CORZCore Scientific

It appears that underwriting fees remain constant and are not adjusted based on redemptions. Revise your disclosure to disclose the effective underwriting fee on a percentage basis for shares at the minimum and maximum redemption levels.

The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page 9 of Amendment No. 1 to disclose the effective underwriting fee in the no redemption and maximum redemption scenarios. The Company respectfully advises the Staff that in a maximum redemption scenario, the Trust Account balance will have been reduced to approximately $0. The Company has revised the disclosure on page 9 of Amendment No.

Rest of the answer

1 to clarify that the full amount of the deferred underwriting fee shall be payable in such event, rather than providing an effective underwriting fee on a percentage basis in the maximum redemption scenario.

Read in the reply ↗

You disclose the Power & Digital Infrastructure Acquisition Corp. ("XPDI") common stock needed to approve the business combination is the majority of the votes cast, subject to the quorum requirements. In light of the Sponsor Agreement that Founder Shares will vote to approve the all of the proposals, please disclose the percentage of non-affiliated public shares needed to approve the business combination proposal.

Rest of the question

Further, please provide this information assuming only a quorum is present.

The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page 12 of Amendment No. 1 to disclose the percentage of non-affiliated public shares needed to approve the Business Combination Proposal, both assuming that all issued and outstanding shares of XPDI common stock are voted and assuming only the minimum number of shares representing a quorum is present and voting.

Summary, Read in the reply ↗

Either in the summary or in a Q&A, please disclose the approximate number of Class A shares of New Core Scientific that will be issued to Core Scientific stockholders at the close of the business combination. Further, please estimate the amount of New Core Scientific Class A shares that underlie the existing convertible promissory notes of Core Scientific.

The Company acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages 7–8 of Amendment No. 1 in response to the Staff’s comment. Read in the reply ↗

Please briefly describe the terms of the acquisitions of Blockcap and RADAR by Core Scientific that occurred in July 2021 and quantify the amount and value of the consideration paid. Further, please disclose the related party nature of the acquisition of Blockcap and discuss its ties to the management of Core Scientific and its principal stockholders.

The Company acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page 25 of Amendment No. 1 in response to the Staff’s comment. Read in the reply ↗

Your registration statement refers to the issuance of Class A Common Stock to stockholders of Core Scientific as part of the initial business combination. Please clarify in the Q&A and Summary sections that New Core Scientific is intended to only have one class of common stock post-merger, as the XPDI Class B common stock issued to the Sponsors will be converted to Class A shares prior to the business combination.

The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages 4–5, 25 and 26 of Amendment No. 1 to clarify that New Core is intended to only have one class of common stock post-merger. Read in the reply ↗

Either in a Q&A or in the Summary, please clarify that even if current unitholders of XPDI redeem their Class A Common Stock, they will retain their public warrant underlying the unit and will continue to be a security holder of New Core Scientific until they sell, exercise or have their warrants redeemed post-merger.

Rest of the question

Further, please describe the circumstances under which you may redeem the warrant for $0.01 per warrant if the price of the common stock exceeds $18 per share.

The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page 5 of Amendment No. 1 as requested. Read in the reply ↗

We note that you do not appear to have a minimum cash requirement or maximum redemption threshold. Accordingly, it appears that nearly all of the XPDI public shares may be redeemed, yet the merger may still be approved by public stockholders.

Rest of the question

Please address that should a large number of public shares be redeemed, there may be substantial volatility in the price of your common stock immediately after the merger due to a low amount of shares available for sale in the public markets.

The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page 82 of Amendment No. 1. Read in the reply ↗

We note that Core Scientific's acquisition of Blockcap is expected to be accounted for as a business combination using the acquisition method of accounting. Considering that Core Scientific and Blockcap were both founded by Darin Feinstein and thus, appear to be under common control, please provide us your analysis explaining why the acquisition method of accounting would be appropriate.

Rest of the question

In this regard, we considered the information on Mr. Feinstein and the background of both companies at https://darinfeinstein.com.

The Company acknowledges the Staff’s comment and informs the Staff that while Blockcap and Core Scientific are related parties, the entities are not under common control. In assessing “control,” management considered the definition of “controlling financial interest” within ASC 810-10-15-8, which states, “For legal entities other than limited partnerships, the usual condition for a controlling financial interest is ownership of a majority voting interest, and, therefore, as a general rule ownership by one reporting entity, directly or indirectly, of more than 50 percent of the outstanding

Rest of the answer

voting shares

[…]” (emphasis added). As “common control” is not explicitly defined within the guidance, management also considered the examples provided in ASC 805-50-15-6; paragraph BC69 of ASU 2015-02, which states that entities under common control include “subsidiaries controlled (directly or indirectly) by a common parent, or a subsidiary and its parent” (emphasis added); and the degree of common ownership—none of which apply to the Core/Blockcap merger.

With respect to Mr. Feinstein, Mr. Feinstein held an approximately 12% equity ownership interest in Blockcap as of the date of the

Core/Blockcap merger and was determined to not have a controlling financial interest in Blockcap. Mr. Feinstein also owned approximately 12% of Core Scientific’s capital stock through BCV 55 LLC, BCV 66 LLC and BCV 77 LLC (collectively, the “BCV Entities”). The Company has therefore determined that Mr. Feinstein does not have a controlling financial interest in any of the BCV Entities or Core Scientific.

Accordingly, the Company determined that the Core/Blockcap merger should be accounted for as a business combination in accordance with ASC 805-10 with Core Scientific determined to be the accounting acquirer.

Read in the reply ↗

We note that the conversion price of the convertible notes resets to 65-80% of the price paid in a SPAC merger, depending on the timing of the change in control or SPAC merger. Based on your anticipated closing of the SPAC merger, please disclose information regarding the new conversion price and the number of shares that would have been included in the calculation of diluted earnings per share, had they not have

Rest of the question

been antidilutive. Additionally, please update note (1) on page 110 to include such conversion information.

The Company acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages 111–112 of Amendment No. 1 in response to the Staff’s comment. Read in the reply ↗

Please expand footnote (A)1 to disclose your methodology and assumptions underlying your valuation of the digital assets and the mining equipment so that it is transparent how you calculated the adjustment amounts. With respect to the digital assets, separately quantify the holdings of Bitcoin, Ethereum and Siacoin.

The Company acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page 106 of

Amendment No. 1 in response to the Staff’s comment. Read in the reply ↗

In light of the recent acquisitions of RADAR and Blockcap by Core Scientific and how each had been a prior customer of Core Scientific, please briefly describe the business of these acquired companies in further detail and describe your plans for integration.

The Company acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page 145 of

Amendment No. 1 in response to the Staff’s comment. In addition, the Company respectfully advises the Staff that almost the entirety of Blockcap’s historical business operations involved securing hosting support space in existing Core

Scientific facilities.

Rest of the answer

Since the acquisition of Blockcap can in effect be characterized as the indirect purchase of additional mining equipment that is both complementary, if not identical, to the mining equipment used in Core Scientific’s existing self-mining business, and already operating securely in existing Core Scientific facilities, Core Scientific has not devoted significant resources to integration, and does not propose to disclose such plans. In addition, much if not all of

RADAR’s technologies and offerings are still in early stages of development or deployment, and Core Scientific has not engaged in significant integration preparation, other than onboarding and integration of RADAR employees. In addition, the Company respectfully informs the Staff that RADAR was not a prior customer of Core Scientific or the Company.

Read in the reply ↗

We note that you have significant amounts of high hash rate data mining rigs on order that greatly exceeds the hash rates for your existing equipment according to page 166. Please briefly provide a description of how you allocate your ordered equipment between selfmining rigs versus hosting rigs. It appears you are allocating more higher hash rate rigs to your self-mining operations than in the past.

Rest of the question

Please clarify the differences in cost and if this strategic shift adds more risk to your operations and financial condition.

The Company acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page 169 of

Amendment No. 1 in response to the Staff’s comment. In addition, the Company respectfully advises the Staff that while it is true that an increased number of higher hash rate mining rigs are being allocated to Core Scientific’s self-mining operations, that occurrence is the natural confluence of newer mining machines generally featuring higher hash rates and Core Scientific’s general shift towards self-mining.

Rest of the answer

Mining machines are generally priced according to hash rate and higher hash rate machines are more expensive than lower hash rate machines. Core Scientific believes that higher cost machines generally have a longer life span and tend to have fewer repair issues, making them a more efficient mining tool.

Core Scientific does not believe that its general shift towards self-mining presents material risks to its operations or financial condition.

Read in the reply ↗

With respect to your Self-Mining operations, please briefly describe your strategy as to how you intend to manage your digital asset inventory. For example, it is unclear whether you will regularly diversify into other digital assets or fiat currency to reduce risk at regular intervals.

The Company acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page 168 of Read in the reply ↗

Please clarify how Core Scientific has determined that over 50% of the power used in its operation was generated from non-carbon emitting, renewable sources. With respect to Core Scientific’s long-term local power agreements, please describe any provisions that require the power to be sourced from renewable energy sources and clarify whether it is charged materially higher energy costs.

The

Company acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages 149–150 of Amendment No. 1 in response to the Staff’s comment. The Company further advises the Staff that none of Core

Scientific’s long-term power agreements contain provisions requiring power to be sourced from renewable energy. Read in the reply ↗

Please clarify how Core Scientific determines how the power it receives from its suppliers are derived from non-carbon emitting, renewable sources. For example, please clarify whether the power suppliers specify how many kilowatts of energy are provided to Core Scientific from renewable sources, such as solar or wind energy.

The Company acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages 149–150 of Amendment No. 1 in response to the Staff’s comment. Read in the reply ↗

Please provide more information regarding the Green-E Certificate Program and how it operates and clarify the sources of the energy credits Core Scientific is purchasing to remain carbon neutral. For example, please clarify whether Core Scientific purchases these credits from its power suppliers or if they are purchased on the open market.

The Company acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages 149–150 of Amendment No. 1 in response to the Staff’s comment. Read in the reply ↗

Clarify how Core Scientific is able to determine that such certificates are sufficient to offset its carbon emissions.

The Company acknowledges the Staff’s comment and advises the Staff that Read in the reply ↗

Please quantify the dollar amount of energy credits Core Scientific has purchased and clarify the size or scale of the carbon offsets they are meant to represent.

The Company acknowledges the

Staff’s comment and advises the Staff that it has revised the disclosure on pages 149–150 of Amendment No. 1 in response to the Staff’s comment. Read in the reply ↗

While you disclose the amount of megawatts you generate, please clarify how you measure your efficiency of your data mining equipment by kilowatt hour.

The Company acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages 149–150 of Amendment No. 1 in response to the Staff’s comment. In addition, the Company respectfully informs the Staff that Core Scientific does not generate megawatts, but instead purchases power. Core Scientific does not monitor efficiency of its data mining equipment on a per-machine or aggregated basis, but it does refer to manufacturer power specifications when forecasting future energy consumption. Read in the reply ↗

We note that a significant amount of RSUs held by B. Kevin Turner have not vested as of his termination date. Please make clear if such awards would be settled in shares of XPDI Class A Common Stock or forfeited as of the closing of this transaction. Expand note (3) on page 110 of the pro forma financial information to include this clarification.

The Company acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages 160 and 112 of Amendment No. 1 in response to the Staff’s comment to disclose the number of shares underlying Mr. Turner’s RSUs that have satisfied the time-based vesting condition as of his termination date. Read in the reply ↗

We note that digital currency assets are deemed intangible assets and that you recognize digital asset mining income below gross profit since the counterparty in such sale or exchange transaction does not appear to be your customer. Tell us how you considered classifying cash flows from digital currency assets within cash flows from investing activities instead of operating activities.

The Company respectfully advises the Staff that

Core Scientific includes digital asset mining income as a component of revenue and includes these activities within operating activities on its Consolidated Statements of Cash Flows.

With respect to the sales of digital assets earned from digital asset mining activities, the proceeds from sale are included within operating activities on Core Scientific’s Consolidated Statements of Cash Flows.

The gain or loss on the sale of digital assets is included as a separate line item below gross profit and included as a component of operating

Rest of the answer

activities on Core Scientific’s Consolidated Statements of Cash Flows. For the years ended December 31, 2020 and 2019, the gain from sales of digital currency assets was $65 thousand and $806 thousand, respectively. For the six months ended June 30, 2021, gain (loss) from sales of digital currency assets was $14 thousand and $(4) thousand, respectively.

Read in the reply ↗

Please provide the beneficial ownership of Core Scientific prior to the initial business combination. Recommendation of the XPDI Board of Directors and Reasons for the Approval of the Merger,

The Company respectfully acknowledges the Staff’s comment and advises the

Staff that it has revised the disclosure on pages 203–206 of Amendment No. 1 in response to the Staff’s comment. Read in the reply ↗

Please clarify whether XPDI board considered the related party nature of the Blockcap/RADAR acquisitions with respect to its recommendation to approve the merger with Blockcap.

The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages 221 and 225 of Amendment No. 1 to clarify that XPDI’s board of directors considered the related party nature of the

Core/Blockcap merger with respect to its recommendation to approve the merger. The Company respectfully advises the Staff that other than RADAR being a subsidiary of Blockcap, the Company was not aware of any material relationships between Core

Scientific and RADAR or Blockcap and RADAR. Read in the reply ↗

With respect to your projections for fiscal years 2021 and 2022 on page 220, please clarify how much of the growth in these figures in 2022 is attributable to the RADAR and Blockcap acquisitions. Further, please clarify how much is of the growth in 2022 is attributable to the opening of your Georgia and North Dakota facilities.

The Company acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page 228 of Amendment No. 1 in response to the Staff’s comment. Read in the reply ↗

Please clarify the basis for the hash rate to increase from 11 EH/S to 31 EH/S from the projected 2021 to 2022 periods. The 2022 projections significantly exceeds the hash rate for the mining equipment you have on order.

Rest of the question

Please clarify whether you expect a significantly different mix of mining equipment in 2022 than what is currently in operation and on order, per page 166, to account for the significant increase in its computer power.

The

Company acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages 227–228 of Amendment No. 1 in response to the Staff’s comment. Read in the reply ↗

In light of the differing business models for the companies used for your comparables analysis, as Core Scientific’s operations and sources of revenue are more diverse and less reliant on self-bitcoin mining, please clarify whether management considered other methods of valuation beyond the Enterprise Value / December 2022 Annualized Adjusted Revenue multiples where all sources of revenue are aggregated in the

Rest of the question

comparables analysis. Further, please clarify whether your board was provided and/or considered additional financial or operating metrics from Core Scientific.

The Company respectfully acknowledges the Staff’s comment and advises the

Staff that it has revised the disclosure on pages 227 and 229 of Amendment No. 1 as requested. Read in the reply ↗

We note that your projections rely on a recent market price for Bitcoin in your projections for revenue and adjusted revenue used in your multiples comparison. Please clarify whether the board considered the volatility of the market price in its evaluation of fairness or valuation of Core Scientific.

The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page 229 and 230 of Amendment No. 1 as requested. Read in the reply ↗

Please identify the Anchor Investors that will purchase Founder shares upon the close of the merger. Core Scientific Holding Co. Notes to Consolidated Financial Statements 2. Summary of Significant Accounting Policies

The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page 1 of Amendment No. 1 to identify the anchor investors that will purchase Founder Shares upon the close of the merger.

Core Scientific Holding Co.

Notes to Consolidated

Financial Statements

2. Summary of Significant Accounting Policies Read in the reply ↗

We note on page 56 that certain of your digital asset holdings are stored using Bittrex, Inc. (“Bittrex”) and Coinbase Global, Inc. (“Coinbase”), each a third-party digital asset service. Considering the numbers of bitcoins that you were awarded during 2019 (516) and 2020 (328) as reported on page 183 and prior periods as well, please explain why you do not report any digital assets on your balance sheet.

Rest of the question

As appropriate, please disclose your off-balance sheet holdings of digital currency assets (if any held by Bittrex or Coinbase) and your assessment as to who has control of those assets. In your response, please address pertinent terms and conditions of the respective agreements. 4. Other Assets, page F-57

The Company acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page F-86 of Amendment No. 1 in response to the Staff’s comment.

4. Other Assets, page F-57 Read in the reply ↗

We note on page 147 that you achieved net carbon neutral status through the purchase of green e-certified renewable energy credits (“REC”). Please disclose your basis of accounting for these renewable energy credits and how they are presented in the financial statements.

The Company acknowledges the Staff’s comment and advises the Staff that Core Scientific acquires

RECs for use, and not for resale, and recognizes the cost of RECs as an expense when they are delivered within general and administrative expenses in Core Scientific’s Consolidated Statements of Operations and Comprehensive Income (Loss). Core

Scientific uses and retires RECs shortly after they are delivered. Purchases of RECs are presented as cash used in operating activities in Core Scientific’s Consolidated Statements of Cash Flows.

Rest of the answer

Payments for RECs to be delivered at a future date are presented as other current assets on Core Scientific’s Consolidated Balance Sheets. For the six months ended June 30, 2021, Core Scientific recognized $0.3 million in REC expenses and does not view this amount as material.

Core Scientific intends to discuss basis of accounting for such RECs in its financial statements when and if purchases of RECs became material.

Read in the reply ↗

Please include the historical unaudited interim financial statements of Blockcap from which the pro forma information was derived. 2. Summary of Significant Accounting Policies

The Company acknowledges the Staff’s comment and advises the

Staff that the historical unaudited interim financial statements of Blockcap from which the pro forma information was derived were included on pages F-166 to F-180 of the Preliminary Registration Statement. However, such financial statements were inadvertently listed in the Preliminary Registration Statement’s Index to Financial Statements under RME Black 200, LLC (please see page F-3 of the Preliminary Registration Statement). The Company has revised the Index to Financial Statements on page F-2 of Amendment No.

Rest of the answer

1 to correctly reflect the inclusion of the requested information in response to the Staff’s comment. The unaudited interim financial statements of Blockcap for the six months ended June 30, 2021 from which the current pro forma information has been derived are included on pages F-121 to F-134 of Amendment No. 1.

2. Summary of Significant Accounting Policies f) Digital Assets, page F-102

Read in the reply ↗

Please disclose the unit of account (i.e., a Bitcoin unit or a divisible fraction of a Bitcoin unit) at which each digital asset is recorded and tested for impairment. Refer to paragraphs 21–27 of FASB ASC 350-30-35.

The Company acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages F-104 and

F-128 of Amendment No. 1 in response to the Staff’s comment. Read in the reply ↗

We note that the Company is entitled to a fractional share of the fixed cryptocurrency award the mining pool operator receives (less digital asset transaction fees to the mining pool operator which are recorded as a component of cost of revenues), for successfully adding a block to the blockchain.

Rest of the question

Regarding the digital asset transaction fees paid to the mining pool operator, please provide us your analysis on how such fees may be deemed a payment for a distinct good or service received from the customer and your assessment of its fair value. Clarify whether the fees are paid in cash or netted against the cryptocurrency award. Refer to ASC 606-10-32-25.

The Company respectfully advises the Staff that, for Blockcap, no pool fees were charged in the year ended December 31, 2020, as both pools used (Luxor and ViaBTC) provided a 0% fee incentive to Blockcap for the provision of hash power. Also, for the six-month period ended

June 30, 2021, for all three pools used (Luxor, ViaBTC and Foundry), no pool fees were charged as all three pools provided 0% fee incentives to Blockcap for the provision of hash power. Read in the reply ↗

Please comply with inline XBRL tagging requirements or advise us. Refer to https://www.sec.gov/structureddata/osd-inline-xbrl.html.

The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has complied with inline XBRL tagging requirements with respect to its preparation and filing of Amendment No. 1.

*****

If any additional supplemental information is required by the Staff or if you have any questions regarding the foregoing, please contact Debbie Yee of Kirkland & Ellis LLP at (713) 836-3630. Read in the reply ↗

Historical Core Scientific, Blockcap Acquisition and Convertible Note Issuance Adjustments to Unaudited Pro Forma Combined Core Scientific and Blockcap Statements of Operations, page 108 1. We note under Other adjustments, footnote (e), in connection with your assessment of a 0% effective tax rate you expect the combined entity to have losses for the foreseeable future.

Rest of the question

Please explain in this footnote your basis for this expectation, including your consideration of the timing of the conversion of the convertible debt and any synergies from the acquisitions. In this regard, we note pro forma operating income for the six months ended June 30, 2021 was largely offset by interest related to convertible debt. 5. Earnings per Share, page 112 2. Regarding adjustment (3), please disclose the unrecognized compensation expense related to 92,080,000 RSUs for which the performance condition has not been met, the nature of the performance condition, and the expected timing of the expense recognition. Likewise, please disclose the unrecognized compensation expense related to the 9,037,500 RSUs held by a former employee, the nature of the transaction-based vesting condition, and the expected timing of the expense recognition.

The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages 107 and 108 of Amendment No. 2 as requested.

5. Earnings per Share, page 112

2. Regarding adjustment (3), please disclose the unrecognized compensation expense related to 92,080,000

RSUs for which the performance condition has not been met, the nature of the performance condition, and the expected timing of the expense recognition.

Rest of the answer

Likewise, please disclose the unrecognized compensation expense related to the 9,037,500 RSUs held by a former employee, the nature of the transaction-based vesting condition, and the expected timing of the expense recognition.

RESPONSE:

The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page 112 of Amendment No. 2 as requested.

Read in the reply ↗

We note your responses to prior comments 14 through 19 regarding your carbon-offset program and how you spend $1.6 million to offset the carbon emissions generated by your mining rigs through renewable energy credits.

Rest of the question

Please provide specific information as to how much carbon emissions you generate, the amount of renewable and total energy you require, and how much each of the renewable energy credits offsets, either in carbon emissions or other power-related measures. Further, please quantify the costs of your non-renewable source of energy annually to provide context for the amounts of funds you spend for the offset renewable energy credits. Core Scientific Notes to Unaudited Consolidated Financial Statements 2. Summary of Significant Accounting Policies

respectfully acknowledges the Staff’s comment and supplementally advises the Staff that in 2021, Core Scientific’s Green House Gas (“GHG”) emission rate per megawatt hour (“MWH”), also referred to as Carbon Intensity, is expected to be 526 lbs. CO2 per MWH. The total energy Core Scientific expects to consume is expected to be 1.95 million MWHs, of which 215,000 MWHs is expected to consist of renewable energy, which is estimated to represent the emission of 514,000 tons of CO2. By purchasing 530,000 RECs, Core Scientific believes that it has achieved net carbon neutral status.

Rest of the answer

Additionally, the Company advises the Staff that it has revised the disclosure on pages 149 and 150 of Amendment No. 2.

Core Scientific

Notes to Unaudited Consolidated Financial Statements

2. Summary of Significant Accounting Policies

Read in the reply ↗

We note your response to comment 29. In light of your significant holdings of bitcoins as of the end of the third quarter, please tell us and disclose on page F-86 and elsewhere, as applicable, any changes in your policy of selling all digital assets and converting them into fiat currency shortly after they are mined. Blockcap, Inc. Notes to Unaudited Condensed Financial Statements 10. Subsequent Events

The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages 146 and 168

Blockcap, Inc.

Notes to Unaudited Condensed Financial Statements

10. Subsequent Events Read in the reply ↗

If material, please disclose the underlying dollar value of the crypto-based loan transactions with NYDIG. In future filings, please disclose the related interest and income taxes paid, along with the dollar value of these non-cash investing activities in your Statements of Cash Flows. Refer to ASC 230-10-50-2 and 3.

The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page F-134 of

Amendment No. 2 as requested. Read in the reply ↗

Please describe your relationship, including material commercial relationships, with NYDIG and clarify whether you will continue to enter into digital asset-denominated loan transactions with NYDIG as part of your ongoing business strategy or other revenue optimization strategies. Please describe any material business and regulatory implications of such activity, such as compliance with the federal securities laws.

The Company respectfully acknowledges the Staff’s comment and informs the Staff that, as disclosed, Core Scientific is a party to a master equipment finance equipment loan with NYDIG, which was entered into in October 2020, and pursuant to which additional loans were received in March and May 2021. The loans have a term of 24 months. In addition, the Company has assumed certain digital asset-denominated loan transactions with NYDIG pursuant to the Blockcap acquisition.

Rest of the answer

Core Scientific does not have any present intention of entering into other digital asset-denominated loan transactions with NYDIG as part of its ongoing business strategy or other revenue optimization strategies, and accordingly, Core Scientific has not considered any business or regulatory implications of such activity.

*****

If any additional supplemental information is required by the Staff or if you have any questions regarding the foregoing, please contact Debbie Yee of Kirkland & Ellis LLP at (713) 836-3630.

Read in the reply ↗

Earnings per Share, page 110 1. We note your response to comment 2 and the revised pro forma note (3) on page 112. Considering that the pro forma presentation is premised on the occurrence of the IPO as of the beginning of the period, and thus, the satisfaction of the RSU performance condition (transaction vesting condition), please make clear why the combined pro forma statements of operations do not reflect the

Rest of the question

recognition of incremental compensation expense related to RSUs that have met the time-based vesting conditions through the end of the periods presented. Nor does the pro forma balance sheet reflect a charge against retained earnings for compensation cost arising from the requisite service and performance condition satisfied through June 30, 2021. Refer to the pertinent guidance under ASC 718. 2. Further explain why the contingently issuable shares underlying the RSUs have not been deemed outstanding (by analogy to ASU 260-10-45-13) for the purpose of calculating pro forma basic loss per share.

The Company respectfully advises the Staff that, as indicated in pro forma note (3) on page 112 of Amendment No. 3, the transaction vesting condition has not been satisfied by the merger of XPDI and Core Scientific. Under the terms of the RSUs, which is filed as Exhibit 10.24 to the Preliminary Registration Statement, and the 2018 Omnibus Incentive Plan, as amended (the

“Plan”), which is filed as Exhibits 10.13 and 10.21 to the Preliminary Registration Statement, a “Transaction-based Vesting Condition” occurs on the earlier of “Change of Control or the initial Public Offering of equity

Rest of the answer

securities of the Company”. This merger constitutes neither.

Under the terms of the Plan, “Public Offering” is defined as “any primary or secondary public offering of any securities pursuant to an effective registration statement (or a qualified Form 1-A) under the Securities Act, other than pursuant to a registration statement on Form S-4 or Form S-8 or any successor or similar form that results in the listing of a class of equity securities of the Company on the New York Stock Exchange or other national exchange or quotation system in the United States.” XPDI’s merger with Core Scientific does not constitute, nor does it involve, a primary or secondary public offering of securities by Core Scientific (the “Company” for purposes of the Plan). Moreover, the definition of “Public Offering” expressly excludes registered public offerings on Form S-4.

XPDI’s merger with Core Scientific similarly does not constitute a “Change of

Control” for purposes of the Plan and its transaction-based vesting condition. The definition of that term is set forth below:

“Change in Control” shall mean (i) the sale or disposition, in one or a series of related transactions, of all or substantially all of the assets of the Company and its subsidiaries (taken as a whole) to any “person” or “group” (as such terms are defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other than the Initial Shareholders or (ii) any person or group, other than the Initial Shareholders, is or becomes the “beneficial owner” (as defined in

Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the total voting power of the voting equity of the

Company, including by way of merger, consolidation or otherwise. In determining whether any person or group constitutes a “person” or “group” for purposes of subsections (i) or (ii) above, the Initial Shareholders shall be excluded from such “person” or “group”. For purposes of determining whether (i) or (ii) has occurred, an issuance of shares of the Company by the Company (or its successor), whether through an initial public offering, other primary issuance or otherwise, shall be excluded. Notwithstanding the foregoing, a Change in Control shall not occur unless such transaction constitutes a change in the ownership of the Company, a change in effective control of the

Company, or a change in the ownership of a substantial portion of the Company’s assets under Section 409A. “Initial Shareholders” shall mean each of the shareholders of the Company and their respective affiliates as of

August 20, 2018.

As described in the Registration Statement under “The Merger” and “Accounting Treatment”, the merger neither constitutes a sale or disposition of all or substantially all of the assets of Core Scientific, nor results in any person or group other than existing Core Scientific stockholders becoming the beneficial owner of more than 50% of the total voting power of the Company.

As a result, the combined pro forma statements of operations do not reflect the recognition of incremental compensation expense related to RSUs that have met the time-based vesting conditions, nor does the pro forma balance sheet reflect a change against retained earnings for compensation cost.

The Company further advises the Staff that it intends to revise its disclosure on page 160 of Amendment No. 3 to clarify that the merger does not constitute a change of control event under the terms of Core Scientific’s RSUs.

2. Further explain why the contingently issuable shares underlying the RSUs have not been deemed outstanding

(by analogy to ASU 260-10-45-13) for the purpose of calculating pro forma basic loss per share.

RESPONSE:

As discussed in the response to Question 1, since no transaction-based vesting condition has been satisfied, shares underlying RSUs are not deemed outstanding.

If any additional supplemental information is required by the Staff or if you have any questions regarding the foregoing, please contact

Debbie Yee of Kirkland & Ellis LLP at (713) 836-3630.

Read in the reply ↗

Earnings per Share, page 110 1. We note that you estimated approximately 92.1 million RSUs outstanding. On page F92 you disclosed that there were 34.2 million RSUs outstanding as of June 30, 2021 and on page F-96, that an additional 23.7 million RSUs were issued subsequent to the balance sheet date. Please reconcile the discrepancy in outstanding RSUs or update your disclosure, as appropriate.

The Company respectfully acknowledges the Staff’s comment and advises the Staff that Core Scientific estimates that approximately 97.5 million RSUs are currently outstanding, which can be reconciled with the disclosures on pages F-101 and F-104 by multiplying the sum of the 45.8 million unvested RSUs outstanding as of September 30, 2021, 9.7 million RSUs issued in October 2021 and

5.6 million RSUs expected to be reserved for future issuance by the exchange rate, 1.5948274216. The Company has revised the disclosure on page 111 of Amendment No.

Rest of the answer

3 as requested.

If any additional supplemental information is required by the Staff or if you have any questions regarding the foregoing, please contact Debbie Yee of Kirkland & Ellis LLP at (713) 836-3630.

Read in the reply ↗

Separately disclose on the face of the consolidated Statements of Operations the cost of tangible goods sold and cost of services pursuant to Rule 5-03.2 of Regulation S-X

The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page F-100 of Amendment No. 4 as requested. Read in the reply ↗

Summary of Significant Accounting Policies Fair Value Measurements, page F-87 2. Regarding the portion of the convertible notes transferred from Level 2 to Level 3, please explain why observable market prices for similar securities are no longer available.

Rest of the question

In addition, provide a narrative description of the uncertainties from the use of disclosed unobservable inputs and how interrelationships and resultant changes in such inputs can impact fair value measurements. Refer to ASC 820-10-50-2(c)(3) and (g). 4. Notes Payable

respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages F-109-F-110 of Amendment No. 4 as requested.

4. Notes Payable Read in the reply ↗

As stipulated in a related risk factor on page 36, please disclose, if so, that at maturity, notes not converted will be owed two times the face value of the note plus accrued interest. Make clear whether the accrued interest is based on your expectation of the unconverted portion of such notes. Further disclose how such settlement provision impacts the fair value of the notes.

The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has restated the consolidated interim financial statements as of and for the nine-months ended September 30, 2021 and has revised the disclosure on pages 35-36, 94, F-108 and F-120 of Amendment No. 4 as requested. Read in the reply ↗

Please refile Exhibits 10.3, 10.5, 10.6 and 10.7 to include a prominent statement on the first page of each exhibits that certain identified information has been excluded from the exhibit because it is both not material and is the type that the company treats as private or confidential. Refer to Regulation S-K Item 601(b)(10)(iv).

The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has refiled the exhibits as requested.

*****

If any additional supplemental information is required by the Staff or if you have any questions regarding the foregoing, please contact Debbie Yee of Kirkland & Ellis LLP at (713) 836-3630. Read in the reply ↗

Summary of Significant Accounting Policies Fair Value Measurements, page F-108 1. We note your response to comment 2 and your disclosures on page F-110 regarding the effects of unobservable inputs "in isolation" in connection with fair value measurement of convertible notes and reissue our comment in part.

Rest of the question

Please additionally disclose: • the interrelationships among unobservable inputs and how they might magnify or mitigate the effect of changes in such unobservable inputs on Level 3 fair value measurement. Refer to ASC 820-10-50-2(g). • the weighted average for the range of values of significant unobservable inputs used to develop Level 3 fair value measurement. Refer to ASC 820-10-50-2(bbb)(2); and • the nature of the payment in kind interest (PIK), whether it constitutes additional notes that have identical terms as the outstanding notes or other securities. 2. For fair value measurement purposes, please disclose your unit of account for Unsecured Convertible Notes. It is unclear why you disclose on page F-109 that Level 3 financial instruments included only certain of the same series of unsecured convertible notes issued during the same time frame (August and early September 2021). We also note that the time lapse between the issue date and the reporting date for Level 2 and Level 3 Unsecured Convertible Notes issued in August and September 2021 and Level 2 Unsecured Convertible notes issued late September 2021 was not significant. 3. We note your presentation of convertible notes in the aggregate on pages F-109 and F110. Please revise to disaggregate such notes based on their respective units of account or class.

The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages F-108, F-110,

F-111 and F-121 of Amendment No. 5 as requested.

2. For fair value measurement purposes, please disclose your unit of account for Unsecured Convertible

Notes. It is unclear why you disclose on page F-109 that Level 3 financial instruments included only certain of the same series of unsecured convertible notes issued during the same time frame (August and early September 2021).

Rest of the answer

We also note that the time lapse between the issue date and the reporting date for Level 2 and

Level 3 Unsecured Convertible Notes issued in August and September 2021 and Level 2 Unsecured Convertible notes issued late September 2021 was not significant.

RESPONSE:

The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page F-110 of

Amendment No. 5 in response to the Staff’s comment.

3. We note your presentation of convertible notes in the aggregate on pages

F-109 and F-110. Please revise to disaggregate such notes based on their respective units of account or class.

RESPONSE:

The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page F-109 of Amendment No. 5 as requested.

*****

If any additional supplemental information is required by the Staff or if you have any questions regarding the foregoing, please contact Debbie Yee of Kirkland & Ellis LLP at (713) 836-3630.

Read in the reply ↗