Olenox $22.9M shortfall imperils off-grid Bitcoin plan

Olenox Industries reported a $22.9 million working-capital deficit at June 30, listing $3.4 million in current assets against $26.26 million in current liabilities. The company is pursuing a shift to off-grid Bitcoin mining that would use natural gas produced by its operations.

Olenox reported preliminary July production of 15.13 BTC, with a gross market value of about $1.16 million at Aug. 21 spot prices. The company noted that coin output is not equivalent to reported revenue or cash because part of the fleet’s output went to hosting providers and a final hosting invoice for power, management fees and profit share had not been finalized. Olenox showed $1.21 million in cash on its June 30 balance sheet.

In May, Olenox acquired miner CS Digital Ventures for preliminary consideration of $30 million. The deal included $14 million of Series E preferred stock and $16 million in unsecured promissory notes, plus warrants and potential contingent stock. The seven seller notes total $16 million, carry 10% annual interest, mature in May 2029 and require interest-only payments beginning August 2026 with quarterly payment mechanics. The stated principal and rate imply about $1.6 million in simple annual interest expense.

The June 30 balance sheet listed $26.26 million in current liabilities, including $14.55 million of accounts payable and accrued expenses, lease current maturities, amounts due to affiliates, credit lines, derivative liabilities, convertible notes, short-term notes and current maturities of long-term debt. The filing states that losses, negative working capital and negative operating cash flows raise substantial doubt about the company’s ability to continue as a going concern, and that there were no committed sources of additional financing at the quarter end. The company said it may need to delay or curtail planned activities if required capital is not available.

Operationally, Olenox recorded an average operational hashrate of 1.02 exahashes per second (EH/s) for July, equal to about 64% of the fleet’s economic capacity. The company cited summer heat, low-power-mode operation and normal equipment availability for the reduced utilization. July miners were hosted at third-party facilities in Texas using grid power; the off-grid plan to convert natural gas into on-site compute, targeted to reach power costs below $0.02 per kilowatt-hour, was not part of those results.

From the May 26 acquisition through June 30, CS Digital generated $1.45 million in revenue and recorded a net loss of $564,104, covering just over one month of operations under Olenox ownership. The unresolved final hosting bill for July remains a factor between mined coin production and cash generation.

On Aug. 19 Olenox disclosed a non-binding letter of intent for a potential acquisition valued at roughly $20 million, payable primarily in preferred stock with some common stock and cash. The filing shows that the gas-to-compute program is not yet operational and that hosting settlements were not finalized at quarter end.