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Bitcoin Miner Rhodium Plans to Go Public Via a Reverse Merger

Soegeefx AppsCrypto MarketBitcoin Miner Rhodium Plans to Go Public Via a Reverse Merger

Rhodium Enterprises Inc,, a Bitcoin mining company that utilizes liquid cooling technology, plans to go public through a reverse merger with software services provider SilverSun Technologies Inc.

SilverSun investors will receive a cash dividend of $1.50 a share equal to about $8.5 million and a stock dividend of one share each in a new holding company subsidiary, the East Hanover, New Jersey-based company said in a statement Thursday. SilverSun shareholders will hold about 3.2% of the common equity ownership after the merger. The company would be listed on Nasdaq.

Rhodium initially filed last October with the US Securities and Exchange Commission to raise up to $100 million in an initial public offering. The Texas-based company launched the IPO in January, but postponed it in the same month. 

“We believe access to U.S. capital markets is paramount to sustainable, long-term success in our capital intensive industry,” Chase Blackmon, Rhodium’s chief executive, said in the statement.

The proposed transaction comes as the shares of most Bitcoin mining companies have slumped this year. The largest public crypto-mining companies lost over $1 billion dollar for the second quarter, while Compute North, which is a major data center provider for Bitcoin mining, filed for bankruptcy last week. 

Rhodium is one of the few major Bitcoin miners that use a proprietary liquid-cooling system. Bitcoin miners use powerful computers to validate transaction data on the Bitcoin network and earn rewards in the form of the token. Those machines tend to get overheated. A high ambient temperature can lower the rigs’ efficiency and accelerate their depreciation. 

Heat has emerged to be one of the biggest challenges for some Bitcoin miners in the US. Southern states such as Texas have become Bitcoin mining hubs due to their liberal crypto regulators and low energy cost. However, the record heat waves across those states sent energy prices soaring and prompted the miners to shut off their rigs. 

The leading mining revenue gauge reached a two-year low due to declining Bitcoin prices, fierce competition among miners and soaring energy cost. 

Source: Bloomberg

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