Argo Blockchain (ARB) Investor Update summary

Overview of the restructuring plan

• The restructuring plan aims to restore financial stability by converting debt to equity and injecting $3.5 million in new funding from Growler, contingent on court approval and participant votes.

• Growler will own 87.5% of the company post-restructuring, note holders 10%, and existing shareholders 2.5%, with all parties retaining certain rights but facing significant dilution.

• If the plan fails, insolvency or liquidation is likely, leaving shareholders and note holders with no value.

• The plan includes delisting from the London Stock Exchange, maintaining a matched bargain facility for six months, and focusing on Nasdaq compliance via an ADS ratio change.

• The court will assess the fairness of the plan, considering expert reports and stakeholder contributions, with the retail advocate representing retail investors' interests.

Financial and operational context

• Argo's financial distress stems from prolonged low crypto prices, high energy costs, and a heavy debt burden, exacerbated by global events and the 2024 Bitcoin halving.

• The Helios facility sale and subsequent loan from Galaxy provided short-term relief but did not resolve underlying issues.

• Extensive marketing for new investment yielded only Growler's viable proposal, as other options were hindered by the $40 million debt.

• Growler's assets being contributed include transformers, switchgears, and mining machine boxes, with mining equipment models M60s and SK19s operating at power costs of $0.055–$0.06/kWh.

• The restructuring will not reduce energy costs but will significantly reduce debt servicing obligations, freeing up cash for business operations.

Shareholder and note holder implications

• Shareholders can convert ordinary shares to ADSs for Nasdaq trading or use the JP Jenkins facility post-delisting; ISA holders must transfer shares out upon delisting.

• Note holders will receive equity in the form of ADSs, with fractional entitlements aggregated and sold, and proceeds distributed pro-rata.

• The plan's allocations were negotiated and supported by independent expert analysis, with the court as the final arbiter of fairness.

• Management will remain largely unchanged, with Growler having a non-executive board representative; no changes to director compensation are proposed.

• Future CapEx and energy cost reduction plans will be addressed after restructuring, with current focus on plan approval.