% (or such other amount as a holder may specify) of the shares of Core Common Stock outstanding immediately after giving effect to such exercise.
If the number of outstanding shares of Core Common Stock is increased by a stock capitalization or stock dividend paid in shares of Core Common Stock to all or substantially all holders of Core Common Stock, or by a split-up of Core Common Stock or other similar event, then, on the effective date of such stock capitalization or stock dividend, split-up or similar event, the number of shares of Core Common Stock issuable on exercise of each warrant will be increased in proportion to such increase in the outstanding shares of Core Common Stock. A rights offering made to all or substantially all holders of Core Common Stock entitling holders to purchase Core Common Stock at a price less than the historical fair market value (as defined below) will be deemed a stock dividend of a number of shares of Core Common Stock equal to the product of (i) the number of shares of Core Common Stock actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for Core Common Stock) and (ii) one (1) minus the quotient of (x) the price per share of Core Common Stock paid in such rights offering and (y) the historical fair market value. For these purposes, (i) if the rights offering is for securities convertible into or exercisable for shares of Core Common Stock, in determining the price payable for Core Common Stock, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) historical fair market value means the volume-weighted average price of shares of Core Common Stock as reported during the 10 trading day period ending on the trading day prior to the first date on which the shares of Core Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.
In addition, if Core, at any time while the warrants are outstanding and unexpired, pays to all or substantially all of the holders of Common Stock a dividend or makes a distribution in cash, securities or other assets to all or substantially all of the holders of Common Stock on account of such shares of Common Stock (or other securities into which the warrants are convertible), other than (a) as described above, or (b) any cash dividends or cash distributions which, when combined on a per-share basis with all other cash dividends and cash distributions paid on the shares of Common Stock during the 365-day period ending on the date of declaration of such dividend or distribution does not exceed $0.50 (as adjusted to appropriately reflect any other adjustments and excluding cash dividends or cash distributions that resulted in an adjustment to the exercise price or to the number of shares of such Common Stock issuable on exercise of each warrant) but only with respect to the amount of the aggregate cash dividends or cash distributions equal to or less than $0.50 per share, then the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each share of Core Common Stock in respect of such event.
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If the number of outstanding shares of Core Common Stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of Core Common Stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of Core Common Stock issuable on exercise of each warrant will be decreased in proportion to such decrease in the number of outstanding shares of Core Common Stock.
Whenever the number of shares of Core Common Stock purchasable upon the exercise of the warrants is adjusted, as described above, the warrant exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of shares of Core Common Stock purchasable upon the exercise of the warrants immediately prior to such adjustment and (y) the denominator of which will be the number of shares of Core Common Stock so purchasable immediately thereafter.
In case of any reclassification or reorganization of the outstanding shares of Core Common Stock (other than those described above or that solely affects the par value of such shares of Core Common Stock), or in the case of any merger or consolidation of us with or into another corporation (other than a consolidation or merger in which we are the continuing corporation and that does not result in any reclassification or reorganization of the outstanding shares of Core Common Stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of us as an entirety or substantially as an entirety in connection with which we are dissolved, the holders of the warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the warrants and in lieu of the shares of Core Common Stock immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of Core Common Stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the warrants would have received if such holder had exercised their warrants immediately prior to such event. However, if such holders were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such consolidation or merger, then the kind and amount of securities, cash or other assets for which each warrant will become exercisable will be deemed to be the weighted average of the kind and amount received per share by such holders in such consolidation or merger that affirmatively make such election, and if a tender, exchange or redemption offer has been made to and accepted by such holders (other than a tender, exchange or redemption offer made by us in connection with redemption rights held by stockholders of the Company as provided for in the Companys certificate of incorporation under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act) more than 65% of the issued and outstanding shares of Core Common Stock, the holder of a warrant will be entitled to receive the highest amount of cash, securities or other property to which such holder would actually have been entitled as a stockholder if such warrant holder had exercised the warrant prior to the expiration of such tender or exchange offer, accepted such offer and all of the shares of Core Common Stock held by such holder had been purchased pursuant to such tender or exchange offer, subject to adjustments (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in the Warrant Agreement. If less than 70% of the consideration receivable by the holders of Core common stock in such a transaction is payable in the form of our Core Common Stock in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the registered holder of the warrant properly exercises the warrant within 30 days following public disclosure of such transaction, the warrant exercise price will be reduced as specified in the Warrant Agreement based on the Black-Scholes value (as defined in the Warrant Agreement) of the warrant. The purpose of such exercise price reduction is to provide additional value to holders of the warrants when an extraordinary transaction occurs during the exercise period of the warrants pursuant to which the holders of the warrants otherwise do not receive the full potential value of the warrants.
Subject to applicable law, any action, proceeding or claim against Core arising out of or relating in any way to the Warrant Agreement will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and Core irrevocably submits to such jurisdiction, which jurisdiction will be the exclusive forum for any such action, proceeding or claim. This provision applies to claims under the Securities Act but does not apply to claims under the Exchange Act or any claim for which the federal district courts of the United States of America are the sole and exclusive forum.
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Anti-Takeover Provisions of Delaware Law
Special Meetings of Stockholders
The certificate of incorporation and the bylaws provide, that special meetings of stockholders may be called only by a majority vote of Cores board of directors, by the Chairman of the board of directors, or by the chief executive officer.
Advance Notice Requirements for Stockholder Proposals and Director Nominations
Our bylaws provide, that stockholders seeking to bring business before an annual meeting of stockholders, or to nominate candidates for election as directors at an annual meeting of stockholders, must provide timely notice of their intent in writing. To be considered timely, a stockholders notice will need to be received by the company secretary at the principal executive offices not later than the close of business on the 90th day nor earlier than the open of business on the 120th day prior to the first anniversary of the preceding years annual meeting. Pursuant to Rule 14a-8 of the Exchange Act, proposals seeking inclusion in Cores annual proxy statement must comply with the notice periods contained therein. Our bylaws specify, certain requirements as to the form and content of a stockholders meeting. These provisions may preclude stockholders from bringing matters before an annual meeting of stockholders or from making nominations for directors at an annual meeting of stockholders.
Authorized but Unissued Shares
Cores authorized but unissued shares of Common Stock and preferred stock are available for future issuances without stockholder approval and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved shares of Common Stock and preferred stock could render more difficult or discourage an attempt to obtain control of Core by means of a proxy contest, tender offer, merger or otherwise.
Choice of Forum
The certificate of incorporation provides that the Court of Chancery of the State of Delaware (or, if and only if, the Court of Chancery of the State of Delaware lacks subject matter jurisdiction, any state court located within the State of Delaware or, if and only if, all such state courts lack subject matter jurisdiction, the federal district court for the District of Delaware) and any appellate court therefrom shall be the sole and exclusive forum for the following claims or causes of action brought under Delaware statutory or common law: (1) any derivative claim or action brought on Cores behalf; (2) any claim or cause of action asserting a breach of fiduciary duty by any of Cores current or former director, officer or other employee; (3) any claim or cause of action asserting a claim against Core arising out of, or pursuant to, the DGCL, the certificate of incorporation or the bylaws; (4) any claim or cause of action seeking to interpret, apply, enforce or determine the validity of the certificate of incorporation or the bylaws (including any right, obligation, or remedy thereunder); (5) any claim or cause of action as to which the DGCL confers jurisdiction to the Court of Chancery of the State of Delaware; or (6) any claim or cause of action asserting a claim against Core or any of its directors, officers or other employees, that is governed by the internal affairs doctrine, in all cases to the fullest extent permitted by law and subject to the court having personal jurisdiction over the indispensable parties named as defendants. The aforementioned provision will not apply to claims or causes of action brought to enforce a duty or liability created by the Securities Act, the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. However, as Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act, and an investor cannot waive compliance with the federal securities laws and the rules and regulations thereunder, there is uncertainty as to whether a court would enforce such a provision. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, the certificate of incorporation provides that the U.S. federal district courts will be the exclusive forum for resolving any complaint asserting a cause or causes of action arising under the Securities Act, including all causes of action asserted against any defendant to such complaint.
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While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions. In such instance, Core would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of the certificate of incorporation. This may require significant additional costs associated with resolving such action in other jurisdictions and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions.
These exclusive forum provisions may limit a stockholders ability to bring a claim in a judicial forum that it finds favorable for disputes with Core or its directors, officers, or other employees, which may discourage lawsuits against Core or its directors, officers and other employees. If a court were to find either exclusive-forum provision in the certificate of incorporation to be inapplicable or unenforceable in an action, Core may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could seriously harm Cores business.
Section 203 of the Delaware General Corporation Law
Core is subject to Section 203 of the DGCL, which prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years after the date that such stockholder became an interested stockholder, with the following exceptions:
| before such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; |
| upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or |
| on or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder. |
In general, Section 203 of the DGCL defines a business combination to include the following:
| any merger or consolidation involving the corporation and the interested stockholder; |
| any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder; |
| subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; |
| any transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any class or series of the corporation beneficially owned by the interested stockholder; and |
| the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits by or through the corporation. |
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In general, Section 203 of the DGCL defines an interested stockholder as an entity or person who, together with the persons affiliates and associates, beneficially owns, or within three years prior to the time of determination of interested stockholder status did own, 15% or more of the outstanding voting stock of the corporation.
The statute could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to acquire Core even though such a transaction may offer its stockholders the opportunity to sell their stock at a price above the prevailing market price.
A Delaware corporation may opt out of these provisions with an express provision in its certificate of incorporation. Core will not opt out of these provisions, which may as a result, discourage or prevent mergers or other takeover or change of control attempts of it.
Transfer Agent and Registrar
The transfer agent and registrar for our securities is Computershare Trust Company, N.A., with offices at 250 Royall Street, Canton, Massachusetts 02021.
Securities Exchange
Our Common Stock and Public Warrants are listed on the Nasdaq Global Select Market under the symbols CORZ and CORZW, respectively.
10
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael Levitt, certify that:
1. | I have reviewed this Annual Report on Form 10-K of Core Scientific, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(c) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: March 30, 2022
/s/ Michael Levitt |
Michael Levitt |
Chief Executive Officer |
(Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael Trzupek, certify that:
1. | I have reviewed this Annual Report on Form 10-K of Core Scientific, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(c) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: | March 30, 2022 |
/s/ Michael Trzupek |
Michael Trzupek |
Chief Financial Officer |
(Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION
Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, (the Exchange Act) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), Michael Levitt, Chief Executive Officer of Core Scientific, Inc. (the Company), and Michael Trzupek, Chief Financial Officer of the Company, each hereby certifies that, to the best of his or her knowledge:
1. | The Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2021, to which this Certification is attached as Exhibit 32.1 (the Annual Report), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and |
2. | The information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
IN WITNESS WHEREOF, the undersigned have set their hands hereto as of the 30th day of March, 2022.
/s/ Michael Levitt |
/s/ Michael Trzupek | |||
Michael Levitt | Michael Trzupek | |||
Chief Executive Officer | Chief Financial Officer | |||
(Principal Executive Officer) | (Principal Financial Officer) |
This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company. under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.