SCHEDULE: Core Scientific, Two Seas Capital Reach Board Agreement

Core Scientific, Inc. and Two Seas Capital LP have entered a cooperation agreement, leading to significant board changes and a standstill on Two Seas Capital's share accumulation.

Summary

• Two Seas Capital LP and its affiliates beneficially own 20,697,679 shares of Core Scientific, Inc. common stock, representing approximately 6.7% of the outstanding shares.
• A cooperation agreement was executed on February 18, 2026, between Core Scientific and Two Seas Capital LP.
• Core Scientific committed to appointing three new independent directors: one by March 15, 2026, a second by September 15, 2026, and a third prior to the 2027 annual meeting, all in consultation with Two Seas Capital.
• One current director will not be nominated for re-election at the 2027 Annual Meeting.
• Jordan Levy, the current Chairman of the Board, will not stand for re-election at the 2026 Annual Meeting.
• Two Seas Capital has agreed to standstill provisions, restricting its beneficial ownership to less than 9.9% of outstanding common stock.
• Two Seas Capital also committed to voting its shares in accordance with the Board's recommendations at the 2026 and 2027 Annual Meetings.
• The aggregate purchase price for shares and options held by the Strategic Fund, Global Fund, and Accounts totals $188,608,121.78.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a moderately positive development, as it signals improved corporate governance through board refreshment and resolves potential shareholder conflict, though the standstill provisions limit the activist's future influence.

Positives

• The company will gain three new independent directors, potentially enhancing board oversight and strategic direction.
• The cooperation agreement resolves potential shareholder activism, providing stability in corporate governance.
• The departure of the current Chairman, Jordan Levy, and another director by 2027 suggests a refresh of board leadership.

Negatives

• Two Seas Capital's influence is capped by a standstill provision, limiting its ability to increase its stake beyond 9.9%.
• Two Seas Capital is required to vote its shares in line with the Board's recommendations for the 2026 and 2027 Annual Meetings, which restricts its independent voting power.

Risks

• The standstill agreement limits Two Seas Capital's ability to acquire additional shares, potentially capping its upside if the stock performs well and it wishes to increase its stake.
• The requirement for Two Seas Capital to vote with the Board's recommendations could be seen as a risk to independent shareholder advocacy if future board decisions are contentious.

Future Outlook

Core Scientific is set to undergo significant board refreshment with the appointment of three new independent directors by the 2027 annual meeting and the departure of the current Chairman and another director. This indicates a strategic shift towards enhanced corporate governance and potentially new strategic directions.

Management Comments

• Jordan Levy, the current Chairman of the Board, has advised the Company that he will not stand for re-election at the 2026 Annual Meeting.

Industry Context

StockSavvy.ai notes that this cooperation agreement reflects a common trend where significant shareholders, often activist funds like Two Seas Capital, engage with company boards to influence governance and strategic direction. Such agreements aim to balance shareholder representation with board stability, a critical factor in the volatile digital asset and Bitcoin mining industry where operational efficiency and strategic agility are paramount. This move could signal a push for greater accountability or a refined strategic focus for Core Scientific amidst evolving market conditions.

Comparison to Industry Standards

• StockSavvy.ai observes that the appointment of multiple independent directors, particularly in consultation with a significant shareholder, aligns with best practices in corporate governance aimed at enhancing board independence and diversity of thought.
• While specific comparable companies or projects are not detailed in the filing, such board refreshment initiatives are often seen in companies undergoing strategic transitions or seeking to improve investor confidence.
• For instance, similar governance enhancements have been pursued by other publicly traded Bitcoin miners like Marathon Digital Holdings or Riot Platforms in response to market pressures or shareholder demands, though the specifics of board composition and activist engagement vary.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders: Potential for improved corporate governance and strategic direction due to board refreshment. However, Two Seas Capital's voting restrictions and standstill agreement might limit future activist pressure.
• Management: The agreement dictates changes in board composition and leadership, which could influence strategic priorities and operational oversight.
• Employees: No direct impact mentioned, but changes in strategic direction could indirectly affect employees.

Next Steps

• Core Scientific to appoint one independent director prior to March 15, 2026.
• Core Scientific to appoint a second independent director prior to, or as soon as reasonably practicable following, the 2026 annual meeting of stockholders, but no later than September 15, 2026.
• Core Scientific to appoint a third independent director prior to the 2027 annual meeting of stockholders.
• One current director will not be nominated for re-election at the 2027 Annual Meeting.
• Jordan Levy will not stand for re-election at the 2026 Annual Meeting.
• Two Seas Capital to vote its shares in accordance with the Board's recommendations at the 2026 and 2027 Annual Meetings.

Key Dates

Recommendation

The cooperation agreement with Two Seas Capital LP, leading to significant board refreshment, is a positive step for corporate governance and could signal a more stable strategic path for Core Scientific. However, the standstill provisions and voting restrictions on Two Seas Capital limit the immediate upside from activist engagement. Given the nature of the agreement, which aims to stabilize governance rather than announce immediate operational or financial catalysts, a 'hold' recommendation is appropriate as investors await the impact of the new board composition on company performance.

Keywords

Core Scientific, Two Seas Capital, Schedule 13D, Cooperation Agreement, Corporate Governance, Board of Directors, Shareholder Activism, Common Stock, SEC Filing, Bitcoin Mining, Digital Assets