Core Scientific, Inc./tx

As previously disclosed in the Current Report on Form 8-K filed on December 21, 2022 by Core Scientific, Inc. (the “Company”), 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. A significant amount of time is required of the Company’s management and personnel to support matters related to the Chapter 11 Cases, the additional complexities of accounting for the implications of the Chapter 11 Cases on multiple aspects of the Company’s financial reporting and the Company’s accounting and financial reporting requirements in accordance with U.S. Generally Accepted Accounting Principles and United States Securities and Exchange regulations. In addition, as previously disclosed in the Current Report on Form 8-K filed on October 27, 2022, the Company’s operating performance and liquidity have been significantly impacted by the prolonged decrease in the price of bitcoin, the increase in electricity costs, and the increase in the global bitcoin network hash rate. The assessment of the financial statement effects of these circumstances must be concluded to complete the Company’s interim financial statements that are to be included in the Quarterly Report on Form 10-Q for the three months ended March 31, 2023 (the “Quarterly Report”). In addition, the Company is evaluating the appropriate disclosures related to liquidity and other matters

As previously disclosed in the Current Report on Form 8-K filed on December 21, 2022 by Core Scientific, Inc. (the “Company”), 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. A significant amount of time is required of the Company’s management and personnel to support matters related to the Chapter 11 Cases, the additional complexities of accounting for the implications of the Chapter 11 Cases on multiple aspects of the Company’s financial reporting and the Company’s accounting and financial reporting requirements in accordance with U.S. Generally Accepted Accounting Principles and United States Securities and Exchange regulations. In addition, as previously disclosed in the Current Report on Form 8-K filed on October 27, 2022, the Company’s operating performance and liquidity were significantly impacted by the prolonged decrease in the price of bitcoin, the increase in electricity costs, and the increase in the global bitcoin network hash rate during the year ended December 31, 2022. The assessment of the financial statement effects of these circumstances must be concluded to complete the Company’s annual financial statements that are to be included in the Annual Report on Form 10-K for the year ended December 31, 2022 (the “Annual Report”). In particular, the Company concluded that an assessment of its carrying value of property, plant and equipment is necessary as of December 31, 2022

Core Scientific, Inc. (the “Company” or the “Registrant”) was unable, without unreasonable effort or expense, to file its Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 (the “Q3 Form 10-Q”) with the Securities and Exchange Commission (“SEC”) within the prescribed time period. As previously disclosed, the Company’s operating performance and liquidity have been severely impacted by the prolonged decrease in the price of bitcoin, the increase in electricity costs, and the increase in the global bitcoin network hash rate. The assessment of the financial statement effects of these circumstances must be concluded to complete the Registrant’s interim financial statements that are to be included in the Q3 Form 10-Q. In particular, the Company concluded that an interim assessment of its carrying value of property, plant and equipment, goodwill, and other intangible assets is necessary as of September 30, 2022. The Company has determined that it is likely that it will recognize asset impairments on some or all of these classifications of tangible and intangible assets. In addition, the Company is evaluating the appropriate disclosures related to liquidity and other matters. The complexity of the analysis for asset impairments and disclosures related to liquidity and other matters has caused delay in finalizing the Registrant’s interim financial statements. As a result of the delays described above, the Registrant requires additional time beyond its prescribed due date for the filing of its Quarterly Report to fully complete its procedures and disclosures relating to its assessment of the financial effects of the prolonged decrease in the price of bitcoin, the increase in electricity costs as well as the Company’s ability to meet its liquidity needs, to comply with covenants in its indebtedness and to exist or remain as a going concern

Core Scientific, Inc. (the “Company” or the “Registrant”) was unable, without unreasonable effort or expense, to file its Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 (the “Q2 Form 10-Q”) with the Securities and Exchange Commission (“SEC”) within the prescribed time period. At June 30, 2022, the Company had, before considering goodwill impairment, $1.06 billion of recognized goodwill, acquired through previous mergers and acquisitions. The Company performs assessments of goodwill impairment at the reporting unit level at least annually or more frequently when events or circumstances indicate the carrying value of a reporting unit is, more likely than not, in excess of its fair value. The Company’s annual testing date is October 31st each year. During the period ending June 30, 2022, the Company identified indicators of impairment due to recent adverse changes in the economy, industry, and business climate, including: the sustained decrease in the price of bitcoin, the increasing cost of financing and the increased volatility of equity markets and the market prices of the Company’s securities. The Company concluded that an interim assessment of its carrying value of goodwill is necessary as of June 30, 2022. The Company has determined that it is likely that the carrying value of the Registrant’s recognized goodwill is in excess of its estimated fair value and that goodwill will be impaired to its estimated fair value. This assessment of goodwill must be concluded to complete the Registrant’s interim financial statements that are to be included in the Q2 Form 10-Q. The complexity of the analysis, including the impact of recent events within the blockchain and digital including bitcoin has caused delay in finalizing the Registrant’s estimates of fair value necessary for the completion of its interim financial statements

The quarterly report on Form 10-Q for the quarter ended June 30, 2021 (the “Form 10-Q”) of Power & Digital Infrastructure Acquisition Company (the “Company”) could not be filed within the prescribed time period due to the fact that the Company was unable to solicit and obtain the necessary review of the Form 10-Q in a timely fashion prior to the due date of the report. Furthermore, the Company could not timely file its Form 10-Q because the XBRL process for the financial statements of the Form 10-Q could not be completed in sufficient time prior to the due date of the report. The Company is working diligently to complete the Form 10-Q as soon as possible and expects to file such report within five calendar days hereof

Power & Digital Infrastructure Acquisition Corp. (the “Company”) has determined that it is unable, without unreasonable effort or expense, to file its Form 10-Q for the fiscal quarter ended March 31, 2021 (the “Form 10-Q”) by the prescribed due date for the reasons described herein. On April 12, 2021, the staff of the Securities and Exchange Commission (the “SEC”) issued a public statement entitled “Staff Statement on Accounting and Reporting Considerations for Warrants issued by Special Purpose Acquisition Companies” (“SPACs”) (the “Statement”). In the Statement, the SEC staff expressed its view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities on the SPAC’s balance sheet as opposed to equity. The Company is currently determining the extent of the Statement’s impact on its financial statements as of and for the fiscal quarter ended March 31, 2021 included in the Form 10-Q and requires additional time to ensure the accuracy of such financial statements. The Registrant expects to file the Form 10-Q on or before the fifth calendar day following the prescribed due date. 2