CORE SCIENTIFIC, INC. Item 1.01 Entry into a Material Definitive Agreement.
Lock-Up Agreements
In connection with the Business Combination, the Company and certain stockholders, officers and directors ofCore Scientific andXPDI Sponsor LLC (the "Sponsor") entered into Lock-Up Agreements (each, a "Lock-Up Agreement") pursuant to which they agreed, among other things, not to dispose of their shares of New Core Common Stock for a period of one hundred eighty (180) days and one year, respectively. The terms of the Lock-Up Agreement are described in the Proxy Statement/Prospectus in the section titled "Other Agreements-Lock-up Agreements" on page 248 of the Proxy Statement/Prospectus. The foregoing description of the Lock-Up Agreement is qualified in its entirety by reference to the full text of the form of Lock-Up Agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
Amended and Restated Registration Rights Agreement
On the Closing Date, that certain Registration Rights Agreement, datedFebruary 9, 2021 , was amended and restated, and XPDI, certain persons and entities receiving shares of New Core Common Stock pursuant to the Merger Agreement, the anchor investors (as defined in the Proxy Statement/Prospectus) and the Sponsor entered into the Amended and Restated Registration Rights Agreement (the "A&R Registration Rights Agreement"). The terms of the A&R Registration Rights Agreement are described in the Proxy Statement/Prospectus in the section titled "Other Agreements-Amended and Restated Registration Rights Agreement" on page 248 of the Proxy Statement/Prospectus. The foregoing description of the A&R Registration Rights Agreement is qualified in its entirety by reference to the full text of the A&R Registration Rights Agreement, a copy of which is attached hereto as Exhibit 10.2 and incorporated herein by reference. Indemnification Agreements On the Closing Date, the Company entered into indemnification agreements with each of its directors and executive officers, a form of which is attached hereto as Exhibit 10.7 and incorporated herein by reference.
Item 2.01 Completion of Acquisition of Disposition of Assets.
The disclosure set forth in the "Introductory Note" above is incorporated by reference into this Item 2.01 of this Current Report on Form 8-K.
FORM 10 INFORMATION
Item 2.01(f) of this Current Report on Form 8-K states that if the predecessor
registrant was a shell company, as XPDI was immediately before the Business
Combination, then the registrant must disclose the information that would be
required if the registrant were filing a general form for registration of
securities on Form 10. Accordingly, the Company, as the successor registrant to
XPDI, is providing the information below that would be included in a Form 10 if
it were to file a Form 10. Please note that the information provided below
relates to the Company after the consummation of the Business Combination unless
otherwise specifically indicated or the context otherwise requires.
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Forward-Looking Statements
The Company makes forward-looking statements in this Current Report on Form 8-K and in documents incorporated herein by reference including statements regarding, among other things, projections, estimates and forecasts of revenue, Adjusted EBITDA and other financial and performance metrics, projections of market opportunity and expectations, the estimated implied enterprise value of the Company, the Company's ability to scale and grow its business and source clean and renewable energy, the advantages and expected growth of the Company, the Company's ability to source and retain talent, expectations related to the terms, timing and benefits of the Mergers as well as the plans, strategies and prospects, both business and financial, of the Company. These forward-looking statements are based on the beliefs and assumptions of the management of the Company. Although the Company believes that its plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, the Company cannot assure you that it will achieve or realize these plans, intentions or expectations. These forward-looking statements are based on information available as of the date of this Current Report on Form 8-K, and current expectations, forecasts and assumptions, and involve a number of risks and uncertainties. Accordingly, forward-looking statements in this Current Report on Form 8-K and in any document incorporated herein by reference should not be relied upon as representing the Company's views as of any subsequent date, and the Company does . . .
Item 3.02 Unregistered Sales of
The convertible notes issued byCore Scientific betweenApril 2021 andNovember 2021 have not been registered under the Securities Act of 1933, as amended (the "Securities Act") in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act. A description of the convertible note issuance is included in the Proxy Statement/Prospectus in the section titled "Unaudited Pro Forma Condensed Financial Information-Description of the Issuance of Convertible Notes" beginning on page 94 of the Proxy Statement/Prospectus, which is incorporated herein by reference.
Item 3.03 Material Modification to Rights of Security Holders.
The information set forth in Item 5.03 of this Current Report on Form 8-K is incorporated herein by reference.
17
--------------------------------------------------------------------------------Item 4.01 Changes in Registrant's Certifying Accountant.
(a) Dismissal of independent registered public accounting firm OnJanuary 21, 2022 , theAudit Committee of the Company approved the dismissal ofMarcum LLP ("Marcum") as its independent registered public accounting firm, effective upon completion of Marcum's audit of the Company's consolidated financial statements as of and for the year endingDecember 31, 2021 , and the issuance of their report thereon (the "Auditor Change Effective Date"). The management of the Company communicated the Audit Committee's decision to Marcum onJanuary 21, 2022 . Marcum's report of independent registered public accounting firm datedJanuary 8, 2021 , except for the subsequent events disclosed in Note 7, as to which the date isFebruary 11, 2021 , on the XPDI consolidated balance sheet as ofDecember 31, 2020 , the related consolidated statements of operations, changes in stockholders' equity and cash flows for the period fromDecember 29, 2020 (inception) throughDecember 31, 2020 , and the related notes to the financial statements did not contain any adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainties, audit scope or accounting principles, except for an explanatory paragraph in such report regarding substantial doubt about the Company's ability to continue as a going concern. During the period fromDecember 29, 2020 (XPDI's inception) throughDecember 31, 2020 and the subsequent interim period throughJanuary 21, 2022 , there were no "disagreements" (as such term is defined in Item 304(a)(1)(iv) of Regulation S-K) with Marcum on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of Marcum, would have caused Marcum to make reference thereto in its reports on XPDI's financial statements for such periods. During the period fromDecember 29, 2020 (XPDI's inception) throughDecember 31, 2020 and the subsequent interim period throughJanuary 21, 2022 , there have been no "reportable events" (as such term is defined in Item 304(a)(1)(v) of Regulation S-K), other than the material weakness in internal controls identified by management related to the accounting for a portion of the Class A Common Stock in permanent equity rather than temporary equity, which resulted in the restatement of XPDI's financial statements as set forth in XPDI's Forms 10-Q for the quarters endedMarch 31, 2021 ,June 30, 2021 andSeptember 30, 2021 as filed with theSEC onMay 25, 2021 ,August 23, 2021 andNovember 15, 2021 , respectively. The Company has provided Marcum with a copy of the disclosures made by the Company in this Item 4.01 and requested that Marcum furnish the Company with a letter addressed to theSEC stating whether it agrees with the statements made by the registrant in this Item 4.01 and, if not, stating the respects in which it does not agree. A letter from Marcum is attached hereto as Exhibit 16.1. (b) Engagement of new independent registered public accounting firm OnJanuary 21, 2022 , theAudit Committee of the Company approved the engagement ofErnst & Young LLP ("EY") as its independent registered public accounting firm, effective upon the Auditor Change Effective Date. EY previously served as . . .
Item 5.01 Changes in Control of Registrant.
The information set forth in the section titled "Introductory Note" and in the
section titled "Security Ownership of Certain Beneficial Owners and Management"
in Item 2.01 of this Current Report on Form 8-K is incorporated herein by
reference.
As a result of the completion of the Business Combination pursuant to the Merger
Agreement, a change of control of XPDI has occurred. Following the Business
Combination, former Core Scientific stockholders own 90.7%, former XPDI public
stockholders own 6.7% and XPDI's Sponsor owns 2.6% of the issued and outstanding
shares of New Core Common Stock, respectively, excluding the impact of unvested
restricted stock units and options.
18
--------------------------------------------------------------------------------Item 5.02 Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The information set forth in the sections titled "Directors and Executive Officers" and "Certain Relationships and Related Party Transactions" in Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference.
2021 Equity Incentive Plan
At the Special Meeting, the stockholders of XPDI approved the Incentive Plan. The description of the Incentive Plan set forth in the Proxy Statement/Prospectus section titled "Proposal No. 5-The Incentive Plan Proposal-Description of the New Core 2021 Plan" beginning on page 257 is incorporated herein by reference. A copy of the full text of the Incentive Plan is filed as Exhibit 10.8 to this Current Report on Form 8-K and is incorporated herein by reference. Following the consummation of the Business Combination, New Core expects that its board of directors will make grants of awards under the Incentive Plan to eligible participants.
2021 Employee Stock Purchase Plan
At the Special Meeting, the stockholders of XPDI approved the ESPP. The description of the ESPP set forth in the Proxy Statement/Prospectus section titled "Proposal No. 6-The ESPP Proposal-Description of the ESPP" beginning on page 266 is incorporated herein by reference. A copy of the full text of the ESPP is filed as Exhibit 10.11 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
At the Special Meeting, the XPDI stockholders considered and approved, among other things, Proposal No. 2-The Charter Proposal (the "Charter Proposal"), which is described in greater detail in the Proxy Statement/Prospectus beginning on page 250 of the Proxy Statement/Prospectus.
The Post-Combination Charter, which became effective upon filing with the
Secretary of State of the
On
Copies of the Post-Combination Charter and the Post-Combination Bylaws are attached hereto as Exhibit 3.1 and Exhibit 3.2, respectively, and are incorporated herein by reference.
The description of the Post-Combination Charter and the general effect of the Post-Combination Charter and the Post-Combination Bylaws upon the rights of holders of the Company's capital stock are included in the Proxy Statement/Prospectus under the section titled "Description ofNew Core Securities " beginning on page 284 of the Proxy Statement/Prospectus, which is incorporated herein by reference.
Item 5.05 Amendments to the Registrant's Code of Ethics, or Waiver of a Provision of the Code of Ethics.
In connection with the Business Combination, onJanuary 19, 2022 , the Company's board of directors approved and adopted a new Code of Conduct applicable to all employees, officers and directors of the Company. A copy of the Code of Conduct can be found in the Investor Relations section of the Company's website at https://investors.corescientific.com/. 19 --------------------------------------------------------------------------------
Item 5.06 Change in Shell Company Status.
As a result of the Business Combination, the Company ceased to be a shell company (as defined inRule 12b-2 of the Exchange Act). A description of the Business Combination and the terms of the Merger Agreement are included in the Proxy Statement/Prospectus in the sections titled "The Merger" and "The Merger Agreement" beginning on page 215 and 236, respectively, of the Proxy Statement/Prospectus, which are incorporated herein by reference.
Further reference is made to the information contained in Item 2.01 of this Current Report on Form 8-K.
Item 9.01 Financial Statement and Exhibits.
(a) Financial Statements of Business Acquired.
The audited consolidated financial statements ofCore Scientific as of and for the years endedDecember 31, 2020 and 2019 and the related notes are included in the Proxy Statement/Prospectus beginning on page F-63 of the Proxy Statement/Prospectus and are incorporated herein by reference. The unaudited consolidated financial statements ofCore Scientific as of and for the nine months endedSeptember 30, 2021 and 2020 and the related notes are included in the Proxy Statement/Prospectus beginning on page F-99 of the Proxy Statement/Prospectus and are incorporated herein by reference.
The audited financial statements of XPDI as of and for the year ended
The unaudited condensed consolidated financial statements of XPDI as of and for the nine months endedSeptember 30, 2021 and the related notes are included in the Proxy Statement/Prospectus beginning on page F-21 of the Proxy Statement/Prospectus and are incorporated herein by reference. The audited financial statements ofBlockcap, Inc. as of and for the years endedDecember 31, 2020 and the period fromFebruary 19, 2019 (inception) throughDecember 31, 2020 and the related notes are included in the Proxy Statement/Prospectus beginning on page F-128 of the Proxy Statement/Prospectus and are incorporated herein by reference.
The condensed financial statements of
The audited financial statements of BEP 888, LLC for period fromJune 1, 2020 (inception) toNovember 30, 2020 and the related notes are included in the Proxy Statement/Prospectus beginning on page F-166 of the Proxy Statement/Prospectus and are incorporated herein by reference. The audited financial statements of BEP 999, LLC for period fromNovember 5, 2020 (inception) toNovember 30, 2020 and the related notes are included in the Proxy Statement/Prospectus beginning on page F-179 of the Proxy Statement/Prospectus and are incorporated herein by reference. The audited financial statements of RME Black 100, LLC for period fromApril 16, 2020 (inception) toNovember 30, 2020 and the related notes are included in the Proxy Statement/Prospectus beginning on page F-187 of the Proxy Statement/Prospectus and are incorporated herein by reference. The audited financial statements of RME Black 200, LLC for period fromApril 27, 2020 (inception) toNovember 30, 2020 and the related notes are included in the Proxy Statement/Prospectus beginning on page F-187 of the Proxy Statement/Prospectus and are incorporated herein by reference. 20
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(b) Pro Forma Financial Information.
The unaudited pro forma condensed combined financial information of XPDI andCore Scientific as of and for the nine months endedSeptember 30, 2021 and for the year endedDecember 31, 2020 is included in the Proxy Statement/Prospectus beginning on page 90 of the Proxy Statement/Prospectus and is incorporated herein by reference. (d) Exhibits. Incorporated by Reference Exhibit Schedule Number Description /Form File No. Exhibit Filing Date 2.1 Agreement and Plan of Merger and S-4/A 333-258720 2.1 August 11, 2021 Reorganization, by and among Power & Digital Infrastructure Acquisition Corp., XPDI Merger Sub Inc., XPDI Merger Sub 2, LLC, and Core Scientific Holding Co. 2.2 First Amendment to Agreement and S-4/A 333-258720 2.2 October 4, 2021 Plan of Merger and Reorganization, by and among Power & Digital Infrastructure Acquisition Corp., XPDI Merger Sub Inc., XPDI Merger Sub 2, LLC, and Core Scientific Holding Co. 2.3 Second Amendment to Agreement and S-4/A 333-258720 2.3 December 30, 2021 Plan of Merger and Reorganization, by and among Power & Digital Infrastructure Acquisition Corp., XPDI Merger Sub Inc., and Core Scientific Holding Co. 3.1* Second Amended and Restated Certificate of Incorporation of Core Scientific, Inc. 3.2* Second Amended and Restated Bylaws of Core Scientific, Inc. 4.1 Warrant Agreement, by and between 8-K 001-40046 4.1 February 12, 2021 Power & Digital Infrastructure Acquisition Corp. and Continental Stock Transfer & Trust Company. 4.2* Assignment, Assumption and Amendment Agreement, by and among Power & Digital Infrastructure Acquisition Corp., Core Scientific Holding Co., Continental Stock Transfer & Trust Company, Computershare Inc. and its wholly-owned subsidiary, Computershare Trust Company, N.A. 4.3 Convertible Note Purchase Agreement, S-4/A 333-258720 4.7 November 19, 2021 by and among Core Scientific Holding Co., the Guarantors thereto, the Purchasers thereto and U.S. Bank National Association as note agent and collateral agent, dated August 20, 2021. 4.4 First Amendment to Convertible Note S-4/A 333-258720 4.8 November 19, 2021 Purchase Agreement, by and among Core Scientific Holding Co., the Guarantors thereto, the Purchasers thereto and U.S. Bank National Association as note agent and collateral agent, dated September 23, 2021. 4.5 Form of Convertible Promissory Note S-4/A 333-258720 4.9 November 19, 2021 (included in Exhibit 4.4). 10.1 Form of Lock-Up Agreement of Core S-4/A 333-258720 10.23 October 4, 2021 Scientific, Inc. 10.2* Amended and Restated Registration Rights Agreement, by and among Power & Digital Infrastructure Acquisition Corp., XPDI Sponsor LLC, Core Scientific Holding Co., and other parties thereto, dated January 19, 2022. 10.3+ Amended and Restated Employment S-4/A 333-258720 10.28 November 19, 2021 Agreement, by and between Core Scientific Holding Co. and Michael J. Levitt, dated October 10, 2021. 21
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10.4+ Employment Agreement by and between S-4/A 333-258720 10.29
Holding Co., dated
10.5+ Letter Agreement, by and between Core S-4/A 333-258720 10.15
dated
10.6+ Letter Agreement, by and between Core S-4/A 333-258720 10.16
10.7+ Form of Indemnification Agreement of S-4/A 333-258720 10.30
Core Scientific, Inc. 10.8*+Core Scientific, Inc. 2021 Equity Incentive Plan.
10.9+ Form of Restricted Stock Unit Award S-4/A 333-258720 10.26
Agreement underlying the Core
Scientific, Inc. 2021 Equity Incentive
Plan.
10.10+ Form of Stock Option Agreement S-4/A 333-258720
10.27
underlying the Core Scientific, Inc.
2021 Equity Incentive Plan.
10.11*+ Core Scientific, Inc. 2021 Employee
Stock Purchase Plan.
10.12+ Non-Employee Director Compensation S-4/A 333-258720 10.14
Policy of
10.13 Industrial Power Contract by and S-4/A 333-258720 10.3
between Murphy Electric Power Board and
BCV 77, LLC, dated December 15, 2017 , as
assigned and assumed on February 19,
2018 .
10.14 Interruptible Power Product Agreement S-4/A 333-258720 10.4
by and between Murphy Electric Power
Board and Core Scientific Holding Co. ,
dated August 30, 2018 .
10.15 Investment Credit Agreement by and S-4/A 333-258720 10.5
among Core Scientific Holding Co. ,
Murphy Electric Power Board and the
Tennessee Valley Authority , dated
October 10, 2018 .
10.16 Master Services Agreement by and S-4/A 333-258720 10.6
between Core Scientific Holding Co. and
Duke Energy Carolinas, LLC , dated June
25, 2018 .
10.17 Electric Service Agreement by and S-4/A 333-258720 10.7
between Core Scientific Holding Co. and
Duke Energy Carolinas, LLC , dated June
10, 2019 .
10.18 Amended and Restated Electric Service S-4/A 333-258720 10.8
Agreement by and between American
Property Acquisitions VII, LLC and The
Board of Water , Light and Sinking Fund
Commissioners of the City of Dalton,
Georgia , dated October 11, 2018
(Industrial South Premises).
10.19 Amended and Restated Electric Service S-4/A 333-258720 10.9
Agreement by and between American
Property Acquisitions VII, LLC and The
Board of Water , Light and Sinking Fund
Commissioners of the City of Dalton,
Georgia , dated October 11, 2018 (Boring
Drive Property).
10.20 Firm Power Contract by and between S-4/A 333-258720 10.10
Core Scientific Holding Co. and theTennessee Valley Authority , datedMarch 12, 2019 , as amended onApril 30, 2020 andFebruary 25, 2021 .
10.21 Interruptible Power Product Agreement S-4/A 333-258720 10.11
by and between Core Scientific Holding
Co. and the Tennessee Valley Authority ,
dated April 28, 2020 .
10.22 Form of Sales and Purchase Agreement S-4/A 333-258720 10.12
by and between Core Scientific and
Bitmain Technologies Limited and
affiliates.
16.1* Letter from Marcum LLP .
21.1* List of Subsidiaries.
99.1* Unaudited pro forma condensed combined
financial information of the Company as
of and for the nine months ended
September 30, 2021 and for the year
ended December 31, 2020 .
104 Cover Page Interactive Data File
(embedded within the Inline XBRL
document)
* Filed herewith.
+ Indicates a management contract or compensatory plan, contract or arrangement.
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