According to a CNBC report that cited a person familiar with the company’s finances, Core Scientific is still generating positive cash flow, but cash is not enough to cover the financing debt owed on equipment it was leasing.

Core Scientific Will Continue Mining Amid Bankruptcy

The report added that the mining firm would not liquidate but would continue its mining operations while reaching a deal with senior security noteholders, which hold most of Core Scientific’s debt.

The latest development comes nearly two months after reports emerged that the mining firm might consider filing for Chapter 11 bankruptcy if its financial health does not improve.

Core Scientific has been experiencing financial issues over the past few months due to the bear market that started at the beginning of this year and litigation with one of its debtors, Celsius Network, which filed for bankruptcy in Q2.

In November, the mining firm revealed that it suffered a second consecutive quarterly loss in Q3, bringing its total loss to nearly $1.7 billion this year. Core Scientific lost $435 million in Q3 and $862 million in Q2. The miner attributed the losses to a decline in bitcoin prices, increasing electricity costs and global hash rate.

Core Scientific has also been unable to clear its debts, which reportedly amount to a staggering $1 billion.

A $72 Million Bailout Offer

Last week, the Bitcoin mining firm was offered a $72 million debt restructuring package to avoid bankruptcy by one of its largest creditors — B. Riley. However, that seems not to have saved the company from its financial crises.

Meanwhile, Core Scientific’s stock CORZ has been severely impacted this year following the company’s financial woes. CORZ, which traded at $10 at the beginning of the year, is currently trading at $0.21, a 98% drop.

The firm’s market cap dropped to $78 million on Tuesday, down from the $4.3 billion valuation in July 2021, when the Bitcoin miner went public.

(By William A. Frederick)