We’ve been tracking an unusual corporate restructuring that reveals something larger about where value creation is heading in the evolving crypto-biotech landscape.
Coeptis Therapeutics Holdings, Inc. (Nasdaq: COEP) recently filed documents detailing a merger with Z-Squared, Inc., a Dogecoin and Litecoin mining operation. The combined valuation sits at approximately $835 million—$660 million attributed to Z-Squared’s mining infrastructure, $75 million to a planned biotech spin-out, and roughly $100 million in tax-loss carryforwards.
The structure itself is straightforward. Post-merger, Z-Squared shareholders will own 79% of the combined entity, with existing Coeptis shareholders retaining 21%. David Halabu will serve as CEO, and Michelle Burke—formerly COO of Minting Dome Inc.—will take the COO role.
But the strategic implications run deeper than the org chart suggests.
This transaction represents a calculated departure from the crowded Bitcoin mining sector. Z-Squared currently operates 9,000 U.S.-based Dogecoin mining machines at full capacity, positioning the merged company as what the filings describe as “the largest publicly-traded, Dogecoin-focused mining company in the world.” The existing infrastructure demonstrates operational maturity, while the hosting agreements and internal logistics capabilities provide the foundation for potential fleet expansion as market conditions evolve.
The Economics of Merged Mining: Why Dogecoin and Litecoin Create Dual Revenue Streams
Dogecoin uses AuxPoW merged mining technology. This allows miners to automatically receive DOGE coins while mining Litecoin.
The dual-reward system generates approximately $6.80 to $7.00 per day in combined LTC and DOGE revenue per mining rig before electricity costs, based on current hardware like the Bitmain Antminer L7.
This matters because it creates operational leverage that Bitcoin-only miners don’t have.
Dogecoin maintains a market capitalization exceeding $20 billion. The proof-of-work rewards from both the Dogecoin and Litecoin blockchain networks provide diversified income streams tied to altcoin economics rather than Bitcoin’s increasingly competitive hashrate wars.
Industry projections suggest that merged mining will continue as a major profitability driver for ASIC operators through 2026, particularly for operators with favorable power costs and efficient hardware deployment.
Power Costs Remain the Dominant Variable
Electricity prices determine profitability more than any other factor in LTC/DOGE mining operations.
Z-Squared has established hosting agreements across multiple jurisdictions and built proprietary software systems designed to manage energy use and optimize performance in real time. The company developed internal logistics and repair capabilities that reduce equipment downtime and extend mining rig lifespans.
These operational efficiencies create more durable infrastructure that positions Z-Squared to maintain competitive advantages even as the sector evolves and technology advances.
Valuation Methodology: How Z-Squared’s $660M Benchmark Compares to Bitcoin Mining Peers
The $660 million valuation for Z-Squared relies on two methodologies: Discounted Cash Flow (DCF) and Guideline Public Company Comparisons (GPC).
The GPC analysis benchmarks against established Bitcoin miners.
Riot Platforms trades at approximately $5.91 billion with 50 exahashes per second (EH/s) of operational hashrate. CleanSpark positions itself as “America’s Bitcoin Miner” with similar operational targets.
These valuations provide context for Z-Squared’s assessment. The DCF model projects that at full capacity, Z-Squared could generate $60 to $75 million in annual EBITDA, equating to $3.00 to $3.25 in earnings per share.
Hardware Valuation and Infrastructure Assets
The merger brings hardware valued at approximately $660 million. This includes 9,000 mining machines, hosting infrastructure, and the software systems that manage operations.
The hardware itself represents tangible assets with measurable output capacity. The hosting agreements provide operational flexibility across different energy markets and regulatory environments.
But the real differentiation lies in the altcoin focus.
Bitcoin mining has become saturated with institutional capital and industrial-scale operations. The hashrate difficulty continues to increase, compressing margins for all but the most efficient operators with the cheapest power.
Dogecoin and Litecoin mining operates in a less crowded space. The merged mining economics create dual revenue streams that provide natural hedging against single-coin price volatility.
The Biotech Spin-Out: Strategic Optionality in a Dual-Sector Model
The planned biotech spin-out, valued at $75 million, represents the second component of Coeptis’ dual-sector strategy.
SEC filings describe this structure as “a shift toward anti-fragile biotech models—enterprises designed to create value whether through clinical success, digital scalability, or asset monetization.”
The spin-out model has precedent in pharma M&A.
Johnson & Johnson’s 2017 Actelion acquisition and Pfizer’s 2022 Biohaven acquisition both used spin-out structures to separate early-stage pipeline assets. This allows buyers to focus on commercial-stage products while maintaining optionality on earlier research.
Recent Series A biotech valuations average approximately $79.4 million, with strong Series B companies crossing $150 million. The $75 million valuation for Coeptis’ biotech spin-out aligns with these benchmarks.
Tax-Loss Carryforwards as Operational Leverage
Coeptis holds approximately $100 million in tax-loss carryforwards.
These carryforwards can offset future taxable income from Z-Squared’s mining operations. This creates operational leverage rarely available in pure-play mining companies.
The tax advantage adds tangible value to the combined $835 million estimated valuation. It reduces the effective tax burden on mining revenue, improving net margins and cash flow generation.
Market Positioning: First-Mover Advantage in Publicly-Traded Altcoin Mining
The combined entity positions itself as a first-mover in the publicly-traded altcoin mining space.
Bitcoin mining companies dominate the public markets. Riot, Marathon Digital, CleanSpark, and others have established market positions focused exclusively on Bitcoin hashrate expansion.
Z-Squared’s Dogecoin focus creates differentiation.
The company taps into proof-of-work rewards from a blockchain network with over $20 billion in market capitalization, while avoiding direct competition with Bitcoin’s industrial mining infrastructure.
The merged mining economics with Litecoin provide additional revenue diversification. Current market dynamics suggest continued potential for LTC and DOGE price appreciation, which could make mining “even more lucrative” for operators with efficient hardware and favorable power costs.
Leadership Experience in International Mining Operations
Michelle Burke’s appointment as COO brings relevant operational experience. Her previous role at Minting Dome Inc. involved managing international mining logistics and hardware deployment across different energy markets and regulatory environments.
This operational expertise becomes valuable as the merged company scales infrastructure and optimizes performance across multiple hosting locations.
Value Drivers: What Powers the $835M Valuation Thesis
The $835 million combined valuation builds on several interconnected operational advantages and market positioning elements.
Dogecoin and Litecoin price performance directly amplifies mining economics.
The merged mining structure creates upside exposure to both DOGE and LTC appreciation. With Dogecoin maintaining over $20 billion in market capitalization and growing institutional interest in altcoins, the dual-revenue model positions Z-Squared to capitalize on continued market development in both ecosystems.
Energy cost optimization represents Z-Squared’s core competitive advantage. The company’s multi-jurisdictional hosting agreements and proprietary energy management software enable dynamic allocation across the most favorable power markets, creating margin expansion opportunities as operations scale.
Z-Squared’s internal maintenance capabilities and hardware management systems extend equipment lifespans beyond industry averages. As mining technology continues advancing, the company’s in-house logistics infrastructure positions it to upgrade equipment efficiently and maintain operational performance.
Strategic Infrastructure and Multi-Jurisdictional Advantages
The hosting agreements across multiple jurisdictions provide operational flexibility that enhances both performance optimization and regulatory positioning.
This multi-jurisdictional approach creates geographic diversification that allows the company to capitalize on favorable energy policies and evolving cryptocurrency regulations. The infrastructure provides natural hedging while maintaining operational agility across different markets.
Comparative Analysis: How Portfolio Separation Creates Shareholder Optionality
This structure allows shareholders to hold exposure to both sectors while enabling each company to pursue financing and partnerships appropriate to its specific market. The mining entity focuses on operational efficiency and infrastructure scaling, while the biotech company develops clinical programs independent of crypto market conditions.
The merged entity generates cash flow from digital asset production and technology services. The separately spun-out biotech company provides shareholders exposure to clinical development and potential pharmaceutical partnerships. The tax-loss carryforwards improve the economics of the mining/technology entity.
The transaction structure—mining operations for the combined entity, biotech spin-out as a separate company—creates optionality for shareholders that pure-play investments lack.
Valuation Multiples and Market Comparisons
Bitcoin mining companies trade at varying multiples depending on operational efficiency, hashrate capacity, and balance sheet strength.
Riot’s $5.91 billion market cap with 50 EH/s provides one benchmark. CleanSpark’s positioning as a U.S.-focused miner with similar operational targets offers another comparison point.
Z-Squared’s $660 million valuation reflects its altcoin focus and smaller scale relative to Bitcoin mining leaders. The GPC methodology accounts for these differences while recognizing the operational similarities in mining infrastructure and energy management.
Strategic Implications: What This Transaction Signals About Market Evolution
The Coeptis-Z-Squared merger represents a broader trend in how companies create value across multiple sectors.
Traditional sector boundaries are becoming more fluid.
Biotech companies increasingly explore digital revenue streams. Mining operations seek diversification beyond Bitcoin’s saturated market. Tax-loss carryforwards become strategic assets that enhance operational economics.
The dual-sector model creates resilience through complementary value streams. The biotech spin-out develops independent value through clinical advancement, while mining operations generate consistent cash flow. Each component enhances the other’s strategic positioning.
This anti-fragile structure—designed to create value across multiple scenarios—reflects a shift in how companies think about portfolio construction and strategic diversification.
Investor Considerations: What the Numbers Actually Mean
The $835 million combined valuation breaks down into three components with distinct value creation pathways.
Z-Squared’s $660 million mining valuation leverages Dogecoin and Litecoin economics, optimized energy costs, and operational excellence. The DCF projections of $60 to $75 million in annual EBITDA establish clear performance benchmarks with significant upside potential as operations reach full capacity.
The $75 million biotech spin-out valuation aligns with Series A benchmarks and creates optionality through clinical development. Success in this component generates substantial upside independent of mining performance, while the dual-sector structure provides multiple pathways to value creation.
The $100 million in tax-loss carryforwards provides tangible value through reduced tax burden on mining revenue. This component enhances cash flow generation and creates operational leverage that compounds as mining operations scale profitably.
The Altcoin Arbitrage Thesis: Why Differentiation Matters More Than Scale
Bitcoin mining has become an arms race of hashrate expansion and energy cost reduction.
The largest operators have institutional backing, access to the cheapest power, and the most efficient hardware—creating a highly competitive landscape.
Z-Squared’s Dogecoin focus sidesteps this dynamic entirely.
The company operates in a less saturated market with dual revenue streams from merged mining. The $20 billion Dogecoin market cap provides sufficient liquidity and mining rewards to support meaningful operations.
The merged mining with Litecoin creates natural diversification. Operators receive rewards from both blockchains simultaneously, improving economics relative to single-coin mining.
This structural advantage—operating in a less crowded altcoin space with dual revenue streams—represents the core thesis behind Z-Squared’s valuation.
What Full Capacity Operations Would Mean for Earnings
At full capacity, Z-Squared’s projected $60 to $75 million in annual EBITDA translates to $3.00 to $3.25 in earnings per share.
These projections assume stable Dogecoin and Litecoin prices, consistent energy costs, and operational efficiency across the 9,000-machine fleet.
The earnings potential provides a framework for assessing valuation relative to Bitcoin mining peers. The altcoin focus and dual-sector structure create differentiation, but the mining economics ultimately depend on the same fundamentals: hardware efficiency, energy costs, and coin prices.
Looking Forward: What This Transaction Reveals About Evolving Value Creation Models
The Coeptis-Z-Squared merger illuminates several trends shaping how companies create and capture value.
First, sector boundaries are becoming more permeable.
Biotech companies explore digital assets. Mining operations pursue pharmaceutical partnerships through spin-outs. Tax advantages from legacy operations enhance new business models.
Second, differentiation matters more than scale in saturated markets. Z-Squared’s altcoin focus creates positioning that Bitcoin mining scale alone cannot replicate.
Third, dual-sector models provide resilience through diversified risk exposure. The combined entity can pursue opportunities in both crypto mining and biotech development, with each component creating value independently.
The $835 million valuation reflects these strategic elements. Whether that valuation proves accurate depends on execution across multiple dimensions: mining operations, energy management, biotech development, and market conditions in both sectors.
But the structure itself—a publicly-traded company with exposure to altcoin mining economics, biotech development, and tax advantages—represents an approach to value creation that extends beyond traditional sector definitions.
We’ll continue tracking how this dual-sector model performs as the merger completes and operations scale.
The Dogecoin and Litecoin mining economics, the biotech spin-out development, and the utilization of tax-loss carryforwards will all contribute to whether the $835 million valuation thesis holds.
For now, the transaction provides a clear example of how companies are rethinking portfolio construction, sector positioning, and value creation in markets where traditional boundaries no longer constrain strategic options.
DISCLAIMER
This analysis is for informational purposes only and does not constitute investment advice. The content is based on publicly available SEC filings and should not be relied upon as the sole basis for investment decisions. Readers should conduct independent research and consult qualified financial professionals before making investment decisions. Digital asset mining and biotechnology investments involve substantial risks. Forward-looking statements are subject to risks and uncertainties, and actual results may differ materially.
