Shareholder-Led Group Sets the Record Straight on Its Meeting with Ionic Digital

Expresses Concern with Inability of Management or Board to Answer Simple Questions About the Business

Explains Proposed Plan for Reconstitution of Board to Drive Turnaround at Ionic

Urges Shareholders to Support Call for a Special Meeting to Vote on Much-Needed Board Refreshment and Governance Change

NEW YORK, NY – October 31, 2024 – Tony Vejseli, a shareholder of Ionic Digital, Inc. (“Ionic” or the “Company”), together with Figure Markets Holdings Inc. and GXD Labs, LLC (collectively, “the Group”) announced today their intention to set the record straight on the events of their meeting with the board of directors (the “Board”), management and counsel of Ionic on the afternoon of October 28th at the offices of White & Case, LLP in midtown Manhattan. 

The Group would like to thank White & Case for hosting and the members of the Board and management team for attending.  However, in the Group’s view Ionic’s subsequent press release was littered with inaccuracies and blatant falsehoods regarding the meeting, which the Group believes require prompt clarification.

It was quite clear to the Group that Ionic did not “reaffirm” its strong momentum in the meeting.  Instead, the Group came away with the impression that the Board demonstrated minimal command of the fundamental operating metrics which any qualified director should have at their fingertips, and which knowledge would certainly be expected of a Board paying itself approximately $450,000 per director per year of shareholder money.  The conversation was far from confidence inspiring and left the Group more concerned about Ionic’s current competitive position and valuation than when they started the meeting.

Mr. Vejseli asked a series of basic questions regarding the Company’s operations and performance, recapped in his post on X, to which any shareholder of any corporation would reasonably expect to receive answers, but which were instead met with zero substantive engagement from anyone at the Company.  Specifically, despite Ionic’s claim to “laser-focus” on implementing its “plan”:

• It was apparent that the Board had not considered the possibility of other liquidity options for shareholders and had no explanation for the Board-imposed trading restrictions.

• The Group presented several options that seek to ensure listing and liquidity in a regulatorily-compliant marketplace; however, it was clear none of these options had been researched or given adequate consideration by the Board.

• Neither the Board nor management could articulate a path forward with respect to its contract with its apparent competitor Hut 8, in which the Company is stuck and neither the Board nor management seemed able to comprehend the Group’s proposed solution.

• Despite repeated requests, the Company could not produce a single number with respect to its operating performance, making the Group skeptical of the ability of the Company and its new auditor to complete a proper audit by the end of Q1 2025.  The Board’s celebration of hiring this new auditor after six months, with the completion of the audit subject to further delay, is in the Group’s eyes yet another example of the directors’ failure to understand the reality and gravity of the Company’s situation.

• No one from Ionic was able to disclose a single expense number during the meeting, as they have been unable to do for the last nine months, nor could they even provide a figure for the Company’s EBITDA. The Group is extremely skeptical of Ionic’s promise to communicate often, transparently and informatively in light of the absolute lack of transparency displayed to date and its ongoing failure to provide basic information let alone critical information relating to expenses.

The Group presented a proposal for much-needed Board refreshment at the Company, which it believes can help restore shareholders faith in the Company and its management and put the Company on the path to profitability and liquidity.. The Group proposed that Tom DiFiore, Scott Duffy and Emmanuel Aidoo step down the Board, to be replaced by three new, independent directors with the requisite experience and skill sets absent from the current Board.

The Group also suggested pathways to provide liquidity for shareholders and set the Company on a road to sustainability that the current Board seems to have ignored to date. Contrary to the Company’s assertion that critical details were absent from the Group’s proposals, the Group notes that all key components of its plan were included in the presentation provided to the entire Board and Ionic management. However, it is clear to the Group that the Board as currently constituted may be incapable of properly considering or implementing these proposals at all. The Group believes the current members of the Board are unqualified to act as fiduciaries and unable to execute on its ideas given their long-term track record of inexperience and value destruction, but a reconstituted Board acting in the best interests of shareholders could properly consider and evaluate all viable options for the Company’s future.

The Group reiterates its certainty that Ionic is not a “best in class” “leader” nor “emerging innovator” in the bitcoin mining industry and that it is time for change at the board level.  

The Group urges shareholders to show their support for a special meeting to vote to remove Scott Duffy, Tom DiFore and Emmanuel Aidoo from the Board for cause by filling out this form.