Bitwise Industries, the technology incubator and real estate company based in downtown Fresno, is reportedly in financial flux with late property tax payments and rent payments amid allegations of seeking high-interest loan deals from investors.
Multiple sources told The Sun that Bitwise co-CEO Jake Soberal has solicited short-term, high interest loans with interest rates ranging between 35 and 50 percent.
Driving the news: The tech incubator, which celebrated a sweeping $80 million investment from firms including Goldman Sachs and Citibank in late February, failed to pay its property taxes on four downtown Fresno buildings, according to records from the Fresno County Assessor’s Office.
- The company was supposed to make a payment of $122,000 on April 10 as the second installment for the 2022-23 tax rolls but failed to do so. It paid its first installment of $122,000 one month late.
- Bitwise has also not paid $500,000 in rent for three buildings that it leases in downtown Fresno, according to a report by GV Wire.
- Shortly after its trumpeted investment from the Kapor Center, The Motley Fool, Goldman Sachs and Citibank, Bitwise listed its three remaining California properties, located in Bakersfield, for sale with a leaseback.
- In recent weeks, the firm’s CEO has sought seven-figure short-term loans, with terms ranging from 30 to 90 days and rates as high as 50 percent during the term, sources with knowledge of the funding solicitations told The Sun.
In the courtroom: Elsewhere, Bitwise settled a lawsuit regarding a refurbished warehouse on R St. and Inyo St. where the company is currently in the process of moving in.
- According to the lawsuit, Bitwise refused to move in or pay the monthly rent of $150,000 when the building was ready for business in December 2021.
- The company settled the lawsuit by purchasing the building for $21 million.
What they’re saying: When asked by The Sun to confirm its pursuit of high-interest, short-term loans solicited by Soberal, a spokesperson for Bitwise declined to comment, citing confidentiality.
- The spokesperson said that the company is constantly engaging in debt and equity transactions as a normal course of business. And despite the reports of missed property tax and rent payments as signs of liquidity issues, Bitwise officials said it is in healthy shape financially.
- “The company is confident in its current financial position,” the Bitwise spokesperson told The Sun. “There is no present concern on the future of the company. As part of the thriving ecosystems of downtown businesses committed to the economic growth of our city, Bitwise Industries has spent the last decade demonstrating the power of digital transformation. Bitwise Industries will continue its work creating spaces that unite communities, while spurring economic and business growth in underserved communities.”