PowerCompute adds $3.765 million collar unwind to bitcoin loan

PowerCompute added a $3.765 million derivatives-unwind cost to its bitcoin-backed loan after terminating the original collar 22 days into a planned 30-day period, an executed agreement filed with the Securities and Exchange Commission on Friday shows.

The cost increased principal from $18.127 million to $21.892 million, or approximately 20.8% by Coinburn’s calculation. The replacement facility continues to pledge 307 BTC but carries a 6.5% annual interest rate, up from 2% under the Aug. 3 agreement.

The disclosure matters because it quantifies a cost that was not visible when PowerCompute initially presented the structure as a way to refinance debt without selling bitcoin. It also illustrates how a corporate bitcoin treasury can remain exposed to financing and derivatives costs even when the underlying loan is described as non-recourse and designed to reduce liquidation risk.

The original collar ended early

PowerCompute entered the initial Arch Lending facility on Aug. 3, borrowing $18.127 million against 307 BTC. That rolling period was scheduled to end Sept. 2 and used a $58,860 floor and $66,370 ceiling, according to the subsequently filed reset confirmation.

The parties instead terminated it by agreement on Aug. 25, after 22 days. The contract records a $3.765 million cost for unwinding the original collar and says that amount was added to the loan rather than paid in cash or USDC. It also states that the charge fully satisfied any excess-appreciation amount for the terminated period.

PowerCompute’s shorter Form 8-K describes the same amount as proceeds used to fund the prior collar feature. The executed annex provides the more precise accounting: principal moved directly from $18.127 million to $21.892 million because of the unwind cost. Approximately $18.1 million of the replacement principal retired the earlier Arch loan.

The annex records a $78,500 BTC reference price at the Aug. 25 reset. That is the lender-determined last-trade price specified by the contract for the pledged bitcoin at the reset time—not a Coinburn spot quote, exchange closing auction, volume-weighted average or measure of bitcoin’s current value.

A new barrier changes the payoff

The replacement rolling period runs from Aug. 25 through Sept. 24. Its contractual floor is $71,112 per BTC, its ceiling is $75,000 and its knock-in barrier is $93,500. Interest for the period is fixed at $118,582.38, calculated in the agreement using the $21.892 million principal, a 6.5% annual rate and a 30/360 convention.

Those thresholds are tested at 8 a.m. Eastern on Sept. 24, rather than continuously. The annex says intraday moves before the reset have no effect. If the reference price remains below $93,500 at the test, the ceiling does not activate and PowerCompute retains the collateral’s appreciation, including appreciation above $75,000.

If the reference price is at least $93,500, the ceiling activates for the entire period. Excess appreciation above $75,000 across the 307 pledged BTC then goes to Arch through bitcoin retention, a cash or USDC payment, an addition to principal, or revised terms on another roll.

The annex separately states that price movement alone does not trigger a margin call or liquidation during the rolling period. That protection does not eliminate maturity obligations, default provisions or settlement risk.

Most of the reported treasury remains pledged

PowerCompute reported 315.1 BTC as of July 31, including the 307 BTC committed to the facility. On that dated company-reported basis, Coinburn calculates that approximately 97.4% of its disclosed treasury was pledged. The company’s holdings may have changed since July 31, so that ratio is not a current balance-sheet measurement.

The company’s Aug. 14 quarterly filing also said substantial doubt about its ability to continue as a going concern had not been alleviated. That filing covered conditions through June 30 and preceded both Arch structures; it is context, not evidence that a default has occurred.

The verified chronology is therefore limited: the original facility began Aug. 3, was restructured Aug. 25, and the executed replacement documents became public through the Aug. 28 SEC filing. The next observable checkpoint is Sept. 24, when the new price test, repayment decision or another negotiated roll is due.