Core Scientific / Power & Digital Infrastructure Acquisition Corp. 8-K Summary
Business context and reporting period
Power & Digital Infrastructure Acquisition Corp. (XPDI), the SPAC seeking to combine with Core Scientific Holding Co., filed this Form 8-K on January 12, 2022 under Item 8.01, Other Events. The filing does not report a quarterly or annual operating period or provide updated financial statements.
XPDI announced supplemental disclosures to its definitive proxy statement concerning the proposed business combination, which would result in Core Scientific becoming part of the combined public company. The definitive proxy statement was declared effective on December 30, 2021, and mailing began on January 3, 2022.
Key financial and transaction metrics
- Barclays Capital Inc. is entitled to approximately $7.2 million of deferred underwriting compensation related to XPDI’s initial public offering.
- Placement agents did not earn fees in connection with the private investment in public equity offering, according to the supplemental disclosure.
- XPDI expects to pay XMS Capital a reasonable and customary advisory fee at the closing of the business combination; the filing does not provide the amount.
- The filing provides no updated revenue, profit, cash flow, margin, debt, liquidity, cash balance, valuation, or operating-performance figures.
- The supplemental disclosures will not change the merger consideration payable to XPDI stockholders, according to XPDI.
Material changes versus the prior comparable period
No comparable-period financial information is provided. The material changes in this filing are disclosures to the proxy statement rather than changes in operating results.
- Core Scientific would retain the right to appoint the directors and officers of the post-closing company.
- No current XPDI directors or officers will serve as directors or officers, or otherwise be employees, of the post-closing company.
- The parties’ draft term sheet contemplated that Core Scientific would determine whether XPDI directors or officers would participate in the post-closing company.
- XPDI revised its proxy disclosure to state that its board considered expected growth, market conditions including the price of bitcoin, the combined company’s market positioning, comparable public-company values, and other qualitative factors when evaluating Core Scientific’s enterprise value.
Outlook, risks, contingencies, and unusual items
XPDI’s special stockholder meeting was scheduled for January 19, 2022 at 9:00 a.m. Central Time. XPDI’s board continued to recommend that stockholders vote in favor of the proposals. Closing remained subject to stockholder approval and other applicable conditions.
XPDI received letters from purported stockholders alleging material omissions in the proxy statement. XPDI stated that it believed the claims were without merit, but voluntarily provided supplemental disclosures to avoid nuisance, cost, distraction, and possible delay to the transaction. The filing states that the supplemental disclosures were not an admission that additional disclosure was legally required or material.
Identified risks include failure or delay in completing the transaction, regulatory or stockholder approval issues, redemption requests, failure to realize expected transaction benefits, uncertainty of projected financial information, access to cash and capital, bitcoin and other digital-asset price volatility, changes in digital-asset regulations or mining economics, limited electric-power availability, cybersecurity breaches, competition, talent retention, growth execution, COVID-19 effects, and litigation or regulatory proceedings.
Most important facts for investors to verify
- Whether XPDI stockholders approved the transaction and whether all closing conditions were satisfied.
- The final merger consideration, redemption level, post-closing ownership, and available cash or liquidity.
- The amount and timing of the XMS Capital advisory fee and the approximately $7.2 million deferred underwriting payment to Barclays.
- The final composition of the post-closing board and management team appointed by Core Scientific.
- Core Scientific’s latest audited and interim revenue, profitability, cash flow, debt, capital-expenditure, and bitcoin-mining operating metrics.
- Any subsequent filings addressing litigation claims, regulatory developments, transaction delays, or changes in the assumptions underlying the projected enterprise value.