I’m pleased to share 3 important updates with all Celsius Creditors, building on the insights provided to our Exclusive Recovery Club members. These updates encapsulates the latest developments aimed at optimizing the value of your Celsius recovery.

As creditors, we are all currently waiting on the next phase of recovery distributions:

• Finishing the last 14% of the first Crypto Distribution;
• Share Distribution;
• Second Crypto / Fiat Distribution, litigation & illiquid assets. 

There have been three main updates that I have summarised for you below:

1. Updated Form 10 Filing by Ionic Digital With Updated Financial Reporting to Year End 2023;

2. Summary of Litigation Administrators’ Quarterly Report Q1 2024;

3. Summary of Court Hearing on 7 May 2024.

All three updates and summaries can be found below. 

Just before we cover the 3 updates for all creditors (US included) here is a quick note for UK and other non-US creditors first….

Quick Note To UK & Non-US Creditors That Wanted To Join The Exclusive Recovery Club

On the Bnk To The Future side we are on the final stages of having our platform approved as a financial promotion in the UK to meet new requirements set by the Financial Conduct Authority (FCA) that will allow us to take on UK creditors that were unable to join the Exclusive Recovery Club due to the new regulations. We will reach out to all UK investors that registered an interest in joining as soon as the financial promotion has been approved and we can onboard UK investors compliantly. 

In the mean time, non-US investors can still join the Exclusive Recovery Club if you have not done so already and all content to maximise the value of your recovery is ready in the portal for you to get started today.  

Full Details
3 Update For All Celsius Creditors (US & International)

UPDATE #1: Updated Form 10 Filing by Ionic Digital With Updated Financial Reporting to Year End 2023

The key differences between 30 April filing and 26 January filing are:

1. Financial reporting: updated form 10 reports year end 2023 financial information where 26 January filing only has 9 months financial to end September 2023.

2. Operational information: updated to year ends data.

3. Certain details that were unknown at the time of the 26 January filing have now been supplied such as senior employee and directors compensation cost, etc.

Financial Reporting

The Form 10 presents the financial reports of Ionic digital as pro-forma accounts because Ionic digital did not come into existence until 30 January 2024 (the Effective Date).  Included in the pro-forma accounts are all the transactions that brought Ionic digital into existence.  Since these transactions only occurred on or after 30 January 2024, the pro-forma accounts are calculated on the basis that the transactions associated with the formation of Ionic Digital and its financing are assumed to have taken place on 1 January 2023 and they are therefore included in the pro-forma reporting for 2023.

The above table analyzes the operating profit of Ionic Digital as it is important for investors to understand whether the company is profitable and therefore viable or not. The table calculates the pro-forma operating profit of Ionic Digital excluding depreciation and other non-operating items (such as crypto gains/ and losses, etc).

Ionic Digital reported a net loss of $170 million for the year 2023; we however are focused on operating profit/loss and calculate that the operating loss for 2023 as reported was negative $10 million.  Adjusting for transaction costs (that would not have occurred under normal operating conditions) the operating loss falls almost to zero and adjusting further to eliminate any double counting of operating expenses (resulting from the rules of proforma accounting) operating profit rises to $15.7 million.   This latter approach was used in the previous Form 10 (published on 26 January 2024) as presented in the right hand column in the above table.

Operational Information

Additional detail of Ionic Digital’s mining operations are provided in the 30 April version of the Form 10, as follows:

1. Mining Fleet

As at end march 2024, Ionic digital has total capacity of 127,183 miners with average efficiency of 30.8 J/Th.

2. Mining Infrastructure

As at end March 2024, Ionic Digital has a total of 229MW in operation (142MW hosted and 87MW of own infrastructure) and a total of 67,300 miners deployed:

Other Information

1. Human Capital, Directors and Executives

As at end March 2024, Ionic Digital has 6 full time employees and 3 full-time independent contractors.

Jordan Levy has been replaced as a Class B Director (appointed by Hut 8) by Stephen Price.

Changes in the senior executive team are: (a) Joel Block has been replaced as CFO by Stuart Gleichenhaus (on an interim basis) and (b) Charles Ammann has joined as Chief Legal Officer and Corporate Secretary.

2. Directors and Executives Remuneration

Details of CEO compensation have been provided:

(a) Base salary of $500,000

(b) Bonus of $250,000 in cash on continued employment through 14 August 2024

(c) Performance bonus of up to $250,000 in cash or equity after 14 August 2024

(d) Further annual performance bonuses up to 100% of base salary (i.e. $500,000) if employment continues beyond 2024.

(e) Long Term Incentive Plan of up to $2,500,000 in equity options

(f) Severance compensation to be determined.

Separately, the Form 10 states that: 

(a) The 8 Board Directors will receive $2 million per annum between them.

(b) 4 executives will receive $2.4 million between them.

(c) 21 other executives will receive $3.3 million between them of which $1.3 million will be offset to Celsius.

3. Hut 8 share purchase

Hut 8 has purchased 374,261 shares in Ionic digital for $6.4 million at a price per share of $17.  This purchase price represents a 15% discount to the effective price paid by creditors (i.e.$20 per share).

Link to Updated Filing on 30 April 2023:

https://www.sec.gov/Archives/edgar/data/2007691/000110465924054931/tm243976-2_1012ba.htm#tI2I

Link to Previous Filing on January 26 2023:  https://www.sec.gov/Archives/edgar/data/2007691/000110465924007325/tm243976-1_1012b.htm#tI2I 

UPDATE #2: Summary of Litigation Administrators’ Quarterly Report Q1 2024

Date: 30 April 2024

Court Docket: 4847

Note: Comments by Bnk To The Future (BF) are enclosed in [square brackets].

1. Litigation Recovery Account

(a) Funded initially with $55 million;

(b) Received $4.6 million in Q1 gross recoveries (illiquid assets and WPE);

(c) Net recoveries of $3.3 million;

(d) No distributions as yet.

2. Illiquid Assets:

• [Our own estimate of potential recovery from Illiquid Assets is approx $104 million.]
• [Recovery so far of $3.3 million represents approx 3% of that.]

3. WPE Settlement:

• $0.95 million in cash settlement received (recognized in Litigation Recovery Account)
• “Millions” received in setoff settlement (not recognized in Litigation Recovery Account)
• [Our own estimate of potential recovery is up to approx $83 million - recovery of $0.95 million represents 1.1%of that]

4. KeyFi Litigation:

• Court imposed TRO prevents KeyFi from transferring any of the assets in KeyFi (e.g. to cover costs of litigation, etc)
• Case will go to trial in early August 2024
• [During the court hearing on 24 April 2024, it was estimated the KeyFi assets amount to approx $8 million].

5. Fabric Litigation:

• Adversary proceeding initiated in January 2023
• Celsius claiming $6 million in unpaid outstanding payments owed.
• Case is being mediated in London in May 2024.

6. Mawson Litigation:

• Adversary proceeding initiated in November 2023
• Case is currently in arbitration.
• [We estimate the value of promissory notes owed by Mawson to be approx $27 million].

7. Equities First: 

• Equities First is seeking to go to arbitration.
• [We estimate that the amount of funds owed by Equities First is approx $359 million].

8. Reliz:

• Celsius holds arbitration awards against Reliz
• ARM is pursuing Reliz for settlement of these

UPDATE #3: Summary of Court Hearing From 7 May 2024

1. Kirkland & Ellis presented updated distribution statistics showing status as at 6 May 2024 together with data from last update on 19 March (the 19 March numbers are struck through and the 6 May numbers are presented in red in the tables below):

(a) Of the $2.6 billion worth of liquid assets that are eligible for distribution, a total of $2.24 has successfully been distributed (i.e. 86%)

(b) This compares with $2.5 billion that was eligible for distribution in March 2024 and $2.0 billion that had been successfully distributed at that time.

(c) The change in liquid assets eligible for distribution is explained in the table below:

Other matters heard:

(a) Jason Voelker application to file motion for adversary proceeding.  Objections were filed by Litigation Administrator and Ionic Digital;

(b) Keith Noyes request for judicial review of ultra vires complaint.  Objection was filed by US Trustee;

(c) Motion to distribute claims of deceased account holders to their heirs.  This motion was uncontested.

Simon Dixon

P.S. Non-US creditors can still join the Exclusive Recovery Club if you have not done so already and all content to maximise the value of your recovery is ready in the portal for you to get started today. 

Join Now To Catch Up