PowerCompute, a Bitcoin mining firm that is also branching into high-performance computing, revealed that its subsidiary, US Digital, secured approximately $18.07 million in financing from Arch Lending. The funds were obtained through two bridge notes signed on July 27, which were specifically intended to pay off existing debts to Galaxy Digital and Liebel. This short-term financing was a temporary measure while the company worked to complete a new, anticipated Bitcoin-secured term facility.

The notes carried an extremely brief term, with a maturity date of July 31, just four days after they were signed, and a final payment deadline of 5 p.m. ET on August 1.

The company's disclosure of the bridge loan coincided with the notes' official maturity date, at which point documents for the longer-term facility were still being finalized. However, the payment deadline of August 1 came and went without any further public communication. As of press time, PowerCompute’s liveSEC submissionsfeed had not been updated since its 8-K filing on July 31, and its investor-relations release feed showed no press release after July 29. With the contractual cutoff now passed, there is no public record indicating whether the company defaulted, received an extension, or successfully refinanced the debt. Although the loan agreements include a 15% annual interest rate for defaults, the disclosure did not state that this penalty had been activated.

The Loan's High Stakes

The company's 8-K filing presented a rounded loan figure of an aggregate $18 million. However, the two individual notes have precise principal amounts: the first note is for $11,005,502.75 and the second carries $7,063,342.53. The combined total of $18,068,845.28 is $68,845.28 higher than the rounded aggregate.

This exact principal represents a staggering 97% of the $18.6 million valuation that PowerCompute assigned to its entire Bitcoin treasury as of June 30. According to the company's June update and mining page, its total holdings on that date were 318.3 BTC, which included 174 BTC already pledged as collateral to Galaxy for its loan facility.

Collateral Complexities and Discrepancies

Details regarding the collateral for the Liebel debt originate from PowerCompute's first-quarter filing. That report indicated that about 112.7 BTC was held in restricted custody for two SE & AJ Liebel loans totaling $7 million. The company's subsequent June update did not refresh that amount. A minor but unexplained naming discrepancy appeared in the July filing, which refers to the creditor as “DE & AJ Liebel.”

Further details from the first-quarter filing revealed that Galaxy Digital had the right to use or rehypothecate the pledged Bitcoin, with an obligation to return the same type and quantity of crypto upon full payment. The amount of collateral held by Galaxy had increased from 145 BTC at December 31, according to the company's annual report, to 174 BTC by March 31.

Lingering Uncertainty Over Refinancing

While PowerCompute said its anticipated Arch facility would be secured by Bitcoin in its treasury, it omitted crucial details. The company has not disclosed the specific amount of Bitcoin to be used as collateral, nor has it provided information on the loan-to-value ratio, margin-call thresholds, cure period, liquidation terms, maturity, or pricing for the new facility. It also remains unclear what happened to the Bitcoin previously held for the Galaxy and Liebel debts—whether it was returned to PowerCompute, transferred directly to Arch, or supplemented.

Consequently, the company's complete collateral stack remains unresolved. The existence of the 15% default clause provides no clarity on whether the refinancing closed or if the penalty rate was triggered. Until PowerCompute discloses the refinancing outcome and clarifies the specifics of the Bitcoin securing the Arch facility, its June 30 total of 318.3 BTC cannot be treated as a current measure of unencumbered liquidity.