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Primeblock and 10X Capital Venture Acquisition Corp. Announce Planned Merger

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Primeblock and 10X Capital Venture Acquisition Corp. Announce Planned Merger

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  • Combination of PrimeBlock and 10X Capital Venture Acquisition Corp. II to advance PrimeBlock’s focus on the blockchain ecosystem
  • In Q4 2021, PrimeBlock generated $24.4 million of revenue, and has over 110 megawatts of installed data center capacity
  • Business combination based on enterprise value of approximately $1.25 billion
  • Led by CEO Gaurav Budhrani, a former Goldman Sachs investment banking veteran who advised on over $300 billion in crypto, technology and natural resources transactions 
  • Co-founded by Web 3 entrepreneurs Ryan Fang & Chandler Song, who founded a leading blockchain infrastructure and developer platform 
  • PrimeBlock has secured a $300 million committed equity financing facility from Cantor Fitzgerald affiliate 
  • Merger expected to be completed by 2H 2022; combined company expected to be listed on NASDAQ  

Prime Blockchain Inc., a diversified infrastructure provider for blockchain technology that owns and operates a growing portfolio of proprietary data centers and crypto assets mining operations in North America, and 10X Capital Venture Acquisition Corp. II, a special purpose acquisition company (SPAC) sponsored by 10X Capital, today announced the execution of  a definitive Business Combination Agreement. Upon closing of the transaction, which values the combined company at an estimated enterprise value of $1.25 billion, former Goldman Sachs investment banking veteran Gaurav Budhrani will be CEO and the combined company is expected to list its stock on the NASDAQ stock market. 

10X Capital and PrimeBlock have secured a $300 million committed equity financing facility from CF Principal Investments LLC, an affiliate of Cantor Fitzgerald & Co. 

PrimeBlock CEO Gaurav Budhrani said, “We are excited to bring PrimeBlock public with the support of our investors and the experienced team from 10X Capital. We believe the transaction will provide tremendous momentum for our next phase of growth. In addition, our partnerships with key suppliers are expected to enhance our ability to rapidly scale the business. We believe we are well-positioned to leverage our infrastructure and technology to provide PrimeBlock’s customers access to the underlying economics of public blockchains.”

Differentiated Platform 

PrimeBlock’s management team has deep experience across the cryptocurrency ecosystem, as well as in scaling sustainable companies, capital markets, and technology. Co-founded by Web 3 entrepreneurs Chandler Song and Ryan Fang, whose past public crypto projects include Ankr (Coinbase:ANKR) and led by former Goldman Sachs veteran Gaurav Budhrani, whose past clients include Coinbase (Nasdaq:COIN) and IonQ (NYSE:IONQ), PrimeBlock operates at scale as a fast-growing provider of diversified infrastructure and proprietary hardware for the crypto asset mining ecosystem. Its cost-effective, rapidly-deployed, modular data centers host computing hardware, including GPUs and ASICs, which contribute network hash rate to public blockchains, including Bitcoin and Ethereum. Heading up operations on the ground across North America is executive Gavin Qu, also formerly of Goldman Sachs.

PrimeBlock generated $24.4 million in revenue for Q4 2021 and seeks to mitigate risk and volatility through its combination of self-mining and hosting revenue streams, operational agility and speed of deployment. The Company has over 110 megawatts of installed data center capacity across 12 facilities in North America, with a focus on North Carolina, Tennessee, and Kentucky, and an ability to deploy its proprietary modular data center design from start to finish in under 8 weeks from site acquisition. 

Commitment to achieving sustainable operations and local economic development

PrimeBlock strives to be a responsible, ethical company and community member. The Company aims to minimize its environmental impact and generate employment opportunities in the communities where it maintains operations. For example, PrimeBlock has made a strategic commitment to contract with energy providers focused on carbon-neutral operations. Currently, PrimeBlock sources approximately 60% of its power from non-carbon emitting sources, and plans to offset the remainder. As a responsible business partner and an innovative operator, PrimeBlock expects to implement additional sustainability-focused solutions for customers, communities and in its business practices.

Partnership with 10X Capital

Hans Thomas, Chairman and CEO of 10X Capital, commented, “Gaurav and the leadership team have articulated a clear and compelling vision for PrimeBlock. They have successfully deployed over 110 megawatts of data center capacity and generated more than $24 million of revenue in the fourth quarter. We are confident they bring the discipline, skills and relevant experience to continue to execute the strategy to achieve growth and value creation for all stakeholders. As co-founders of Ankr (Coinbase:ANKR), Ryan and Chandler have a proven track record of innovating and executing at scale in the Crypto / Blockchain space, and Gaurav has the deep technology and capital markets experience to translate this innovation to the public markets.”

Thomas continued, “10X Capital is focused on advancing environmental, social and governance (ESG) best practices and promoting Diversity, Equity, and Inclusion in our portfolio companies.  We are very pleased to be working with the diverse and dynamic team at PrimeBlock. They have built strong relationships with key partners, including the Tennessee Valley Authority, one of the largest major utilities in the U.S., with a commitment to net-zero carbon emissions by 2050, and with approximately 60% of its current production from non-carbon emitting sources today.”

See related article: CarbonlandDAO and Trust ESG NFTs Protect Forest Biodiversity and Generates Carbon Removal Credits

Key Transaction Terms

The Boards of Directors of PrimeBlock and 10X Capital have unanimously approved the proposed merger, which is expected to be completed in the second half of 2022, subject to regulatory approval, the approval of the proposed merger by PrimeBlock’s stockholders and 10X Capital’s shareholders and the satisfaction or waiver of other customary closing conditions.

Additional information about PrimeBlock’s operations and financial performance, along with the transaction outlined in the Business Combination Agreement, can be found in the investor presentation that will be filed by 10X Capital on a Current Report on Form 8-K with the Securities and Exchange Commission and can be viewed at www.sec.gov.

Financial and Legal Advisors

Cantor Fitzgerald & Co. is serving as capital markets advisor to 10X Capital and Cohen & Company Capital Markets, a division of J.V.B. Financial Group, LLC and Canaccord Genuity are serving as financial advisors to 10X Capital on this transaction. King & Spalding LLP is legal counsel to CF Principal Investments LLC in connection with the Committed Equity Facility.  Latham & Watkins LLP is legal counsel to 10X Capital. White & Case LLP and Reed Smith LLP are each legal counsel to PrimeBlock. DLA Piper LLP (US) is legal counsel to Cohen & Company Capital Markets.

Source: Prime Blockchain, Inc.

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