Core Scientific Inc

Item 1A. Risk Factors

Risks Related to Our Proposed Merger with CoreWeave

The consummation of the Merger is contingent upon the satisfaction of a number of conditions that may be outside of our or CoreWeaves control and that we and CoreWeave may be unable to satisfy or obtain, or which may delay the consummation of the Merger or result in the imposition of conditions that could reduce the anticipated benefits from the Merger or cause the parties to abandon the Merger.

Consummation of the Merger is contingent upon the satisfaction of a number of conditions, some of which are beyond our and CoreWeaves control, including, among others:

the adoption of the Merger Agreement by the affirmative vote of the holders of a majority of the issued and outstanding shares of Company common stock entitled to vote (the Company Stockholder Approval);

the expiration or termination of the waiting period (and any extension thereof, including any commitment to, or agreement with, any governmental body to delay the consummation of, or not to consummate before a certain date, the Merger) applicable to the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the HSR Act);

the effectiveness of the registration statement on For a discussion of our risk factors, see Part m S-4 to be filed by CoreWeave pursuant to which the shares of CoreWeave Class A common stock to be issued in connection with the Merger will be registered with the SEC, and the absence of any stop order suspending such effectiveness or proceeding for the purpose of suspending such effectiveness being pending before the SEC;

the absence of any injunction or other order issued by a governmental body or applicable law enjoining, restraining, preventing or prohibiting or making illegal the consummation of the Merger; and

the approval for listing on Nasdaq of the shares of CoreWeave Class A common stock to be issued in connection with the Merger. 

Each partys obligation to complete the Merger is also subject to certain additional conditions, including:

the other party having complied in all material respects with its pre-closing obligations and covenants under the Merger Agreement;

the accuracy of the representations and warranties of the other party in the Merger Agreement (subject to certain materiality qualifiers); and

the absence of a material adverse effect with respect to the other party.

These conditions to the closing of the Merger may not be fulfilled in a timely manner or at all, and, accordingly, the Merger may not be completed. In addition, each of CoreWeave and the Company may terminate the Merger Agreement under certain specified circumstances, including but not limited to, if (1) if any order has become final and non-appealable or there is a law, in each case having the effect of permanently enjoining the consummation of the Merger or making the Merger illegal or otherwise prohibited; (2) if the consummation of the Merger does not occur on or before April 7, 2026; (3) if the Company Stockholder Approval is not obtained at the meeting of the Companys stockholders convened to obtain the Company Stockholder Approval; or (4) if the other party breaches its representations, warranties or covenants in the Merger Agreement in a way that would entitle the party seeking to terminate the Merger Agreement not to consummate the Merger, subject to the right of the breaching party to cure the breach. In addition, prior to receiving approval of the Merger Agreement by the Companys stockholders, (i) CoreWeave may terminate the Merger Agreement if our Board of Directors has changed its recommendation in favor of the Merger and (ii) the Company may terminate the Merger Agreement to enter into a definitive agreement with respect to a Superior Proposal (as defined in the Merger Agreement). Upon the termination of the Merger Agreement under specified circumstances, including, among others, the termination by CoreWeave in the event of a Change of Recommendation (as defined in the Merger Agreement) by our Board of Directors, the Company would be required to pay CoreWeave a termination fee of $270 million.

As a condition to granting the required clearance under the HSR Act, the Federal Trade Commission may impose limitations or costs, require divestitures or place restrictions on the conduct of the combined company after the closing of the Merger; provided, however, that CoreWeave and its subsidiaries will not be required to take or agree to take (and neither the Company nor any of its subsidiaries will take, offer to take, or otherwise agree to without CoreWeaves prior written consent) any such action that would

reasonably be expected to, either individually or in the aggregate, be material to the business, financial condition or results of operations of CoreWeave, the Company and their respective subsidiaries, taken as a whole; provided, however, that for this purpose, CoreWeave, the Company and their respective subsidiaries, taken as a whole, will be deemed a consolidated group of entities of the

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size and scale of a hypothetical company that is 100% of the size of the Company and its subsidiaries, taken as a whole, as of the date of the Merger Agreement. Such conditions or changes and the process of obtaining the required clearance under the HSR Act could, among other things, have the effect of delaying completion of the Merger or of imposing additional costs or limitations on the combined company following the Merger, any of which may have an adverse effect on the combined company following the Merger.

We and CoreWeave may also be subject to lawsuits challenging the Merger, and adverse rulings in these lawsuits may delay or prevent the Merger from being completed or require us or CoreWeave to incur significant costs to defend or settle these lawsuits. Any delay in completing the Merger could cause us not to realize, or to be delayed in realizing, some or all of the benefits that we expect to achieve if the Merger is successfully completed within the expected time frame.

I. Item f the Merger is not completed, or if there are significant delays in completing the Merger, the trading prices of our common stock and our future business and financial results could be negatively affected, and we may be subject to several risks, including the following:

negative reactions from the financial markets, including declines in the prices of our common stock due to the fact that current prices may reflect a market assumption that the Merger will be completed;

having to pay certain significant costs relating to the Merger; and

the attention of our management will have been diverted to the Merger rather than our own operations and pursuit of other opportunities that could have been beneficial to us.

Failure to realize the anticipated benefits of the Merger, delay in realizing those benefits, or significant challenges in integrating the Company with CoreWeave could have an adverse effect on the price of CoreWeave Class A common stock that Company stockholders will own following the completion of the Merger.

We and CoreWeave have operated and, until the completion of the Merger, will continue to operate, independently. The success of the Merger, including anticipated benefits and cost savings, will depend, in part, on our and CoreWeaves ability to successfully integrate our respective operations in a manner that results in various benefits and that does not materially disrupt existing business and strategic relationships or result in a loss of customers. The process of integrating operations could result in a loss of key personnel or cause an interruption of, or loss of momentum in, the activities of one or more of the combined companys businesses. Inconsistencies in standards, controls, procedures and policies could adversely affect the combined company. The diversion of managements attention and any delays or difficulties encountered in connection with the Merger and the integration of the Company and CoreWeaves operations could have an adverse effect on the business, financial condition, operating results and prospects of the combined company. If the Company and CoreWeave experience difficulties in the integration process, including those listed above, we may not fully realize the anticipated benefits of the Merger in a timely manner or at all, and the price of CoreWeave Class A common stock to be issued to Company stockholders in the Merger could be adversely affected.

Uncertainty about the Merger may adversely affect relationships with our customers, suppliers, service providers, partners, consultants, and other business counterparties, whether or not the Merger is completed.

In response to the announcement of the Merger, our existing or prospective customers, suppliers, service providers, partners, consultants, and other business counterparties may:

delay, defer, or cease entering into a business relationship with us or the combined company;

terminate their relationships with us or the combined company;

delay or defer other decisions concerning us or the combined company; or

seek to change the terms on which they do business with us or the combined company.

Any such delays or changes to terms could materially harm our business or, if the Merger is completed, the business of the combined company.

Losses of customers, suppliers, service providers, consultants or other important strategic relationships could have a material adverse effect on our business, financial condition and results of operations. Such adverse effects could also be exacerbated by a delay in the completion of the Merger for any reason, including delays associated with obtaining the requisite regulatory approval under the HSR Act or the approval of our stockholders.

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As a result of the Merger, our current and prospective employees could experience uncertainty about their future with us or the combined company. As a result, key employees may depart because of issues relating to such uncertainty or a desire not to remain with CoreWeave following the completion of the Merger.

As a result of the Merger, our current and prospective employees could experience uncertainty about their future with us or the combined company, or decide that they do not want to continue their employment with the combined company. As a result, key employees may depart because of issues relating to such uncertainty or a desire not to remain with CoreWeave following the completion of the Merger. Losses of officers, key employees or other employees could materially harm our business, results of operations and financial condition. Such adverse effects could also be exacerbated by a delay in the completion of the Merger for any reason, including delays associated with obtaining requisite regulatory approvals or the approval of our stockholders. We may also experience challenges in hiring new employees during the pendency of the Merger, or if the Merger Agreement is terminated, which could harm our ability to grow our business, execute on our business plans or enhance our operations. If the Merger is consummated, the combined company may be less attractive to current and prospective employees, which could harm the business and prospects of the combined company.

Restrictions under the Merger Agreement may adversely affect our business and operations.

Under the terms of the Merger Agreement, we are subject to certain restrictions on the conduct of our business prior to completing the Merger which may adversely affect our ability to execute certain of our business strategies, including, but not limited to, making material acquisitions, disposing of material assets, entering into material agreements, making capital expenditures in excess of specified amounts, issuing additional capital stock or other equity securities, or incurring additional indebtedness (in each case, subject to certain exceptions). These limitations may have adverse effects on our existing or planned relationships with our existing or prospective customers, suppliers, service providers, consultants and employees, which could adversely affect our business and operations prior to the completion of the Merger.

Because the consideration to be received by our stockholders in connection with the Merger will include a fixed number of shares of Class A common stock of CoreWeave, and the market price of such shares has fluctuated and will continue to fluctuate, our stockholders cannot be sure of the value of the consideration they will receive in the Merger. Furthermore, with respect to the fairness of such consideration from a financial point of view, (i) the separate fairness opinions received by the Companys board of directors from each of our financial advisors in connection with the signing of the Merger Agreement only speak as of the date of the Merger Agreement and not as of any other date and (ii) under Delaware law, the Companys stockholders are not entitled to an appraisal of the fair value of their shares in connection with the Merger.

Under the Merger Agreement, at the effective time of the Merger, each share of Company common stock (other than each share of Company common stock held in treasury or held or owned by the Company, CoreWeave or Miami Merger Sub I, Inc. immediately prior to the effective time of the Merger) issued and outstanding immediately prior to the effective time of the Merger will be cancelled and converted into the right to receive 0.1A. Risk 235 fully paid and non-assessable shares of CoreWeave Class A common stock. The market value of the consideration our stockholders will receive in the Merger will therefore fluctuate with the market price of CoreWeave Class A common stock. The implied value of the merger consideration to our stockholders has fluctuated since the date of the announcement of the Merger Agreement and will continue to fluctuate until the date the Merger is completed, which could occur a considerable amount of time after the date hereof.

CoreWeaves share price changes may result from a variety of factors, including, among others, general market and economic conditions, changes in CoreWeaves and our respective businesses, operations and prospects, risks inherent in the respective businesses, changes in market assessments of the likelihood that the Merger will be completed and/or the value that may be generated by the Merger and changes with respect to expectations regarding the timing of the Merger and regulatory considerations. Many of these factors are beyond both our and CoreWeaves control. You are urged to obtain current market quotations for both the Company and CoreWeave common stock traded on the Nasdaq (trading symbols CORZ and CRWV, respectively).

Furthermore, the Companys board of directors has received the separate opinions from each of our financial advisors in connection with the signing of the Merger Agreement, each to the effect that, as of the date of such opinion and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations set forth therein, the exchange ratio in the Merger Agreement is fair from a financial point of view to the holders of shares of Core Scientific common stock (other than the cancelled shares). Changes in the operations and prospects of the Company or CoreWeave, general market and economic conditions and other factors that may be beyond the control of the Company or CoreWeave, and on which our financial advisors opinions were based, may significantly alter the value of the Company or CoreWeave or the prices of the shares of Company common stock or CoreWeave common stock by the time the Merger is completed. The opinions do not speak as of the time the Merger will be completed or as of any date other than the date of each such opinion. Because the Company does not currently

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anticipate asking its financial advisors to provide updated fairness opinions, the opinions will not address the fairness of the Merger Consideration from a financial point of view at the time the Merger is completed.

Factorsinally, under Delaware law, the holders of Company common stock are not entitled to an appraisal of the fair value of their shares in connection with the Merger. Appraisal rights are statutory rights that enable stockholders to dissent from certain extraordinary transactions, such as certain mergers, and to demand that the corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to stockholders in connection with the applicable transaction. Under Delaware law, appraisal rights are not available for the shares of any class or series if the shares of the class or series are listed on a national securities exchange or held of record by more than 2,000 holders on the record date, unless the stockholders receive in exchange for their shares anything other than shares of stock of the surviving or resulting corporation or of any other corporation that is publicly listed or held by more than 2,000 holders of record, cash proceeds from the sale of fractional shares or fractional depositary receipts or any combination of the foregoing. Shares of Companys Annual Report on For common stock are listed on the Nasdaq, and the Companys stockholders will receive CoreWeave Class A common stock pursuant to the Merger Agreement and cash proceeds from the sale of fractional shares. Approval for the listing of the shares of CoreWeave common stock on the Nasdaq is a condition to completion of the Merger.

The Merger Agreement contains provisions that could discourage or deter a potential competing acquirer from making a favorable alternative transaction proposal to the Company and, in specified circumstances, could require us to pay substantial termination fees to CoreWeave.

Under the Merger Agreement, the Company is subject to no-shop restrictions and is not permitted, subject to certain exceptions set forth in the Merger Agreement, to initiate, solicit or knowingly encourage or facilitate any inquiries or the making of any proposal or offer by or with a third party with respect to an acquisition proposal and to furnish nonpublic information to, or engage in discussions or negotiations with, a third party interested in pursuing an alternative business combination transaction. Further, our Board of Directors is required to recommend that our stockholders vote in favor of the Merger, subject to exceptions for superior proposals and other situations where failure to effect a recommendation change would be inconsistent with the Board of Directors fiduciary duties. Upon the termination of the Merger Agreement under specified circumstances, including, among others, the termination by CoreWeave in the event of a Change of Recommendation (as defined in the Merger Agreement) by our Board of Directors, the Company would be required to pay CoreWeave a termination fee of $270 million. Such provisions of the Merger Agreement could discourage or deter a third party that may be willing to pay more than CoreWeave for the Companys outstanding common stock from considering or proposing such an acquisition of the Company.

Litigation may arise in connection with the Merger, which could be costly, prevent consummation of the Merger, divert managements attention and otherwise materially harm our business.

Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into merger agreements and/or their directors and officers. A negative outcome in any such lawsuit could result in substantial costs to the Company, including any costs associated with the indemnification of directors and officers. Regardless of the outcome of any future litigation related to the Merger, such litigation may be time-consuming and expensive and may distract our management from running the day-to-day operations of their business. If the Merger is not consummated for any reason, litigation could be filed in connection with the failure to consummate the Merger. Any litigation related to the Merger may result in negative publicity or an unfavorable impression of us, which could adversely affect the price of Company common stock, impair our ability to recruit or retain employees, damage our business relationships or otherwise materially harm our operations and financial performance.

Shares of CoreWeave Class A common stock received by our stockholders as a result of the Merger will have different rights from shares of Company common stock.

Upon consummation of the Merger, our stockholders will no longer be stockholders of the Company, but will instead become stockholders of CoreWeave, and their rights as stockholders will be governed by the CoreWeave certificate of incorporation and bylaws. The terms of the CoreWeave certificate of incorporation and bylaws may be materially different than the terms of the Companys certificate of incorporation and bylaws, which currently govern the rights of our stockholders.

The multi-class structure of CoreWeave common stock has the effect of concentrating voting power with CoreWeaves co-founders.

CoreWeaves Class B common stock has ten votes per share, CoreWeaves Class A common stock has one vote per share and CoreWeaves Class C common stock has no votes per share. As of March 31, 2025, Michael Intrator, CoreWeaves Chief Executive Officer, President, and Chairman of CoreWeaves board of directors, Brian Venturo, CoreWeaves Chief Strategy Officer, and Brannin McBee, CoreWeaves Chief Development Officer (together, the CoreWeave Co-Founders) collectively hold all of the

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issued and outstanding shares of CoreWeaves Class B com 1mon stock. Because of the ten-to-one voting ratio between CoreWeaves Class B common stock and Class A common stock, the CoreWeave Co-Founders collectively continue to control a significant percentage of the combined voting power of CoreWeaves common stock, which voting power may increase over time upon the exercise or settlement and exchange of equity awards held by the CoreWeave Co-Founders pursuant to their equity exchange rights which provide each Co-Founder with the right (but not obligation) to require CoreWeave to exchange, for shares of CoreWeave Class B common stock, any shares of CoreWeave Class A common stock received by him upon the exercise or settlement of equity awards for shares of CoreWeave Class A common stock granted prior to September 2024. Therefore, the CoreWeave Co-Founders, individually or together, will be able to significantly influence matters submitted to CoreWeave stockholders for approval, including the election of directors, amendments of CoreWeaves organizational documents and any merger, consolidation, sale of all or substantially all of CoreWeaves assets, or other major corporate transactions.

Additionally, future issuances of CoreWeave Class C common stock may further concentrate the voting power of CoreWeave Co-Founders by prolonging the duration of their control and/or by giving them an opportunity to achieve liquidity without diminishing their voting power.

The interests of the CoreWeave Co-Founders, individually or together, may not coincide with the interests of the other holders of capital stock of CoreWeave, including our stockholders who receive CoreWeave Class A common stock in the Merger. This concentration of ownership may harm the value of CoreWeave Class A common stock our stockholders receive in the Merger by, among other things delaying, deferring or preventing a change in control of CoreWeave, impeding a merger, consolidation, takeover or other business combination involving CoreWeave, or causing CoreWeave to enter into transactions or agreements that are not in the best interests of all stockholders.

Under the Nasdaq Rules, a controlled companya company of which more than 50% of the voting power for the election of its directors is held by an individual, group or another companymay elect not to comply with certain corporate governance requirements, including the requirement that a majority of its directors be independent, as defined in the Nasdaq Rules, and the requirement that its compensation and nominating and corporate governance committees consist entirely of independent directors. CoreWeave may rely on the controlled company exemption under the Nasdaq Rules. As a result, a majority of the members of its board may not be independent directors and its nominating and corporate governance and compensation committees may not consist entirely of independent directors. Accordingly, holders of CoreWeave common stock may not have the same protections afforded to stockholders of companies that are subject to all of Nasdaqs corporate governance requirements

For a discussion of our other risk factors, see Part I. Item 1A. Risk Factors of the Companys Annual Report on Form 10-K for fiscal year December 31, 2024, which was filed with the SEC on February 27, 2025.

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During fiscal year 2024, our Colocation segment was referred to as HPC Hosting, and, as such, any risk factors referring to the HPC Hosting segment or HPC hosting business should be read as being applicable to our Colocation segment and high-density colocation business.