Core Scientific reveals financial distress in SEC filing, says its end may be near
Bitcoin miner Core Scientific filed forms with the United States Securities and Exchange Commission (SEC) on Oct. 26 indicating that will not make payments due in late October and early November. The company blamed low Bitcoin prices, increased electricity costs, an increase in the global Bitcoin hash rate and litigation with the bankrupt crypto lender Celsius for the situation.
The payments the company will skip would have gone to equipment and other financing and two promissory notes. Its creditors may decide to exercise remedies such as accelerating the debt or suing the company, it noted. Those actions, in turn, could result in “events of default under the Company’s other indebtedness agreements” and more creditor remedies against the company. It adds:
Core Scientific has engaged legal and financial advisers and is negotiating with creditors and considering restructuring its capital. It may also initiate bankruptcy proceedings, the filing warned. The company’s coffers have shrunk from 1,051 Bitcoins (BTC ) and $29.5 million in cash on Sept. 30 to 24 BTC and $26.6 million on Oct. 26. Core Scientific had holdings of 8,058 BTC as of May 31.
If you wonder how Core Scientific has got here, take a look at how it managed to grow quarterly #BTC production through the spiking D/E ratio. pic.twitter.com/6o8GDNJktI
The company has an equity line of credit with B. Riley with the right to sell up to $100,000,000 of common stock to the financial services company. It had received $20.7 million in net proceeds from the agreement as of Oct. 26.
Related: B. Riley may purchase up to $100M stake in Bitcoin miner Iris Energy
Core Scientific filed papers in court on Oct. 19 claiming that Celsius had refused to pay its bills to the company
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