Lien Documents Against Bitwise Paint Desperate Financial Picture

Lenders may have to get in line to get what’s owed them if financially-distressed Bitwise can’t turn things around.

The California Secretary of State posts claims that lenders make to borrowers through the Uniform Commercial Code. Lenders detail in these documents what was offered as collateral should a borrower not be able to pay back what is owed.

UCC filings are not rare in business finance and are not on their own a sign of financial distress. Seven filings to Bitwise entities were posted as fulfilled.

A Bitwise spokeswoman declined to comment for this story.

The following are active liens against Bitwise:

A Chowchilla Lender Secures 5% of Bitwise 12 Days Before Furloughs

• 6.7 million shares in BW Industries from former co-CEO Irma Olguin Jr. to Agri Capital Inc., a Chowchilla-based lending company.
• 6.4 million shares in BW Industries from former co-CEO Jake Soberal to Agri Capital Inc.
• Bitwise’s parent company, BW Industries Inc., posted a total of 275 million shares on a state of Delaware website, making the combined 13.1 million shares owed to Agri Capital a roughly 4.7% ownership.

Calls for comment made by GV Wire to Agri Capital were not returned.

Bitwise Double Dips on Employee Retention Credits

• In October 2022, Bitwise leveraged  $4 million in employee retention credits from the IRS toward a loan from investment company 1861 Acquisition LLC. In November, $2 million were leveraged to the same company. Court documents show the tax credits were valued at more than $6 million. ERC provided up to $26,000 per employee for keeping workers employed through the Covid pandemic. The Connecticut company is suing Bitwise to collect the money, accusing Soberal and Bitwise of fraud.
• Colorado-based investment company Greenline Ventures listed Employee Retention Credits from the same time period as collateral in a filing. Calls made to Greenline Ventures were not returned.
• Redwood City-based Sobrato Family Foundation listed “all personal property assets” of Bitwise Technology Consulting, LLC. Real estate magnate John Sobrato started the foundation in 1998, providing philanthropic support for Silicon Valley nonprofits, according to the foundation’s website. A call to the Sobrato Foundation was not returned. Vague listings against “all assets” are typically unsecured loans.

Bitwise’s Growing Office Needs

• Cisco Systems Capital Corp. listed office equipment as collateral against Bitwise Industries Inc.
• One Apple computer tower and one Pro Display XDR, a computer monitor that can cost as much as $5,000, was listed as collateral, as well as a 24-inch iMac against Bitwise Design Inc. from Illinois-based Secured Lender Solutions LLC.
• Computer equipment from Dell Financial Services LLC against Bitwise Industries Inc.
• Equipment leased from Apple Financial Services Powered by De Lage Landen Financial Services against Bitwise Industries.
• 13 13-inch MacBook Pros and three 16-inch MacBook Pros from CHTD Co.
• Five 13-inch MacBook Pros and two 16-inch MacBook Pros from Financial Agent Services.
• An office equipment lease from Camber Road Partners Inc.

2020 Listings Still Active

• Two 16-inch MacBook Pros and three 13.3-inch MacBook Pros from Secured Lender Solution, LLC.

2019 Listings Still Active

• Eight MacBook Pros listed by Illinois-based Financial Agent Services.
• A lien financing statement posted in 2018 from Secured Lender Solutions LLC was amended in 2019 to include 10 MacBook Pros.