Core Scientific is going through a rough patch. The Bitcoin miner has filed forms with the SEC revealing that due to several factors, it will not be able to make payments on time.
Bitcoin miner Core Scientific filed forms with the United States Securities and Exchange Commission 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 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. 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 added:
“The Company anticipates that existing cash resources will be depleted by the end of 2022 or sooner. […] Given the uncertainty regarding the Company’s financial condition, substantial doubt exists about the Company’s ability to continue as a going concern for a reasonable period of time.” 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 shrunk from 1,051 BTC and $29.5 million in cash on Sept. 30 to 24 BTC and $26.6 million on Oct. 26.
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