SCHEDULE: Two Seas Capital Boosts Core Scientific Stake, Opposes Merger

Two Seas Capital LP has increased its beneficial ownership in Core Scientific, Inc. to 6.5% and is actively soliciting proxies against the company's proposed merger agreement.

Summary

• Two Seas Capital LP, Two Seas Capital GP LLC, and Sina Toussi (Reporting Persons) filed Amendment No. 1 to their Schedule 13D regarding Core Scientific, Inc.
• Reporting Persons beneficially own 19,902,624 shares of Core Scientific, Inc. Common Stock, representing approximately 6.5% of the outstanding shares.
• This ownership includes 313,646 shares issuable upon exercise of warrants and 3,400,000 shares issuable upon exercise of options.
• The aggregate purchase price for the 2,539,321 shares directly held by the Strategic Fund was approximately $34,271,121.
• The Global Fund's holdings, including 12,961,981 shares, 34,000 options, and 313,646 warrants, had an aggregate purchase price of approximately $136,531,588.
• Accounts held 687,676 shares with an aggregate purchase price of approximately $9,628,940.
• Two Seas Capital LP intends to vote against the adoption of the Merger Agreement at the upcoming Special Meeting.
• Reporting Persons filed a Definitive Proxy Statement on September 29, 2025, to solicit proxies against the Issuer's proposal to adopt the Merger Agreement.
• The options to purchase Common Stock have an exercise price of $15 per share and expire on January 16, 2026.
• The Global Fund previously sold options to purchase 1,700,000 shares of Common Stock with an exercise price of $21 per share, expiring on January 16, 2026.
• The Global Fund no longer holds any cash-settled swaps positions.

Sentiment

Score: 7

Explanation: The filing indicates a strong activist stance by a significant shareholder who is increasing their stake and opposing a merger. This suggests the activist sees substantial value in the company beyond the merger terms, which could be positive for long-term shareholders if the activist's efforts lead to a better outcome or a higher valuation. However, it also introduces uncertainty and potential for conflict.

Positives

• An activist investor, Two Seas Capital, has increased its stake, indicating confidence in the company's underlying value.
• Two Seas Capital is actively opposing the proposed merger, suggesting they believe the current merger terms undervalue the company or that a better strategic path exists.
• The Reporting Persons have acquired a significant stake (6.5%), giving them a strong voice in corporate governance matters.

Negatives

• Significant disagreement between a major shareholder and company management regarding a key strategic transaction (the merger).
• The opposition to the merger introduces uncertainty regarding its completion.

Risks

• Uncertainty surrounding the outcome of the proposed merger due to activist opposition.
• Potential for a prolonged proxy contest, which could divert management attention and resources.
• Risk that the merger, if blocked, might not be replaced by a more favorable alternative, or that the company's standalone value might not meet expectations.

Future Outlook

The immediate future outlook is centered on the upcoming Special Meeting where shareholders will vote on the proposed Merger Agreement. Two Seas Capital is actively campaigning against the merger, indicating a potential for the transaction to be blocked or renegotiated.

Management Comments

• Two Seas Capital LP has expressed its intent to vote against the adoption of the Merger Agreement at the upcoming Special Meeting and intends to solicit proxies against the Issuer's proposal to adopt the Merger Agreement at the Special Meeting.

Industry Context

This filing highlights an activist investor's challenge to a significant corporate transaction, a common occurrence in industries undergoing consolidation or where perceived valuation discrepancies exist. For Core Scientific, a company in the volatile cryptocurrency mining sector, such shareholder activism can significantly influence strategic direction and market perception, especially concerning major M&A activities.

Comparison to Industry Standards

• NA

Corporate Governance

Stakeholder Impact

• Shareholders: Directly impacted by the proxy solicitation and the outcome of the merger vote. Those who align with Two Seas Capital's view may see potential for increased value if the merger is blocked or renegotiated.
• Management: Faces opposition to a key strategic initiative, potentially leading to increased pressure and distraction.
• Potential Acquirer (if applicable to the merger): Faces increased risk of the merger failing.

Next Steps

• Special Meeting for shareholders to vote on the Merger Agreement.
• Continued proxy solicitation by Reporting Persons against the merger.

Key Dates

Recommendation

The activist investor, Two Seas Capital, has significantly increased its stake in Core Scientific and is actively opposing the proposed merger. This suggests a belief that the company is undervalued and that the merger terms are not in the best interest of shareholders. For investors who align with this view, the activist's actions could unlock greater value, making it a 'buy' recommendation based on the potential for a better outcome than the current merger proposal.

Keywords

Core Scientific, Two Seas Capital, Schedule 13D, activist investor, merger opposition, proxy fight, beneficial ownership, common stock, warrants, options, corporate governance