The IPO of the new Bitcoin mining activity of Celsius sold to Ionic Digital has been postponed indefinitely.
Yesterday Ionic Digital published an official update for its shareholders in which it announced changes in leadership, the Board of Directors, and the auditor.
The abandonment of the previous auditor has caused the postponement of the stock market listing.
The IPO of Ionic Digital: the new Bitcoin mining company born from Celsius
In February of this year Celsius emerged from bankruptcy and repaid the creditors.
Celsius had closed its doors in June 2022, after the implosion of the crypto ecosystem Terra/Luna.
Although its main activity was crypto lending, the company also had a division that dealt with Bitcoin mining.
In February of this year, the creditor repayment plan included the creation of a new company, Ionic Digital, which would take over the entire mining activity of Celsius.
So it happened, so much so that today Ionic Digital does crypto mining in the USA, but the original plan also included its listing on the stock exchange (IPO).
Since creditors of Celsius were given part of the reimbursement in shares of Ionic Digital, the idea was to list the company on the stock exchange shortly, so that those who received their shares as a form of reimbursement could then easily liquidate them on the market.
However, the new company is having problems, of an administrative nature but perhaps also accounting, and has been forced to postpone the stock market listing indefinitely.
The changes at the top
The official update published yesterday reveals the problems that the new company is going through.
Although revealing that their actual mining activity is expanding, the Company has announced a significant transition.
In fact, in July 2024, CEO Matt Prusak effectively resigned because he did not agree to extend his employment contract beyond the deadline of August 14. The company’s Board of Directors is now searching for a new CEO, and in the meantime, will appoint the current Chief Financial Officer (CFO) John Penver as interim CEO.
But the transition is not limited to the change of leadership.
Between June and July, two new members joined the Board of Directors.
This is H. McIntyre (Mac) Gardner, the new director of Class B who has replaced Asher Genoot, and Scott N. Flanders, who has replaced Max Holmes. The president remains Emmanuel Aidoo.
Furthermore, the Council expects that a second Class B director will be appointed soon to fill the vacancy on the Council resulting from Steven Price’s resignation in July.
In other words, three have left the Consiglio di Amministrazione di Ionic Digital, and for now only two have taken their place.
Bitcoin mining: the problem for the IPO of the new identity of Celsius
But the real problem that forced the company to postpone the IPO is another one.
The official update reveals that in May RSM US informed the company that it would not be able to continue to perform the role of auditor.
So Ionic Digital has in fact temporarily lost its revisore contabile.
RSM justified its decision by stating that it is a strategic decision to disengage from all audit engagements with companies in the crypto sector.
Ionic Digital specifies that the decision of RSM was not the result of a disagreement on accounting principles, or on financial statements, or on the audit procedure, so much so that the reports of RSM on the financial statements contained in the documents filed with the SEC do not contain any adverse opinions or disclaimers of opinion.
The problem is that, for now, Ionic Digital has not yet found another auditor who has agreed to review their accounts, and in the absence of an auditor, it cannot include its financial statement among the documents filed with the SEC. The SEC, in fact, only accepts financial statements that have been reviewed by a certified auditor.
Ionic Digital writes:
“Therefore, the temporary absence of an auditor has prevented the Company from updating its filings with the SEC, which in turn has delayed Ionic Digital’s efforts to become a public reporting company. Once a new auditor has been appointed, the Company will work quickly to prepare the reviewed financial statements required to file future filings with the SEC necessary to complete the process of becoming a public company”.
The solution
From these statements, it would emerge that the solution to the problem could simply be to find a new auditor.
At that point, according to the company’s statements, it would only be a matter of time before the listing on the stock exchange.
However, it has been almost three months since the previous reviewer abandoned them, and the fact that it is taking them so long to find another one does not seem like a good sign.
For now, in fact, it does not appear that the documentation submitted to date to the SEC presents any problems, but this is not nearly enough to assert that the stock market listing process will definitely proceed.
We can only wait to understand if (and when) they will find a new auditor, and what the next documents presented to the SEC will be, particularly the financial statement. At this point, it doesn’t even seem possible to speculate on definite timelines for the final listing on the stock exchange.