One of the major Bitcoin mining firms, Core Scientific, recently completed a $55 million equity funding round. The platform has now opted for insolvency. The firm has noted that the offering was oversubscribed and the funding is now going to be returned to investors.
The platform announced on 8th January, that the $55 million equity expired last week. The platform noted that full repayment of the previously withdrawn amount of debtor-in-possession (DIP) listed on financing is going to be added to Chapter 11 filing in January.
The platform further noted that the filing will also account for additional liquidity. CEO Adam Sullivan noted that the forum is going to continue the growth plan execution. The platform disclosed $2.3 million in asset holdings and $559 million in liabilities out of the total $1.8 billion equity.
The platform is also making plans to apply for a relisting at NASDAQ after the bankruptcy proceedings have been fulfilled. On 4th January, 2024 Core Scientific declared that it was preparing for repayment of DIP‘s outstanding balance for creditor B.Riley Financial. The $35 million funding in DIP contract has remained accessible to the firm.
Core Scientific Recovers from Insolvency
Core Scientific opted for a bankruptcy proceeding in December, 2022. The platform sustained massive losses on account of the crypto bear market and energy cost inflation. At the same time, the mining company also quoted mining difficulty and debt write offs from Celsius as one of the major causes of the fall in revenues.
The company managed to recover from insolvent condition using its restructuring plan with $709 million in outstanding payments and an additional $791 million in the form of shareholder’s equity. Core Scientific shareholders are looking forward to receive new shares issues.
The new shares will provide them trading platform share at $1.08 per unit rate. The mining firm has declared that the noteholders are going to receive $1.628 on every $1 convertible note in April.
Furthermore, the exchange will also issue $1.201 per $1 face value of notes payable in August. The platform finalized $77 million deal to purchase 27 thousand Bitcoin mining units from Bitmain in September, 2023. Anchorage, another mining firm holds equity stake in the acquisition contract.
Core Scientific to Assist Bitmain in Expanding Mining Operations
In addition to mining unit purchases, Core Scientific has also signed a hosting agreement with Bitmain. As per the court agreement, Bitmain agreed to pay mining hardware in exchange for cash and equity payment based on the restructuring plan of Core Scientific.
The platform is set to provide mining rigs at $23 million in cash plus $53.9 million in common stocks of Core Scientific. The insolvency filing of the mining farm is also inclusive of BlockFi, Mass Mutual Asset Finance, and Anchorage.
The platform appointed Adam Sullivan as the new CEO of the firm during bankruptcy proceedings starting in August last year. Former CEO and co-founder Mike Levitt is currently serving as the chairperson of board. Before joining Core Scientific, Sullivan was associated with XMS Capital Partners and managing transactions valued at $5 billion.
He also supervised the merge of Core Scientific with Power and Digital Infrastructure Acquisition in 2021. The mining firm underwent an increase in liquidity on account of Bitcoin price appreciation, mining power increment, and declining energy prices.