Texas-based bitcoin miner Core Scientific revealed it is in serious financial trouble.
Its cash resources will run out by the end of 2022 or sooner, according to a Securities and Exchange Commission filing on Oct. 26. It will not make payments due in late October and early November with respect to several of its equipment and other financings.
Core Scientific held 24 bitcoins (worth about $495,000 at today's prices) and approximately $26.6 million in cash at the time of the filing, down from 1,051 bitcoins and approximately $29.5 million in cash just a few weeks ago on Sept. 30.
The company said it has been severely impacted by the prolonged decrease in the price of bitcoin, the increase in electricity costs, the increase in the global bitcoin network hash rate and litigation with crypto lender Celsius.
Celsius, which filed for Chapter 11 bankruptcy protection earlier this year, invested $54 million in Core Scientific in July 2021 as part of an over $200 million investment in bitcoin mining.
Core Scientific claims it is still owed $5.4 million for services related to hosting Celsius Mining. Celsius filed a motion in response, saying its bankruptcy status protects it from enforcement action and legal proceedings by creditors.
The company is in the process for exploring a number of potential strategic alternatives with respect to the company’s capital structure, including hiring strategic advisers, raising additional capital or restructuring its existing capital structure.
“The company may seek alternative sources of equity or debt financing, delay capital expenditures or evaluate potential asset sales, and potentially could seek relief under the applicable bankruptcy or insolvency laws,” it said.
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