Item 2.01 Completion of Acquisition or Disposition of Assets.
The disclosure set forth in the "Explanatory Note" above is incorporated by reference into this Item 2.01. The material provisions of the Merger Agreement are described in the Original Report, which is incorporated by reference herein.
FORM 10 INFORMATION
Cautionary Note Regarding Forward-Looking Statements
This Amended Report contains or incorporates by reference "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
These statements may include, but are not limited to, statements regarding the
Merger and its anticipated effects, the Company's business, the benefits of the
Merger and its effects on our shareholders and the associated objectives,
expectations, and intentions, all statements regarding the Company's expected
future financial position, results of operations, cash flows, dividends,
financing plans, business strategy, budgets, capital expenditures, competitive
positions, growth opportunities, plans and objectives of management, all
discussions, expressed or implied, and statements containing words such as
"anticipate," "approximate," "believe," "plan," "estimate," "expect," "project,"
"could," "can," "would," "should," "will," "intend," "may," "might,"
"potential," "upside" and other similar words and expressions. All statements in
this Amended Report that are not historical facts are forward-looking statements
that reflect the best judgment of the Company based upon currently available
information. Such forward-looking statements are inherently uncertain, and our
shareholders, other potential investors, or any other person reviewing this
Amended Report must recognize that actual results may differ materially from the
Company's expectations as a result of a variety of factors, including, without
limitation, those discussed below. Such forward-looking statements are based
upon management's current expectations and include known and unknown risks,
uncertainties, and other factors, many of which the Company is unable to predict
or control, that may cause its actual results, performance or plans to differ
materially from any future results, performance or plans expressed or implied by
such forward-looking statements. These statements involve risks, uncertainties,
and other factors discussed below and detailed from time-to-time in the
Company's filings with the
? our ability to successfully integrate acquired businesses or new products, or
to realize anticipated synergies in connection with the acquisition of the new
businesses line; 2
? the effect of COVID-19, closure of offices and site location(s); on our ability
to service our customers resulting in less revenues;
? our limited cash and our history of losses;
? our ability to achieve profitability;
? customer demand for solutions we offer;
? the impact of competitive or alternative products, technologies, and pricing;
? general economic conditions and events and the impact they may have on us, on
our customers, and on our potential customers;
? general cryptocurrency risks;
? technological changes and developments in the blockchain and cryptocurrencies;
? risks related to changes of rules and regulations in connection with
cryptocurrencies in general and Ethereum in particular;
? risks related to Ethereum's transition from "proof-of-work" to
"proof-of-stake" model that may render mining activities within Ethereum
blockchain obsolete;
? risks related to the geographical locations of our mining facilities;
? competition for blockchain platforms and technologies;
? our ability to obtain adequate financing in the future;
? our ability to continue as a going concern;
? our ability to complete strategic transactions, which may include acquisitions,
mergers, dispositions, joint ventures, or investments;
? lawsuits and other claims by third parties;
? our success at managing the risks involved in the foregoing items; and
? other risks and uncertainties set forth in this Amended Report or the Company's
periodic filings in the section entitled "Risk Factors," which is incorporated
herein by reference. TRADEMARKS
This Current Report contains additional trade names, trademarks, and service marks of other companies that are the property of their respective owners. We do not intend our use or display of other companies' trade names, trademarks, or service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies.
3 BUSINESS Overview
Acquisition of
The Merger with TTM Digital resulted in a change of control of the Company, with the shareholders of TTM Digital receiving that number of shares equal to no less than eighty percent (80%) of the outstanding shares of capital stock of the Company. The Merger was structured as and is intended to constitute a tax-free exchange pursuant to Section 368(a)(1)(A) and Section 368(a)(2)(E) of the Internal Revenue Code of 1986, as amended.
As a result of the Merger, the Company now has two wholly-owned subsidiaries: TTM Digital and SGS.
The Company intends to support SGS, which has historically provided secure
wireless networking and cybersecurity products to the
Nature of the Business - Blockchain Technology & Cryptocurrency
Blockchains are decentralized digital ledgers that record and enable secure peer-to-peer transactions without third-party intermediaries. Blockchains enable the existence of digital assets by allowing participants to confirm transactions without the need for a central certifying authority. When a participant requests a transaction, a peer-to-peer network consisting of computers, known as nodes, validates the transaction and the user's status using known algorithms. After the transaction is verified, it is combined with other transactions to create a new block of data for the ledger. The new block is added to the existing blockchain in a way that is permanent and unalterable, and the transaction is complete.
Blockchain-based cryptocurrencies are a medium of exchange that uses encryption techniques to control the creation of monetary units and to verify the transfer of funds. Transactions are processed using the computing power of specialized hardware and the entity tasked with processing a transaction earns a reward for this service - this process is generally referred to as "mining" and the entities effecting transactions are generally referred to as "miners." Some of the key features of cryptocurrency transactions are as follows:
? Miners use powerful computers that tally the transactions to run the
blockchain.
? Every transaction and the ownership of every cryptocurrency unit in circulation
is recorded in the blockchain and miners update the blockchain each time a
transaction is made and ensure the authenticity of the information in the
blockchain.
? Miners receive a transaction fee for their service in the form of a portion of
the new digital "coins" that are issued.
4
? In the case of mining Ethereum, the digital "coins" that are generated are
referred to as Ether or "ETH."
? The transaction and mining process is commonly referred to as the
"proof-of-work" phase in the evolution of the Ethereum blockchain.
? Proof-of-work is a decentralized consensus mechanism that requires members of a
network to expend effort solving an arbitrary mathematical puzzle to secure the
blockchain.
? Proof-of-work is used widely in cryptocurrency mining, for validating
transactions and mining new tokens and is the precursor to "proof-of-stake"
(see below for more information around "proof-of-stake").
The Company owns or operates thousands of highly efficient Graphics Processing Units (predominantly, NVIDIA) generating approximately 500 Gigahash of computing power, i.e., powerful computers ("GPUs"), including a large number of specialized Cryptocurrency Mining Processors. These GPUs are currently online and securing the Ethereum blockchain and generating ETH around the clock with high efficiency. The Company's mining operations are primarily focused on Ethereum. Historically, the Company has mined other digital assets which operate on network configurations compatible to the mining equipment on hand.
The Company operates its cryptocurrency mining operations out of two
purpose-built cryptocurrency mining optimized data centers in
Proof of Stake - Ethereum's Transition
In addition to its mining activities, the Company anticipates aggregating ETH to prepare for something known as "staking" or "proof-of-stake" (or "PoS"). PoS is a novel consensus mechanism created as an alternative to "proof-of-work" and is seen as the next step in the evolution of the Ethereum blockchain.
"Staking" is the act of locking or holding cryptocurrencies to receive rewards within a dedicated algorithm compatible with the blockchain protocol. It is a process where holders of tokens (ETH, in this case) can lock their tokens (i.e., not transfer them from a dedicated cryptographic wallet), and at particular intervals, the protocol of the Ethereum blockchain randomly assigns the right to one of the holders to validate the next block of the blockchain. Typically, the probability of being chosen is proportional to the amount of ETH held - the more ETH that is locked up, the higher the chances of being selected to validate a block.
We will derive "staking" revenue from transaction validation on a proof-of-stake blockchain when one of our nodes successfully creates or validates a block. Revenues would be recognized at the point when the block creation or validation is complete, and the rewards are available for transfer. As noted above, staking revenue would be driven by the quantity, price, and rewards rate of the staked crypto asset. In essence, staking is an energy-efficient equivalent of mining where the Company would be able to use pools of tokens as collateral to validate transactions and create blocks. In exchange for this service, the Company would earn financial rewards.
As of the date of this Amended Report, it has been officially announced that Ethereum is moving to a consensus mechanism based on a proof-of-stake model. PoS involves validation instead of mining that drastically improves the energy efficiency of the protocol, lowers hardware requirements, and may potentially increase the speed of transaction. Such announcement may or may not result in the actual switch of the entire Ethereum ecosystem to the PoS due to multiple factors: for instance, due to the threat of the so-called "51% attack" and other security concerns. Nevertheless, Ethereum's transition is highly probable, especially due to the community's effort to reduce the environmental impact of the transactions. As a result, the Company realizes that it may have to implement staking strategies in connection with Ethereum blockchain and switch its mining facilities to other cryptocurrencies or other use cases. PoS may significantly impact the Company's operations and business strategies.
Revenue Generation
The Company provides transaction processing services to the Ethereum blockchain (aka, mining). On a continuous basis, the Company competes with other miners around the world to "seal" blocks of transactions and append them to the Ethereum blockchain. When the Company finds a solution and appends a block to the chain, it receives a Block Reward plus the transaction fees included in the block. The Company makes money when the price of ETH is higher than the cost of operations/production. With efficient GPU mining fleets, the Company is uniquely positioned to provide transaction processing services to ETH in all market environments.
The Company generates revenue through its cryptocurrency mining operation. The Company expects that staking may also become a source of its revenue generation.
5 Mining Operations
The Company owns and operates thousands of NVIDIA GPUs generating approximately . . .
Item 9.01 Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
The audited financial statements of TTM Digital as of and for the years ended
(b) Pro forma financial information.
Unaudited pro forma combined financial information for the fiscal year ended
(c) Shell company transactions. None.
(d) Exhibits. 33 (d) Exhibits
The following exhibits are furnished as part of this Amended Report and supplement the previously filed exhibits in the Original Report:
Exhibit No. Description 10.1 Asset Exchange and Contribution Agreement datedMarch 30, 2021 by and betweenCoreWeave, Inc. andTTM Digital Assets & Technologies, Inc. * 10.2 Purchase order datedApril 1, 2021 CoreWeave, Inc. and TTM DigitalAssets & Technologies, Inc. * 10.3 Hosting Facility Services Order datedApril 1, 2021 CoreWeave, Inc. andTTM Digital Assets & Technologies, Inc. * 23.1 Consent ofFriedman LLP 99.1 Audited Financial Statements of TTM Digital Assets & Technologies, Inc. as of and for the years endedDecember 31, 2020 and 2019, and the related Independent Auditor's Report 99.2 Unaudited Condensed Consolidated Financial Statements of TTM DigitalAssets & Technologies, Inc. for the Three Months endedMarch 31, 2021 and 2020. 99.3 Unaudited pro forma combined financial information for the fiscal year endedDecember 31, 2020 and as of and for the three months endedMarch 31, 2021 . * The Company has redacted provisions or terms of this Exhibit pursuant to Regulation S-K Item 601(b)(10)(iv). The Company agrees to furnish an unredacted copy of the Exhibit to theSEC upon its request. 34
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