First Phase Expected to Become Operational in 90 days
SAN ANTONIO, Aug. 9, 2021 (GLOBE NEWSWIRE) — Ecoark Holdings, Inc. (“Ecoark”) (NASDAQ: ZEST), has announced that it intends to allocate approximately $3 million of the net proceeds from its recently completed $20 million registered direct offering, towards the development of a proposed digital asset mining business, with a focus on Bitcoin. We intend to deploy the capital for a Beta Site (“Beta”) development of a 6 MW (“megawatt”) cryptocurrency mining operation in Texas, with a targeted near-term expansion capacity of 50 MW on the first project. The project will represent the first major capital investment in cryptocurrency mining to be operated by our newly formed, indirect wholly-owned subsidiary Bitstream Mining LLC (“Bitstream”), a wholly-owned subsidiary of Trend Discovery Holdings LLC (“Trend”), another wholly-owned subsidiary of Ecoark. On August 6, 2021, Bitstream signed an engagement agreement with an industry leading strategic partner in Electric Reliability Council of Texas (“ERCOT”) with comprehensive full life-cycle energy service experience of over 20 years, which we view as critical to energy-related infrastructure deployment. Bitstream is expected to secure a power contract in the next 30 days and commence commercialization within 90 days, subject to market conditions and availability of mining equipment.
With ERCOT electric power grid deficiencies experienced during severe weather cycles this past winter, Bitstream is expected to be positioned to help mitigate grid imbalances at critical times, as part of our Environmental, Social, and Governance (“ESG”) strategy, by switching off cryptocurrency mining and selling our 6 MW of power back to the ERCOT grid. We plan to utilize our strategic partner’s capabilities to monitor the ERCOT supply and demand market in real-time and redirect our power away from cryptocurrency mining on a moment’s notice to alleviate grid imbalances. In addition, Ecoark will continue to monitor for potential future opportunities in stranded natural gas.
“By reducing our power consumption when load resources are inadequate, we can help alleviate grid pressure, benefiting local communities and helping to ensure they have access to power when they need it most,” said M. Britt Swann, President of Bitstream. “We look forward to assisting green infrastructure development in Texas by alleviating grid imbalances when solar and wind are unable to satiate demand. Today’s exciting announcement of our first mining project serves as a platform for value creation in this rapidly growing sector. We expect that this Beta project will help Ecoark diversify its business into the cryptocurrency market, and upon success, expand Bitstream’s future capacity beyond 50 MW.”
About Ecoark Holdings, Inc.
Founded in 2011, Ecoark is a diversified holding company. The company has three wholly owned subsidiaries: Zest Labs, Inc. (“Zest Labs”), Banner Midstream Corp (“Banner Midstream”) and Trend Discovery. Zest Labs, offers the Zest Fresh™ solution, a breakthrough approach to quality management of fresh food, is specifically designed to help substantially reduce the $161 billion amount of food loss the U.S. experiences each year. Banner Midstream is engaged in oil and gas exploration, production, and drilling operations on over 30,000 cumulative acres of active mineral leases in Texas, Louisiana, and Mississippi. Banner Midstream also provides transportation and logistics services and procures and finances equipment to oilfield transportation services contractors. In addition to leading our new business opportunity, Trend invests in a select number of early-stage startups each year as part of the fund’s Venture Capital strategy; we are open-minded investors with a founder-first mentality. Trend Discovery LP has an audited track record of uncorrelated outperformance of the S&P 500 since inception.
ZEST FRESH™ and Zest Labs™ are trademarks of Zest Labs, Inc.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to the expected use of net proceeds from the recently completed offering, the development of a cryptocurrency mining operation in Texas, the anticipated timing of execution of a binding power contract and of the Beta mining facility becoming operational, our plans regarding using the future mining operation to alleviate power grid imbalances using our strategic partner’s capabilities and the expected benefits thereof, our plans with respect to natural gas, potential future expansion of Bitstream’s future capacity, and other statements that are not statements of historical fact. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. These statements are based on management’s current expectations and beliefs, as well as a number of assumptions concerning future events. Such forward-looking statements are subject to known and unknown risks, uncertainties, assumptions, and other important factors, such as market and other conditions, many of which are outside management’s control. Important factors that could cause actual results to differ from those in the forward-looking statements include our ability to execute a binding power contract when expected on the terms acceptable to us, or at all, our ability to procure the necessary high speed computers needed for cryptocurrency mining in a timely manner, including due to the international semiconductor shortage, our limited experience in commercial scale cryptocurrency mining, intense competition in the cryptocurrency mining market, potential future legislation or regulatory initiative limiting the use of digital assets as a medium of exchange, significant volatility of the price of digital assets, and their potentially limited liquidity. . Additional risks and uncertainties are identified and discussed in Ecoark’s filings with the SEC, including the Annual Report on Form 10-K for the fiscal year ended March 31, 2021 and prospectus supplement dated August 4, 2021. Any forward-looking statement made by us herein speaks only as of the date on which it is made. Additional factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.