Bitcoin Miner Core Scientific Says It May Seek Bankruptcy

Operating performance and liquidity have been severely affected by a prolonged drop in the price of bitcoin, rising electricity costs, increased competition and litigation with the bankrupt Celsius Network LLC, the Austin, Texas-based company said in a US Securities and Exchange Commission filing. Said. on Thursday. Shares of Core Scientific fell more than 40% in trading ahead of regular market timing.

Bitcoin mining companies such as Core Scientific were recently opting to sell equities, resorting to one of their least lucrative options to raise money as profits dried up and higher interest rates made borrowing more expensive. The company entered into a $100 million common stock purchase agreement with B. Riley Principal Capital II in July. Bitcoin is down almost 70% since hitting a record high in November 2021.

Core Scientific said it would not make payments in late October and early November in relation to a number of equipment and other financing, including two bridge promissory notes. The company is exploring options including hiring strategic advisors, raising additional capital or restructuring its existing capital structure.

Core Scientific 24. Held bitcoins and about $26.6 million in cash as of Thursday. This compared with 1,051 bitcoins and approximately $29.5 million in cash as of September, the company said in the filing.

Shares that traded up to $14.32 are now down about 37 cents. They have registered a decline of over 90% this year.

Other work by Core Scientific:

• Adds Weil, Gotshal & Mange as Legal Adviser and PJT Partners as Financial Adviser
• Started engaging in discussions with creditors regarding initiatives to improve liquidity
• May seek alternative sources of equity or debt financing, delay capital expenditures or evaluate potential asset sales
• potentially seek relief under applicable bankruptcy or insolvency laws

This story has been published without modification in text from a wire agency feed.