Core Scientific might not make it past November 2023 after revealing $1.7B in losses

Hull Invest

Core Scientific, one of the largest publicly traded Bitcoin miners, may not be successful until the end of the year.

In its quarterly report filed with the SEC, the company said it had “substantial doubt” about its ability to continue if it failed to raise its liquidity.

“However, our ability to raise funds through funding and capital market transactions is subject to a number of risks and uncertainties, and current market conditions may reduce the availability of these capital and liquidity sources. I’m here.

We expect our existing cash resources to be exhausted by the end of 2022. Given the uncertainties regarding our financial position, there is considerable doubt as to our ability to continue as a going concern through November 2023. ”

Allegations about the company’s solvency were first raised at the end of October. Earlier filings revealed that rising electricity prices and falling Bitcoin prices have severely impacted performance and liquidity.

core scientific 10-Q filing There is no doubt that the company is struggling, as it reported a net loss of $434.8 million in the third quarter alone. His $862 million net loss in the second quarter brought the company’s total net loss for the nine months ending September 30 to $1.71 billion.

core scientific net loss
Table showing Core Scientific third quarter and annual net losses for 2021 and 2022 (Source: SEC)

For the full year, the company made just $519 million in revenue. Third quarter earnings were $162.5 million.

core scientific interest
Table showing Core Scientific third quarter and annual earnings for 2021 and 2022 (Source: SEC)

Core Scientific claims that the losses incurred are the result of rising electricity costs and a rapid decline in the price of Bitcoin. Most of the company’s hosting revenue came from his two customers, one accounted for 46% of his 2022 revenue, and his other 19%. .

In another part of the filing, the company said Celsius was “one of its biggest customers.” Since filing for voluntary relief under Chapter 11 in September, Celsius is reportedly seeking to withhold payment of certain fees charged as part of his contract with Core Scientific. It is The company is actively seeking resolution from bankruptcy court.

However, the filing clarifies that losses incurred by Core Scientific from other expenses may reduce the amount it is seeking from Celsius.

The company has revealed that it provides hosting services to entities controlled and owned by company executives. He also sold mining equipment to his own executives and more than doubled his revenue from those sales last year.

Equipment sales revenue from the company’s executives doubled from $29.1 million in 2021 to $67.3 million in 2022.

Since the beginning of the year, Core Scientific has spent $1.8 million on executives’ private jets and travel. Also on the exchange he lost $13.1 million and over a period of 130 months he signed a contract to lease office space in the new headquarters by paying a base rent of $14 million.

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