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Core Scientific gets Questioned to Continue Work Without Additional Funding

  • Bitcoin miner Core Scientific reported net loss of $434.8 million in the third quarter of 2022

  • The Company's ability to continue as a going is under concern until November 2023.

23-Nov-2022 By: Divya Behl
Core Scientific gets

Given the financial uncertainty, Bitcoin miner Core Scientific 

Has expressed "substantial doubt" that it will be able to continue operations over the next 12 months.

The company reported a net loss of $434.8 million in the third quarter of 2022 in its quarterly report filed with the US SEC on November 22.

After $862 million in net losses in the second quarter, its total net losses for 2022 are $1.71 billion.

The company stated that in order to continue operations until November 2023, it will require additional liquidity, and that its cash resources "will be depleted by 2022 or sooner."

Given the uncertainty surrounding the Company's financial condition, there is significant doubt about the Company's ability to continue is under concern until November 2023.

It also expressed concerns about its ability to raise funds through financing or capital markets, citing "uncertainties and current market conditions" that have reduced the availability of such liquidity sources.

Rising energy costs, the falling price of Bitcoin, and an increased hash rate were also cited as reasons for its liquidity squeeze, with the company's ability to continue operating in "substantial doubt." 

Core Scientific previously stated in an SEC filing on Oct. 26 that a low Bitcoin price, rising electricity costs, and a refusal by bankrupt crypto lender Celsius to repay a $2.1 million loan could cause its cash reserves to be "depleted by the end of 2022 or sooner."

Core Scientific has taken steps to alleviate financial stress, such as lowering operating costs, deferring or reducing capital expenditures, and increasing hosting revenues.

It has also decided not to make payments to some of the companies from which it has borrowed money, warning that it may be sued for nonpayment and face interest rate increases as a result.

Core Scientific is not the only crypto mining company struggling to remain in business in the current market, with Argo Blockchain attempting to raise additional liquidity through subscription for ordinary shares and warning that if it fails to do so, it will cease operations.

Iris Energy, an Australian mining firm, is also in financial trouble, revealing in a Nov. 21 filing to the SEC that it had unplugged hardware due to "insufficient cash flow."

How many companies do you believe will be impacted by the current bear market? Share your views in the comment section below.

Read also: Are We Indirectly Banning Crypto Because of FTX?

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