8-K/A
Core Scientific, Inc./tx 0001839341 NONE NONE 0001839341 2023-02-28 2023-02-28 0001839341 us-gaap:CommonStockMember 2023-02-28 2023-02-28 0001839341 us-gaap:WarrantMember 2023-02-28 2023-02-28

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K/A

(Amendment No. 1)

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 28, 2023

 

 

Core Scientific, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-40046   86-1243837

(State or other jurisdiction

of incorporation)

  

(Commission

File Number)

  

(IRS Employer

Identification No.)

 

210 Barton Springs Road, Suite 300

Austin, Texas

   78704
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (512) 402-5233

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

  

Trading

Symbol(s)

  

Name of each exchange

on which registered

Common stock, par value $0.0001 per share   CORZQ   *
Warrants, exercisable for shares of common stock   CRZWQ   *

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company  ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

*     The registrant’s common stock and warrants began trading exclusively on the OTC Pink Marketplace on January 3, 2023 under the Symbols “CORZQ” and “CRZWQ,” respectively.

 

 

 

Explanatory Note

This Amendment No. 1 amends Item 7.01 of the Current Report on Form 8-K originally filed by Core Scientific, Inc. (the “Company”) with the Securities and Exchange Commission on March 1, 2023 (the “Original Form 8-K”) to correct errors to the monthly operating data furnished within Exhibit 99.1, Exhibit 99.3, Exhibit 99.4 and Exhibit 99.5 attached thereto (the “Exhibits”). Other than as described herein, this Amendment No. 1 does not amend any other information previously filed in the Original Form 8-K, which information is incorporated herein by reference.

As previously announced, on December 21, 2022, the Company and certain of its affiliates (collectively, the “Debtors”) filed voluntary petitions (the “Chapter 11 Cases”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) seeking relief under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”). The Debtors continue to operate their business and manage their properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. Additional information about the Chapter 11 Cases, including access to Court documents, is available online at cases.stretto.com/CoreScientific/, a website administered by Stretto, Inc., a third-party bankruptcy claims and noticing agent. The information on this web site is not incorporated by reference into, and does not constitute part of, this Form 8-K.

 
Item 7.01.

Regulation FD Disclosure.

On February 28, 2023, the Debtors each filed with the Bankruptcy Court their monthly operating reports for the period beginning January 1, 2023 and ending January 31, 2023 (collectively, the “January Monthly Operating Reports”). The January Monthly Operating Reports of the Company, Core Scientific Operating Company, Core Scientific Acquired Mining LLC and Radar Relay, Inc. are attached hereto, as Exhibits 99.1 through 99.4, and are incorporated herein by reference. Exhibits 99.1 through 99.4 are replacements of the Exhibits attached to the Original Form 8-K. This Amendment No. 1 to the Original Form 8-K (including the exhibits hereto) will not be deemed an admission as to the materiality of any information required to be disclosed solely by Regulation FD. The January Monthly Operating Reports and other filings with the Bankruptcy Court related to the Chapter 11 Cases may be available electronically at cases.stretto.com/CoreScientific/.

The information contained in this Item 7.01 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing.

Cautionary Statement Regarding the January Monthly Operating Reports

The Company cautions investors and potential investors not to place undue reliance upon the information contained in the January Monthly Operating Reports, which were not prepared for the purpose of providing the basis for an investment decision relating to any of the securities of the Company. The January Monthly Operating Reports are limited in scope, cover a limited time period and have been prepared solely for the purpose of complying with the monthly reporting requirements of the Bankruptcy Court. The January Monthly Operating Reports were not audited or reviewed by independent accountants, were not prepared in accordance with generally accepted accounting principles in the United States, are in a format prescribed by applicable bankruptcy laws or rules, and are subject to future adjustment and reconciliation. There can be no assurance that, from the perspective of an investor or potential investor in the Company’s securities, the January Monthly Operating Reports are complete. The January Monthly Operating Reports also contain information for periods which are shorter or otherwise different from those required in the Company’s reports pursuant to the Exchange Act, and such information might not be indicative of the Company’s financial condition or operating results for the period that would be reflected in the Company’s financial statements or in its reports pursuant to the Exchange Act. Results set forth in the January Monthly Operating Reports should not be viewed as indicative of future results.

Furthermore, this Form 8-K and/or the January Monthly Operating Reports may include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “will,” “expect,” “anticipate,” “believe,” “seek,” “target” or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. The Company’s actual results may differ materially from those anticipated in these forward-looking statements as a result of certain risks and other factors, which could include the following: risks and uncertainties relating to the Company’s Chapter 11 Cases including but not limited to, the Company’s ability to obtain Bankruptcy Court approval with respect to motions in its Chapter 11 Cases, successfully enter into and implement a restructuring plan, emerge from Chapter 11 and achieve significant cash flows from operations; the effects of the Chapter 11 Cases on the Company and on the interests of various constituents, Bankruptcy Court rulings in the Chapter 11 Cases and the outcome of the Chapter 11 Cases in general, the length of time the Company will operate under the Chapter 11 Cases, risks associated with any third-party motions in the Chapter 11 Cases, the potential adverse effects of the Chapter 11 Cases on the Company’s liquidity or results of operations and increased legal and other professional costs necessary to execute the Company’s reorganization; finalization and receipt of the replacement debtor-in-possession facility; satisfaction of any conditions to which the Company’s debtor-in-possession financing is subject and the risk that these conditions may not be satisfied for various reasons, including for reasons outside of the Company’s control; the consequences of the acceleration of the Company’s debt obligations; the trading price and volatility of the Company’s common stock and the risks related to trading on the OTC Pink Market; as well as other risk factors set forth in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. These statements are provided for illustrative purposes only and are based on various assumptions, whether or not identified in this press release, and on the current expectations of the Company’s management. These forward-looking statements are not intended to serve, and must not be relied on by any investor, as a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of the Company. These forward-looking statements are subject to a number of risks and uncertainties, including those identified in the Company’s reports filed with the U.S. Securities & Exchange Commission, and if any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. Accordingly, undue reliance should not be placed upon the forward-looking statements.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit
No.

   

Exhibit

99.1    Core Scientific, Inc., Monthly Operating Report for the period ended January 31, 2023
99.2    Core Scientific Operating Company, Monthly Operating Report for the period ended January 31, 2023
99.3    Core Scientific Acquired Mining LLC, Monthly Operating Report for the period ended January 31, 2023
99.4    Radar Relay, Inc., Monthly Operating Report for the period ended January 31, 2023
104    Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    Core Scientific, Inc.
Date: May 1, 2023     By:  

/s/ Todd M. DuChene

    Name:   Todd M. DuChene
    Title:   President and Chief Legal Officer

Exhibit 99.1

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

 

In re:

   

§

   

Chapter 11

  

§

   

CORE SCIENTIFIC, INC., et al.,

   

§

   

Case No. 22-90341 (DRJ)

  

§

   

                     Debtors.1

   

§

   

(Jointly Administered)

AMENDED JANUARY 2023 MONTHLY

OPERATING REPORT FOR CORE SCIENTIFIC, INC.2

 

 

1 

The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, are as follows: Core Scientific Mining LLC (6971); Core Scientific, Inc. (3837); Core Scientific Acquired Mining LLC (6074); Core Scientific Operating Company (5526); Radar Relay, Inc. (0496); Core Scientific Specialty Mining (Oklahoma) LLC (4327); American Property Acquisition, LLC (0825); Starboard Capital LLC (6677); RADAR LLC (5106); American Property Acquisitions I, LLC (9717); and American Property Acquisitions, VII, LLC (3198). The Debtors’ corporate headquarters and service address is 210 Barton Springs Road, Suite 300, Austin, Texas 78704.

2 

This document (the “Amended MOR”) amends the Debtor-In-Possession Monthly Operating Report for Filing Period Ending 1/31/2023 (Case No. 22-90341, Docket No. 598) (the “Initial MOR”). For a list of changes to the Amended MOR, please see Exhibit A to the Notice of Filing of Amended January and February 2023 MORs for Debtor Core Scientific, Inc., filed contemporaneously herewith.

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF TEXAS

HOUSTON

 

In Re. Core Scientific, Inc.    §       Case No. 22-90341                                                                  
              §                           
 

 

    §       Lead Case No. 22-90341                                                         
                      Debtor(s)    §      
           ☒ Jointly Administered

 

Monthly Operating Report         Chapter 11
Reporting Period Ended: 01/31/2023                                                Petition Date: 12/21/2022
Months Pending: 1       Industry Classification:     3    3     4     1

 

Reporting Method:    Accrual Basis    ☒    Cash Basis    ☐
Debtor’s Full-Time Employees (current):       235            
Debtor’s Full-Time Employees (as of date of order for relief):    236            

Supporting Documentation (check all that are attached):

(For jointly administered debtors, any required schedules must be provided on a non-consolidated basis for each debtor)

 

☒

Statement of cash receipts and disbursements

☒

Balance sheet containing the summary and detail of the assets, liabilities and equity (net worth) or deficit

☒

Statement of operations (profit or loss statement)

☐

Accounts receivable aging

☐

Postpetition liabilities aging

☐

Statement of capital assets

☐

Schedule of payments to professionals

☐

Schedule of payments to insiders

☐

All bank statements and bank reconciliations for the reporting period

☐

Description of the assets sold or transferred and the terms of the sale or transfer

 

/s/ Alfredo R. Pérez

      

Alfredo R. Pérez

Signature of Responsible Party                        Printed Name of Responsible Party

04/29/2023

      
Date      

700 Louisiana Street, Suite 1700, Houston, Texas 77002

      Address

STATEMENT: This Periodic Report is associated with an open bankruptcy case; therefore, Paperwork Reduction Act exemption 5 C.F.R. § 1320.4(a)(2) applies.

 

UST Form 11-MOR (12/01/2021)    1   

Debtor’s Name Core Scientific, Inc.    Case No. 22-90341

 

Part 1: Cash Receipts and Disbursements

    Current Month      Cumulative  

a.

   

Cash balance beginning of month

    $ 35,747,841     
     

 

 

     

b.

   

Total receipts (net of transfers between accounts)

    $ 45      $ 35,547,215  
     

 

 

     

 

 

  

c.

   

Total disbursements (net of transfers between accounts)

    $ 2,519,071      $ 2,519,071  
     

 

 

     

 

 

  

d.

   

Cash balance end of month (a+b-c)

    $ 33,228,815     
     

 

 

     

e.

   

Disbursements made by third party for the benefit of the estate

    $ 0      $ 0  
     

 

 

     

 

 

  

f.

   

Total disbursements for quarterly fee calculation (c+e)

    $ 2,519,071      $ 2,519,071  
     

 

 

     

 

 

  

Part 2: Asset and Liability Status

(Not generally applicable to Individual Debtors. See Instructions.)

    Current Month         

a.

   

Accounts receivable (total net of allowance)

    $ 488,990,509     
     

 

 

     

b.

   

Accounts receivable over 90 days outstanding (net of allowance)

    $ 0     
     

 

 

     

c.

   

Inventory (Book ☒    Market ☐    Other ☐    (attach explanation))

    $ 0     
     

 

 

     

d

   

Total current assets

    $ 2,293,698,880     
     

 

 

     

e.

   

Total assets

    $ 2,296,257,669     
     

 

 

     

f.

   

Postpetition payables (excluding taxes)

    $ 0     
     

 

 

     

g.

   

Postpetition payables past due (excluding taxes)

    $ 0     
     

 

 

     

h.

   

Postpetition taxes payable

    $ 0     
     

 

 

     

i.

   

Postpetition taxes past due

    $ 0     
     

 

 

     

j.

   

Total postpetition debt (f+h)

    $ 0     
     

 

 

     

k.

   

Prepetition secured debt

    $ 684,395,370     
     

 

 

     

l.

   

Prepetition priority debt

    $ 0     
     

 

 

     

m.

   

Prepetition unsecured debt

    $ 0     
     

 

 

     

n.

   

Total liabilities (debt) (j+k+l+m)

    $ 684,395,370     
     

 

 

     

o.

   

Ending equity/net worth (e-n)

    $ 1,611,862,299     
     

 

 

     

Part 3: Assets Sold or Transferred

    Current Month      Cumulative  

a.

   

Total cash sales price for assets sold/transferred outside the ordinary course of business

    $ 0      $ 0  
     

 

 

     

 

 

  

b.

   

Total payments to third parties incident to assets being sold/transferred outside the ordinary course of business

    $ 0      $ 0  
     

 

 

     

 

 

  

c.

   

Net cash proceeds from assets sold/transferred outside the ordinary course of business (a-b)

    $ 0      $ 0  
     

 

 

     

 

 

  

Part 4: Income Statement (Statement of Operations)

(Not generally applicable to Individual Debtors. See Instructions.)

    Current Month      Cumulative  

a.

   

Gross income/sales (net of returns and allowances)

    $ 0     
     

 

 

     

b.

   

Cost of goods sold (inclusive of depreciation, if applicable)

    $ 0     
     

 

 

     

c.

   

Gross profit (a-b)

    $ 0     
     

 

 

     

d.

   

Selling expenses

    $ 0     
     

 

 

     

e.

   

General and administrative expenses

    $ 0     
     

 

 

     

f.

   

Other expenses

    $ 0     
     

 

 

     

g.

   

Depreciation and/or amortization (not included in 4b)

    $ 0     
     

 

 

     

h.

   

Interest

    $ 0     
     

 

 

     

i.

   

Taxes (local, state, and federal)

    $ 0     
     

 

 

     

j.

   

Reorganization items

    $ 0     
     

 

 

     

k.

   

Profit (loss)

    $ 0      $ 91,773  
     

 

 

     

 

 

  

 

UST Form 11-MOR (12/01/2021)    2   

Debtor’s Name Core Scientific, Inc.    Case No. 22-90341

 

Part 5: Professional Fees and Expenses                    
          Approved
Current Month		   Approved
Cumulative		   Paid Current
Month    		   Paid
Cumulative    
a.   Debtor’s professional fees & expenses (bankruptcy)   Aggregate Total                
    Itemized Breakdown by Firm                    
        Firm Name   Role                
    i                        
    ii                        
    iii                        
    iv                        
    v                        
    vi                        
    vii                        
    viii                        
    ix                        
    x                        
    xi                        
    xii                        
    xiii                        
    xiv                        
    xv                        
    xvi                        
    xvii                        
    xviii                        
    xix                        
    xx                        
    xxi                        
    xxii                        
    xxiii                        
    xxiv                        
    xxv                        
    xxvi                        
    xxvii                        
    xxviii                        
    xxix                        
    xxx                        
    xxxi                        
    xxxii                        
    xxxiii                        
    xxxiv                        
    xxxv                        
    xxxvi                        

 

UST Form 11-MOR (12/01/2021)    3   

Debtor’s Name Core Scientific, Inc.    Case No. 22-90341

 

  

                                                 
  xxxvii                                           
  xxxviii                        
  xxxix                        
  xl                        
  xli                        
  xlii                        
  xliii                        
  xliv                        
  xlv                        
  xlvi                        
  xlvii                        
  xlviii                        
  xlix                        
  l                        
  li                        
  lii                        
  liii                        
  liv                        
  lv                        
  lvi                        
  lvii                        
  lviii                        
  lix                        
  lx                        
  lxi                        
  lxii                        
  lxiii                        
  lxiv                        
  lxv                        
  lxvi                        
  lxvii                        
  lxviii                        
  lxix                        
  lxx                        
  lxxi                        
  lxxii                        
  lxxiii                        
  lxxiv                        
  lxxv                        
  lxxvi                        
  lxxvii                        
  lxxviii                        

 

UST Form 11-MOR (12/01/2021)    4   

Debtor’s Name Core Scientific, Inc.    Case No. 22-90341

 

    lxxix                        
  lxxx                        
  lxxxi                        
  lxxxii                        
  lxxxiii                        
  lxxxiv                        
  lxxxv                        
  lxxxvi                        
  lxxxvii                        
  lxxxviii                        
  lxxxix                        
  xc                        
  xci                        
  xcii                        
  xciii                        
  xciv                        
  xcv                        
  xcvi                        
  xcvii                        
  xcviii                        
  xcix                        
  c                        
  ci                        
             
         

Approved
Current Month

  

Approved
Cumulative

  

Paid Current
Month

  

Paid Cumulative

b.   Debtor’s professional fees & expenses (nonbankruptcy) Aggregate Total                
  Itemized Breakdown by Firm                
        Firm Name   Role                
    i                        
    ii                        
    iii                        
    iv                        
    v                        
    vi                        
    vii                        
    viii                        
    ix                        
    x                        
    xi                        
    xii                        
    xiii                        
    xiv                        

 

UST Form 11-MOR (12/01/2021)    5   

Debtor’s Name Core Scientific, Inc.    Case No. 22-90341

 

    xv                                              
  xvi                        
  xvii                        
  xviii                        
  xix                        
  xx                        
  xxi                        
  xxii                        
  xxiii                        
  xxiv                        
  xxv                        
  xxvi                        
  xxvii                        
  xxviii                        
  xxix                        
  xxx                        
  xxxi                        
  xxxii                        
  xxxiii                        
  xxxiv                        
  xxxv                        
  xxxvi                        
  xxxvii                        
  xxxviii                        
  xxxix                        
  xl                        
  xli                        
  xlii                        
  xliii                        
  xliv                        
  xlv                        
  xlvi                        
  xlvii                        
  xlviii                        
  xlix                        
  l                        
  li                        
  lii                        
  liii                        
  liv                        
  lv                        
  lvi                        

 

UST Form 11-MOR (12/01/2021)    6   

Debtor’s Name Core Scientific, Inc.    Case No. 22-90341

 

    lvii                                                                                                                
  lviii                        
  lix                        
  lx                        
  lxi                        
  lxii                        
  lxiii                        
  lxiv                        
  lxv                        
  lxvi                        
  lxvii                        
  lxviii                        
  lxix                        
  lxx                        
  lxxi                        
  lxxii                        
  lxxiii                        
  lxxiv                        
  lxxv                        
  lxxvi                        
  lxxvii                        
  lxxviii                        
  lxxix                        
  lxxx                        
  lxxxi                        
  lxxxii                        
  lxxxiii                        
  lxxxiv                        
  lxxxv                        
  lxxxvi                        
  lxxxvii                        
  lxxxviii                        
  lxxxix                        
  xc                        
  xci                        
  xcii                        
  xciii                        
  xciv                        
  xcv                        
  xcvi                        
  xcvii                        
  xcviii                        
  xcix                        
  c                        
c.   All professional fees and expenses (debtor & committees)   $0   $0   $0   $0

 

UST Form 11-MOR (12/01/2021)    7   

Debtor’s Name Core Scientific, Inc.    Case No. 22-90341

 

Part 6: Postpetition Taxes

    Current Month      Cumulative  

a.   Postpetition income taxes accrued (local, state, and federal)

    $ 0      $ 0  
  

 

 

     

 

 

  

b.  Postpetition income taxes paid (local, state, and federal)

    $ 0      $ 0  
  

 

 

     

 

 

  

c.   Postpetition employer payroll taxes accrued

    $ 0      $ 102,744  
  

 

 

     

 

 

  

d.  Postpetition employer payroll taxes paid

    $ 0      $ 0  
  

 

 

     

 

 

  

e.   Postpetition property taxes paid

    $ 0      $ 0  
  

 

 

     

 

 

  

f.   Postpetition other taxes accrued (local, state, and federal)

    $ 0      $ 0  
  

 

 

     

 

 

  

g.  Postpetition other taxes paid (local, state, and federal)

    $ 0      $ 0  
  

 

 

     

 

 

  

Part 7: Questionnaire - During this reporting period:

                            

a.   Were any payments made on prepetition debt? (if yes, see Instructions)

      Yes  ☐       No  ☒       

b.  Were any payments made outside the ordinary course of business without court approval? (if yes, see Instructions)

      Yes  ☐       No  ☒       

c.   Were any payments made to or on behalf of insiders?

      Yes  ☐       No  ☒       

d.  Are you current on postpetition tax return filings?

      Yes  ☒       No  ☐       

e.   Are you current on postpetition estimated tax payments?

      Yes  ☒       No  ☐       

f.   Were all trust fund taxes remitted on a current basis?

      Yes  ☒       No  ☐       

g.  Was there any postpetition borrowing, other than trade credit? (if yes, see Instructions)

      Yes  ☐       No  ☒       

h.  Were all payments made to or on behalf of professionals approved by the court?

      Yes  ☐       No  ☐       N/A  ☒    

i.   Do you have: Worker’s compensation insurance?

      Yes  ☒       No  ☐       

If yes, are your premiums current?

      Yes  ☒       No  ☐       N/A  ☐       (if no, see Instructions ) 

Casualty/property insurance?

      Yes  ☒       No  ☐       

If yes, are your premiums current?

      Yes  ☒       No  ☐       N/A  ☐       (if no, see Instructions ) 

General liability insurance?

      Yes  ☒       No  ☐       

If yes, are your premiums current?

      Yes  ☒       No  ☐       N/A  ☐       (if no, see Instructions ) 

j.   Has a plan of reorganization been filed with the court?

      Yes  ☐       No  ☒       

k.  Has a disclosure statement been filed with the court?

      Yes  ☐       No  ☒       

l.   Are you current with quarterly U.S. Trustee fees as set forth under 28 U.S.C. § 1930?

      Yes  ☒       No  ☐       

 

UST Form 11-MOR (12/01/2021)    8   

Debtor’s Name Core Scientific, Inc.    Case No. 22-90341

 

Part 8: Individual Chapter 11 Debtors (Only)

                     

a.   Gross income (receipts) from salary and wages

    $                         0                                  
  

 

 

        

b.  Gross income (receipts) from self-employment

    $ 0        
  

 

 

        

c.   Gross income from all other sources

    $ 0        
  

 

 

        

d.  Total income in the reporting period (a+b+c)

    $ 0        
  

 

 

        

e.   Payroll deductions

    $ 0        
  

 

 

        

f.   Self-employment related expenses

    $ 0        
  

 

 

        

g.  Living expenses

    $ 0        
  

 

 

        

h.  All other expenses

    $ 0        
  

 

 

        

i.   Total expenses in the reporting period (e+f+g+h)

    $ 0        
  

 

 

        

j.   Difference between total income and total expenses (d-i)

    $ 0        
  

 

 

        

k.  List the total amount of all postpetition debts that are past due

    $ 0        
  

 

 

        

l.   Are you required to pay any Domestic Support Obligations as defined by 11 U.S.C § 101(14A)?

      Yes  ☐       No  ☒    

m.   If yes, have you made all Domestic Support Obligation payments?

      Yes  ☐       No  ☐       N/A  ☒ 

Privacy Act Statement

28 U.S.C. § 589b authorizes the collection of this information, and provision of this information is mandatory under 11 U.S.C.

§§ 704, 1106, and 1107. The United States Trustee will use this information to calculate statutory fee assessments under 28 U.S.C. § 1930(a)(6). The United States Trustee will also use this information to evaluate a chapter 11 debtor’s progress through the bankruptcy system, including the likelihood of a plan of reorganization being confirmed and whether the case is being prosecuted in good faith. This information may be disclosed to a bankruptcy trustee or examiner when the information is needed to perform the trustee’s or examiner’s duties or to the appropriate federal, state, local, regulatory, tribal, or foreign law enforcement agency when the information indicates a violation or potential violation of law. Other disclosures may be made for routine purposes. For a discussion of the types of routine disclosures that may be made, you may consult the Executive Office for United States Trustee’s systems of records notice, UST-001, “Bankruptcy Case Files and Associated Records.” See 71 Fed. Reg. 59,818 et seq. (Oct. 11, 2006). A copy of the notice may be obtained at the following link: http:// www.justice.gov/ust/eo/rules_regulations/index.htm. Failure to provide this information could result in the dismissal or conversion of your bankruptcy case or other action by the United States Trustee. 11 U.S.C. § 1112(b)(4)(F).

I declare under penalty of perjury that the foregoing Monthly Operating Report and its supporting documentation are true and correct and that I have been authorized to sign this report on behalf of the estate.

 

/s/ Michael Bros

      

Michael Bros

Signature of Responsible Party       Printed Name of Responsible Party

SVP, Capital Markets and Acquisitions

      

04/29/2023

Title       Date

 

UST Form 11-MOR (12/01/2021)    9   

Debtor’s Name Core Scientific, Inc.    Case No. 22-90341

 

LOGO

 

UST Form 11-MOR (12/01/2021)    10   

Debtor’s Name Core Scientific, Inc.    Case No. 22-90341

 

LOGO

 

UST Form 11-MOR (12/01/2021)    11   

Debtor’s Name Core Scientific, Inc.    Case No. 22-90341

 

LOGO

 

UST Form 11-MOR (12/01/2021)    12   

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

 

In re:    §    Chapter 11
   §   
CORE SCIENTIFIC, INC., et al.,    §    Case No. 22-90341 (DRJ)
   §   

Debtors.1

    §    (Jointly Administered)

MONTHLY OPERATING REPORT NOTES FOR JANUARY 2023

On December 21, 2022 (the “Petition Date”), Core Scientific, Inc. and its debtor affiliates, as debtors and debtors in possession in the above-captioned chapter 11 cases (collectively, the “Debtors” or the “Company”), each commenced a voluntary case under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). The Debtors are authorized to operate their businesses and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. The Debtors’ chapter 11 cases are being jointly administered for procedural purposes only pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) and Rule 1015-1 of the Bankruptcy Local Rules for the United States Bankruptcy Court for the Southern District of Texas (the “Local Rules”). On January 9, 2023, the United States Trustee for Region 7 (the “U.S. Trustee”) appointed an official committee of unsecured creditors (the “Creditors’ Committee”) in these chapter 11 cases pursuant to section 1102 of the Bankruptcy Code. No trustee or examiner has been appointed in these chapter 11 cases.

The following notes and statements of limitations and disclaimers should be referred to, and referenced in connection with, any review of this Monthly Operating Report (the “MOR”).

 

  1.

Introduction. This MOR is unaudited and does not purport to represent financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), and it is not intended to fully reconcile to the consolidated financial statements prepared by the Debtors. Information contained in this MOR has been derived from the Debtors’ books and records, but does not reflect in all circumstances presentation for GAAP or SEC reporting purposes. Therefore, to comply with their obligations to provide MORs during these chapter 11 cases, the Debtors have prepared this MOR using the best information presently available to them, which has been collected, maintained, and prepared in accordance with their historical accounting practices. Accordingly, this MOR is true and accurate to the best of the Debtors’ knowledge, information, and belief, based on

 

1 

The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, are as follows: Core Scientific Mining LLC (6971); Core Scientific, Inc. (3837); Core Scientific Acquired Mining LLC (6074); Core Scientific Operating Company (5526); Radar Relay, Inc. (0496); Core Scientific Specialty Mining (Oklahoma) LLC (4327); American Property Acquisition, LLC (0825); Starboard Capital LLC (6677); RADAR LLC (5106); American Property Acquisitions I, LLC (9717); and American Property Acquisitions, VII, LLC (3198). The Debtors’ corporate headquarters and service address is 210 Barton Springs Road, Suite 300, Austin, Texas 78704.

 

Page 1

  currently-available data. The results of operations and financial position contained herein are not necessarily indicative of results that may be expected for any period other than the period beginning on January 1, 2023 and ending January 31, 2023, or for the full year, and may not necessarily reflect the Debtors’ future consolidated results of operations and financial position.

 

  2.

Reservation of Rights. This MOR is limited in scope, covers the period beginning on January 1, 2023 and ending January 31, 2023, and has been prepared solely for the purpose of complying with the monthly reporting requirements of the Debtors’ chapter 11 cases. The unaudited financial information for this report has been derived from the Debtors’ books and records. The information presented herein has not been subject to all procedures that typically would be applied to financial information in accordance with U.S. GAAP. Upon the application of such procedures, the Debtors believe that the financial information could be subject to material change. The information furnished in this MOR includes normal recurring adjustments but does not include all of the adjustments that typically would be made for interim financial information presented in accordance with GAAP.

Given the complexity of the Debtors’ business, inadvertent errors or omission may occur. Accordingly, the Debtors hereby reserve all of their rights to dispute the nature, validity, status, enforceability, or executory natures of any claim amount, agreement, representation, or other statement set forth in this MOR. Further, the Debtors reserve the right to amend or supplement this MOR, if necessary, but shall be under no obligation to do so.

 

  3.

Basis of Presentation. Although the Debtors generally prepare their financial statements on a consolidated basis, the MOR has been prepared on an entity-by-entity basis (excluding most intercompany eliminations) for Debtors Core Scientific, Inc., Core Scientific Acquired Mining LLC, Core Scientific Operating Company, Core Scientific Mining LLC, Radar Relay, Inc., Core Scientific Specialty Mining (Oklahoma) LLC, American Property Acquisition, LLC, Starboard Capital LLC, RADAR LLC, American Property Acquisitions I, LLC, and American Property Acquisitions VII, LLC. The financial information contained herein is unaudited, limited in scope, covers a limited time period, and has been prepared solely for the purpose of complying with the monthly reporting requirements for chapter 11 debtors issued by the UST.

The amounts reported in this MOR are as-of January 31, 2023, the end of the Debtors’ reporting period. This MOR covers the period beginning January 1, 2023 and ending January 31, 2023.

 

  4.

Accounting Principles. The Debtors maintain their financial records according to GAAP, however the MOR does not purport to represent financial statements prepared in accordance with GAAP, nor are they intended to be fully reconciled with the financial statements of the Debtors.

The Debtors generally prepare financial statements on a consolidated basis. To the extent that there are negative asset balances for an individual Debtor, such as accounts receivable and current assets, they may be due to some intercompany elimination transactions or adjustments in each specific Debtor’s books and records.

 

Page 2

  5.

Currency. Unless otherwise indicated, all amounts in the MOR are reflected in U.S. dollars.

 

  6.

Consolidated Entity Accounts Payable and Disbursement Systems. Cash is received and disbursed by the Debtors as described in the Emergency Motion of Debtors for Entry of Interim and Final Orders (I) Authorizing Debtors to (A) Continue their Existing Cash Management System, (B) Maintain Existing Business Forms and Intercompany Arrangements, (C) Continue Intercompany Transactions, and (D) Continue Utilizing Employee Credit Cards; and (II) Granting Related Relief (Docket No. 12) (the “Cash Management Motion”) and the Debtors’ receipt and disbursement of cash is consistent with the Debtors’ historical cash management practices. Due to the consolidated cash management reporting system, certain cash payments may be paid out of a legal entity that is different than the legal entity at which the expenses were incurred. Also, certain cash receipts may be received in a different legal entity than the legal entity at which the accounts receivable is recorded. Disbursements attributed to each entity represent the entity on behalf of which payments were made, on a proportional allocated basis, from the consolidated cash management system.

 

  7.

Supporting Documentation. At the direction of the U.S. Trustee, the following schedules are attached to the MORs: (i) Statement of Cash Receipts and Disbursements; (ii) Balance Sheet; (iii) Income Statement (profit or loss statement); and (iv) Schedule of Payments to Insiders.

Statement of Cash Receipts and Disbursements. Based on guidance received from the Office of the United States Trustee in connection with the completion of UST Form 11-MOR Part 1, Cash Receipts and Disbursements, reported cash receipts and disbursements should exclude intercompany and debtor-to-debtor transactions. As a result, for those debtors with net intercompany cash outflows or inflows during the reporting period, the ending cash balances reported on Form 11-MOR Part 1 may not match the ending cash balances per the Debtors’ bank statements or the Debtors’ books and records. For additional information on ending cash balances per the Debtors’ books and records, see the attached cash balances per MOR-1: Schedule of Cash Receipts and Disbursements.

Balance Sheet. Liabilities Subject to Compromise (“LSTC”): LSTC represent the Debtors’ estimate of prepetition claims to be resolved in connection with the chapter 11 cases. As a result of the chapter 11 filings, the payment of prepetition liabilities are subject to compromise or other treatment under a plan of reorganization. The determination of how such liabilities will ultimately be settled or treated cannot be made until the Court approves a chapter 11 plan of reorganization. Accordingly, the ultimate amount of such liabilities is not determinable at this time. Prepetition liabilities that are subject to compromise under ASC 852 are preliminary and may be subject to, among other things, future adjustments depending on Court actions, further developments with respect to disputed claims, determinations of the secured status of certain claims, the values of any collateral securing such claims, rejection of executory contracts, continued reconciliation or other events.

As noted, although the Debtors generally prepare financial statements on a consolidated basis, these MORs are prepared on an entity-by-entity basis. The

 

Page 3

Debtors maintain separate balance sheets in their books and records for the following entities: Core Scientific Acquired Mining LLC, Core Scientific, Inc., Core Scientific Operating Company, and Radar Relay, Inc. The Debtors, however, do not maintain separate balance sheets for the remaining Debtor entities. Consequently, the balance sheets included in the MOR for these Debtors reflect no balances.

Values in the balance sheet(s) attached hereto represent rounded numbers. Accordingly, subtotals may not agree to the summation of the rounded numbers presented.

Income Statement. As noted, although the Debtors generally prepare financial statements on a consolidated basis, these MORs are prepared on an entity-by-entity basis. The Debtors maintain separate income statements in their books and records for the following entities: Core Scientific Acquired Mining LLC, Core Scientific, Inc., Core Scientific Operating Company, and Radar Relay, Inc. The Debtors, however, do not maintain separate income statements for the remaining Debtor entities. Consequently, the income statements included in the MOR for these Debtors reflect no income.

Schedule of Payments to Insiders. This schedule provides additional detail for the period on page 1 of the MOR. For each insider payment made during the reporting period the following information is provided: recipient; date of payment or benefit provided; amount of cash payment or market value of non-cash payment; and reason for each payment made.

 

  8.

Part 1, Cash Receipts and Disbursements. Cumulative quarter-to-date for Q1 2023 disbursements are reported in the Cumulative figures in the MOR. Cumulative case to date total disbursements through January 31, 2023 are $31,472,636.

 

  9.

Part 5a, Professional Fees and Expenses. For purposes of Part 5a of the MORs, and consistent with the Order Establishing Procedures for Interim Compensation and Reimbursement of Expenses for Professionals (Docket No. 541) (the “Interim Compensation Order”), professional fees and expenses are considered approved if the applicable Monthly Statement (as defined in the Interim Compensation Order) has been served and the objection deadline relating to such Monthly Statement has expired prior to the last day of the applicable MOR period.

 

  10.

Part 7 Questionnaire. Pursuant to certain orders of the Bankruptcy Court entered in the Debtors’ chapter 11 cases (the “First Day Orders”), the Debtors were authorized (but not directed) to pay, among other things, certain prepetition claims of their employees, taxing authorities, insurers, critical vendors, and certain other prepetition creditors. Amounts paid pursuant to the First Day Orders are monitored as to limits provided in the applicable orders of the Bankruptcy Court governing payment of such prepetition obligations, and this report is available to the U.S. Trustee as required.

 

Page 4

MOR-1: 1/1/2023 - 1/31/2023 SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS

 

Description

   Core
Scientific,
Inc.		     Core
Scientific
Acquired
Mining
LLC		     Core
Scientific
Operating
Company		     Radar
Relay,
Inc.		     Core
Scientific
Mining
LLC		     Core
Scientific
Specialty
Mining
(Oklahoma)
LLC		     American
Property
Acquisition,
LLC		     Starboard
Capital
LLC		     RADAR
LLC		     American
Property
Acquisitions
I, LLC		     American
Property
Acquisitions
VII, LLC		     Total  

Receipts

                        

Crypto Currencies Sales Proceeds

     —         2,728,618       28,811,819       —         —         —         —         —         —         —         —       $ 31,540,436  

Hosting Service

     —         —         5,009,114       —         —         —         —         —         —         —         —         5,009,114  

Other Receipts

     45       —         352,481       —         —         —         —         —         —         —         —         352,525  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Receipts

     45       2,728,618       34,173,413       —         —         —         —         —         —         —         —         36,902,076  

Disbursements

                        

Suppliers or vendors

     2,514,771       1,007,353       12,583,419       —         —         —         —         —         —         —         —       $ 16,105,543  

Taxes / Governmental

     —         439,021       5,498,326       —         —         —         —         —         —         —         —         5,937,346  

Services

     —         1,117       13,991       —         —         —         —         —         —         —         —         15,109  

Financial / Bank Fees

     4,300       13       160       —         —         —         —         —         —         —         —         4,473  

Employee Expense

     —         230,231       2,883,433       —         —         —         —         —         —         —         —         3,113,664  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Disbursements

     2,519,071       1,677,735       20,979,329       —         —         —         —         —         —         —         —         25,176,135  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net Cash Flow (excl. Internal Transfers)

     (2,519,026 )      1,050,883       13,194,084       —         —         —         —         —         —         —         —         11,725,941  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Bank Cash Balance Beginning of Month

     35,747,841       697,746       16,371,155       —         —         —         —         —         —         —         —         52,816,742  

Net Cash Flow (excl. Internal Transfers; w/ Allocation)

     (2,519,026 )      1,050,883       13,194,084       —         —         —         —         —         —         —         —      
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

MOR Part 1 d. Cash Balance

   $ 33,228,814     $ 1,748,629     $ 29,565,239     $ —       $ —       $ —       $ —       $ —       $ —       $ —       $ —       $ 64,542,683  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Reversing Disbursement Allocation

     —         1,675,120       (1,675,120 )      —         —         —         —         —         —         —         —         —    

Internal Transfers

     (6,295,746 )      (2,200,000 )      8,495,746       —         —         —         —         —         —         —         —         —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Cash Balance End of Month

   $ 26,933,068     $ 1,223,749     $ 36,385,865     $ —       $ —       $ —       $ —       $ —       $ —       $ —       $ —       $ 64,542,683  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

MOR-2: End of Jan 2023 Balance Sheet

 

(US $)

    Core
Scientific,
Inc.		     Core
Scientific
Acquired
Mining LLC		     Core
Scientific
Operating
Company		     Radar
Relay Inc		     Core
Scientific
Mining
LLC		      Core
Scientific
Specialty
Mining
(Oklahoma)
LLC		      American
Property
Acquisition,
LLC		      Starboard
Capital
LLC		      RADAR
LLC		      American
Property
Acquisitions
I, LLC		      American
Property
Acquisitions
VII, LLC		      Elimination
Co		     Total¹  

ASSETS

                                  

Cash and Equivalents

      —         1,223,749       35,777,275       —         —          —          —          —          —          —          —          —         37,001,024  

Restricted Cash

      —         —         27,541,658       —         —          —          —          —          —          —          —          —         27,541,658  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

Total Cash

      —         1,223,749       63,318,933       —         —          —          —          —          —          —          —          —         64,542,682  

Accounts receivable, net of allowance

      —         —         464,216       —         —          —          —          —          —          —          —          —         464,216  

Accounts receivable from related parties

      488,990,509       140,152,775       (486,675,668 )      1,189,298       —          —          —          —          —          —          —          (143,591,406 )      65,507  

Deposits for equipment

      —         —         25,827,664       —         —          —          —          —          —          —          —          —         25,827,664  

Digital currency assets

      —         —         —         —         —          —          —          —          —          —          —          —         —    

Prepaid expenses and other

      —         22,748,095       24,659,767       —         —          —          —          —          —          —          —          (22,738,466 )      24,669,396  

Total other current assets

      1,804,708,371       (1,128,933,066 )      (673,043,932 )      —         —          —          —          —          —          —          —          —         2,731,373  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

Total Current Assets

      2,293,698,880       (964,808,448 )      (1,045,449,019 )      1,189,298       —          —          —          —          —          —          —          (166,329,871 )      118,300,839  

Property, plant and equipment

      —         67,098,040       588,325,778       —         —          —          —          —          —          —          —          (15,616,704 )      639,807,114  

Operating lease-right-of-use assets

      —         —         20,264,625       —         —          —          —          —          —          —          —          —         20,264,625  

Goodwill

      —         232,587,379       (167,058,249 )      (65,529,130 )      —          —          —          —          —          —          —          —         0  

Intangible assets, net

      —         —         1,674,297       —         —          —          —          —          —          —          —          —         1,674,297  

Other noncurrent assets

      2,558,789       (0 )      6,781,630       —         —          —          —          —          —          —          —          —         9,340,419  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

Total Assets

      2,296,257,669       (665,123,029 )      (595,460,938 )      (64,339,833 )      —          —          —          —          —          —          —          (181,946,575 )      789,387,294  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

LIABILITIES, PREFERRED STOCK & EQUITY

                                  

Accounts Payable

      —         143,605,208       86,090,383       12,682       —          —          —          —          —          —          —          (143,591,406 )      86,116,867  

Accrued expenses and other

      199,366       17,449,784       85,495,328       (12,734 )      —          —          —          —          —          —          —          —         103,131,744  

Deferred revenue

      —         —         112,557,414       —         —          —          —          —          —          —          —          (38,626,663 )      73,930,751  

Derivative warrant liabilities

      (900 )      —         —         —         —          —          —          —          —          —          —          —         (900 ) 

Operating lease liabilities, current portion

      —         —         1,170,064       —         —          —          —          —          —          —          —          —         1,170,064  

Financing lease liabilities, current portion

      —         —         70,796,077       —         —          —          —          —          —          —          —          —         70,796,077  

Long-term debt, current portion

      —         —         880,936,991       —         —          —          —          —          —          —          —          —         880,936,991  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

Total current liabilities

      198,466       161,054,993       1,237,046,258       (52 )      —          —          —          —          —          —          —          (182,218,069 )      1,216,081,595  

Operating lease liabilities, net of current portion

      —         —         14,156,228       —         —          —          —          —          —          —          —          —         14,156,228  

Financing lease liabilities, net of current portion

      —         —         —         —         —          —          —          —          —          —          —          —         —    

Long-term debt, net of current portion

      8,356,293       —         (8,356,293 )      —         —          —          —          —          —          —          —          —         (0 ) 

Other noncurrent liabilities

      —         18,084,856       (15,497,086 )      (2,587,769 )      —          —          —          —          —          —          —          —         1  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

Total Liabilities

      8,554,759       179,139,849       1,227,349,107       (2,587,821 )      —          —          —          —          —          —          —          (182,218,069 )      1,230,237,824  

Pre-Petition Subject to Compromise

      684,395,370       —         (684,395,370 )      —         —          —          —          —          —          —          —          —         —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

Total Pre-Petition Subject to Compromise

      684,395,370       —         (684,395,370 )      —         —          —          —          —          —          —          —          —         —    

Post-Petition Short Term Liabilities

      —         —         —         —         —          —          —          —          —          —          —          —         —    

Post-Petition Long Term Liabilities

      —         —         —         —         —          —          —          —          —          —          —          —         —    

Preferred stock

      —         —         —         —         —          —          —          —          —          —          —          —         —    

Common stock

      37,478       —         —         —         —          —          —          —          —          —          —          —         37,478  

Additional paid-in capital

      1,783,051,000       (15,979,141 )      2,887,621       —         —          —          —          —          —          —          —          —         1,769,959,480  

Accumulated deficit

      (179,780,938 )      (828,330,719 )      (1,141,302,296 )      (61,752,012 )      —          —          —          —          —          —          —          318,476       (2,210,847,488 ) 

Other Comprehensive Income

      —         —         —         —         —          —          —          —          —          —          —          —         —    

Cumulative Translation Adjustment

      —         46,983       —         —         —          —          —          —          —          —          —          (46,983 )      —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

Total Equity

      1,603,307,540       (844,262,878 )      (1,138,414,675 )      (61,752,012 )      —          —          —          —          —          —          —          271,494       (440,850,530 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

Total Liabilities, Preferred Stock & Equity

      2,296,257,669       (665,123,029 )      (595,460,938 )      (64,339,833 )      —          —          —          —          —          —          —          (181,946,575 )      789,387,294  

 

1 

The ‘Elimination Co’ column addresses the accounting of intercompany balances to enable consolidated reporting in the ‘Total’ column

MOR-3: 1/1/2023 - 1/31/2023 Profit & Loss

 

Total Revenue

(US $)

    Core
Scientific,
Inc.		      Core
Scientific
Acquired
Mining LLC		     Core
Scientific
Operating
Company		     Radar
Relay Inc		     Core
Scientific
Mining
LLC		      Core
Scientific
Specialty
Mining
(Oklahoma)
LLC		      American
Property
Acquisition,
LLC		      Starboard
Capital
LLC		      RADAR
LLC		      American
Property
Acquisitions
I, LLC		      American
Property
Acquisitions
VII, LLC		  

Hosting revenue from customers

      —          —         6,314,128.30       —         —          —          —          —          —          —          —    

Hosting revenue from related parties

      —          —         1,308,852.63       —         —          —          —          —          —          —          —    

Equipment sales to customers

      —          —         —         —         —          —          —          —          —          —          —    

Equipment sales to related parties

      —          —         —         —         —          —          —          —          —          —          —    

Digital asset mining income

      —          2,661,793.73       28,276,892.87       —         —          —          —          —          —          —          —    

Network services and defi revenue

      —          —         —         —         —          —          —          —          —          —          —    
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total Revenue

      —          2,661,793.73       35,899,873.80       —         —          —          —          —          —          —          —    
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Cost of revenue

      —          (3,349,178.15 )      (59,046,556.03 )      —         —          —          —          —          —          —          —    
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Gross Profit

      —          (687,384.42 )      (23,146,682.23 )      —         —          —          —          —          —          —          —    
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Gain (loss) on legal settlements

      —          —         —         —         —          —          —          —          —          —          —    

Gain (loss) from sales of digital currency assets

      —          11,455.01       138,931.37       —         —          —          —          —          —          —          —    

Impairments of digital currency assets

      —          —         —         —         —          —          —          —          —          —          —    

Impairment of goodwill and other intangibles

      —          —         —         —         —          —          —          —          —          —          —    

Impairment of property, plant and equipment

      —          —         —         —         —          —          —          —          —          —          —    

Losses on exchange or disposal of property, plant and equipment

      —          —         —         —         —          —          —          —          —          —          —    

Operating expenses:

      —                —          —          —          —          —          —          —    

Research and development

      —          —         (659,379.93 )      (10,931.82 )      —          —          —          —          —          —          —    

Sales and marketing

      —          —         (338,532.41 )      —         —          —          —          —          —          —          —    

General and administrative

      —          (8,357.78 )      (4,762,536.85 )      (50.00 )      —          —          —          —          —          —          —    

Advisor Fees

      —          —         —         —         —          —          —          —          —          —          —    
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total operating expenses

      —          (8,357.78 )      (5,760,449.19 )      (10,981.82 )      —          —          —          —          —          —          —    
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Operating Income (Loss)

      —          (684,287.19 )      (28,768,200.05 )      (10,981.82 )      —          —          —          —          —          —          —    

Non-operating income (expense), net:

      —                —          —          —          —          —          —          —    

Loss on debt extinguishment

      —          —         —         —         —          —          —          —          —          —          —    

Interest expense, net

      —          —         13,482.06       —         —          —          —          —          —          —          —    

Other non-operating expenses, net

      —          —         —         —         —          —          —          —          —          —          —    

Reorganization items

      —          —         (7,646,333.49 )      —         —          —          —          —          —          —          —    
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total Non-operating income (expense), net:

      —          —         (7,632,851.43 )      —         —          —          —          —          —          —          —    
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Income (loss) before income taxes

      —          (684,287.19 )      (36,401,051.48 )      (10,981.82 )      —          —          —          —          —          —          —    

Income tax expense

      —          —         —         —         —          —          —          —          —          —          —    
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net Income (Loss)

      —          (684,287.19 )      (36,401,051.48 )      (10,981.82 )      —          —          —          —          —          —          —    
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Exhibit 99.2

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

 

In re:

   

§

   

Chapter 11

  

§

   

CORE SCIENTIFIC, INC., et al.,

   

§

   

Case No. 22-90341 (DRJ)

  

§

   

Debtors.1

  

§

   

(Jointly Administered)

AMENDED JANUARY 2023 MONTHLY

OPERATING REPORT FOR CORE SCIENTIFIC OPERATING COMPANY2

 

 

1 

The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, are as follows: Core Scientific Mining LLC (6971); Core Scientific, Inc. (3837); Core Scientific Acquired Mining LLC (6074); Core Scientific Operating Company (5526); Radar Relay, Inc. (0496); Core Scientific Specialty Mining (Oklahoma) LLC (4327); American Property Acquisition, LLC (0825); Starboard Capital LLC (6677); RADAR LLC (5106); American Property Acquisitions I, LLC (9717); and American Property Acquisitions, VII, LLC (3198). The Debtors’ corporate headquarters and service address is 210 Barton Springs Road, Suite 300, Austin, Texas 78704.

2 

This document (the “Amended MOR”) amends the Debtor-In-Possession Monthly Operating Report for Filing Period Ending 1/31/2023 (Case No. 22-90343, Docket No. 6) (the “Initial MOR”). For a list of changes to the Amended MOR, please see Exhibit A to the Notice of Filing of Amended January and February 2023 MORs for Debtor Core Scientific Operating Company, filed contemporaneously herewith.

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF TEXAS

HOUSTON

 

In Re. Core Scientific Operating Company    §      

Case No. 22-90343

              §                           
 

 

    §      

Lead Case No. 22-90341

                      Debtor(s)    §      
           ☒ Jointly Administered

 

Monthly Operating Report         Chapter 11
Reporting Period Ended: 01/31/2023                                                Petition Date: 12/21/2022
Months Pending: 1       Industry Classification:      3     3      4     1

 

Reporting Method:    Accrual Basis    ☒    Cash Basis    ☐
Debtor’s Full-Time Employees (current):       0            
Debtor’s Full-Time Employees (as of date of order for relief):    0            

Supporting Documentation (check all that are attached):

(For jointly administered debtors, any required schedules must be provided on a non-consolidated basis for each debtor)

 

☒

Statement of cash receipts and disbursements

☒

Balance sheet containing the summary and detail of the assets, liabilities and equity (net worth) or deficit

☒

Statement of operations (profit or loss statement)

☐

Accounts receivable aging

☐

Postpetition liabilities aging

☐

Statement of capital assets

☐

Schedule of payments to professionals

☒

Schedule of payments to insiders

☐

All bank statements and bank reconciliations for the reporting period

☐

Description of the assets sold or transferred and the terms of the sale or transfer

 

/s/ Alfredo R. Pérez

      

Alfredo R. Pérez

Signature of Responsible Party       Printed Name of Responsible Party

04/29/2023

      
Date      

700 Louisiana Street, Suite 1700, Houston, Texas 77002

      Address

STATEMENT: This Periodic Report is associated with an open bankruptcy case; therefore, Paperwork Reduction Act exemption 5 C.F.R. § 1320.4(a)(2) applies.

 

 

UST Form 11-MOR (12/01/2021)   1  

Debtor’s Name Core Scientific Operating Company    Case No. 22-90343

 

Part 1: Cash Receipts and Disbursements

    Current Month      Cumulative  

a.

    Cash balance beginning of month    $ 16,371,155     
     

 

 

     

b.

    Total receipts (net of transfers between accounts)    $ 34,173,413      $ 51,988,391  
     

 

 

     

 

 

  

c.

    Total disbursements (net of transfers between accounts)    $ 20,979,329      $ 20,979,329  
     

 

 

     

 

 

  

d.

    Cash balance end of month (a+b-c)    $ 29,565,239     
     

 

 

     

e.

    Disbursements made by third party for the benefit of the estate    $ 0      $ 0  
     

 

 

     

 

 

  

f.

    Total disbursements for quarterly fee calculation (c+e)    $ 20,979,329      $ 20,979,329  
     

 

 

     

 

 

  

Part 2: Asset and Liability Status

(Not generally applicable to Individual Debtors. See Instructions.)

    Current Month         

a.

    Accounts receivable (total net of allowance)    $ -486,211,452     
     

 

 

     

b.

    Accounts receivable over 90 days outstanding (net of allowance)    $ 0     
     

 

 

     

c.

    Inventory    (Book ☒    Market ☐    Other ☐    (attach explanation))    $ 0     
     

 

 

     

d

    Total current assets    $ -1,045,449,019     
     

 

 

     

e.

    Total assets    $ -595,460,938     
     

 

 

     

f.

    Postpetition payables (excluding taxes)    $ 129,921,302     
     

 

 

     

g.

    Postpetition payables past due (excluding taxes)    $ 0     
     

 

 

     

h.

    Postpetition taxes payable    $ 107,881     
     

 

 

     

i.

    Postpetition taxes past due    $ 0     
     

 

 

     

j.

    Total postpetition debt (f+h)    $ 130,029,183     
     

 

 

     

k.

    Prepetition secured debt    $ 345,172,039     
     

 

 

     

l.

    Prepetition priority debt    $ 73,998,247     
     

 

 

     

m.

    Prepetition unsecured debt    $ 182,716,347     
     

 

 

     

n.

    Total liabilities (debt) (j+k+l+m)    $ 731,915,816     
     

 

 

     

o.

    Ending equity/net worth (e-n)    $ -1,327,376,754     
     

 

 

     

Part 3: Assets Sold or Transferred

    Current Month      Cumulative  

a.

    Total cash sales price for assets sold/transferred outside the ordinary course of business    $ 0      $ 0  
     

 

 

     

 

 

  

b.

    Total payments to third parties incident to assets being sold/transferred outside the ordinary course of business    $ 0      $ 0  
     

 

 

     

 

 

  

c.

    Net cash proceeds from assets sold/transferred outside the ordinary course of business (a-b)    $ 0      $ 0  
     

 

 

     

 

 

  

Part 4: Income Statement (Statement of Operations)

(Not generally applicable to Individual Debtors. See Instructions.)

    Current Month      Cumulative  

a.

    Gross income/sales (net of returns and allowances)    $ 35,899,874     
     

 

 

     

b.

    Cost of goods sold (inclusive of depreciation, if applicable)    $ 59,046,556     
     

 

 

     

c.

    Gross profit (a-b)    $ -23,146,682     
     

 

 

     

d.

    Selling expenses    $ 338,532     
     

 

 

     

e.

    General and administrative expenses    $ 4,762,537     
     

 

 

     

f.

    Other expenses    $ 659,380     
     

 

 

     

g.

    Depreciation and/or amortization (not included in 4b)    $ 47,617     
     

 

 

     

h.

    Interest    $ -13,482     
     

 

 

     

i.

    Taxes (local, state, and federal)    $ 0     
     

 

 

     

j.

    Reorganization items    $ 7,646,333     
     

 

 

     

k.

    Profit (loss)    $ -36,401,051      $ -47,966,513  
     

 

 

     

 

 

  

 

UST Form 11-MOR (12/01/2021)    2   

Debtor’s Name Core Scientific Operating Company    Case No. 22-90343

 

Part 5: Professional Fees and Expenses                    
          Approved
Current Month		   Approved
Cumulative		  

Paid Current    

Month    

  

Paid    

Cumulative    

a.   Debtor’s professional fees & expenses (bankruptcy) Aggregate Total   $15,109   $15,109   $15,109   $15,109
    Itemized Breakdown by Firm                    
        Firm Name   Role                
    i   Stretto, Inc   Other   $15,109   $15,109   $15,109   $15,109
    ii                        
    iii                        
    iv                        
    v                        
    vi                        
    vii                        
    viii                        
    ix                        
    x                        
    xi                        
    xii                        
    xiii                        
    xiv                        
    xv                        
    xvi                        
    xvii                        
    xviii                        
    xix                        
    xx                        
    xxi                        
    xxii                        
    xxiii                        
    xxiv                        
    xxv                        
    xxvi                        
    xxvii                        
    xxviii                        
    xxix                        
    xxx                        
    xxxi                        
    xxxii                        
    xxxiii                        
    xxxiv                        
    xxxv                        
    xxxvi                        

 

UST Form 11-MOR (12/01/2021)    3   

Debtor’s Name Core Scientific Operating Company    Case No. 22-90343

 

  

                                                 
  xxxvii                        
  xxxviii                        
  xxxix                        
  xl                        
  xli                        
  xlii                        
  xliii                        
  xliv                        
  xlv                        
  xlvi                        
  xlvii                        
  xlviii                        
  xlix                        
  l                        
  li                        
  lii                        
  liii                        
  liv                        
  lv                        
  lvi                        
  lvii                        
  lviii                        
  lix                        
  lx                        
  lxi                        
  lxii                        
  lxiii                        
  lxiv                        
  lxv                        
  lxvi                        
  lxvii                        
  lxviii                        
  lxix                        
  lxx                        
  lxxi                        
  lxxii                        
  lxxiii                        
  lxxiv                        
  lxxv                        
  lxxvi                        
  lxxvii                        
  lxxviii                        

 

UST Form 11-MOR (12/01/2021)    4   

Debtor’s Name Core Scientific Operating Company    Case No. 22-90343

 

    lxxix                        
  lxxx                        
  lxxxi                        
  lxxxii                        
  lxxxiii                        
  lxxxiv                        
  lxxxv                        
  lxxxvi                        
  lxxxvii                        
  lxxxviii                        
  lxxxix                        
  xc                        
  xci                        
  xcii                        
  xciii                        
  xciv                        
  xcv                        
  xcvi                        
  xcvii                        
  xcviii                        
  xcix                        
  c                        
  ci                        
             
          Approved
Current Month		   Approved
Cumulative		  

Paid Current    

Month    

  

Paid    

Cumulative    

b.   Debtor’s professional fees & expenses (nonbankruptcy) Aggregate Total                
  Itemized Breakdown by Firm                
        Firm Name   Role                
    i                        
    ii                        
    iii                        
    iv                        
    v                        
    vi                        
    vii                        
    viii                        
    ix                        
    x                        
    xi                        
    xii                        
    xiii                        
    xiv                        

 

UST Form 11-MOR (12/01/2021)    5   

Debtor’s Name Core Scientific Operating Company    Case No. 22-90343

 

    xv                                              
  xvi                        
  xvii                        
  xviii                        
  xix                        
  xx                        
  xxi                        
  xxii                        
  xxiii                        
  xxiv                        
  xxv                        
  xxvi                        
  xxvii                        
  xxviii                        
  xxix                        
  xxx                        
  xxxi                        
  xxxii                        
  xxxiii                        
  xxxiv                        
  xxxv                        
  xxxvi                        
  xxxvii                        
  xxxviii                        
  xxxix                        
  xl                        
  xli                        
  xlii                        
  xliii                        
  xliv                        
  xlv                        
  xlvi                        
  xlvii                        
  xlviii                        
  xlix                        
  l                        
  li                        
  lii                        
  liii                        
  liv                        
  lv                        
  lvi                        

 

UST Form 11-MOR (12/01/2021)    6   

Debtor’s Name Core Scientific Operating Company    Case No. 22-90343

 

    lvii                                              
  lviii                        
  lix                        
  lx                        
  lxi                        
  lxii                        
  lxiii                        
  lxiv                        
  lxv                        
  lxvi                        
  lxvii                        
  lxviii                        
  lxix                        
  lxx                        
  lxxi                        
  lxxii                        
  lxxiii                        
  lxxiv                        
  lxxv                        
  lxxvi                        
  lxxvii                        
  lxxviii                        
  lxxix                        
  lxxx                        
  lxxxi                        
  lxxxii                        
  lxxxiii                        
  lxxxiv                        
  lxxxv                        
  lxxxvi                        
  lxxxvii                        
  lxxxviii                        
  lxxxix                        
  xc                        
  xci                        
  xcii                        
  xciii                        
  xciv                        
  xcv                        
  xcvi                        
  xcvii                        
  xcviii                        
  xcix                        
    c                        
c.   All professional fees and expenses (debtor & committees)   $15,109   $15,109   $15,109   $15,109

 

UST Form 11-MOR (12/01/2021)    7   

Debtor’s Name Core Scientific Operating Company    Case No. 22-90343

 

Part 6: Postpetition Taxes

    Current Month      Cumulative  

a.   Postpetition income taxes accrued (local, state, and federal)

    $ 0      $ 29,997  
  

 

 

     

 

 

  

b.  Postpetition income taxes paid (local, state, and federal)

    $ 0      $ 0  
  

 

 

     

 

 

  

c.   Postpetition employer payroll taxes accrued

    $ 105,019      $ 105,019  
  

 

 

     

 

 

  

d.  Postpetition employer payroll taxes paid

    $ 212,816      $ 212,816  
  

 

 

     

 

 

  

e.   Postpetition property taxes paid

    $ 17,284      $ 17,284  
  

 

 

     

 

 

  

f.   Postpetition other taxes accrued (local, state, and federal)

    $ 107,881      $ 123,576  
  

 

 

     

 

 

  

g.  Postpetition other taxes paid (local, state, and federal)

    $ 0      $ 0  
  

 

 

     

 

 

  

 

Part 7: Questionnaire - During this reporting period:

                         

a.   Were any payments made on prepetition debt? (if yes, see Instructions)

      Yes  ☒      No  ☐     

b.  Were any payments made outside the ordinary course of business without court approval? (if yes, see Instructions)

      Yes  ☐      No  ☒     

c.   Were any payments made to or on behalf of insiders?

      Yes  ☒      No  ☐     

d.  Are you current on postpetition tax return filings?

      Yes  ☒      No  ☐     

e.   Are you current on postpetition estimated tax payments?

      Yes  ☒      No  ☐     

f.   Were all trust fund taxes remitted on a current basis?

      Yes  ☒      No  ☐     

g.  Was there any postpetition borrowing, other than trade credit? (if yes, see Instructions)

      Yes  ☐      No  ☒     

h.  Were all payments made to or on behalf of professionals approved by the court?

      Yes  ☒      No  ☐      N/A  ☐   

i.   Do you have:      Worker’s compensation insurance?

      Yes  ☒      No  ☐     

If yes, are your premiums current?

      Yes  ☒      No  ☐      N/A  ☐      (if no, see Instructions ) 

Casualty/property insurance?

      Yes  ☒      No  ☐     

If yes, are your premiums current?

      Yes  ☒      No  ☐      N/A  ☐      (if no, see Instructions ) 

General liability insurance?

      Yes  ☒      No  ☐     

If yes, are your premiums current?

      Yes  ☒      No  ☐      N/A  ☐      (if no, see Instructions ) 

j.   Has a plan of reorganization been filed with the court?

      Yes  ☐      No  ☒     

k.  Has a disclosure statement been filed with the court?

      Yes  ☐      No  ☒     

l.   Are you current with quarterly U.S. Trustee fees as set forth under 28 U.S.C. § 1930?

      Yes  ☒      No  ☐     

 

UST Form 11-MOR (12/01/2021)    8   

Debtor’s Name Core Scientific Operating Company    Case No. 22-90343

 

Part 8: Individual Chapter 11 Debtors (Only)

                     

a.   Gross income (receipts) from salary and wages

    $                         0                                  
  

 

 

        

b.  Gross income (receipts) from self-employment

    $ 0        
  

 

 

        

c.   Gross income from all other sources

    $ 0        
  

 

 

        

d.  Total income in the reporting period (a+b+c)

    $ 0        
  

 

 

        

e.   Payroll deductions

    $ 0        
  

 

 

        

f.   Self-employment related expenses

    $ 0        
  

 

 

        

g.  Living expenses

    $ 0        
  

 

 

        

h.  All other expenses

    $ 0        
  

 

 

        

i.   Total expenses in the reporting period (e+f+g+h)

    $ 0        
  

 

 

        

j.   Difference between total income and total expenses (d-i)

    $ 0        
  

 

 

        

k.  List the total amount of all postpetition debts that are past due

    $ 0        
  

 

 

        

l.   Are you required to pay any Domestic Support Obligations as defined by 11 U.S.C § 101(14A)?

      Yes  ☐        No  ☒       

m.   If yes, have you made all Domestic Support Obligation payments?

      Yes  ☐        No  ☐        N/A  ☒     

Privacy Act Statement

28 U.S.C. § 589b authorizes the collection of this information, and provision of this information is mandatory under 11 U.S.C. §§ 704, 1106, and 1107. The United States Trustee will use this information to calculate statutory fee assessments under 28 U.S.C. § 1930(a)(6). The United States Trustee will also use this information to evaluate a chapter 11 debtor’s progress through the bankruptcy system, including the likelihood of a plan of reorganization being confirmed and whether the case is being prosecuted in good faith. This information may be disclosed to a bankruptcy trustee or examiner when the information is needed to perform the trustee’s or examiner’s duties or to the appropriate federal, state, local, regulatory, tribal, or foreign law enforcement agency when the information indicates a violation or potential violation of law. Other disclosures may be made for routine purposes. For a discussion of the types of routine disclosures that may be made, you may consult the Executive Office for United States Trustee’s systems of records notice, UST-001, “Bankruptcy Case Files and Associated Records.” See 71 Fed. Reg. 59,818 et seq. (Oct. 11, 2006). A copy of the notice may be obtained at the following link: http:// www.justice.gov/ust/eo/rules_regulations/index.htm. Failure to provide this information could result in the dismissal or conversion of your bankruptcy case or other action by the United States Trustee. 11 U.S.C. § 1112(b)(4)(F).

I declare under penalty of perjury that the foregoing Monthly Operating Report and its supporting documentation are true and correct and that I have been authorized to sign this report on behalf of the estate.

 

/s/ Michael Bros

      

Michael Bros

Signature of Responsible Party       Printed Name of Responsible Party

SVP, Capital Markets and Acquisitions

      

04/29/2023

Title       Date

 

UST Form 11-MOR (12/01/2021)    9   

Debtor’s Name Core Scientific Operating Company    Case No. 22-90343

 

LOGO

 

UST Form 11-MOR (12/01/2021)    10   

Debtor’s Name Core Scientific Operating Company    Case No. 22-90343

 

LOGO

 

UST Form 11-MOR (12/01/2021)    11   

Debtor’s Name Core Scientific Operating Company    Case No. 22-90343

 

LOGO

 

UST Form 11-MOR (12/01/2021)    12   

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

 

In re:    §    Chapter 11
   §   
CORE SCIENTIFIC, INC., et al.,    §    Case No. 22-90341 (DRJ)
   §   

Debtors.1

   §    (Jointly Administered)

MONTHLY OPERATING REPORT NOTES FOR JANUARY 2023

On December 21, 2022 (the “Petition Date”), Core Scientific, Inc. and its debtor affiliates, as debtors and debtors in possession in the above-captioned chapter 11 cases (collectively, the “Debtors” or the “Company”), each commenced a voluntary case under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). The Debtors are authorized to operate their businesses and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. The Debtors’ chapter 11 cases are being jointly administered for procedural purposes only pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) and Rule 1015-1 of the Bankruptcy Local Rules for the United States Bankruptcy Court for the Southern District of Texas (the “Local Rules”). On January 9, 2023, the United States Trustee for Region 7 (the “U.S. Trustee”) appointed an official committee of unsecured creditors (the “Creditors’ Committee”) in these chapter 11 cases pursuant to section 1102 of the Bankruptcy Code. No trustee or examiner has been appointed in these chapter 11 cases.

The following notes and statements of limitations and disclaimers should be referred to, and referenced in connection with, any review of this Monthly Operating Report (the “MOR”).

 

  1.

Introduction. This MOR is unaudited and does not purport to represent financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), and it is not intended to fully reconcile to the consolidated financial statements prepared by the Debtors. Information contained in this MOR has been derived from the Debtors’ books and records, but does not reflect in all circumstances presentation for GAAP or SEC reporting purposes. Therefore, to comply with their obligations to provide MORs during these chapter 11 cases, the Debtors have prepared this MOR using the best information presently available to them, which has been collected, maintained, and prepared in accordance with their historical accounting practices. Accordingly, this MOR is true and accurate to the best of the Debtors’ knowledge, information, and belief, based on

 

1 

The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, are as follows: Core Scientific Mining LLC (6971); Core Scientific, Inc. (3837); Core Scientific Acquired Mining LLC (6074); Core Scientific Operating Company (5526); Radar Relay, Inc. (0496); Core Scientific Specialty Mining (Oklahoma) LLC (4327); American Property Acquisition, LLC (0825); Starboard Capital LLC (6677); RADAR LLC (5106); American Property Acquisitions I, LLC (9717); and American Property Acquisitions, VII, LLC (3198). The Debtors’ corporate headquarters and service address is 210 Barton Springs Road, Suite 300, Austin, Texas 78704.

 

  Page 1  

  currently-available data. The results of operations and financial position contained herein are not necessarily indicative of results that may be expected for any period other than the period beginning on January 1, 2023 and ending January 31, 2023, or for the full year, and may not necessarily reflect the Debtors’ future consolidated results of operations and financial position.

 

  2.

Reservation of Rights. This MOR is limited in scope, covers the period beginning on January 1, 2023 and ending January 31, 2023, and has been prepared solely for the purpose of complying with the monthly reporting requirements of the Debtors’ chapter 11 cases. The unaudited financial information for this report has been derived from the Debtors’ books and records. The information presented herein has not been subject to all procedures that typically would be applied to financial information in accordance with U.S. GAAP. Upon the application of such procedures, the Debtors believe that the financial information could be subject to material change. The information furnished in this MOR includes normal recurring adjustments but does not include all of the adjustments that typically would be made for interim financial information presented in accordance with GAAP.

Given the complexity of the Debtors’ business, inadvertent errors or omission may occur. Accordingly, the Debtors hereby reserve all of their rights to dispute the nature, validity, status, enforceability, or executory natures of any claim amount, agreement, representation, or other statement set forth in this MOR. Further, the Debtors reserve the right to amend or supplement this MOR, if necessary, but shall be under no obligation to do so.

 

  3.

Basis of Presentation. Although the Debtors generally prepare their financial statements on a consolidated basis, the MOR has been prepared on an entity-by-entity basis (excluding most intercompany eliminations) for Debtors Core Scientific, Inc., Core Scientific Acquired Mining LLC, Core Scientific Operating Company, Core Scientific Mining LLC, Radar Relay, Inc., Core Scientific Specialty Mining (Oklahoma) LLC, American Property Acquisition, LLC, Starboard Capital LLC, RADAR LLC, American Property Acquisitions I, LLC, and American Property Acquisitions VII, LLC. The financial information contained herein is unaudited, limited in scope, covers a limited time period, and has been prepared solely for the purpose of complying with the monthly reporting requirements for chapter 11 debtors issued by the UST.

The amounts reported in this MOR are as-of January 31, 2023, the end of the Debtors’ reporting period. This MOR covers the period beginning January 1, 2023 and ending January 31, 2023.

 

  4.

Accounting Principles. The Debtors maintain their financial records according to GAAP, however the MOR does not purport to represent financial statements prepared in accordance with GAAP, nor are they intended to be fully reconciled with the financial statements of the Debtors.

The Debtors generally prepare financial statements on a consolidated basis. To the extent that there are negative asset balances for an individual Debtor, such as accounts receivable and current assets, they may be due to some intercompany elimination transactions or adjustments in each specific Debtor’s books and records.

 

Page 2

  5.

Currency. Unless otherwise indicated, all amounts in the MOR are reflected in U.S. dollars.

 

  6.

Consolidated Entity Accounts Payable and Disbursement Systems. Cash is received and disbursed by the Debtors as described in the Emergency Motion of Debtors for Entry of Interim and Final Orders (I) Authorizing Debtors to (A) Continue their Existing Cash Management System, (B) Maintain Existing Business Forms and Intercompany Arrangements, (C) Continue Intercompany Transactions, and (D) Continue Utilizing Employee Credit Cards; and (II) Granting Related Relief (Docket No. 12) (the “Cash Management Motion”) and the Debtors’ receipt and disbursement of cash is consistent with the Debtors’ historical cash management practices. Due to the consolidated cash management reporting system, certain cash payments may be paid out of a legal entity that is different than the legal entity at which the expenses were incurred. Also, certain cash receipts may be received in a different legal entity than the legal entity at which the accounts receivable is recorded. Disbursements attributed to each entity represent the entity on behalf of which payments were made, on a proportional allocated basis, from the consolidated cash management system.

 

  7.

Supporting Documentation. At the direction of the U.S. Trustee, the following schedules are attached to the MORs: (i) Statement of Cash Receipts and Disbursements; (ii) Balance Sheet; (iii) Income Statement (profit or loss statement); and (iv) Schedule of Payments to Insiders.

Statement of Cash Receipts and Disbursements. Based on guidance received from the Office of the United States Trustee in connection with the completion of UST Form 11-MOR Part 1, Cash Receipts and Disbursements, reported cash receipts and disbursements should exclude intercompany and debtor-to-debtor transactions. As a result, for those debtors with net intercompany cash outflows or inflows during the reporting period, the ending cash balances reported on Form 11-MOR Part 1 may not match the ending cash balances per the Debtors’ bank statements or the Debtors’ books and records. For additional information on ending cash balances per the Debtors’ books and records, see the attached cash balances per MOR-1: Schedule of Cash Receipts and Disbursements.

Balance Sheet. Liabilities Subject to Compromise (“LSTC”): LSTC represent the Debtors’ estimate of prepetition claims to be resolved in connection with the chapter 11 cases. As a result of the chapter 11 filings, the payment of prepetition liabilities are subject to compromise or other treatment under a plan of reorganization. The determination of how such liabilities will ultimately be settled or treated cannot be made until the Court approves a chapter 11 plan of reorganization. Accordingly, the ultimate amount of such liabilities is not determinable at this time. Prepetition liabilities that are subject to compromise under ASC 852 are preliminary and may be subject to, among other things, future adjustments depending on Court actions, further developments with respect to disputed claims, determinations of the secured status of certain claims, the values of any collateral securing such claims, rejection of executory contracts, continued reconciliation or other events.

As noted, although the Debtors generally prepare financial statements on a consolidated basis, these MORs are prepared on an entity-by-entity basis. The

 

Page 3

Debtors maintain separate balance sheets in their books and records for the following entities: Core Scientific Acquired Mining LLC, Core Scientific, Inc., Core Scientific Operating Company, and Radar Relay, Inc. The Debtors, however, do not maintain separate balance sheets for the remaining Debtor entities. Consequently, the balance sheets included in the MOR for these Debtors reflect no balances.

Values in the balance sheet(s) attached hereto represent rounded numbers. Accordingly, subtotals may not agree to the summation of the rounded numbers presented.

Income Statement. As noted, although the Debtors generally prepare financial statements on a consolidated basis, these MORs are prepared on an entity-by-entity basis. The Debtors maintain separate income statements in their books and records for the following entities: Core Scientific Acquired Mining LLC, Core Scientific, Inc., Core Scientific Operating Company, and Radar Relay, Inc. The Debtors, however, do not maintain separate income statements for the remaining Debtor entities. Consequently, the income statements included in the MOR for these Debtors reflect no income.

Schedule of Payments to Insiders. This schedule provides additional detail for the period on page 1 of the MOR. For each insider payment made during the reporting period the following information is provided: recipient; date of payment or benefit provided; amount of cash payment or market value of non-cash payment; and reason for each payment made.

 

  8.

Part 1, Cash Receipts and Disbursements. Cumulative quarter-to-date for Q1 2023 disbursements are reported in the Cumulative figures in the MOR. Cumulative case to date total disbursements through January 31, 2023 are $31,472,636.

 

  9.

Part 5a, Professional Fees and Expenses. For purposes of Part 5a of the MORs, and consistent with the Order Establishing Procedures for Interim Compensation and Reimbursement of Expenses for Professionals (Docket No. 541) (the “Interim Compensation Order”), professional fees and expenses are considered approved if the applicable Monthly Statement (as defined in the Interim Compensation Order) has been served and the objection deadline relating to such Monthly Statement has expired prior to the last day of the applicable MOR period.

 

  10.

Part 7 Questionnaire. Pursuant to certain orders of the Bankruptcy Court entered in the Debtors’ chapter 11 cases (the “First Day Orders”), the Debtors were authorized (but not directed) to pay, among other things, certain prepetition claims of their employees, taxing authorities, insurers, critical vendors, and certain other prepetition creditors. Amounts paid pursuant to the First Day Orders are monitored as to limits provided in the applicable orders of the Bankruptcy Court governing payment of such prepetition obligations, and this report is available to the U.S. Trustee as required.

 

Page 4

MOR-1: 1/1/2023 - 1/31/2023 SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS

 

Description

   Core
Scientific,
Inc.		     Core
Scientific
Acquired
Mining
LLC		     Core
Scientific
Operating
Company		     Radar
Relay,
Inc.		     Core
Scientific
Mining
LLC		     Core
Scientific
Specialty
Mining
(Oklahoma)
LLC		     American
Property
Acquisition,
LLC		     Starboard
Capital
LLC		     RADAR
LLC		     American
Property
Acquisitions
I, LLC		     American
Property
Acquisitions
VII, LLC		     Total  

Receipts

                        

Crypto Currencies Sales Proceeds

     —         2,728,618       28,811,819       —         —         —         —         —         —         —         —       $ 31,540,436  

Hosting Service

     —         —         5,009,114       —         —         —         —         —         —         —         —         5,009,114  

Other Receipts

     45       —         352,481       —         —         —         —         —         —         —         —         352,525  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Receipts

     45       2,728,618       34,173,413       —         —         —         —         —         —         —         —         36,902,076  

Disbursements

                        

Suppliers or vendors

     2,514,771       1,007,353       12,583,419       —         —         —         —         —         —         —         —       $ 16,105,543  

Taxes / Governmental

     —         439,021       5,498,326       —         —         —         —         —         —         —         —         5,937,346  

Services

     —         1,117       13,991       —         —         —         —         —         —         —         —         15,109  

Financial / Bank Fees

     4,300       13       160       —         —         —         —         —         —         —         —         4,473  

Employee Expense

     —         230,231       2,883,433       —         —         —         —         —         —         —         —         3,113,664  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Disbursements

     2,519,071       1,677,735       20,979,329       —         —         —         —         —         —         —         —         25,176,135  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net Cash Flow (excl. Internal Transfers)

     (2,519,026 )      1,050,883       13,194,084       —         —         —         —         —         —         —         —         11,725,941  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Bank Cash Balance Beginning of Month

     35,747,841       697,746       16,371,155       —         —         —         —         —         —         —         —         52,816,742  

Net Cash Flow (excl. Internal Transfers; w/ Allocation)

     (2,519,026 )      1,050,883       13,194,084       —         —         —         —         —         —         —         —      
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

MOR Part 1 d. Cash Balance

   $ 33,228,814     $ 1,748,629     $ 29,565,239     $ —       $ —       $ —       $ —       $ —       $ —       $ —       $ —       $ 64,542,683  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Reversing Disbursement Allocation

     —         1,675,120       (1,675,120 )      —         —         —         —         —         —         —         —         —    

Internal Transfers

     (6,295,746 )      (2,200,000 )      8,495,746       —         —         —         —         —         —         —         —         —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Cash Balance End of Month

   $ 26,933,068     $ 1,223,749     $ 36,385,865     $ —       $ —       $ —       $ —       $ —       $ —       $ —       $ —       $ 64,542,683  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

MOR-2: End of Jan 2023 Balance Sheet

 

(US $)

   Core
Scientific,
Inc.		     Core
Scientific
Acquired
Mining LLC		     Core
Scientific
Operating
Company		     Radar
Relay Inc		     Core
Scientific
Mining
LLC		     Core
Scientific
Specialty
Mining
(Oklahoma)
LLC		     American
Property
Acquisition,
LLC		     Starboard
Capital
LLC		     RADAR
LLC		     American
Property
Acquisitions
I, LLC		     American
Property
Acquisitions
VII, LLC		     Elimination
Co		     Total¹  

ASSETS

                          

Cash and Equivalents

     —         1,223,749       35,777,275       —         —         —         —         —         —         —         —         —         37,001,024  

Restricted Cash

     —         —         27,541,658       —         —         —         —         —         —         —         —         —         27,541,658  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Cash

     —         1,223,749       63,318,933       —         —         —         —         —         —         —         —         —         64,542,682  

Accounts receivable, net of allowance

     —         —         464,216       —         —         —         —         —         —         —         —         —         464,216  

Accounts receivable from related parties

     488,990,509       140,152,775       (486,675,668 )      1,189,298       —         —         —         —         —         —         —         (143,591,406 )      65,507  

Deposits for equipment

     —         —         25,827,664       —         —         —         —         —         —         —         —         —         25,827,664  

Digital currency assets

     —         —         —         —         —         —         —         —         —         —         —         —         —    

Prepaid expenses and other

     —         22,748,095       24,659,767       —         —         —         —         —         —         —         —         (22,738,466 )      24,669,396  

Total other current assets

     1,804,708,371       (1,128,933,066 )      (673,043,932 )      —         —         —         —         —         —         —         —         —         2,731,373  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Current Assets

     2,293,698,880       (964,808,448 )      (1,045,449,019 )      1,189,298       —         —         —         —         —         —         —         (166,329,871 )      118,300,839  

Property, plant and equipment

     —         67,098,040       588,325,778       —         —         —         —         —         —         —         —         (15,616,704 )      639,807,114  

Operating lease-right-of-use assets

     —         —         20,264,625       —         —         —         —         —         —         —         —         —         20,264,625  

Goodwill

     —         232,587,379       (167,058,249 )      (65,529,130 )      —         —         —         —         —         —         —         —         0  

Intangible assets, net

     —         —         1,674,297       —         —         —         —         —         —         —         —         —         1,674,297  

Other noncurrent assets

     2,558,789       (0 )      6,781,630       —         —         —         —         —         —         —         —         —         9,340,419  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Assets

     2,296,257,669       (665,123,029 )      (595,460,938 )      (64,339,833 )      —         —         —         —         —         —         —         (181,946,575 )      789,387,294  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

LIABILITIES, PREFERRED STOCK & EQUITY

                          

Accounts Payable

     —         143,605,208       86,090,383       12,682       —         —         —         —         —         —         —         (143,591,406 )      86,116,867  

Accrued expenses and other

     199,366       17,449,784       85,495,328       (12,734 )      —         —         —         —         —         —         —         —         103,131,744  

Deferred revenue

     —         —         112,557,414       —         —         —         —         —         —         —         —         (38,626,663 )      73,930,751  

Derivative warrant liabilities

     (900 )      —         —         —         —         —         —         —         —         —         —         —         (900 ) 

Operating lease liabilities, current portion

     —         —         1,170,064       —         —         —         —         —         —         —         —         —         1,170,064  

Financing lease liabilities, current portion

     —         —         70,796,077       —         —         —         —         —         —         —         —         —         70,796,077  

Long-term debt, current portion

     —         —         880,936,991       —         —         —         —         —         —         —         —         —         880,936,991  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total current liabilities

     198,466       161,054,993       1,237,046,258       (52 )      —         —         —         —         —         —         —         (182,218,069 )      1,216,081,595  

Operating lease liabilities, net of current portion

     —         —         14,156,228       —         —         —         —         —         —         —         —         —         14,156,228  

Financing lease liabilities, net of current portion

     —         —         —         —         —         —         —         —         —         —         —         —         —    

Long-term debt, net of current portion

     8,356,293       —         (8,356,293 )      —         —         —         —         —         —         —         —         —         (0 ) 

Other noncurrent liabilities

     —         18,084,856       (15,497,086 )      (2,587,769 )      —         —         —         —         —         —         —         —         1  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Liabilities

     8,554,759       179,139,849       1,227,349,107       (2,587,821 )      —         —         —         —         —         —         —         (182,218,069 )      1,230,237,824  

Pre-Petition Subject to Compromise

     684,395,370       —         (684,395,370 )      —         —         —         —         —         —         —         —         —         —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Pre-Petition Subject to Compromise

     684,395,370       —         (684,395,370 )      —         —         —         —         —         —         —         —         —         —    

Post-Petition Short Term Liabilities

     —         —         —         —         —         —         —         —         —         —         —         —         —    

Post-Petition Long Term Liabilities

     —         —         —         —         —         —         —         —         —         —         —         —         —    

Preferred stock

     —         —         —         —         —         —         —         —         —         —         —         —         —    

Common stock

     37,478       —         —         —         —         —         —         —         —         —         —         —         37,478  

Additional paid-in capital

     1,783,051,000       (15,979,141 )      2,887,621       —         —         —         —         —         —         —         —         —         1,769,959,480  

Accumulated deficit

     (179,780,938 )      (828,330,719 )      (1,141,302,296 )      (61,752,012 )      —         —         —         —         —         —         —         318,476       (2,210,847,488 ) 

Other Comprehensive Income

     —         —         —         —         —         —         —         —         —         —         —         —         —    

Cumulative Translation Adjustment

     —         46,983       —         —         —         —         —         —         —         —         —         (46,983 )      —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Equity

     1,603,307,540       (844,262,878 )      (1,138,414,675 )      (61,752,012 )      —         —         —         —         —         —         —         271,494       (440,850,530 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Liabilities, Preferred Stock & Equity

     2,296,257,669       (665,123,029 )      (595,460,938 )      (64,339,833 )      —         —         —         —         —         —         —         (181,946,575 )      789,387,294  

 

1 

The ‘Elimination Co’ column addresses the accounting of intercompany balances to enable consolidated reporting in the ‘Total’ column

MOR-3: 1/1/2023 - 1/31/2023 Profit & Loss

 

Total Revenue

(US $)

   Core
Scientific,
Inc.		     Core
Scientific
Acquired
Mining LLC		     Core
Scientific
Operating
Company		     Radar
Relay Inc		     Core
Scientific
Mining
LLC		     Core
Scientific
Specialty
Mining
(Oklahoma)
LLC		     American
Property
Acquisition,
LLC		     Starboard
Capital
LLC		     RADAR
LLC		     American
Property
Acquisitions
I, LLC		     American
Property
Acquisitions
VII, LLC		  

Hosting revenue from customers

     —         —         6,314,128.30       —         —         —         —         —         —         —         —    

Hosting revenue from related parties

     —         —         1,308,852.63       —         —         —         —         —         —         —         —    

Equipment sales to customers

     —         —         —         —         —         —         —         —         —         —         —    

Equipment sales to related parties

     —         —         —         —         —         —         —         —         —         —         —    

Digital asset mining income

     —         2,661,793.73       28,276,892.87       —         —         —         —         —         —         —         —    

Network services and defi revenue

     —         —         —         —         —         —         —         —         —         —         —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Revenue

     —         2,661,793.73       35,899,873.80       —         —         —         —         —         —         —         —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Cost of revenue

     —         (3,349,178.15 )      (59,046,556.03 )      —         —         —         —         —         —         —         —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Gross Profit

     —         (687,384.42 )      (23,146,682.23 )      —         —         —         —         —         —         —         —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Gain (loss) on legal settlements

     —         —         —         —         —         —         —         —         —         —         —    

Gain (loss) from sales of digital currency assets

     —         11,455.01       138,931.37       —         —         —         —         —         —         —         —    

Impairments of digital currency assets

     —         —         —         —         —         —         —         —         —         —         —    

Impairment of goodwill and other intangibles

     —         —         —         —         —         —         —         —         —         —         —    

Impairment of property, plant and equipment

     —         —         —         —         —         —         —         —         —         —         —    

Losses on exchange or disposal of property, plant and equipment

     —         —         —         —         —         —         —         —         —         —         —    
Operating expenses:     —               —         —         —         —         —         —         —    

Research and development

     —         —         (659,379.93 )      (10,931.82 )      —         —         —         —         —         —         —    

Sales and marketing

     —         —         (338,532.41 )      —         —         —         —         —         —         —         —    

General and administrative

     —         (8,357.78 )      (4,762,536.85 )      (50.00 )      —         —         —         —         —         —         —    

Advisor Fees

     —         —         —         —         —         —         —         —         —         —         —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
Total operating expenses     —         (8,357.78 )      (5,760,449.19 )      (10,981.82 )      —         —         —         —         —         —         —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
Operating Income (Loss)     —         (684,287.19 )      (28,768,200.05 )      (10,981.82 )      —         —         —         —         —         —         —    

Non-operating income (expense), net:

     —               —         —         —         —         —         —         —    

Loss on debt extinguishment

     —         —         —         —         —         —         —         —         —         —         —    

Interest expense, net

     —         —         13,482.06       —         —         —         —         —         —         —         —    

Other non-operating expenses, net

     —         —         —         —         —         —         —         —         —         —         —    

Reorganization items

     —         —         (7,646,333.49 )      —         —         —         —         —         —         —         —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Non-operating income (expense), net:

     —         —         (7,632,851.43 )      —         —         —         —         —         —         —         —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Income (loss) before income taxes

     —         (684,287.19 )      (36,401,051.48 )      (10,981.82 )      —         —         —         —         —         —         —    

Income tax expense

     —         —         —         —         —         —         —         —         —         —         —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
Net Income (Loss)     —         (684,287.19 )      (36,401,051.48 )      (10,981.82 )      —         —         —         —         —         —         —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Core Scientific Operating Company

MOR-5: 1/1/2023 - 1/31/2023 Payments to Insiders

 

Name

   

Title

    Date      Amount     

Description

Michael Levitt

    Chief Executive Officer      1/6/2023      $ 2,307.69      Base Salary

Michael Levitt

    Chief Executive Officer      1/20/2023      $ 2,307.69      Base Salary

Denise Sterling

    Executive Vice President, Chief Financial Officer      1/6/2023      $ 11,538.46      Base Salary

Denise Sterling

    Executive Vice President, Chief Financial Officer      1/20/2023      $ 11,538.46      Base Salary

Darin Feinstein

    Executive Vice President, Strategy      1/6/2023      $ 2,307.69      Base Salary

Darin Feinstein

    Executive Vice President, Strategy      1/20/2023      $ 2,307.69      Base Salary

Todd DuChene

    President and Chief Legal Officer      1/6/2023      $ 11,538.46      Base Salary

Todd DuChene

    President and Chief Legal Officer      1/20/2023      $ 19,230.77      Base Salary

Exhibit 99.3

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

 

In re:    §        Chapter 11
   §   
CORE SCIENTIFIC, INC., et al.,    §    Case No. 22-90341 (DRJ)
   §   

Debtors.1

   §    (Jointly Administered)

AMENDED JANUARY 2023 MONTHLY

OPERATING REPORT FOR CORE SCIENTIFIC ACQUIRED MINING LLC2

 

 

1 

The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, are as follows: Core Scientific Mining LLC (6971); Core Scientific, Inc. (3837); Core Scientific Acquired Mining LLC (6074); Core Scientific Operating Company (5526); Radar Relay, Inc. (0496); Core Scientific Specialty Mining (Oklahoma) LLC (4327); American Property Acquisition, LLC (0825); Starboard Capital LLC (6677); RADAR LLC (5106); American Property Acquisitions I, LLC (9717); and American Property Acquisitions, VII, LLC (3198). The Debtors’ corporate headquarters and service address is 210 Barton Springs Road, Suite 300, Austin, Texas 78704.

2 

This document (the “Amended MOR”) amends the Debtor-In-Possession Monthly Operating Report for Filing Period Ending 1/31/2023 (Case No. 22-90342, Docket No. 6) (the “Initial MOR”). For a list of changes to the Amended MOR, please see Exhibit A to the Notice of Filing of Amended January and February 2023 MORs for Debtor Core Scientific Acquired Mining, filed contemporaneously herewith.

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF TEXAS

HOUSTON

 

In Re. Core Scientific Acquired Mining LLC    §       Case No. 22-90342                                                                  
              §                           
 

 

    §       Lead Case No. 22-90341                                                         
                      Debtor(s)    §      
           ☒ Jointly Administered

 

Monthly Operating Report         Chapter 11
Reporting Period Ended: 01/31/2023                                                Petition Date: 12/21/2022
Months Pending: 1       Industry Classification:     3    3     4     1

 

Reporting Method:    Accrual Basis    ☒    Cash Basis    ☐
Debtor’s Full-Time Employees (current):       0            
Debtor’s Full-Time Employees (as of date of order for relief):    0            

Supporting Documentation (check all that are attached):

(For jointly administered debtors, any required schedules must be provided on a non-consolidated basis for each debtor)

 

☒

Statement of cash receipts and disbursements

☒

Balance sheet containing the summary and detail of the assets, liabilities and equity (net worth) or deficit

☒

Statement of operations (profit or loss statement)

☐

Accounts receivable aging

☐

Postpetition liabilities aging

☐

Statement of capital assets

☐

Schedule of payments to professionals

☐

Schedule of payments to insiders

☐

All bank statements and bank reconciliations for the reporting period

☐

Description of the assets sold or transferred and the terms of the sale or transfer

 

/s/ Alfredo R. Pérez

      

Alfredo R. Pérez

Signature of Responsible Party                    Printed Name of Responsible Party

04/29/2023

      
Date      

700 Louisiana Street, Suite 1700, Houston, Texas 77002

      Address

STATEMENT: This Periodic Report is associated with an open bankruptcy case; therefore, Paperwork Reduction Act exemption 5 C.F.R. § 1320.4(a)(2) applies.

 

UST Form 11-MOR (12/01/2021)   1

Debtor’s Name Core Scientific Acquired Mining LLC    Case No. 22-90342

 

Part 1: Cash Receipts and Disbursements

    Current Month      Cumulative  

a.

   

Cash balance beginning of month

    $ 697,746     
     

 

 

     

b.

   

Total receipts (net of transfers between accounts)

    $ 2,728,618      $ 3,417,958  
     

 

 

     

 

 

  

c.

   

Total disbursements (net of transfers between accounts)

    $ 1,677,735      $ 1,677,735  
     

 

 

     

 

 

  

d.

   

Cash balance end of month (a+b-c)

    $ 1,748,629     
     

 

 

     

e.

   

Disbursements made by third party for the benefit of the estate

    $ 0      $ 0  
     

 

 

     

 

 

  

f.

   

Total disbursements for quarterly fee calculation (c+e)

    $ 1,677,735      $ 1,677,735  
     

 

 

     

 

 

  

Part 2: Asset and Liability Status

(Not generally applicable to Individual Debtors. See Instructions.)

    Current Month         

a.

   

Accounts receivable (total net of allowance)

    $ 140,152,775     
     

 

 

     

b.

   

Accounts receivable over 90 days outstanding (net of allowance)

    $ 0     
     

 

 

     

c.

   

Inventory ( Book ☒     Market ☐     Other ☐     (attach explanation))

    $ 0     
     

 

 

     

d

   

Total current assets

    $ -964,808,448     
     

 

 

     

e.

   

Total assets

    $ -665,123,029     
     

 

 

     

f.

   

Postpetition payables (excluding taxes)

    $ 0     
     

 

 

     

g.

   

Postpetition payables past due (excluding taxes)

    $ 0     
     

 

 

     

h.

   

Postpetition taxes payable

    $ 0     
     

 

 

     

i.

   

Postpetition taxes past due

    $ 0     
     

 

 

     

j.

   

Total postpetition debt (f+h)

    $ 0     
     

 

 

     

k.

   

Prepetition secured debt

    $ 0     
     

 

 

     

l.

   

Prepetition priority debt

    $ 0     
     

 

 

     

m.

   

Prepetition unsecured debt

    $ 0     
     

 

 

     

n.

   

Total liabilities (debt) (j+k+l+m)

    $ 0     
     

 

 

     

o.

   

Ending equity/net worth (e-n)

    $ -665,123,029     
     

 

 

     

Part 3: Assets Sold or Transferred

    Current Month      Cumulative  

a.

   

Total cash sales price for assets sold/transferred outside the ordinary course of business

    $ 0      $ 0  
     

 

 

     

 

 

  

b.

   

Total payments to third parties incident to assets being sold/transferred outside the ordinary course of business

    $ 0      $ 0  
     

 

 

     

 

 

  

c.

   

Net cash proceeds from assets sold/transferred outside the ordinary course of business (a-b)

    $ 0      $ 0  
     

 

 

     

 

 

  

Part 4: Income Statement (Statement of Operations)

(Not generally applicable to Individual Debtors. See Instructions.)

    Current Month      Cumulative  

a.

   

Gross income/sales (net of returns and allowances)

    $ 2,661,794     
     

 

 

     

b.

   

Cost of goods sold (inclusive of depreciation, if applicable)

    $ 3,349,178     
     

 

 

     

c.

   

Gross profit (a-b)

    $ -687,384     
     

 

 

     

d.

   

Selling expenses

    $ 0     
     

 

 

     

e.

   

General and administrative expenses

    $ 8,358     
     

 

 

     

f.

   

Other expenses

    $ 0     
     

 

 

     

g.

   

Depreciation and/or amortization (not included in 4b)

    $ 1,847     
     

 

 

     

h.

   

Interest

    $ 0     
     

 

 

     

i.

   

Taxes (local, state, and federal)

    $ 0     
     

 

 

     

j.

   

Reorganization items

    $ 0     
     

 

 

     

k.

   

Profit (loss)

    $ -684,287      $ -1,068,379  
     

 

 

     

 

 

  

 

UST Form 11-MOR (12/01/2021)   2       

Debtor’s Name Core Scientific Acquired Mining LLC    Case No. 22-90342

 

Part 5: Professional Fees and Expenses
         

Approved
Current Month

  

Approved
Cumulative

  

Paid Current
Month

  

Paid
    Cumulative    

a.   Debtor’s professional fees & expenses (bankruptcy) Aggregate Total                
   

Itemized Breakdown by Firm

                
        Firm Name   Role                
    i                        
    ii                        
    iii                        
    iv                        
    v                        
    vi                        
    vii                        
    viii                        
    ix                        
    x                        
    xi                        
    xii                        
    xiii                        
    xiv                        
    xv                        
    xvi                        
    xvii                        
    xviii                        
    xix                        
    xx                        
    xxi                        
    xxii                        
    xxiii                        
    xxiv                        
    xxv                        
    xxvi                        
    xxvii                        
    xxviii                        
    xxix                        
    xxx                        
    xxxi                        
    xxxii                        
    xxxiii                        
    xxxiv                        
    xxxv                        
    xxxvi                        

 

UST Form 11-MOR (12/01/2021)   3       

Debtor’s Name Core Scientific Acquired Mining LLC    Case No. 22-90342

 

    xxxvii                                           
    xxxviii                        
    xxxix                        
    xl                        
    xli                        
    xlii                        
    xliii                        
    xliv                        
    xlv                        
    xlvi                        
    xlvii                        
    xlviii                        
    xlix                        
    l                        
    li                        
    lii                        
    liii                        
    liv                        
    lv                        
    lvi                        
    lvii                        
    lviii                        
    lix                        
    lx                        
    lxi                        
    lxii                        
    lxiii                        
    lxiv                        
    lxv                        
    lxvi                        
    lxvii                        
    lxviii                        
    lxix                        
    lxx                        
    lxxi                        
    lxxii                        
    lxxiii                        
    lxxiv                        
    lxxv                        
    lxxvi                        
    lxxvii                        
    lxxviii                        

 

UST Form 11-MOR (12/01/2021)   4       

Debtor’s Name Core Scientific Acquired Mining LLC    Case No. 22-90342

 

    lxxix                                              
  lxxx                        
  lxxxi                        
  lxxxii                        
  lxxxiii                        
  lxxxiv                        
  lxxxv                        
  lxxxvi                        
  lxxxvii                        
  lxxxviii                        
  lxxxix                        
  xc                        
  xci                        
  xcii                        
  xciii                        
  xciv                        
  xcv                        
  xcvi                        
  xcvii                        
  xcviii                        
  xcix                        
  c                        
  ci                        
             
         

Approved
Current Month

  

Approved
Cumulative

  

Paid Current
Month

  

Paid
Cumulative

b.   Debtor’s professional fees & expenses (nonbankruptcy) Aggregate Total                
  Itemized Breakdown by Firm                
      Firm Name   Role                
  i                        
  ii                        
  iii                        
  iv                        
  v                        
  vi                        
  vii                        
  viii                        
  ix                        
  x                        
  xi                        
  xii                        
  xiii                        
  xiv                        

 

UST Form 11-MOR (12/01/2021)   5       

Debtor’s Name Core Scientific Acquired Mining LLC    Case No. 22-90342

 

    xv                                              
  xvi                        
  xvii                        
  xviii                        
  xix                        
  xx                        
  xxi                        
  xxii                        
  xxiii                        
  xxiv                        
  xxv                        
  xxvi                        
  xxvii                        
  xxviii                        
  xxix                        
  xxx                        
  xxxi                        
  xxxii                        
  xxxiii                        
  xxxiv                        
  xxxv                        
  xxxvi                        
  xxxvii                        
  xxxviii                        
  xxxix                        
  xl                        
  xli                        
  xlii                        
  xliii                        
  xliv                        
  xlv                        
  xlvi                        
  xlvii                        
  xlviii                        
  xlix                        
  l                        
  li                        
  lii                        
  liii                        
  liv                        
  lv                        
  lvi                        

 

UST Form 11-MOR (12/01/2021)   6       

Debtor’s Name Core Scientific Acquired Mining LLC    Case No. 22-90342

 

    lvii                        
  lviii                        
  lix                        
  lx                        
  lxi                        
  lxii                        
  lxiii                        
  lxiv                        
  lxv                        
  lxvi                        
  lxvii                        
  lxviii                        
  lxix                        
  lxx                        
  lxxi                        
  lxxii                        
  lxxiii                        
  lxxiv                        
  lxxv                        
  lxxvi                        
  lxxvii                        
  lxxviii                        
  lxxix                        
  lxxx                        
  lxxxi                        
  lxxxii                        
  lxxxiii                        
  lxxxiv                        
  lxxxv                        
  lxxxvi                        
  lxxxvii                        
  lxxxviii                        
  lxxxix                        
  xc                        
  xci                        
  xcii                        
  xciii                        
  xciv                        
  xcv                        
  xcvi                        
  xcvii                        
  xcviii                        
    xcix                        
    c                        
c.   All professional fees and expenses (debtor & committees)   $0     $0     $0     $0 

 

UST Form 11-MOR (12/01/2021)   7       

Debtor’s Name Core Scientific Acquired Mining LLC    Case No. 22-90342

 

Part 6: Postpetition Taxes

    Current Month      Cumulative  

a.   Postpetition income taxes accrued (local, state, and federal)

    $ 0      $ 0  
  

 

 

     

 

 

  

b.  Postpetition income taxes paid (local, state, and federal)

    $ 0      $ 0  
  

 

 

     

 

 

  

c.   Postpetition employer payroll taxes accrued

    $ 0      $ 0  
  

 

 

     

 

 

  

d.  Postpetition employer payroll taxes paid

    $ 0      $ 0  
  

 

 

     

 

 

  

e.   Postpetition property taxes paid

    $ 0      $ 0  
  

 

 

     

 

 

  

f.   Postpetition other taxes accrued (local, state, and federal)

    $ 0      $ 0  
  

 

 

     

 

 

  

g.  Postpetition other taxes paid (local, state, and federal)

    $ 0      $ 0  
  

 

 

     

 

 

  

Part 7: Questionnaire - During this reporting period:

  

a.   Were any payments made on prepetition debt? (if yes, see Instructions)

      Yes  ☐      No  ☒     

b.  Were any payments made outside the ordinary course of business without court approval? (if yes, see Instructions)

      Yes  ☐      No  ☒     

c.   Were any payments made to or on behalf of insiders?

      Yes  ☐      No  ☒     

d.  Are you current on postpetition tax return filings?

      Yes  ☒      No  ☐     

e.   Are you current on postpetition estimated tax payments?

      Yes  ☒      No  ☐     

f.   Were all trust fund taxes remitted on a current basis?

      Yes  ☒      No  ☐     

g.  Was there any postpetition borrowing, other than trade credit? (if yes, see Instructions)

      Yes  ☐      No  ☒     

h.  Were all payments made to or on behalf of professionals approved by the court?

      Yes  ☐      No  ☐      N/A ☒    

i.   Do you have: Worker’s compensation insurance?

      Yes  ☒      No  ☐     

If yes, are your premiums current?

      Yes  ☒      No  ☐      N/A ☐       (if no, see Instructions)  

Casualty/property insurance?

      Yes  ☒      No  ☐     

If yes, are your premiums current?

      Yes  ☒      No  ☐      N/A ☐       (if no, see Instructions)  

General liability insurance?

      Yes  ☒      No  ☐     

If yes, are your premiums current?

      Yes  ☒      No  ☐      N/A ☐       (if no, see Instructions)  

j.   Has a plan of reorganization been filed with the court?

      Yes  ☐      No  ☒     

k.  Has a disclosure statement been filed with the court?

      Yes  ☐      No  ☒     

l.   Are you current with quarterly U.S. Trustee fees as set forth under 28 U.S.C. § 1930?

      Yes  ☒      No  ☐     

 

UST Form 11-MOR (12/01/2021)   8       

Debtor’s Name Core Scientific Acquired Mining LLC    Case No. 22-90342

 

Part 8: Individual Chapter 11 Debtors (Only)

                     

a.   Gross income (receipts) from salary and wages

    $                     0                                  
  

 

 

        

b.  Gross income (receipts) from self-employment

    $ 0        
  

 

 

        

c.   Gross income from all other sources

    $ 0        
  

 

 

        

d.  Total income in the reporting period (a+b+c)

    $ 0        
  

 

 

        

e.   Payroll deductions

    $ 0        
  

 

 

        

f.   Self-employment related expenses

    $ 0        
  

 

 

        

g.  Living expenses

    $ 0        
  

 

 

        

h.  All other expenses

    $ 0        
  

 

 

        

i.   Total expenses in the reporting period (e+f+g+h)

    $ 0        
  

 

 

        

j.   Difference between total income and total expenses (d-i)

    $ 0        
  

 

 

        

k.  List the total amount of all postpetition debts that are past due

    $ 0        
  

 

 

        

l. Are you required to pay any Domestic Support Obligations as defined by 11 U.S.C § 101(14A)?

      Yes  ☐      No  ☒     

m. If yes, have you made all Domestic Support Obligation payments?

      Yes  ☐      No  ☐      N/A  ☒   

Privacy Act Statement

28 U.S.C. § 589b authorizes the collection of this information, and provision of this information is mandatory under 11 U.S.C.

§§ 704, 1106, and 1107. The United States Trustee will use this information to calculate statutory fee assessments under 28 U.S.C. § 1930(a)(6). The United States Trustee will also use this information to evaluate a chapter 11 debtor’s progress through the bankruptcy system, including the likelihood of a plan of reorganization being confirmed and whether the case is being prosecuted in good faith. This information may be disclosed to a bankruptcy trustee or examiner when the information is needed to perform the trustee’s or examiner’s duties or to the appropriate federal, state, local, regulatory, tribal, or foreign law enforcement agency when the information indicates a violation or potential violation of law. Other disclosures may be made for routine purposes. For a discussion of the types of routine disclosures that may be made, you may consult the Executive Office for United States Trustee’s systems of records notice, UST-001, “Bankruptcy Case Files and Associated Records.” See 71 Fed. Reg. 59,818 et seq. (Oct. 11, 2006). A copy of the notice may be obtained at the following link: http:// www.justice.gov/ust/eo/rules_regulations/index.htm. Failure to provide this information could result in the dismissal or conversion of your bankruptcy case or other action by the United States Trustee. 11 U.S.C. § 1112(b)(4)(F).

I declare under penalty of perjury that the foregoing Monthly Operating Report and its supporting documentation are true and correct and that I have been authorized to sign this report on behalf of the estate.

 

/s/ Michael Bros

      

Michael Bros

Signature of Responsible Party       Printed Name of Responsible Party

SVP, Capital Markets and Acquisitions

      

04/29/2023

Title       Date

 

UST Form 11-MOR (12/01/2021)   9       

Debtor’s Name Core Scientific Acquired Mining LLC    Case No. 22-90342

 

LOGO

 

UST Form 11-MOR (12/01/2021)   10       

Debtor’s Name Core Scientific Acquired Mining LLC    Case No. 22-90342

 

LOGO

 

UST Form 11-MOR (12/01/2021)   11       

Debtor’s Name Core Scientific Acquired Mining LLC    Case No. 22-90342

 

LOGO

 

UST Form 11-MOR (12/01/2021)   12       

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

 

In re:    §    Chapter 11
   §   
CORE SCIENTIFIC, INC., et al.,    §    Case No. 22-90341 (DRJ)
   §   

Debtors.1

    §    (Jointly Administered)

MONTHLY OPERATING REPORT NOTES FOR JANUARY 2023

On December 21, 2022 (the “Petition Date”), Core Scientific, Inc. and its debtor affiliates, as debtors and debtors in possession in the above-captioned chapter 11 cases (collectively, the “Debtors” or the “Company”), each commenced a voluntary case under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). The Debtors are authorized to operate their businesses and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. The Debtors’ chapter 11 cases are being jointly administered for procedural purposes only pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) and Rule 1015-1 of the Bankruptcy Local Rules for the United States Bankruptcy Court for the Southern District of Texas (the “Local Rules”). On January 9, 2023, the United States Trustee for Region 7 (the “U.S. Trustee”) appointed an official committee of unsecured creditors (the “Creditors’ Committee”) in these chapter 11 cases pursuant to section 1102 of the Bankruptcy Code. No trustee or examiner has been appointed in these chapter 11 cases.

The following notes and statements of limitations and disclaimers should be referred to, and referenced in connection with, any review of this Monthly Operating Report (the “MOR”).

 

  1.

Introduction. This MOR is unaudited and does not purport to represent financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), and it is not intended to fully reconcile to the consolidated financial statements prepared by the Debtors. Information contained in this MOR has been derived from the Debtors’ books and records, but does not reflect in all circumstances presentation for GAAP or SEC reporting purposes. Therefore, to comply with their obligations to provide MORs during these chapter 11 cases, the Debtors have prepared this MOR using the best information presently available to them, which has been collected, maintained, and prepared in accordance with their historical accounting practices. Accordingly, this MOR is true and accurate to the best of the Debtors’ knowledge, information, and belief, based on

 

1 

The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, are as follows: Core Scientific Mining LLC (6971); Core Scientific, Inc. (3837); Core Scientific Acquired Mining LLC (6074); Core Scientific Operating Company (5526); Radar Relay, Inc. (0496); Core Scientific Specialty Mining (Oklahoma) LLC (4327); American Property Acquisition, LLC (0825); Starboard Capital LLC (6677); RADAR LLC (5106); American Property Acquisitions I, LLC (9717); and American Property Acquisitions, VII, LLC (3198). The Debtors’ corporate headquarters and service address is 210 Barton Springs Road, Suite 300, Austin, Texas 78704.

 

Page 1

  currently-available data. The results of operations and financial position contained herein are not necessarily indicative of results that may be expected for any period other than the period beginning on January 1, 2023 and ending January 31, 2023, or for the full year, and may not necessarily reflect the Debtors’ future consolidated results of operations and financial position.

 

  2.

Reservation of Rights. This MOR is limited in scope, covers the period beginning on January 1, 2023 and ending January 31, 2023, and has been prepared solely for the purpose of complying with the monthly reporting requirements of the Debtors’ chapter 11 cases. The unaudited financial information for this report has been derived from the Debtors’ books and records. The information presented herein has not been subject to all procedures that typically would be applied to financial information in accordance with U.S. GAAP. Upon the application of such procedures, the Debtors believe that the financial information could be subject to material change. The information furnished in this MOR includes normal recurring adjustments but does not include all of the adjustments that typically would be made for interim financial information presented in accordance with GAAP.

Given the complexity of the Debtors’ business, inadvertent errors or omission may occur. Accordingly, the Debtors hereby reserve all of their rights to dispute the nature, validity, status, enforceability, or executory natures of any claim amount, agreement, representation, or other statement set forth in this MOR. Further, the Debtors reserve the right to amend or supplement this MOR, if necessary, but shall be under no obligation to do so.

 

  3.

Basis of Presentation. Although the Debtors generally prepare their financial statements on a consolidated basis, the MOR has been prepared on an entity-by-entity basis (excluding most intercompany eliminations) for Debtors Core Scientific, Inc., Core Scientific Acquired Mining LLC, Core Scientific Operating Company, Core Scientific Mining LLC, Radar Relay, Inc., Core Scientific Specialty Mining (Oklahoma) LLC, American Property Acquisition, LLC, Starboard Capital LLC, RADAR LLC, American Property Acquisitions I, LLC, and American Property Acquisitions VII, LLC. The financial information contained herein is unaudited, limited in scope, covers a limited time period, and has been prepared solely for the purpose of complying with the monthly reporting requirements for chapter 11 debtors issued by the UST.

The amounts reported in this MOR are as-of January 31, 2023, the end of the Debtors’ reporting period. This MOR covers the period beginning January 1, 2023 and ending January 31, 2023.

 

  4.

Accounting Principles. The Debtors maintain their financial records according to GAAP, however the MOR does not purport to represent financial statements prepared in accordance with GAAP, nor are they intended to be fully reconciled with the financial statements of the Debtors.

The Debtors generally prepare financial statements on a consolidated basis. To the extent that there are negative asset balances for an individual Debtor, such as accounts receivable and current assets, they may be due to some intercompany elimination transactions or adjustments in each specific Debtor’s books and records.

 

Page 2

  5.

Currency. Unless otherwise indicated, all amounts in the MOR are reflected in U.S. dollars.

 

  6.

Consolidated Entity Accounts Payable and Disbursement Systems. Cash is received and disbursed by the Debtors as described in the Emergency Motion of Debtors for Entry of Interim and Final Orders (I) Authorizing Debtors to (A) Continue their Existing Cash Management System, (B) Maintain Existing Business Forms and Intercompany Arrangements, (C) Continue Intercompany Transactions, and (D) Continue Utilizing Employee Credit Cards; and (II) Granting Related Relief (Docket No. 12) (the “Cash Management Motion”) and the Debtors’ receipt and disbursement of cash is consistent with the Debtors’ historical cash management practices. Due to the consolidated cash management reporting system, certain cash payments may be paid out of a legal entity that is different than the legal entity at which the expenses were incurred. Also, certain cash receipts may be received in a different legal entity than the legal entity at which the accounts receivable is recorded. Disbursements attributed to each entity represent the entity on behalf of which payments were made, on a proportional allocated basis, from the consolidated cash management system.

 

  7.

Supporting Documentation. At the direction of the U.S. Trustee, the following schedules are attached to the MORs: (i) Statement of Cash Receipts and Disbursements; (ii) Balance Sheet; (iii) Income Statement (profit or loss statement); and (iv) Schedule of Payments to Insiders.

Statement of Cash Receipts and Disbursements. Based on guidance received from the Office of the United States Trustee in connection with the completion of UST Form 11-MOR Part 1, Cash Receipts and Disbursements, reported cash receipts and disbursements should exclude intercompany and debtor-to-debtor transactions. As a result, for those debtors with net intercompany cash outflows or inflows during the reporting period, the ending cash balances reported on Form 11-MOR Part 1 may not match the ending cash balances per the Debtors’ bank statements or the Debtors’ books and records. For additional information on ending cash balances per the Debtors’ books and records, see the attached cash balances per MOR-1: Schedule of Cash Receipts and Disbursements.

Balance Sheet. Liabilities Subject to Compromise (“LSTC”): LSTC represent the Debtors’ estimate of prepetition claims to be resolved in connection with the chapter 11 cases. As a result of the chapter 11 filings, the payment of prepetition liabilities are subject to compromise or other treatment under a plan of reorganization. The determination of how such liabilities will ultimately be settled or treated cannot be made until the Court approves a chapter 11 plan of reorganization. Accordingly, the ultimate amount of such liabilities is not determinable at this time. Prepetition liabilities that are subject to compromise under ASC 852 are preliminary and may be subject to, among other things, future adjustments depending on Court actions, further developments with respect to disputed claims, determinations of the secured status of certain claims, the values of any collateral securing such claims, rejection of executory contracts, continued reconciliation or other events.

As noted, although the Debtors generally prepare financial statements on a consolidated basis, these MORs are prepared on an entity-by-entity basis. The

 

Page 3

Debtors maintain separate balance sheets in their books and records for the following entities: Core Scientific Acquired Mining LLC, Core Scientific, Inc., Core Scientific Operating Company, and Radar Relay, Inc. The Debtors, however, do not maintain separate balance sheets for the remaining Debtor entities. Consequently, the balance sheets included in the MOR for these Debtors reflect no balances.

Values in the balance sheet(s) attached hereto represent rounded numbers. Accordingly, subtotals may not agree to the summation of the rounded numbers presented.

Income Statement. As noted, although the Debtors generally prepare financial statements on a consolidated basis, these MORs are prepared on an entity-by-entity basis. The Debtors maintain separate income statements in their books and records for the following entities: Core Scientific Acquired Mining LLC, Core Scientific, Inc., Core Scientific Operating Company, and Radar Relay, Inc. The Debtors, however, do not maintain separate income statements for the remaining Debtor entities. Consequently, the income statements included in the MOR for these Debtors reflect no income.

Schedule of Payments to Insiders. This schedule provides additional detail for the period on page 1 of the MOR. For each insider payment made during the reporting period the following information is provided: recipient; date of payment or benefit provided; amount of cash payment or market value of non-cash payment; and reason for each payment made.

 

  8.

Part 1, Cash Receipts and Disbursements. Cumulative quarter-to-date for Q1 2023 disbursements are reported in the Cumulative figures in the MOR. Cumulative case to date total disbursements through January 31, 2023 are $31,472,636.

 

  9.

Part 5a, Professional Fees and Expenses. For purposes of Part 5a of the MORs, and consistent with the Order Establishing Procedures for Interim Compensation and Reimbursement of Expenses for Professionals (Docket No. 541) (the “Interim Compensation Order”), professional fees and expenses are considered approved if the applicable Monthly Statement (as defined in the Interim Compensation Order) has been served and the objection deadline relating to such Monthly Statement has expired prior to the last day of the applicable MOR period.

 

  10.

Part 7 Questionnaire. Pursuant to certain orders of the Bankruptcy Court entered in the Debtors’ chapter 11 cases (the “First Day Orders”), the Debtors were authorized (but not directed) to pay, among other things, certain prepetition claims of their employees, taxing authorities, insurers, critical vendors, and certain other prepetition creditors. Amounts paid pursuant to the First Day Orders are monitored as to limits provided in the applicable orders of the Bankruptcy Court governing payment of such prepetition obligations, and this report is available to the U.S. Trustee as required.

 

Page 4

MOR-1: 1/1/2023 - 1/31/2023 SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS

 

Description

   Core
Scientific,
Inc.		     Core
Scientific
Acquired
Mining
LLC		     Core
Scientific
Operating
Company		     Radar
Relay,
Inc.		     Core
Scientific
Mining
LLC		     Core
Scientific
Specialty
Mining
(Oklahoma)
LLC		     American
Property
Acquisition,
LLC		     Starboard
Capital
LLC		     RADAR
LLC		     American
Property
Acquisitions
I, LLC		     American
Property
Acquisitions
VII, LLC		     Total  

Receipts

                        

Crypto Currencies Sales Proceeds

     —         2,728,618       28,811,819       —         —         —         —         —         —         —         —       $ 31,540,436  

Hosting Service

     —         —         5,009,114       —         —         —         —         —         —         —         —         5,009,114  

Other Receipts

     45       —         352,481       —         —         —         —         —         —         —         —         352,525  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Receipts

     45       2,728,618       34,173,413       —         —         —         —         —         —         —         —         36,902,076  

Disbursements

                        

Suppliers or vendors

     2,514,771       1,007,353       12,583,419       —         —         —         —         —         —         —         —       $ 16,105,543  

Taxes / Governmental

     —         439,021       5,498,326       —         —         —         —         —         —         —         —         5,937,346  

Services

     —         1,117       13,991       —         —         —         —         —         —         —         —         15,109  

Financial / Bank Fees

     4,300       13       160       —         —         —         —         —         —         —         —         4,473  

Employee Expense

     —         230,231       2,883,433       —         —         —         —         —         —         —         —         3,113,664  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Disbursements

     2,519,071       1,677,735       20,979,329       —         —         —         —         —         —         —         —         25,176,135  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net Cash Flow (excl. Internal Transfers)

     (2,519,026 )      1,050,883       13,194,084       —         —         —         —         —         —         —         —         11,725,941  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Bank Cash Balance Beginning of Month

     35,747,841       697,746       16,371,155       —         —         —         —         —         —         —         —         52,816,742  

Net Cash Flow (excl. Internal Transfers; w/ Allocation)

     (2,519,026 )      1,050,883       13,194,084       —         —         —         —         —         —         —         —      
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

MOR Part 1 d. Cash Balance

   $ 33,228,814     $ 1,748,629     $ 29,565,239     $ —       $ —       $ —       $ —       $ —       $ —       $ —       $ —       $ 64,542,683  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Reversing Disbursement Allocation

     —         1,675,120       (1,675,120 )      —         —         —         —         —         —         —         —         —    

Internal Transfers

     (6,295,746 )      (2,200,000 )      8,495,746       —         —         —         —         —         —         —         —         —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Cash Balance End of Month

   $ 26,933,068     $ 1,223,749     $ 36,385,865     $ —       $ —       $ —       $ —       $ —       $ —       $ —       $ —       $ 64,542,683  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

MOR-2: End of Jan 2023 Balance Sheet

 

(US $)

   Core
Scientific,
Inc.		     Core
Scientific
Acquired
Mining LLC		     Core
Scientific
Operating
Company		     Radar
Relay Inc		     Core
Scientific
Mining
LLC		     Core
Scientific
Specialty
Mining
(Oklahoma)
LLC		     American
Property
Acquisition,
LLC		     Starboard
Capital
LLC		     RADAR
LLC		     American
Property
Acquisitions
I, LLC		     American
Property
Acquisitions
VII, LLC		     Elimination
Co		     Total¹  

ASSETS

                          

Cash and Equivalents

     —         1,223,749       35,777,275       —         —         —         —         —         —         —         —         —         37,001,024  

Restricted Cash

     —         —         27,541,658       —         —         —         —         —         —         —         —         —         27,541,658  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Cash

     —         1,223,749       63,318,933       —         —         —         —         —         —         —         —         —         64,542,682  

Accounts receivable, net of allowance

     —         —         464,216       —         —         —         —         —         —         —         —         —         464,216  

Accounts receivable from related parties

     488,990,509       140,152,775       (486,675,668 )      1,189,298       —         —         —         —         —         —         —         (143,591,406 )      65,507  

Deposits for equipment

     —         —         25,827,664       —         —         —         —         —         —         —         —         —         25,827,664  

Digital currency assets

     —         —         —         —         —         —         —         —         —         —         —         —         —    

Prepaid expenses and other

     —         22,748,095       24,659,767       —         —         —         —         —         —         —         —         (22,738,466 )      24,669,396  

Total other current assets

     1,804,708,371       (1,128,933,066 )      (673,043,932 )      —         —         —         —         —         —         —         —         —         2,731,373  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Current Assets

     2,293,698,880       (964,808,448 )      (1,045,449,019 )      1,189,298       —         —         —         —         —         —         —         (166,329,871 )      118,300,839  

Property, plant and equipment

     —         67,098,040       588,325,778       —         —         —         —         —         —         —         —         (15,616,704 )      639,807,114  

Operating lease-right-of-use assets

     —         —         20,264,625       —         —         —         —         —         —         —         —         —         20,264,625  

Goodwill

     —         232,587,379       (167,058,249 )      (65,529,130 )      —         —         —         —         —         —         —         —         0  

Intangible assets, net

     —         —         1,674,297       —         —         —         —         —         —         —         —         —         1,674,297  

Other noncurrent assets

     2,558,789       (0 )      6,781,630       —         —         —         —         —         —         —         —         —         9,340,419  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Assets

     2,296,257,669       (665,123,029 )      (595,460,938 )      (64,339,833 )      —         —         —         —         —         —         —         (181,946,575 )      789,387,294  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

LIABILITIES, PREFERRED STOCK & EQUITY

                          

Accounts Payable

     —         143,605,208       86,090,383       12,682       —         —         —         —         —         —         —         (143,591,406 )      86,116,867  

Accrued expenses and other

     199,366       17,449,784       85,495,328       (12,734 )      —         —         —         —         —         —         —         —         103,131,744  

Deferred revenue

     —         —         112,557,414       —         —         —         —         —         —         —         —         (38,626,663 )      73,930,751  

Derivative warrant liabilities

     (900 )      —         —         —         —         —         —         —         —         —         —         —         (900 ) 

Operating lease liabilities, current portion

     —         —         1,170,064       —         —         —         —         —         —         —         —         —         1,170,064  

Financing lease liabilities, current portion

     —         —         70,796,077       —         —         —         —         —         —         —         —         —         70,796,077  

Long-term debt, current portion

     —         —         880,936,991       —         —         —         —         —         —         —         —         —         880,936,991  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total current liabilities

     198,466       161,054,993       1,237,046,258       (52 )      —         —         —         —         —         —         —         (182,218,069 )      1,216,081,595  

Operating lease liabilities, net of current portion

     —         —         14,156,228       —         —         —         —         —         —         —         —         —         14,156,228  

Financing lease liabilities, net of current portion

     —         —         —         —         —         —         —         —         —         —         —         —         —    

Long-term debt, net of current portion

     8,356,293       —         (8,356,293 )      —         —         —         —         —         —         —         —         —         (0 ) 

Other noncurrent liabilities

     —         18,084,856       (15,497,086 )      (2,587,769 )      —         —         —         —         —         —         —         —         1  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Liabilities

     8,554,759       179,139,849       1,227,349,107       (2,587,821 )      —         —         —         —         —         —         —         (182,218,069 )      1,230,237,824  

Pre-Petition Subject to Compromise

     684,395,370       —         (684,395,370 )      —         —         —         —         —         —         —         —         —         —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Pre-Petition Subject to Compromise

     684,395,370       —         (684,395,370 )      —         —         —         —         —         —         —         —         —         —    

Post-Petition Short Term Liabilities

     —         —         —         —         —         —         —         —         —         —         —         —         —    

Post-Petition Long Term Liabilities

     —         —         —         —         —         —         —         —         —         —         —         —         —    

Preferred stock

     —         —         —         —         —         —         —         —         —         —         —         —         —    

Common stock

     37,478       —         —         —         —         —         —         —         —         —         —         —         37,478  

Additional paid-in capital

     1,783,051,000       (15,979,141 )      2,887,621       —         —         —         —         —         —         —         —         —         1,769,959,480  

Accumulated deficit

     (179,780,938 )      (828,330,719 )      (1,141,302,296 )      (61,752,012 )      —         —         —         —         —         —         —         318,476       (2,210,847,488 ) 

Other Comprehensive Income

     —         —         —         —         —         —         —         —         —         —         —         —         —    

Cumulative Translation Adjustment

     —         46,983       —         —         —         —         —         —         —         —         —         (46,983 )      —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Equity

     1,603,307,540       (844,262,878 )      (1,138,414,675 )      (61,752,012 )      —         —         —         —         —         —         —         271,494       (440,850,530 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Liabilities, Preferred Stock & Equity

     2,296,257,669       (665,123,029 )      (595,460,938 )      (64,339,833 )      —         —         —         —         —         —         —         (181,946,575 )      789,387,294  

 

1 

The ‘Elimination Co’ column addresses the accounting of intercompany balances to enable consolidated reporting in the ‘Total’ column

MOR-3: 1/1/2023 - 1/31/2023 Profit & Loss

 

Total Revenue

(US $)

   Core
Scientific,
Inc.		     Core
Scientific
Acquired
Mining LLC		     Core
Scientific
Operating
Company		     Radar
Relay Inc		     Core
Scientific
Mining
LLC		     Core
Scientific
Specialty
Mining
(Oklahoma)
LLC		     American
Property
Acquisition,
LLC		     Starboard
Capital
LLC		     RADAR
LLC		     American
Property
Acquisitions
I, LLC		     American
Property
Acquisitions
VII, LLC		  

Hosting revenue from customers

     —         —         6,314,128.30       —         —         —         —         —         —         —         —    

Hosting revenue from related parties

     —         —         1,308,852.63       —         —         —         —         —         —         —         —    

Equipment sales to customers

     —         —         —         —         —         —         —         —         —         —         —    

Equipment sales to related parties

     —         —         —         —         —         —         —         —         —         —         —    

Digital asset mining income

     —         2,661,793.73       28,276,892.87       —         —         —         —         —         —         —         —    

Network services and defi revenue

     —         —         —         —         —         —         —         —         —         —         —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Revenue

     —         2,661,793.73       35,899,873.80       —         —         —         —         —         —         —         —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Cost of revenue

     —         (3,349,178.15 )      (59,046,556.03 )      —         —         —         —         —         —         —         —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Gross Profit

     —         (687,384.42 )      (23,146,682.23 )      —         —         —         —         —         —         —         —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Gain (loss) on legal settlements

     —         —         —         —         —         —         —         —         —         —         —    

Gain (loss) from sales of digital currency assets

     —         11,455.01       138,931.37       —         —         —         —         —         —         —         —    

Impairments of digital currency assets

     —         —         —         —         —         —         —         —         —         —         —    

Impairment of goodwill and other intangibles

     —         —         —         —         —         —         —         —         —         —         —    

Impairment of property, plant and equipment

     —         —         —         —         —         —         —         —         —         —         —    

Losses on exchange or disposal of property, plant and equipment

     —         —         —         —         —         —         —         —         —         —         —    
Operating expenses:     —               —         —         —         —         —         —         —    

Research and development

     —         —         (659,379.93 )      (10,931.82 )      —         —         —         —         —         —         —    

Sales and marketing

     —         —         (338,532.41 )      —         —         —         —         —         —         —         —    

General and administrative

     —         (8,357.78 )      (4,762,536.85 )      (50.00 )      —         —         —         —         —         —         —    

Advisor Fees

     —         —         —         —         —         —         —         —         —         —         —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
Total operating expenses     —         (8,357.78 )      (5,760,449.19 )      (10,981.82 )      —         —         —         —         —         —         —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
Operating Income (Loss)     —         (684,287.19 )      (28,768,200.05 )      (10,981.82 )      —         —         —         —         —         —         —    

Non-operating income (expense), net:

     —               —         —         —         —         —         —         —    

Loss on debt extinguishment

     —         —         —         —         —         —         —         —         —         —         —    

Interest expense, net

     —         —         13,482.06       —         —         —         —         —         —         —         —    

Other non-operating expenses, net

     —         —         —         —         —         —         —         —         —         —         —    

Reorganization items

     —         —         (7,646,333.49 )      —         —         —         —         —         —         —         —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Non-operating income (expense), net:

     —         —         (7,632,851.43 )      —         —         —         —         —         —         —         —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Income (loss) before income taxes

     —         (684,287.19 )      (36,401,051.48 )      (10,981.82 )      —         —         —         —         —         —         —    

Income tax expense

     —         —         —         —         —         —         —         —         —         —         —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
Net Income (Loss)     —         (684,287.19 )      (36,401,051.48 )      (10,981.82 )      —         —         —         —         —         —         —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Exhibit 99.4

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

 

In re:   §    Chapter 11
  §   
CORE SCIENTIFIC, INC., et al.,   §    Case No. 22-90341 (DRJ)
  §   

Debtors.1

   §    (Jointly Administered)

AMENDED JANUARY 2023 MONTHLY

OPERATING REPORT FOR RADAR RELAY, INC.2

 

 

1 

The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, are as follows: Core Scientific Mining LLC (6971); Core Scientific, Inc. (3837); Core Scientific Acquired Mining LLC (6074); Core Scientific Operating Company (5526); Radar Relay, Inc. (0496); Core Scientific Specialty Mining (Oklahoma) LLC (4327); American Property Acquisition, LLC (0825); Starboard Capital LLC (6677); RADAR LLC (5106); American Property Acquisitions I, LLC (9717); and American Property Acquisitions, VII, LLC (3198). The Debtors’ corporate headquarters and service address is 210 Barton Springs Road, Suite 300, Austin, Texas 78704.

2 

This document (the “Amended MOR”) amends the Debtor-In-Possession Monthly Operating Report for Filing Period Ending 1/31/2023 (Case No. 22-90344, Docket No. 6) (the “Initial MOR”). For a list of changes to the Amended MOR, please see Exhibit A to the Notice of Filing of Amended January and February 2023 MORs for Debtor Radar Relay, Inc., filed contemporaneously herewith.

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF TEXAS

HOUSTON

 

In Re. Radar Relay, Inc.    §       Case No. 22-90344                                                                  
              §                           
 

 

    §       Lead Case No. 22-90341                                                         
                      Debtor(s)    §      
           ☒ Jointly Administered

 

Monthly Operating Report         Chapter 11
Reporting Period Ended: 01/31/2023                                                Petition Date: 12/21/2022
Months Pending: 1       Industry Classification:     3    3     4     1

 

Reporting Method:    Accrual Basis     ☒    Cash Basis     ☐
Debtor’s Full-Time Employees (current):       0            
Debtor’s Full-Time Employees (as of date of order for relief):    0            

Supporting Documentation (check all that are attached):

(For jointly administered debtors, any required schedules must be provided on a non-consolidated basis for each debtor)

 

☒

Statement of cash receipts and disbursements

☒

Balance sheet containing the summary and detail of the assets, liabilities and equity (net worth) or deficit

☒

Statement of operations (profit or loss statement)

☐

Accounts receivable aging

☐

Postpetition liabilities aging

☐

Statement of capital assets

☐

Schedule of payments to professionals

☐

Schedule of payments to insiders

☐

All bank statements and bank reconciliations for the reporting period

☐

Description of the assets sold or transferred and the terms of the sale or transfer

 

/s/ Alfredo R. Pérez

      

Alfredo R. Pérez

Signature of Responsible Party                        Printed Name of Responsible Party

04/29/2023

      
Date      

700 Louisiana Street, Suite 1700, Houston, Texas 77002

      Address

STATEMENT: This Periodic Report is associated with an open bankruptcy case; therefore, Paperwork Reduction Act exemption 5 C.F.R. § 1320.4(a)(2) applies.

 

UST Form 11-MOR (12/01/2021)    1   

Debtor’s Name Radar Relay, Inc.    Case No. 22-90344

 

Part 1: Cash Receipts and Disbursements

    Current Month      Cumulative  

a.

   

Cash balance beginning of month

    $ 0     
     

 

 

     

b.

   

Total receipts (net of transfers between accounts)

    $ 0      $ 0  
     

 

 

     

 

 

  

c.

   

Total disbursements (net of transfers between accounts)

    $ 0      $ 0  
     

 

 

     

 

 

  

d.

   

Cash balance end of month (a+b-c)

    $ 0     
     

 

 

     

e.

   

Disbursements made by third party for the benefit of the estate

    $ 0      $ 0  
     

 

 

     

 

 

  

f.

   

Total disbursements for quarterly fee calculation (c+e)

    $ 0      $ 0  
     

 

 

     

 

 

  

Part 2: Asset and Liability Status

(Not generally applicable to Individual Debtors. See Instructions.)

    Current Month         

a.

   

Accounts receivable (total net of allowance)

    $ 1,189,298     
     

 

 

     

b.

   

Accounts receivable over 90 days outstanding (net of allowance)

    $ 0     
     

 

 

     

c.

   

Inventory (Book ☒    Market ☐    Other ☐    (attach explanation))

    $ 0     
     

 

 

     

d

   

Total current assets

    $ 1,189,298     
     

 

 

     

e.

   

Total assets

    $ -64,339,833     
     

 

 

     

f.

   

Postpetition payables (excluding taxes)

    $ 0     
     

 

 

     

g.

   

Postpetition payables past due (excluding taxes)

    $ 0     
     

 

 

     

h.

   

Postpetition taxes payable

    $ 0     
     

 

 

     

i.

   

Postpetition taxes past due

    $ 0     
     

 

 

     

j.

   

Total postpetition debt (f+h)

    $ 0     
     

 

 

     

k.

   

Prepetition secured debt

    $ 0     
     

 

 

     

l.

   

Prepetition priority debt

    $ 0     
     

 

 

     

m.

   

Prepetition unsecured debt

    $ 0     
     

 

 

     

n.

   

Total liabilities (debt) (j+k+l+m)

    $ 0     
     

 

 

     

o.

   

Ending equity/net worth (e-n)

    $ -64,339,833     
     

 

 

     

Part 3: Assets Sold or Transferred

    Current Month      Cumulative  

a.

   

Total cash sales price for assets sold/transferred outside the ordinary course of business

    $ 0      $ 0  
     

 

 

     

 

 

  

b.

   

Total payments to third parties incident to assets being sold/transferred outside the ordinary course of business

    $ 0      $ 0  
     

 

 

     

 

 

  

c.

   

Net cash proceeds from assets sold/transferred outside the ordinary course of business (a-b)

    $ 0      $ 0  
     

 

 

     

 

 

  

Part 4: Income Statement (Statement of Operations)

(Not generally applicable to Individual Debtors. See Instructions.)

    Current Month      Cumulative  

a.

   

Gross income/sales (net of returns and allowances)

    $ 0     
     

 

 

     

b.

   

Cost of goods sold (inclusive of depreciation, if applicable)

    $ 0     
     

 

 

     

c.

   

Gross profit (a-b)

    $ 0     
     

 

 

     

d.

   

Selling expenses

    $ 0     
     

 

 

     

e.

   

General and administrative expenses

    $ 50     
     

 

 

     

f.

   

Other expenses

    $ 10,932     
     

 

 

     

g.

   

Depreciation and/or amortization (not included in 4b)

    $ 0     
     

 

 

     

h.

   

Interest

    $ 0     
     

 

 

     

i.

   

Taxes (local, state, and federal)

    $ 0     
     

 

 

     

j.

   

Reorganization items

    $ 0     
     

 

 

     

k.

   

Profit (loss)

    $ -10,982      $ -35,336  
     

 

 

     

 

 

  

 

UST Form 11-MOR (12/01/2021)    2   

Debtor’s Name Radar Relay, Inc.    Case No. 22-90344

 

Part 5: Professional Fees and Expenses                    
          Approved
Current Month		   Approved
Cumulative		   Paid Current
Month    		   Paid
Cumulative    
a.   Debtor’s professional fees & expenses (bankruptcy)   Aggregate Total                
    Itemized Breakdown by Firm                    
        Firm Name   Role                
    i                        
    ii                        
    iii                        
    iv                        
    v                        
    vi                        
    vii                        
    viii                        
    ix                        
    x                        
    xi                        
    xii                        
    xiii                        
    xiv                        
    xv                        
    xvi                        
    xvii                        
    xviii                        
    xix                        
    xx                        
    xxi                        
    xxii                        
    xxiii                        
    xxiv                        
    xxv                        
    xxvi                        
    xxvii                        
    xxviii                        
    xxix                        
    xxx                        
    xxxi                        
    xxxii                        
    xxxiii                        
    xxxiv                        
    xxxv                        
    xxxvi                        

 

UST Form 11-MOR (12/01/2021)    3   

Debtor’s Name Radar Relay, Inc.    Case No. 22-90344

 

  

                                                 
  xxxvii                                           
  xxxviii                        
  xxxix                        
  xl                        
  xli                        
  xlii                        
  xliii                        
  xliv                        
  xlv                        
  xlvi                        
  xlvii                        
  xlviii                        
  xlix                        
  l                        
  li                        
  lii                        
  liii                        
  liv                        
  lv                        
  lvi                        
  lvii                        
  lviii                        
  lix                        
  lx                        
  lxi                        
  lxii                        
  lxiii                        
  lxiv                        
  lxv                        
  lxvi                        
  lxvii                        
  lxviii                        
  lxix                        
  lxx                        
  lxxi                        
  lxxii                        
  lxxiii                        
  lxxiv                        
  lxxv                        
  lxxvi                        
  lxxvii                        
  lxxviii                        

 

UST Form 11-MOR (12/01/2021)    4   

Debtor’s Name Radar Relay, Inc.    Case No. 22-90344

 

    lxxix                        
  lxxx                        
  lxxxi                        
  lxxxii                        
  lxxxiii                        
  lxxxiv                        
  lxxxv                        
  lxxxvi                        
  lxxxvii                        
  lxxxviii                        
  lxxxix                        
  xc                        
  xci                        
  xcii                        
  xciii                        
  xciv                        
  xcv                        
  xcvi                        
  xcvii                        
  xcviii                        
  xcix                        
  c                        
  ci                        
             
         

Approved
Current Month

  

Approved
Cumulative

  

Paid Current
Month

  

Paid Cumulative

b.   Debtor’s professional fees & expenses (nonbankruptcy) Aggregate Total                
  Itemized Breakdown by Firm                
        Firm Name   Role                
    i                        
    ii                        
    iii                        
    iv                        
    v                        
    vi                        
    vii                        
    viii                        
    ix                        
    x                        
    xi                        
    xii                        
    xiii                        
    xiv                        

 

UST Form 11-MOR (12/01/2021)    5   

Debtor’s Name Radar Relay, Inc.    Case No. 22-90344

 

    xv                                              
  xvi                        
  xvii                        
  xviii                        
  xix                        
  xx                        
  xxi                        
  xxii                        
  xxiii                        
  xxiv                        
  xxv                        
  xxvi                        
  xxvii                        
  xxviii                        
  xxix                        
  xxx                        
  xxxi                        
  xxxii                        
  xxxiii                        
  xxxiv                        
  xxxv                        
  xxxvi                        
  xxxvii                        
  xxxviii                        
  xxxix                        
  xl                        
  xli                        
  xlii                        
  xliii                        
  xliv                        
  xlv                        
  xlvi                        
  xlvii                        
  xlviii                        
  xlix                        
  l                        
  li                        
  lii                        
  liii                        
  liv                        
  lv                        
  lvi                        

 

UST Form 11-MOR (12/01/2021)    6   

Debtor’s Name Radar Relay, Inc.    Case No. 22-90344

 

    lvii                                                             
  lviii                                                                                                       
  lix                                        
  lx                                        
  lxi                                        
  lxii                                        
  lxiii                                        
  lxiv                                        
  lxv                                        
  lxvi                                        
  lxvii                                        
  lxviii                                        
  lxix                                        
  lxx                                        
  lxxi                                        
  lxxii                                        
  lxxiii                                        
  lxxiv                                        
  lxxv                                        
  lxxvi                                        
  lxxvii                                        
  lxxviii                                        
  lxxix                                        
  lxxx                                        
  lxxxi                                        
  lxxxii                                        
  lxxxiii                                        
  lxxxiv                                        
  lxxxv                                        
  lxxxvi                                        
  lxxxvii                                        
  lxxxviii                                        
  lxxxix                                        
  xc                                        
  xci                                        
  xcii                                        
  xciii                                        
  xciv                                        
  xcv                                        
  xcvi                                        
  xcvii                                        
  xcviii                                        
  xcix                                        
  c                                        
c.   All professional fees and expenses (debtor & committees)   $ 0     $ 0     $ 0     $ 0  

 

UST Form 11-MOR (12/01/2021)    7   

Debtor’s Name Radar Relay, Inc.    Case No. 22-90344

 

Part 6: Postpetition Taxes

    Current Month      Cumulative  

a.   Postpetition income taxes accrued (local, state, and federal)

    $ 0      $ 0  
  

 

 

     

 

 

  

b.  Postpetition income taxes paid (local, state, and federal)

    $ 0      $ 0  
  

 

 

     

 

 

  

c.   Postpetition employer payroll taxes accrued

    $ 0      $ 0  
  

 

 

     

 

 

  

d.  Postpetition employer payroll taxes paid

    $ 0      $ 0  
  

 

 

     

 

 

  

e.   Postpetition property taxes paid

    $ 0      $ 0  
  

 

 

     

 

 

  

f.   Postpetition other taxes accrued (local, state, and federal)

    $ 0      $ 0  
  

 

 

     

 

 

  

g.  Postpetition other taxes paid (local, state, and federal)

    $ 0      $ 0  
  

 

 

     

 

 

  

Part 7: Questionnaire - During this reporting period:

                            

a.   Were any payments made on prepetition debt? (if yes, see Instructions)

      Yes  ☐       No  ☒       

b.  Were any payments made outside the ordinary course of business without court approval? (if yes, see Instructions)

      Yes  ☐       No  ☒       

c.   Were any payments made to or on behalf of insiders?

      Yes  ☐       No  ☒       

d.  Are you current on postpetition tax return filings?

      Yes  ☒       No  ☐       

e.   Are you current on postpetition estimated tax payments?

      Yes  ☒       No  ☐       

f.   Were all trust fund taxes remitted on a current basis?

      Yes  ☒       No  ☐       

g.  Was there any postpetition borrowing, other than trade credit? (if yes, see Instructions)

      Yes  ☐       No  ☒       

h.  Were all payments made to or on behalf of professionals approved by the court?

      Yes  ☐       No  ☐       N/A  ☒    

i.   Do you have: Worker’s compensation insurance?

      Yes  ☒       No  ☐       

If yes, are your premiums current?

      Yes  ☒       No  ☐       N/A  ☐       (if no, see Instructions ) 

Casualty/property insurance?

      Yes  ☒       No  ☐       

If yes, are your premiums current?

      Yes  ☒       No  ☐       N/A  ☐       (if no, see Instructions ) 

General liability insurance?

      Yes  ☒       No  ☐       

If yes, are your premiums current?

      Yes  ☒       No  ☐       N/A  ☐       (if no, see Instructions ) 

j.   Has a plan of reorganization been filed with the court?

      Yes  ☐       No  ☒       

k.  Has a disclosure statement been filed with the court?

      Yes  ☐       No  ☒       

l.   Are you current with quarterly U.S. Trustee fees as set forth under 28 U.S.C. § 1930?

      Yes  ☒       No  ☐       

 

UST Form 11-MOR (12/01/2021)    8   

Debtor’s Name Radar Relay, Inc.    Case No. 22-90344

 

Part 8: Individual Chapter 11 Debtors (Only)

                     

a.   Gross income (receipts) from salary and wages

    $                         0                                  
  

 

 

        

b.  Gross income (receipts) from self-employment

    $ 0        
  

 

 

        

c.   Gross income from all other sources

    $ 0        
  

 

 

        

d.  Total income in the reporting period (a+b+c)

    $ 0        
  

 

 

        

e.   Payroll deductions

    $ 0        
  

 

 

        

f.   Self-employment related expenses

    $ 0        
  

 

 

        

g.  Living expenses

    $ 0        
  

 

 

        

h.  All other expenses

    $ 0        
  

 

 

        

i.   Total expenses in the reporting period (e+f+g+h)

    $ 0        
  

 

 

        

j.   Difference between total income and total expenses (d-i)

    $ 0        
  

 

 

        

k.  List the total amount of all postpetition debts that are past due

    $ 0        
  

 

 

        

l.   Are you required to pay any Domestic Support Obligations as defined by 11 U.S.C § 101(14A)?

   Yes ☐     No  ☒      

m.   If yes, have you made all Domestic Support Obligation payments?

   Yes ☐     No  ☐       N/A ☒

 

Privacy Act Statement

28 U.S.C. § 589b authorizes the collection of this information, and provision of this information is mandatory under 11 U.S.C. §§ 704, 1106, and 1107. The United States Trustee will use this information to calculate statutory fee assessments under 28 U.S.C. § 1930(a)(6). The United States Trustee will also use this information to evaluate a chapter 11 debtor’s progress through the bankruptcy system, including the likelihood of a plan of reorganization being confirmed and whether the case is being prosecuted in good faith. This information may be disclosed to a bankruptcy trustee or examiner when the information is needed to perform the trustee’s or examiner’s duties or to the appropriate federal, state, local, regulatory, tribal, or foreign law enforcement agency when the information indicates a violation or potential violation of law. Other disclosures may be made for routine purposes. For a discussion of the types of routine disclosures that may be made, you may consult the Executive Office for United States Trustee’s systems of records notice, UST-001, “Bankruptcy Case Files and Associated Records.” See 71 Fed. Reg. 59,818 et seq. (Oct. 11, 2006). A copy of the notice may be obtained at the following link: http:// www.justice.gov/ust/eo/rules_regulations/index.htm. Failure to provide this information could result in the dismissal or conversion of your bankruptcy case or other action by the United States Trustee. 11 U.S.C. § 1112(b)(4)(F).

I declare under penalty of perjury that the foregoing Monthly Operating Report and its supporting documentation are true and correct and that I have been authorized to sign this report on behalf of the estate.

 

/s/ Michael Bros

      

Michael Bros

Signature of Responsible Party       Printed Name of Responsible Party

SVP, Capital Markets and Acquisitions

      

04/29/2023

Title       Date

 

 

UST Form 11-MOR (12/01/2021)    9   

Debtor’s Name Radar Relay, Inc.    Case No. 22-90344

 

LOGO

 

 

UST Form 11-MOR (12/01/2021)    10   

Debtor’s Name Radar Relay, Inc.    Case No. 22-90344

 

LOGO

 

 

UST Form 11-MOR (12/01/2021)    11   

Debtor’s Name Radar Relay, Inc.    Case No. 22-90344

 

LOGO

 

 

UST Form 11-MOR (12/01/2021)    12   

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

 

In re:   §    Chapter 11
  §   
CORE SCIENTIFIC, INC., et al.,   §    Case No. 22-90341 (DRJ)
  §   

Debtors.1

  §    (Jointly Administered)

MONTHLY OPERATING REPORT NOTES FOR JANUARY 2023

On December 21, 2022 (the “Petition Date”), Core Scientific, Inc. and its debtor affiliates, as debtors and debtors in possession in the above-captioned chapter 11 cases (collectively, the “Debtors” or the “Company”), each commenced a voluntary case under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). The Debtors are authorized to operate their businesses and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. The Debtors’ chapter 11 cases are being jointly administered for procedural purposes only pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) and Rule 1015-1 of the Bankruptcy Local Rules for the United States Bankruptcy Court for the Southern District of Texas (the “Local Rules”). On January 9, 2023, the United States Trustee for Region 7 (the “U.S. Trustee”) appointed an official committee of unsecured creditors (the “Creditors’ Committee”) in these chapter 11 cases pursuant to section 1102 of the Bankruptcy Code. No trustee or examiner has been appointed in these chapter 11 cases.

The following notes and statements of limitations and disclaimers should be referred to, and referenced in connection with, any review of this Monthly Operating Report (the “MOR”).

 

  1.

Introduction. This MOR is unaudited and does not purport to represent financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), and it is not intended to fully reconcile to the consolidated financial statements prepared by the Debtors. Information contained in this MOR has been derived from the Debtors’ books and records, but does not reflect in all circumstances presentation for GAAP or SEC reporting purposes. Therefore, to comply with their obligations to provide MORs during these chapter 11 cases, the Debtors have prepared this MOR using the best information presently available to them, which has been collected, maintained, and prepared in accordance with their historical accounting practices. Accordingly, this MOR is true and accurate to the best of the Debtors’ knowledge, information, and belief, based on

 

1 

The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, are as follows: Core Scientific Mining LLC (6971); Core Scientific, Inc. (3837); Core Scientific Acquired Mining LLC (6074); Core Scientific Operating Company (5526); Radar Relay, Inc. (0496); Core Scientific Specialty Mining (Oklahoma) LLC (4327); American Property Acquisition, LLC (0825); Starboard Capital LLC (6677); RADAR LLC (5106); American Property Acquisitions I, LLC (9717); and American Property Acquisitions, VII, LLC (3198). The Debtors’ corporate headquarters and service address is 210 Barton Springs Road, Suite 300, Austin, Texas 78704.

 

Page 1

  currently-available data. The results of operations and financial position contained herein are not necessarily indicative of results that may be expected for any period other than the period beginning on January 1, 2023 and ending January 31, 2023, or for the full year, and may not necessarily reflect the Debtors’ future consolidated results of operations and financial position.

 

  2.

Reservation of Rights. This MOR is limited in scope, covers the period beginning on January 1, 2023 and ending January 31, 2023, and has been prepared solely for the purpose of complying with the monthly reporting requirements of the Debtors’ chapter 11 cases. The unaudited financial information for this report has been derived from the Debtors’ books and records. The information presented herein has not been subject to all procedures that typically would be applied to financial information in accordance with U.S. GAAP. Upon the application of such procedures, the Debtors believe that the financial information could be subject to material change. The information furnished in this MOR includes normal recurring adjustments but does not include all of the adjustments that typically would be made for interim financial information presented in accordance with GAAP.

Given the complexity of the Debtors’ business, inadvertent errors or omission may occur. Accordingly, the Debtors hereby reserve all of their rights to dispute the nature, validity, status, enforceability, or executory natures of any claim amount, agreement, representation, or other statement set forth in this MOR. Further, the Debtors reserve the right to amend or supplement this MOR, if necessary, but shall be under no obligation to do so.

 

  3.

Basis of Presentation. Although the Debtors generally prepare their financial statements on a consolidated basis, the MOR has been prepared on an entity-by-entity basis (excluding most intercompany eliminations) for Debtors Core Scientific, Inc., Core Scientific Acquired Mining LLC, Core Scientific Operating Company, Core Scientific Mining LLC, Radar Relay, Inc., Core Scientific Specialty Mining (Oklahoma) LLC, American Property Acquisition, LLC, Starboard Capital LLC, RADAR LLC, American Property Acquisitions I, LLC, and American Property Acquisitions VII, LLC. The financial information contained herein is unaudited, limited in scope, covers a limited time period, and has been prepared solely for the purpose of complying with the monthly reporting requirements for chapter 11 debtors issued by the UST.

The amounts reported in this MOR are as-of January 31, 2023, the end of the Debtors’ reporting period. This MOR covers the period beginning January 1, 2023 and ending January 31, 2023.

 

  4.

Accounting Principles. The Debtors maintain their financial records according to GAAP, however the MOR does not purport to represent financial statements prepared in accordance with GAAP, nor are they intended to be fully reconciled with the financial statements of the Debtors.

The Debtors generally prepare financial statements on a consolidated basis. To the extent that there are negative asset balances for an individual Debtor, such as accounts receivable and current assets, they may be due to some intercompany elimination transactions or adjustments in each specific Debtor’s books and records.

 

Page 2

  5.

Currency. Unless otherwise indicated, all amounts in the MOR are reflected in U.S. dollars.

 

  6.

Consolidated Entity Accounts Payable and Disbursement Systems. Cash is received and disbursed by the Debtors as described in the Emergency Motion of Debtors for Entry of Interim and Final Orders (I) Authorizing Debtors to (A) Continue their Existing Cash Management System, (B) Maintain Existing Business Forms and Intercompany Arrangements, (C) Continue Intercompany Transactions, and (D) Continue Utilizing Employee Credit Cards; and (II) Granting Related Relief (Docket No. 12) (the “Cash Management Motion”) and the Debtors’ receipt and disbursement of cash is consistent with the Debtors’ historical cash management practices. Due to the consolidated cash management reporting system, certain cash payments may be paid out of a legal entity that is different than the legal entity at which the expenses were incurred. Also, certain cash receipts may be received in a different legal entity than the legal entity at which the accounts receivable is recorded. Disbursements attributed to each entity represent the entity on behalf of which payments were made, on a proportional allocated basis, from the consolidated cash management system.

 

  7.

Supporting Documentation. At the direction of the U.S. Trustee, the following schedules are attached to the MORs: (i) Statement of Cash Receipts and Disbursements; (ii) Balance Sheet; (iii) Income Statement (profit or loss statement); and (iv) Schedule of Payments to Insiders.

Statement of Cash Receipts and Disbursements. Based on guidance received from the Office of the United States Trustee in connection with the completion of UST Form 11-MOR Part 1, Cash Receipts and Disbursements, reported cash receipts and disbursements should exclude intercompany and debtor-to-debtor transactions. As a result, for those debtors with net intercompany cash outflows or inflows during the reporting period, the ending cash balances reported on Form 11-MOR Part 1 may not match the ending cash balances per the Debtors’ bank statements or the Debtors’ books and records. For additional information on ending cash balances per the Debtors’ books and records, see the attached cash balances per MOR-1: Schedule of Cash Receipts and Disbursements.

Balance Sheet. Liabilities Subject to Compromise (“LSTC”): LSTC represent the Debtors’ estimate of prepetition claims to be resolved in connection with the chapter 11 cases. As a result of the chapter 11 filings, the payment of prepetition liabilities are subject to compromise or other treatment under a plan of reorganization. The determination of how such liabilities will ultimately be settled or treated cannot be made until the Court approves a chapter 11 plan of reorganization. Accordingly, the ultimate amount of such liabilities is not determinable at this time. Prepetition liabilities that are subject to compromise under ASC 852 are preliminary and may be subject to, among other things, future adjustments depending on Court actions, further developments with respect to disputed claims, determinations of the secured status of certain claims, the values of any collateral securing such claims, rejection of executory contracts, continued reconciliation or other events.

As noted, although the Debtors generally prepare financial statements on a consolidated basis, these MORs are prepared on an entity-by-entity basis. The

 

Page 3

Debtors maintain separate balance sheets in their books and records for the following entities: Core Scientific Acquired Mining LLC, Core Scientific, Inc., Core Scientific Operating Company, and Radar Relay, Inc. The Debtors, however, do not maintain separate balance sheets for the remaining Debtor entities. Consequently, the balance sheets included in the MOR for these Debtors reflect no balances.

Values in the balance sheet(s) attached hereto represent rounded numbers. Accordingly, subtotals may not agree to the summation of the rounded numbers presented.

Income Statement. As noted, although the Debtors generally prepare financial statements on a consolidated basis, these MORs are prepared on an entity-by-entity basis. The Debtors maintain separate income statements in their books and records for the following entities: Core Scientific Acquired Mining LLC, Core Scientific, Inc., Core Scientific Operating Company, and Radar Relay, Inc. The Debtors, however, do not maintain separate income statements for the remaining Debtor entities. Consequently, the income statements included in the MOR for these Debtors reflect no income.

Schedule of Payments to Insiders. This schedule provides additional detail for the period on page 1 of the MOR. For each insider payment made during the reporting period the following information is provided: recipient; date of payment or benefit provided; amount of cash payment or market value of non-cash payment; and reason for each payment made.

 

  8.

Part 1, Cash Receipts and Disbursements. Cumulative quarter-to-date for Q1 2023 disbursements are reported in the Cumulative figures in the MOR. Cumulative case to date total disbursements through January 31, 2023 are $31,472,636.

 

  9.

Part 5a, Professional Fees and Expenses. For purposes of Part 5a of the MORs, and consistent with the Order Establishing Procedures for Interim Compensation and Reimbursement of Expenses for Professionals (Docket No. 541) (the “Interim Compensation Order”), professional fees and expenses are considered approved if the applicable Monthly Statement (as defined in the Interim Compensation Order) has been served and the objection deadline relating to such Monthly Statement has expired prior to the last day of the applicable MOR period.

 

  10.

Part 7 Questionnaire. Pursuant to certain orders of the Bankruptcy Court entered in the Debtors’ chapter 11 cases (the “First Day Orders”), the Debtors were authorized (but not directed) to pay, among other things, certain prepetition claims of their employees, taxing authorities, insurers, critical vendors, and certain other prepetition creditors. Amounts paid pursuant to the First Day Orders are monitored as to limits provided in the applicable orders of the Bankruptcy Court governing payment of such prepetition obligations, and this report is available to the U.S. Trustee as required.

 

Page 4

MOR-1: 1/1/2023 - 1/31/2023 SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS

 

Description

   Core
Scientific,
Inc.		     Core
Scientific
Acquired
Mining
LLC		     Core
Scientific
Operating
Company		     Radar
Relay,
Inc.		     Core
Scientific
Mining
LLC		     Core
Scientific
Specialty
Mining
(Oklahoma)
LLC		     American
Property
Acquisition,
LLC		     Starboard
Capital
LLC		     RADAR
LLC		     American
Property
Acquisitions I,
LLC		     American
Property
Acquisitions VII,
LLC		     Total  

Receipts

                        

Crypto Currencies Sales Proceeds

     —         2,728,618       28,811,819       —         —         —         —         —         —         —         —       $ 31,540,436  

Hosting Service

     —         —         5,009,114       —         —         —         —         —         —         —         —         5,009,114  

Other Receipts

     45       —         352,481       —         —         —         —         —         —         —         —         352,525  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Receipts

     45       2,728,618       34,173,413       —         —         —         —         —         —         —         —         36,902,076  

Disbursements

                        

Suppliers or vendors

     2,514,771       1,007,353       12,583,419       —         —         —         —         —         —         —         —       $ 16,105,543  

Taxes / Governmental

     —         439,021       5,498,326       —         —         —         —         —         —         —         —         5,937,346  

Services

     —         1,117       13,991       —         —         —         —         —         —         —         —         15,109  

Financial / Bank Fees

     4,300       13       160       —         —         —         —         —         —         —         —         4,473  

Employee Expense

     —         230,231       2,883,433       —         —         —         —         —         —         —         —         3,113,664  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Disbursements

     2,519,071       1,677,735       20,979,329       —         —         —         —         —         —         —         —         25,176,135  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net Cash Flow (excl. Internal Transfers)

     (2,519,026 )      1,050,883       13,194,084       —         —         —         —         —         —         —         —         11,725,941  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Bank Cash Balance Beginning of Month

     35,747,841       697,746       16,371,155       —         —         —         —         —         —         —         —         52,816,742  

Net Cash Flow (excl. Internal Transfers; w/ Allocation)

     (2,519,026 )      1,050,883       13,194,084       —         —         —         —         —         —         —         —      
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

MOR Part 1 d. Cash Balance

   $ 33,228,814     $ 1,748,629     $ 29,565,239     $ —       $ —       $ —       $ —       $ —       $ —       $ —       $ —       $ 64,542,683  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Reversing Disbursement Allocation

     —         1,675,120       (1,675,120 )      —         —         —         —         —         —         —         —         —    

Internal Transfers

     (6,295,746 )      (2,200,000 )      8,495,746       —         —         —         —         —         —         —         —         —    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Cash Balance End of Month

   $ 26,933,068     $ 1,223,749     $ 36,385,865     $ —       $ —       $ —       $ —      

$

—  

 

   $ —       $ —       $ —       $ 64,542,683  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

MOR-2: End of Jan 2023 Balance Sheet

 

(US $)    Core
Scientific,
Inc.		     Core
Scientific
Acquired
Mining LLC		     Core
Scientific
Operating
Company		     Radar
Relay
Inc		     Core
Scientific
Mining
LLC		      Core
Scientific
Specialty
Mining
(Oklahoma)
LLC		      American
Property
Acquisition,
LLC		      Starboard
Capital
LLC		      RADAR
LLC		      American
Property
Acquisitions I,
LLC		      American
Property
Acquisitions VII,
LLC		      Elimination
Co		     Total¹  

ASSETS

                                  

Cash and Equivalents

      —         1,223,749       35,777,275       —         —          —          —          —          —          —          —          —         37,001,024  

Restricted Cash

      —         —         27,541,658       —         —          —          —          —          —          —          —          —         27,541,658  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

Total Cash

      —         1,223,749       63,318,933       —         —          —          —          —          —          —          —          —         64,542,682  

Accounts receivable, net of allowance

      —         —         464,216       —         —          —          —          —          —          —          —          —         464,216  

Accounts receivable from related parties

      488,990,509       140,152,775       (486,675,668 )      1,189,298       —          —          —          —          —          —          —          (143,591,406 )      65,507  

Deposits for equipment

      —         —         25,827,664       —         —          —          —          —          —          —          —          —         25,827,664  

Digital currency assets

      —         —         —         —         —          —          —          —          —          —          —          —         —    

Prepaid expenses and other

      —         22,748,095       24,659,767       —         —          —          —          —          —          —          —          (22,738,466 )      24,669,396  

Total other current assets

      1,804,708,371       (1,128,933,066 )      (673,043,932 )      —         —          —          —          —          —          —          —          —         2,731,373  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

Total Current Assets

      2,293,698,880       (964,808,448 )      (1,045,449,019 )      1,189,298       —          —          —          —          —          —          —          (166,329,871 )      118,300,839  

Property, plant and equipment

      —         67,098,040       588,325,778       —         —          —          —          —          —          —          —          (15,616,704 )      639,807,114  

Operating lease-right-of-use assets

      —         —         20,264,625       —         —          —          —          —          —          —          —          —         20,264,625  

Goodwill

      —         232,587,379       (167,058,249 )      (65,529,130 )      —          —          —          —          —          —          —          —         0  

Intangible assets, net

      —         —         1,674,297       —         —          —          —          —          —          —          —          —         1,674,297  

Other noncurrent assets

      2,558,789       (0 )      6,781,630       —         —          —          —          —          —          —          —          —         9,340,419  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

Total Assets

      2,296,257,669       (665,123,029 )      (595,460,938 )      (64,339,833 )      —          —          —          —          —          —          —          (181,946,575 )      789,387,294  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

LIABILITIES, PREFERRED STOCK & EQUITY

                                  

Accounts Payable

      —         143,605,208       86,090,383       12,682       —          —          —          —          —          —          —          (143,591,406 )      86,116,867  

Accrued expenses and other

      199,366       17,449,784       85,495,328       (12,734 )      —          —          —          —          —          —          —          —         103,131,744  

Deferred revenue

      —         —         112,557,414       —         —          —          —          —          —          —          —          (38,626,663 )      73,930,751  

Derivative warrant liabilities

      (900 )      —         —         —         —          —          —          —          —          —          —          —         (900 ) 

Operating lease liabilities, current portion

      —         —         1,170,064       —         —          —          —          —          —          —          —          —         1,170,064  

Financing lease liabilities, current portion

      —         —         70,796,077       —         —          —          —          —          —          —          —          —         70,796,077  

Long-term debt, current portion

      —         —         880,936,991       —         —          —          —          —          —          —          —          —         880,936,991  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

Total current liabilities

      198,466       161,054,993       1,237,046,258       (52 )      —          —          —          —          —          —          —          (182,218,069 )      1,216,081,595  

Operating lease liabilities, net of current portion

      —         —         14,156,228       —         —          —          —          —          —          —          —          —         14,156,228  

Financing lease liabilities, net of current portion

      —         —         —         —         —          —          —          —          —          —          —          —         —    

Long-term debt, net of current portion

      8,356,293       —         (8,356,293 )      —         —          —          —          —          —          —          —          —         (0 ) 

Other noncurrent liabilities

      —         18,084,856       (15,497,086 )      (2,587,769 )      —          —          —          —          —          —          —          —         1  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

Total Liabilities

      8,554,759       179,139,849       1,227,349,107       (2,587,821 )      —          —          —          —          —          —          —          (182,218,069 )      1,230,237,824  

Pre-Petition Subject to Compromise

      684,395,370       —         (684,395,370 )      —         —          —          —          —          —          —          —          —         —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

Total Pre-Petition Subject to Compromise

      684,395,370       —         (684,395,370 )      —         —          —          —          —          —          —          —          —         —    

Post-Petition Short Term Liabilities

      —         —         —         —         —          —          —          —          —          —          —          —         —    

Post-Petition Long Term Liabilities

      —         —         —         —         —          —          —          —          —          —          —          —         —    

Preferred stock

      —         —         —         —         —          —          —          —          —          —          —          —         —    

Common stock

      37,478       —         —         —         —          —          —          —          —          —          —          —         37,478  

Additional paid-in capital

      1,783,051,000       (15,979,141 )      2,887,621       —         —          —          —          —          —          —          —          —         1,769,959,480  

Accumulated deficit

      (179,780,938 )      (828,330,719 )      (1,141,302,296 )      (61,752,012 )      —          —          —          —          —          —          —          318,476       (2,210,847,488 ) 

Other Comprehensive Income

      —         —         —         —         —          —          —          —          —          —          —          —         —    

Cumulative Translation Adjustment

      —         46,983       —         —         —          —          —          —          —          —          —          (46,983 )      —    

Total Equity

      1,603,307,540       (844,262,878 )      (1,138,414,675 )      (61,752,012 )      —          —          —          —          —          —          —          271,494       (440,850,530 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

Total Liabilities, Preferred Stock & Equity

      2,296,257,669       (665,123,029 )      (595,460,938 )      (64,339,833 )      —          —          —          —          —          —          —          (181,946,575 )      789,387,294  

 

1 

The ‘Elimination Co’ column addresses the accounting of intercompany balances to enable consolidated reporting in the ‘Total’ column

MOR-3: 1/1/2023 - 1/31/2023 Profit & Loss

 

Total Revenue

(US $)

    Core
Scientific,
Inc.		      Core
Scientific
Acquired
Mining
LLC		     Core
Scientific
Operating
Company		     Radar
Relay
Inc		     Core
Scientific
Mining
LLC		      Core
Scientific
Specialty
Mining
(Oklahoma)
LLC		      American
Property
Acquisition,
LLC		      Starboard
Capital
LLC		      RADAR
LLC		      American
Property
Acquisitions
I, LLC		      American
Property
Acquisitions
VII, LLC		  

Hosting revenue from customers

      —          —         6,314,128.30       —         —          —          —          —          —          —          —    

Hosting revenue from related parties

      —          —         1,308,852.63       —         —          —          —          —          —          —          —    

Equipment sales to customers

      —          —         —         —         —          —          —          —          —          —          —    

Equipment sales to related parties

      —          —         —         —         —          —          —          —          —          —          —    

Digital asset mining income

      —          2,661,793.73       28,276,892.87       —         —          —          —          —          —          —          —    

Network services and defi revenue

      —          —         —         —         —          —          —          —          —          —          —    
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total Revenue

      —          2,661,793.73       35,899,873.80       —         —          —          —          —          —          —          —    
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Cost of revenue

      —          (3,349,178.15 )      (59,046,556.03 )      —         —          —          —          —          —          —          —    
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Gross Profit

      —          (687,384.42 )      (23,146,682.23 )      —         —          —          —          —          —          —          —    
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Gain (loss) on legal settlements

      —          —         —         —         —          —          —          —          —          —          —    

Gain (loss) from sales of digital currency assets

      —          11,455.01       138,931.37       —         —          —          —          —          —          —          —    

Impairments of digital currency assets

      —          —         —         —         —          —          —          —          —          —          —    

Impairment of goodwill and other intangibles

      —          —         —         —         —          —          —          —          —          —          —    

Impairment of property, plant and equipment

      —          —         —         —         —          —          —          —          —          —          —    

Losses on exchange or disposal of property, plant and equipment

      —          —         —         —         —          —          —          —          —          —          —    

Operating expenses:

      —                —          —          —          —          —          —          —    

Research and development

      —          —         (659,379.93 )      (10,931.82 )      —          —          —          —          —          —          —    

Sales and marketing

      —          —         (338,532.41 )      —         —          —          —          —          —          —          —    

General and administrative

      —          (8,357.78 )      (4,762,536.85 )      (50.00 )      —          —          —          —          —          —          —    

Advisor Fees

      —          —         —         —         —          —          —          —          —          —          —    
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total operating expenses

      —          (8,357.78 )      (5,760,449.19 )      (10,981.82 )      —          —          —          —          —          —          —    
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Operating Income (Loss)

      —          (684,287.19 )      (28,768,200.05 )      (10,981.82 )      —          —          —          —          —          —          —    

Non-operating income (expense), net:

      —                —          —          —          —          —          —          —    

Loss on debt extinguishment

      —          —         —         —         —          —          —          —          —          —          —    

Interest expense, net

      —          —         13,482.06       —         —          —          —          —          —          —          —    

Other non-operating expenses, net

      —          —         —         —         —          —          —          —          —          —          —    

Reorganization items

      —          —         (7,646,333.49 )      —         —          —          —          —          —          —          —    
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total Non-operating income (expense), net:

      —          —         (7,632,851.43 )      —         —          —          —          —          —          —          —    
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Income (loss) before income taxes

      —          (684,287.19 )      (36,401,051.48 )      (10,981.82 )      —          —          —          —          —          —          —    

Income tax expense

      —          —         —         —         —          —          —          —          —          —          —    
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net Income (Loss)

      —          (684,287.19 )      (36,401,051.48 )      (10,981.82 )      —          —          —          —          —          —          —