Core Scientific, Inc. — Form 8-K Summary
Reporting date: August 1, 2022; filed August 4, 2022. The filing reports financing transactions and related equity issuance. It does not provide operating results for a comparable reporting period.
Business Context and Transaction
Core Scientific entered into two amended and restated unsecured bridge promissory notes with B. Riley entities: $60 million with B. Riley Commercial Capital, LLC and $15 million with an affiliate, for aggregate principal of $75 million. The proceeds were used for working capital and general corporate purposes.
Financial Metrics and Liquidity
| Item | Amount or Terms |
|---|---|
| Aggregate principal | $75 million |
| Interest rate | 7% per annum |
| Original maturity | December 7, 2022 |
| Amended maturity | June 1, 2023 |
| Initial payment | $18.0 million on August 1, 2022 |
| Scheduled payments | $4.875 million monthly from September through December 2022; $6.25 million monthly from January through May 2023 |
| Advisory fee | $750,000, paid in common stock |
| Shares issued for advisory fee | 386,697 shares |
The filing does not provide revenue, profit, cash flow, margin, total debt, or cash balance information.
Material Changes Versus Prior Disclosure
- The amended and restated notes extend the maturity date from December 7, 2022 to June 1, 2023.
- The notes establish scheduled principal amortization beginning August 1, 2022 and continuing through May 1, 2023.
- The company issued 386,697 common shares to B. Riley Securities, Inc. for the $750,000 advisory fee and agreed to register those shares for resale.
Covenants, Risks, and Unusual Items
- Specified equity issuance proceeds, certain secured debt proceeds exceeding $500 million, and 25% of net cash proceeds from equity line of credit sales must be applied to repay the notes, subject to stated exceptions.
- The notes include quarterly financial reporting requirements and negative covenants restricting mergers, material asset dispositions, certain dividends or distributions, prepayment of contractually subordinated debt, affiliate transactions, and certain material contract changes.
- Payment defaults, covenant breaches, and other customary events of default may permit acceleration of the notes.
- The notes are unsecured and are not guaranteed by any Core Scientific subsidiary.
- The advisory-fee shares were issued in an unregistered transaction under Section 4(a)(2) and Rule 506(b) of Regulation D.
Key Facts for Investors to Verify
- Whether Core Scientific met the scheduled principal payments and quarterly reporting covenant.
- Available cash and liquidity relative to the $75 million note obligations and required amortization schedule.
- Any equity line of credit sales, new secured debt, or other equity issuances that could trigger mandatory repayments.
- Whether any event of default or acceleration has occurred.
- The resale registration status and potential dilution associated with the 386,697 advisory-fee shares.
- The complete terms, omitted schedules, and attachments to the amended and restated notes filed as Exhibits 10.1 and 10.2.