Frequently Asked Questions

We are committed to informative and frequent communication with shareholders. We encourage shareholders to refer to the FAQs below, which we intend to continue to update. Our FAQs aim to cover topics we are hearing about as well as questions from shareholders including information about your Ionic Digital shares, updates on our business strategy and performance, and our corporate governance standards. If you don't have a chance to read these in full now, please note:

Ionic Digital is committed to facilitating liquidity for its shareholders and is in advanced stages on a plan to provide our shareholders with liquidity prior to its planned public listing on a national securities exchange
Ionic's intention to list on Nasdaq, a national securities exchange, was described in detail and disseminated to the thousands of Celsius creditors that now hold Ionic stock
In tandem with its planned Nasdaq listing, Ionic Digital is prepared to consider actionable, committed alternatives to provide stockholders with liquidity. Ionic Digital is requesting input from Figure Technologies to understand its proposals to provide liquidity to shareholders and looks forward to further dialogue with all relevant parties.
The Company quickly began the deployment of its miner inventory and had 96,000 miners deployed by September 30, 2024. By the end of 2024 we anticipate having a total of 395MW of power deployed
We expect to include further financial performance (including cost and EBITDA) in our forthcoming Form S-1 which we are working diligently towards finalizing as soon as possible pending completion of our financial audit, which we are striving to complete at the beginning of 2025

Information about your Ionic Shares

Who is Ionic Digital?

Ionic Digital Inc. (“Ionic Digital”) was formed in January 2024 to operate the Bitcoin mining and other assets it acquired from aﬃliates of Celsius Network LLC (collectively, the “Celsius Debtors”) under the Modiﬁed Joint Chapter 11 Plan of Reorganization of Celsius Network LLC and Its Debtor Aﬃliates (the “Plan”).

The Plan was consummated on January 31, 2024.

Among other things, the Plan provided for the formation of a new entity (“MiningCo”) intended to acquire and operate Celsius’s Bitcoin mining and other assets for the beneﬁt of certain Celsius creditors, who were issued stock in Ionic Digital to satisfy (in part) claims those creditors held against Celsius.

The Plan contemplated that Ionic Digital would become a publicly traded company on a national stock exchange, thereby providing shareholders with a liquidity option for their shares in Ionic Digital.

You can learn more about Ionic Digital by reading its Registration Statement on Form 10 ﬁled with the Securities and Exchange Commission (“SEC”) on January 26, 2024 (the “Registration Statement”), as amended on April 30, 2024, available through this link:

https://www.sec.gov/Archives/edgar/data/2007691/000110465924071135/tm243976d5_1012ba.htm

Why did I receive Ionic Digital stock?

You received Ionic Digital Class A common stock in connection with the satisfaction, settlement, release, and discharge of your claim against the Celsius Debtors under the Plan.

How was my share amount calculated?

The number of shares of Ionic Digital Class A common stock that you received was approximately equal to (1) the size of your claim against the Celsius Debtors, divided by (2) $20, which was the value attributed to each share of stock for purposes of the Plan. The number of shares you received was rounded (up or down) to the nearest whole number because fractional shares cannot be issued.

Where are my shares of Ionic located?

Your shares of Ionic Digital Class A common stock are recorded on the books and records of Odyssey Transfer and Trust Company (“Odyssey”), Ionic Digital’s stock transfer agent, who is responsible for maintaining Ionic Digital’s shareholder records. Odyssey sent you an email from the email address “ionicdigital@odysseytrust.com” containing instructions for how you can access information about your shares, including your account statement.

Can I obtain a stock certificate for my shares?

No, Ionic Digital does not offer physical certiﬁcates. All shares will be held in uncertiﬁcated book-entry format.

Information about Ionic’s business operations

What are the Company's immediate priorities?

Ionic Digital is focused on:

Identifying and executing options to provide maximum liquidity for shareholders in a regulatory compliant manner
Maximizing shareholder value through operational excellence, including finalizing an independent assessment of the Company’s Bitcoin mining management arrangements, overseen by an outside expert
Completing an audit by Q1 2025 and moving swiftly to meet its objective of becoming a public company
Ensuring the listing of Ionic Digital’s stock is on a trusted, regulatory compliant national securities exchange that will provide shareholders with a liquid market for the Company’s stock
Communicating often, transparently, and informatively with shareholders

Where is Ionic doing business?

Ionic Digital is currently operating in multiple states, including Texas, Oklahoma, Georgia and New York. As of September 30, 2024, we are self-mining across 5 sites in Texas and have our equipment mining at hosted sites in other states.

As of September 30, 2024, Ionic Digital had deployed 96,000 miners using approximately 320 MW of power, with a deployed hash rate of 8.5EH/s. During the month of September 2024, we mined approximately 108 BTC, and from the Company’s inception through September 30, 2024, we had mined approximately 1,550 BTC.

The remaining miners will be in production by the fourth quarter of 2024 when the Ward County facility (formerly known as Cedarvale) is complete. By the end of 2024 we anticipate having a total of 395 MW of power deployed.

A map of our physical locations and key operating metrics is located at www.ionicdigital.com

What is the MSA with Hut8?

The Management Services Agreement (“MSA”) is an agreement between Ionic Digital and U.S. Data Management Group LLC (“Hut 8”) entered into on the effective date of the Plan that provides for Hut 8 to manage and oversee certain aspects of the day-to-day Bitcoin mining business operations of Ionic Digital, under our direction and supervision. The MSA was entered into via the bankruptcy court/bid process and Hut 8 was the Plan sponsor. Once the Plan became effective, the MSA took effect.

Under the MSA, Hut 8 will complete and deliver certain capital projects upon Ionic Digital’s approval of the required funding, including building and energizing up to 100MW of Bitcoin mining facilities within 12 months at a capped construction cost of $395K/MW. The capped construction costs will also apply to up to 300MW of additional developments for medium voltage to plug ready infrastructure within a 24-month period.

The MSA had an initial term of 4 years and may be extended for an additional year at the discretion of Ionic Digital’s board of directors, or automatically extends for an additional year should Ionic Digital’s EH/s be greater than 23 EH/s prior to the third anniversary of the agreement. Hut 8 receives an annual management fee for providing these services.

Why was the MSA modified in June 2024?

In June 2024, the Company and Hut 8 mutually agreed to amend and restate the MSA. This resulted in several improvements to the terms of the MSA for the benefit of the Company and its shareholders.

The amendments to the MSA included a greater than 25% reduction in management fees, the removal of the liquidity deadline, and related termination provisions as Ionic Digital continues to pursue a public listing, and a new right to terminate the MSA for convenience at any time for a termination fee which generally will be $22.5M.

A summary of the key terms of the amended and restated MSA is available at https://x.com/ionicdigital/status/1828392378274881679?s=46&t=igB1FAoPf7ZsZMvL4DmJdQ

How much BTC has Ionic generated?

Through September 30, 2024, Ionic Digital has mined approximately 1,550 BTC, bringing our total BTC holdings of as the end of September to 2102.29 Bitcoin.

How does Ionic intend to successfully compete in the BTC market?

Ionic Digital is a leading cryptocurrency mining company that intends to leverage cutting edge technology to mine Bitcoin efficiently, profitably and sustainably.

Additionally, we intend to:

Be an emerging innovator in energy monetization with data centers across the U.S.
Combine our experience in data center management, blockchain technology and digital infrastructure to be at the forefront of mining innovation and technology
Monetize excess power generation and improve the economic return from our energy projects, including ways to integrate HPC, AI and next generation computing capabilities.

How is Ionic performing so far?

Ionic Digital quickly began the deployment of its miner inventory and had 96,000 miners deployed by September 30, 2024. The remaining miners will be in production by the fourth quarter of 2024 when the site in Ward County, Texas (formerly known as our Cedarvale facility) is complete.

By the end of 2024 we anticipate having a total of 395MW of power deployed.

Ionic Digital accomplished this deployment while preserving the majority of the capital it had when it was funded and began operating on February 1, 2024. We have used our cash resources to fund operations and our capital projects and have generated over 1500 BTC from these operations during the same period. At the end of September 2024, our combined cash/BTC balances were approximately the same as our initial net cash on hand.

Ionic Digital expects to convert some of the BTC to cash during the fourth quarter of 2024 to maintain an adequate liquidity level to fund ongoing operations, and to use for strategic investments in future sites.

What is the average j/TH of the Ionic Miner Fleet?

Our miner fleet has an average of 31 j/TH as of September 30, 2024.

What is Ionic’s cost to mine a BTC?

The cost varies by mining location and whether the site is Company-owned or is hosted by another company. The average cost to self-mine a BTC in the second quarter of 2024 was $24,000 per BTC (excluding depreciation).

Why does Ionic want to list its shares on a regulated national securities exchange?

Ionic’s intention to list on Nasdaq, a national stock exchange, was described in detail in the Plan and its related disclosure statement, which was disseminated to Celsius’s hundreds of thousands of creditors who were entitled to vote on the Plan.

The rationale for listing on a national securities exchange like Nasdaq remains the same today, which is that it offers significant benefits for the Company and shareholders, including enhanced visibility, credibility, and access to a broader pool of investors. The stringent listing standards of a national securities exchange can enable Ionic to leverage a well-established trading infrastructure and reach institutional investors who prefer or require investing on a national securities exchange. These factors collectively align with Ionic’s strategic goals and commitment to maximizing long-term shareholder value.

Ionic Digital is committed to facilitating liquidity for its shareholders. Ionic Digital will continue to assess options that are designed to provide stockholders with liquidity, which may include other national exchanges and/or alternative trading systems.

When does Ionic expect BDO to complete its audit?

Ionic anticipates that BDO will complete its 2024 audit by the end of the first quarter of 2025.

How can I be kept informed as a shareholder?

Ionic Digital will continue to keep its FAQs updated as relevant information becomes available.

Corporate Governance

Who is on Ionic’s board of directors and how were those directors chosen?

More information on our current board of directors is available at https://www.ionicdigital.com/team

The Plan provided that Ionic Digital would have initially an 8-person board of directors: 2 individuals chosen by Hut 8 as a result of its contractual relationship with Ionic Digital, and 6 individuals chosen by Celsius’s Official Committee of Unsecured Creditors (the “Celsius UCC”). The designees chosen by the Celsius UCC were Scott Duffy, Thomas DiFiore, Elizabeth LaPuma, Max Holmes, Fred Arnold, and Emmanuel Aidoo.

The identities of each proposed director candidate was disclosed in a supplement to the Plan that was distributed to the hundred of thousands of Celsius creditors entitled to vote on the Plan, which was approved by Celsius creditors and the Bankruptcy Court.

The Plan provided that, following Ionic Digital’s formation, the Board may fill vacancies. Per the Celsius Plan of Reorganization, any vacancy occurring in the board for any cause shall, unless (as) the board determines by resolution that any such vacancies shall be filled by the stockholders or (b) as otherwise required by law, be filled only by the affirmative vote of a majority of the directors.

Each director shall hold office until the annual meeting at which such director’s term expires and until such director’s successor is duly elected and qualified, or until such director’s resignation, disqualification or removal.

How is the board structured?

Our board is structured and governed in a manner consistent with best practices and following the structure of the majority of publicly-traded entities. The board currently comprises six members with two open seats to be filled in the near future, and has the following three standing committees in addition to an Emergence Committee:

Audit Committee
Compensation Committee
Nominating and Corporate Governance Committee

The composition of each of the board committees, including the chairperson, can be found at https://www.ionicdigital.com/committee-composition. The charters for the standing committees can also be found at https://www.ionicdigital.com/corporate-governance

What is the board’s primary responsibility?

The primary function of the board is oversight. The board exercises its business judgment to act as an advisor and counselor to senior management and define and enforce standards of accountability, all with a view to enabling senior management to execute their responsibilities fully and in the best interests of the Company and its shareholders. Consistent with that function, the following are the primary responsibilities of the board:

Overseeing and reviewing the Company’s strategic direction and objectives, taking into account (among other considerations) the Company’s risk profile and exposures and its relationships with key stakeholders;
Overseeing the conduct of the Company’s business in the best interests of the Company and its shareholders;
Selecting, evaluating and compensating the chief executive officer (the “CEO”) and other key executives, and planning for CEO and key executive succession;
Monitoring the Company’s accounting and financial reporting practices and reviewing the Company’s financial and other controls; and
Overseeing the Company’s compliance with applicable laws and regulations and the processes that are in place to safeguard the Company’s assets and manage material enterprise risks.

Does the board evaluate offers to acquire Ionic Digital or other strategic proposals?

If the board were to receive an actionable, committed proposal involving Ionic Digital (such as to acquire Ionic Digital or make an investment in Ionic Digital), the Board will carefully consider and assess any such proposal.

The board expects that, when considering any such offers or proposals, the board would engage professional advisors to guide and counsel the board through the decision-making process.

Ionic Digital has received certain unsolicited offers or strategic proposals, but the counterparties involved have not responded to the Company’s request for additional information about the funding sources, parties involved in the transaction and other information that would enable the board to make a well-informed decision whether to proceed with a full evaluation of the proposal.

Is Ionic Digital Considering Proposals from Figure Markets and GXD Labs?

As stated in the Company’s press release, Ionic Digital and its board are fiduciaries for shareholders and are prepared to fully consider any and all actionable proposals from its shareholders. Ionic and its board, with the assistance of its counsel and advisors, will fully assess the proposals from Figure Markets and GXD Labs in due course.

Although the Company will fully consider Figure Markets and GXD Labs’ concepts, the proposals put forth lack critical detail about how they would ultimately achieve it, and significant aspects of the proposals are inconsistent with the Celsius creditor-back and Court-approved plan of reorganization.

Why did Ionic not become public within 60 days of filing its Form 10 with the SEC?

The assets Ionic Digital acquired came from a legal entity named Celsius Mining, LLC. This entity was not publicly-traded and was a subsidiary of Celsius Network Limited.

In order to become a public company, Ionic Digital is required to have audited financial statements for the predecessor entity, Celsius Mining, which were included as part of Ionic Digital’s submission of a Form 10 filed with the SEC. All financial statements included in the Form10 have to be “current” as defined in SEC rules and regulations at the time of filing and at the time of effectiveness.

This meant that an auditor had to be engaged to audit the stand-alone financial statements of Celsius Mining for the financial statements to be included in the Form 10.

RSM US LLP (“RSM”) was engaged and completed its audit of Celsius Mining in May 2024, but then resigned as the auditor of Ionic Digital. On October 17, 2024, Ionic Digital engaged BDO USA as its new auditor and BDO will be required to complete a review of Ionic Digital’s 2024 interim financial statements, including the most recent quarter, before we can make another filing with the SEC that includes all these financial statements.

Without an auditor to review its current interim financial statements, the Company was unable to continue its filings with the SEC. Management worked to replace RSM with another auditing firm through an RFP process, that ultimately led to the hiring of BDO USA as the Company’s new auditing firm.

Because of the need to have Celsius Mining’s financial statements be audited for fiscal year 2023, it was not possible for Ionic Digital to become a public company within 60 days of filing its initial Form 10 filing with the SEC.

Is Ionic’s board compensation structure in-line with industry standards?

Yes, Ionic’s board is compensated in accordance with industry standards for the work required to execute the Plan and become listed on a national securities exchange.

What is the purpose of the emergence committee?

The purpose of the emergence committee is to ensure the Company is executing its business strategy in accordance with Celsius’ Plan of Reorganization

Becoming a public company

When will Ionic become a public company?

The exact date at which Ionic Digital will become a publicly-traded company is not known at this time but is currently expected to be in Q1 or Q2 of 2025. We understand that the process has taken longer than was initially thought when Ionic Digital was established. The resignation of the Company’s initial auditor RSM caused delays in the registration process and is a primary reason this process has taken longer than was anticipated.

The absence of an auditor until a replacement was selected and engaged prevented the Company from having financial statements that had been audited or reviewed. These financial statements are required to be reviewed or audited in order to be included in any filings with the SEC. Thus, the absence of an auditor stopped the Company from being able to provide current financial statements and to make new filings as part of the registration process, effectively delaying the time required to make Ionic Digital a publicly-traded company.

When does Ionic plan to file an S-1 with the SEC?

Ionic currently plans to file an S-1 with the SEC which we are working diligently towards finalizing as soon as possible pending completion of our financial audit, which we are striving to complete at the beginning of 2025.

Who are Ionic’s auditors?

On October 21, 2024, we announced that BDO USA has been engaged as the independent registered public account firm (i.e., the auditor) for Ionic Digital.

Why did RSM resign as the Company’s auditors?

RSM resigned as the Company’s auditor in May 2024. RSM informed the Company that it would not be able to continue serving as the Company’s auditors due to a strategic decision by RSM to disengage from all audit engagements with publicly-traded Bitcoin mining companies. RSM’s decision was not the result of any disagreement with the Company on accounting principles, practices, financial statement disclosures, or auditing scope or procedure.

Why does having an auditor impact Ionic’s ability to become a publicly traded company?

In order to become a publicly traded company, we must register the Company’s shares with the SEC.

The registration process requires us to submit financial statements and other information in a Registration Statement with the SEC. Any financial statements included in these filings must be audited or reviewed by an independent public accounting firm (auditor) and the financial statements must be current. Without an auditor, the Company could not submit audited or reviewed current financial statements, thus stopping the registration process.

Now that the Company has engaged a new auditor, we will complete and have reviewed current financial statements for the Company. We will then recommence the filing process by providing an updated submission to the SEC. Ionic Digital will then be back on the road to becoming a publicly traded company.