Core Scientific, Inc. · NASDAQ:CORZ
Core Scientific — SPAC Merger (July 2021)
39 slides from Core Scientific's SPAC merger presentation, Jul 21, 2021
Slide 1: Core Scientific Investor Presentation July 2021
CORE SCIENTIFIC INVESTOR PRESENTATION July 2021
Slide 2: Legal Disclaimer
LEGAL DISCLAIMER ® 2 PROPRIETARY & CONFIDENTIAL CONFIDENTIAL INFORMATION. The information in this presentation is highly confidential. This presentation has been furnished to you solely for your information. The distribution of this presentation by an authorized recipient to any other person is unau
Slide 3: XPDI Investment Thesis
XPDI INVESTMENT THESIS Core Scientific is a leader in multiple key XPDI target industry sectors 1. With purchased Green - E Energy Certificates in 2021 Data Centers & Data Center Management Blockchain Infra s tru c tu re Frontier Technology Infra s tru c tu re Rene w able Power Genera t i on Energy
Slide 4: Transaction Summary
TRANSACTION SUMMARY ® 4 PROPRIETARY & CONFIDENTIAL T ransa c tion Structure • Core Scientific, Inc. (“Core Scientific”) to combine with Power & Digital Infrastructure Acquisition Corp. (“XPDI”), a publicly listed Special Purpose Acquisition Company with ~$345mm cash currently held in trust • Transac
Slide 5: Speaking Today
SPEAKING TODAY Michael Levitt Co - Founder, Co - Chairman and CEO Michael Trzupek Chief Financial Officer 30+ years in the finance industry, 20+ years investing in TMT, 20+ years managing high growth finance businesses Served as CEO of Kayne Anderson Capital; Vice Chairman and Partner at Apollo Glob
Slide 6: Core Scientific Overview
CORE SCIENTIFIC OVERVIEW Digital Asset Mining Largest N orth A m erican vertically integrated, self - mining operation Blockchain Technology Development Pioneering innovative financial products and services through blockchain technology and DeFi ® 6 PROPRIETARY & CONFIDENTIAL THE LEADER IN HIGH PERF
Slide 7: Core Scientific Investment Thesis
CORE SCIENTIFIC INVESTMENT THESIS Demonstrated track record of success Experienced management team Strong financial performance with compelling long - term growth opportunities Market leader uniquely positioned to address large, rapidly growing digital assets economy Diversified revenue model and di
Slide 8: Market Leader uniquely positioned to address digital assets economy
MARKET LEADER uniquely positioned to address large, rapidly growing digital assets economy ® 8 PROPRIETARY & CONFIDENTIAL
Slide 9: Large, Growing Market Opportunity
~$1.4T Total Cryptocurrency Market Cap (Jul. ’21) 1 ~$500B Decentralized Finance (DeFi) Market Size Opportunity 2 LARGE, GROWING MARKET OPPORTUNITY Bitcoin and Dig i tal Asse t s Blockchain Adjacencies 1. Coin Gecko as of 7/12/21 2. Chainlink ® 9 PROPRIETARY & CONFIDENTIAL
Slide 10: Rapidly Growing Institutional Adoption
RAPIDLY GROWING INSTITUTIONAL ADOPTION Mar - 21: Morgan Stanley will offer Bitcoin funds to high - net - worth wealth management clients Mar - 21: Goldman Sachs restarts its cryptocurrency trading desk to deal bitcoin futures and non - deliverable forwards for clients Apr - 21: Venmo users will be a
Slide 11: .8 .4 7.2 .0 .7 .6 NA .0 7.7 + NA 0 Self -
14 .8 10 .4 7.2 6 .0 2 .7 2 .6 NA 31 .0 7.7 + NA 40 30 20 10 0 Self - Mining Hosting 1,683 1,167 1,074 883 846 0 0 NA NA 0 1 , 0 0 0 2 , 00 0 Source : Public filings, press releases and other publicly available information Note : All Core Scientific figures reflect pro forma acquisition of Blockcap
Slide 12: Demonstrated Track Record of Success
DEMONSTRATED TRACK RECORD of success ® 12 PROPRIETARY & CONFIDENTIAL
Slide 13: Scaling the Business and Delivering Results
Note: Please see “Legal Disclaimer” on page 2 for more information on the financial and operational projections included in this presentation. The Company’s management believes the projections and the assumptions underlying such projections have a reasonable basis as of the date of this presentation
Slide 14: Diversified Revenue Model and Differentiated Solutions
Diversified revenue model and DIFFERENTIATED SOLUTIONS ® 14 PROPRIETARY & CONFIDENTIAL
Slide 15: Diversified Business Model
DIVERSIFIED BUSINESS MODEL Digital Asset Mining Fully integrated self - mining operation focused on the generation of digital assets powering and securing blockchain networks 1 Hosting and In f rastruct u re Fully managed blockch a in hosting solutions for large scale operators 2 Blockchain Technolo
Slide 16: Competitive Differentiators
1. Patents as of 7/14/21 COMPETITIVE DIFFERENTIATORS Vertically integrated op erati on s at scale L ar g est mi n er in North America Strategic partnership w i t h B itm a in 71 patents and applications related to b l o ckcha i n a n d infrastructure 1 Proprietary fleet ma n a g eme n t software ® 1
Slide 17: Growing Competitive Advantage
311 106 105 - 20 300 144 80 60 50 51 2 2 1. Current capacity per latest company disclosure, excludes 3 rd party hosted capacity; Riot (company press release, July ’21), Bitfarms (company presentation, June ’21), Hut 8 (company presentation, May ‘21), Greenidge (company presentation, March ’21), Mara
Slide 18: Environmentally Conscious
1. As of March 2021; Power usage effectiveness, ratio of the total energy used by a data center facility to the energy delivered to its computing equipment. Source: Company ENVIRONMENTALLY CONSCIOUS x Creates more renewable energy in collaboration with utilities x Energy - efficient mining hardware
Slide 19: Strong Financial Performance
STRONG FINANCIAL PERFORMANCE with compelling long - term growth opportunities ® 19 PROPRIETARY & CONFIDENTIAL
Slide 20: $6 $203 $572 10% 41% 50% 20A 2021E 2022E $60 $493 $1 , 1
$6 $203 $572 10% 41% 50% 2 0 20A 3 2021E 3 2022E $60 $493 $1 , 1 40 2 0 20 A 2 0 21 E 2 0 22 E Note: Assumes average Bitcoin price of $30K in 2021/22; AI not included in projections; Please see “Legal Disclaimer” on page 2 for more information on the financial and operational projections included in
Slide 21: Delivering Significant KPI Growth
DELIVERING SIGNIFICANT KPI GROWTH Note: Represents year - end figure; Please see “Legal Disclaimer” on page 2 for more information on the financial and operational projections included in this presentation. The Company’s management believes the projections and the assumptions underlying such project
Slide 22: Scale, Efficiency, and Technology Drive a Low Breakeven Mining Price
fees of 6.61 BTC (as of 7/5/21) 1. Reflects cost of power per bitcoin mined and difficulty; power cost of 3.55c per kWh Note: Analysis assumes current network hash rate difficulty of 106 EH/s and block reward + transaction 2. Reflects illustrative client hosting per kWh 3. Bitmain Antminer S19 Pro -
Slide 23: Experienced Management Team
EXPERIENCED management team ® 23 PROPRIETARY & CONFIDENTIAL
Slide 24: Experienced Management Team – Executive Leadership
TODD DUCHENE General Counsel EXPERIENCED MANAGEMENT TEAM – EXECUTIVE LEADERSHIP SHARON ORLOPP Chief Human Resources Officer MICHAEL LEVITT Co - Founder, Co - Chairman and CEO MICHAEL TRZUPEK Chief Financial Officer ALAN CURTIS Chief Technology Officer BRETT HARRISON Chief Development Officer WES T O
Slide 25: Compelling Long-Term Growth
COMPELLING LONG - TERM GROWTH Clear vision for infrastructure and product development Scale and Enhance Digital Asset Mining Opportunistically add next - gen machines, develop new low - cost clean power sites, and continue opti m izing mining operations Expand In f rastruct u re Build on current mar
Slide 26: Transaction Details
Transaction Details ® 26 PROPRIETARY & CONFIDENTIAL
Slide 27: Transaction Detail
($mm) (mm) Core Scientific Shareholders 4 4,000 400.0 Convertible Notes (Net Share Settlement) 5 54 5.4 XPDI Public Shareholders XPDI Sponsor Shares 6 345 86 34.5 8.6 Pro Forma Equity Value 4,485 448.5 100.0% Plus: Pro Forma Debt Balance 5 273 Less: Pro Forma Cash Balance 1, 2 (369) Less: Pro Forma
Slide 28: Comparable Analysis
($ in millions, unless otherwise noted) Comparable Analysis Core Riot Marathon Scientific 1 Blockchain 2 Digital Holdings 3 YTD 6/30/21 Self - Mining Bitcoin Mined (#) 1,683 1,167 846 December 2022 Estimated Self - Mining Hash Rate (EH/s) 14.8 7.7 10.4 December 2022 Estimated Hosting Hash Rate (EH/s
Slide 29: Analyst Perspectives on Comparable Valuation
($ in millions, unless otherwise noted) At Current Riot Blockchain VWAP 1 At Riot Blockchain Price Target 2022E EBITDA Multiple 2 Implied Riot Blockchain Enterprise Value 3,037 5,134 Compass Point 2022E Riot Blockchain EBITDA 257 257 Illustrative 2022E EBITDA Multiple 11.8x 20.0x Core Scientific 202
Slide 30: Core Scientific Investment Thesis
CORE SCIENTIFIC INVESTMENT THESIS Demonstrated track record of success Experienced management team Strong financial performance with compelling long - term growth opportunities Market leader uniquely positioned to address large, rapidly growing digital assets economy Diversified revenue model and di
Slide 31: Appendix
APPENDIX ® 31 PROPRIETARY & CONFIDENTIAL
Slide 32: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION ® 32 PROPRIETARY & CONFIDENTIAL 1. Represents non - cash charges related to share - based compensation arrangements with employees, consultants and vendors, which vary from period to period depending on timing of awards and other factors 2. Represents gains or losses w
Slide 33: Risk Factors
RISK FACTORS ® 33 PROPRIETARY & CONFIDENTIAL
Slide 34: Risk Factors (1/6)
RISK FACTORS (1/6) The below list of key risks has been prepared solely for the purposes of potential investors evaluating the the proposed Business Combination, and not for any other purpose. Unless the context otherwise requires, all reference in this subsection to the "Company," "Core Scientific,
Slide 35: Risk Factors
6. Changes in tariffs, import or export restrictions, Chinese regulations or other trade barriers could have a material adverse effect on our business, financial condition and results of operations. 7. Our historical financial results may not be indicative of our future performance and our inability
Slide 36: Risk Factors
17. We may not be able to compete effectively against our current and future competitors, which could have a material adverse effect on our business, financial condition and results of operations. 18. If the award of digital assets for solving blocks and transaction fees for recording transactions a
Slide 37: Risk Factors
27. We may not be able to adequately protect our intellectual property rights and other proprietary rights, which could have a material adverse effect on business, financial condition and results of operations. 28. Significant or unexpected changes to our transaction processing operations may have a
Slide 38: Risk Factors
40. 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 ha
Slide 39: Risks Related to the Business Combination and the Combined Entity
Risks Related to the Business Combination and the Combined Entity 48. The financial and operational projections related to the Company may not be realized, which may adversely affect the trading price of our common stock following the closing of the Business Combination. 49. The trading price of our