Vulcan, the bitcoin miner formerly known as Greenidge Generation, says it may need bankruptcy protection if a $39.4 million financing package doesn't close before $33.1 million in senior notes come due Oct. 31. As of Aug. 16, the deal was still open, with no proceeds received and no securities issued.
A $39.4 Million Lifeline
The proposed financing, agreed to in July, would sell 17,146,190 shares at $1.71 each, raising about $29.3 million, and issue a $10 million convertible note to Machine Investment Group. Machine Investment Group and affiliates of Atlas Holdings are leading the transaction. Net proceeds are estimated at $37.7 million, which Vulcan plans to apply to the notes — $33.1 million of principal plus roughly $1.4 million of contractual interest.
Closing conditions include Nasdaq listing approval, delivery of transaction and collateral documents, stockholder consent, and at least $30 million in gross proceeds. If those conditions aren't met, the agreements can be terminated as early as Oct. 10 — 21 days before the notes mature.
The Cash Crunch
Vulcan's balance sheet looks thin against the debt. At June 30, the company held $3.197 million in cash and $6.027 million in digital assets, a combined $9.2 million. The senior note principal alone stands at $33.138 million. The company said projected operating cash flow wouldn't be enough to meet its existing debt obligations.
An earlier exchange during the second quarter trimmed about $3.6 million of old notes, but Vulcan issued roughly $1.4 million of new notes due in 2030 and 1,277,111 shares in return. That didn't solve the bigger problem.
What Happens If the Deal Falls Through
If the PIPE doesn't deliver the required funds, Vulcan would need to find another financing source, extend the maturity, restructure, or sell assets. The company didn't rule out any of those paths. It also warned that failure could result in default and potentially bankruptcy protection.
Illustrative figures in the company's disclosures show what a successful close would look like: total debt dropping from $36.9 million to $13.7 million, and net debt falling from $27.7 million to $1.3 million. Those numbers are conditional on the financing actually closing.
The Note Terms and the Clock
The senior notes require principal and final scheduled interest payment on Oct. 31. Optional redemption requires 10 to 60 calendar days' notice. In its Aug. 14 results release, Vulcan said it intended to redeem the notes but explicitly stated the release was not a redemption notice.
The Oct. 10 termination date looms large. If the financing isn't closed by then, the agreements can be called off, and the company is back to a $33 million hole with only $9.2 million on hand.
