What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-11-25 compared with 2024-12-03 · 231 added, 179 removed, 284 unchanged (59% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

($ presented in 000's, except for bitcoin price)

Forward-Looking Statements

5 unchanged sentences

Business Overview

We are a bitcoin mining company.

We have no intention to mine, purchase or hold any other cryptocurrency at this time or in the foreseeable future, and we did not hold any other cryptocurrency as of September 30, 2024.

We independently own and operate a large portfolio of data centers across the United States with locations in Georgia, Mississippi and Tennessee for a total developed power capacity of approximately 552 MW as of September 30, 2024.

We are currently finalizing the developments of 75 MW in Wyoming and 16.5 MW in Mississippi.

We have also had a hosting arrangement with GRIID Infrastructure, Inc.

to host up to 54 MW of our bitcoin miners in Tennessee, which hosting arrangement terminated when we closed on our acquisition of GRIID Infrastructure, Inc.

on October 30, 2024, and the 54 MW continued as our owned and operated facilities.

We have an independent data center operation in Massena, NY that hosts 50 MW for us, which agreement will terminate on January 1, 2025.

We design our infrastructure to responsibly secure and support bitcoin, the world’s most recognized digital commodity.

We cultivate trust and transparency among our employees, the communities we operate in and the people around the world who depend on bitcoin.

We are a data center developer, until recently focused exclusively on bitcoin mining.

We focus on providing scalable, energy-efficient digital infrastructure across the United States.

We independently own, lease and operate a large portfolio of data centers and power assets with locations in Georgia, Tennessee, Mississippi and Wyoming for a total contracted power capacity of approximately 1,027 MW as of September 30, 2025.

In October 2025, we acquired property and secured long-term power supply agreements in Texas to support the development of a next-generation data center campus.

We intend to continue our growth in these regions and are actively developing plans for additional capacity in these states and other domestic regions.

We had an independent data center operation in Massena, NY subject to a hosting agreement that operated 50 MW, which expired on December 31, 2024.

The parties commenced wind-down procedures upon expiration.

All MW allocated to the Company have been vacated as of September 30, 2025.

We have no intention to mine, purchase or hold any other crypto assets at this time or in the foreseeable future, and we did not hold any other crypto asset as of September 30, 2025.

We design our infrastructure to responsibly secure and support both bitcoin mining and AI and HPC workloads.

We cultivate trust and transparency among our employees and the communities where we operate.

Bitcoin Mining

Bitcoin was introduced in 2008 with the goal of serving as a digital means of exchanging and storing value.

Bitcoin is a form of digital currency that depends upon a consensus-based network and a public ledger called a “blockchain,” which contains a record of every bitcoin transaction ever processed.

The bitcoin network is the first decentralized peer-to-peer payment network, powered by users participating in the consensus protocol, with no central authority or middlemen, that has wide network participation.

The authenticity of each bitcoin transaction is protected through digital signatures that correspond with addresses of users that send and receive bitcoin.

Users have full control over remitting bitcoin from their own sending addresses.

All transactions on the bitcoin blockchain are transparent, allowing those running the appropriate software to confirm the validity of each transaction.

To be recorded on the blockchain, each bitcoin transaction is validated through a proof-of-work consensus method, which entails solving cryptographic functions to validate transactions and post them on the blockchain.

This process is called mining.

Miners are rewarded with bitcoins, both in the form of newly created bitcoins and fees in bitcoin, for successfully solving for the cryptographic function and providing computing power to the network.

Factors such as access to computer processing capacity, interconnectivity, electricity cost, environmental factors (such as cooling capacity) and location play important roles in mining.

As of September 30, 2024, our operating mining units were capable of producing over 27.6 EH/s of computing power.

In bitcoin mining, “hashrate” is a measure of the computing and processing power and speed by which a computer processes transactions on the bitcoin network.

We expect to continue increasing our computing power through the end of 2024 and beyond as we expand our infrastructure at our owned sites in Wyoming, Tennessee, and Mississippi, seek strategic acquisition targets, and through strategic co-location agreements.

As of October 31, 2024, we are capable of producing 31.5 EH/s of computing power.

A company’s computing power measured in hashrate is generally considered to be one of the most important metrics for evaluating bitcoin mining companies.

We owned approximately 235,000 miners as of September 30, 2024, of which approximately 189,000 were in service and the remainder mainly pertains to new machines ready to install in the expansion in Wyoming, Mississippi and Tennessee.

These miners range in age from 1-45 months and have an average age of approximately 12 months.

Effective, May 2024, we estimate the useful lives of our miners to be 3-years (see Note 2 - Summary of Significant Accounting Policies).

Bitcoin mining has historically been our principal revenue generating business activity.

Factors such as access to specialized mining servers, energy, electricity cost, environmental factors (such as cooling capacity) and location play important roles in mining.

As of September 30, 2025, our operating mining units produced an average computing power of 45.6 EH/s, reaching a peak of 50 EH/s during the period.

In bitcoin mining, “hashrate” is a measure of the computing and processing power and speed by which a mining computer mines and processes transactions on the bitcoin network.

We expect to continue increasing our computing power through 2025 and beyond as we expand infrastructure at our owned sites in Tennessee and across our portfolio of data centers in Georgia, Mississippi, and Wyoming, while also pursuing regional expansion opportunities and evaluating strategic acquisition targets.

A company’s computing power, measured in hashrate, is a significant driver of its bitcoin mining revenue, and when compared to the global hashrate, determines the company’s market share, making hashrate one of the most important metrics for evaluating bitcoin mining companies.

We owned approximately 336,544 miners, of which approximately 241,934 were in service as of September 30, 2025.

The remainder primarily consists of new machines that are ready for installation at expansion sites, are under evaluation for relocation, or are awaiting repair.

Our miners range in age from 1-57 months and have an average age of approximately 15 months.

Effective May 2024, we estimate the useful lives of our miners to be three years (see Note 2 - Summary of Significant Accounting Policies).

We do not have scheduled downtime for our miners;

We periodically perform unscheduled maintenance on our miners, but such downtime has not historically been significant.

however, we periodically perform unscheduled maintenance and curtailments on our miners, but such downtime has not historically been significant.

When performing unscheduled maintenance, we will typically replace the miner with a substitute miner to limit overall downtime.

The miners owned as of September 30, 2024 have a range of energy efficiency (watts per terahash – “w/th”) of 15.0 to 34 w/th with an average energy efficiency of 21.9 w/th.

We obtain bitcoin as a result of our mining operations, and we sell bitcoin from time to time to support our operations and strategic growth.

We also will utilize our bitcoin as collateral for lending arrangements.

We do not currently plan to engage in regular trading of bitcoin (other than as necessary to convert our bitcoin into U.S.

dollars) or to engage in hedging activities related to our holding of bitcoin;

however, our decisions to hold or sell bitcoin at any given time may be impacted by the bitcoin market, which has been historically characterized by significant volatility.

Currently, we do not use a formula or specific methodology to determine whether or when we will sell bitcoin that we hold, or the number of bitcoins we will sell.

Rather, decisions to hold or sell bitcoins are currently determined by management by analyzing the need for working capital, forecasts and monitoring the market in real time.

The miners in service as of September 30, 2025 had a range of energy efficiency of 13.5 to 29.5 W/TH with an average operating energy efficiency of 16.7 W/TH.

We obtain bitcoin from our mining operations by contributing all of our computing power to a single mining pool operator, which is currently our sole customer under a contract terminable at any time by either party.

In exchange, we earn variable consideration in the form of bitcoin rewards, determined daily using a predetermined formula based on our contributed computing power.

The consideration is included in revenue once it is no longer constrained, when we can reasonably estimate the rewards and determine a significant reversal is unlikely, and our sole performance obligation of providing computing power is satisfied.

Revenue is not disaggregated into block rewards and transaction fees.

From time to time, we sell bitcoin to support operations and strategic growth, and we may also use bitcoin as collateral for lending arrangements.

In April 2025, we launched an institutional-grade in-house trading function as we shift to a balanced approach between monetizing new production and building long-term holdings, and we plan to continue to integrate these strategies into our regular treasury management activities.

As part of this strategy, we began entering into bitcoin-linked derivative contracts to economically hedge the volatility of bitcoin prices and to generate liquidity in support of core operating activities.

These contracts serve as a strategic alternative to selling bitcoin directly and are intended to monetize our bitcoin holdings while managing exposure to adverse price movements.

The types of derivatives utilized for this purpose may include bitcoin futures, options, and other structured instruments.

These contracts are typically short-term in nature and may be cash-settled or settled in-kind.

Treasury management activities may serve cash management, strategic growth, or bitcoin balance hedging, incremental other income or other general corporate purposes.

Currently, we do not employ a fixed formula for when or how much bitcoin to sell, and decisions are made by management based on working capital needs, real-time market conditions, risk management objectives, and broader strategic considerations.

The value of bitcoin has historically been subject to wide swings.

20 unchanged sentences

See Note 2 - Summary of Significant Accounting Policies for more details on the impact of implementation to the consolidated financial statements.

As a result, the carrying value of each bitcoin we held at October 1, 2023 and each subsequent reporting period reflects the price of one bitcoin quoted on the active exchange, Coinbase, at the end of the reporting period.

As a result, the carrying value of each bitcoin we held on October 1, 2023 and each subsequent reporting period reflects the price of one bitcoin quoted on the active exchange, Coinbase, at the end of the reporting period.

Therefore, decreases in the market price of bitcoin could have a material impact on our earnings and on the carrying value of our bitcoin.

As of September 30, 2023, we held $0.05 in USD Coin (“USDC”), which is a digital currency that is fully backed by U.S.

dollar assets, with the value of one USDC coin pegged 1:1 to the value of one U.S.

As of September 30, 2025, we did not hold any other cryptocurrency of value other than bitcoin.

AI and HPC Hosting

Leveraging our power optimization, land acquisition, engineering, operations and construction expertise, we have been actively pursuing opportunities to develop portions of our sites and power pipeline for AI, HPC and other advanced data-center hosting and leasing applications.

The expansion of AI technologies and the increasing electricity requirements of AI and HPC workloads have positioned our infrastructure as a competitive platform for hyperscalers, cloud service providers and AI and HPC companies seeking reliable and energy-efficient capacity.

As of the date of filing of this Annual Report on Form 10-K, we have not had material revenue from our AI and HPC services business, and operating results from this business are not reflected in historical results of operations, including our results of operations for the fiscal year ended September 30, 2025.

We are evaluating existing properties for potential conversion or dual-use development to support AI and HPC tenants and are advancing design and permitting activities for greenfield data-center sites.

On October 27, 2025, we acquired property in Austin County, Texas and executed long-term power supply agreements totaling 285 megawatts to support the development of a next-generation data-center campus.

This transaction marked the Company’s entry into the Texas market and expanded our power portfolio for future AI and HPC development.

We maintain real property holdings through our wholly owned and consolidated subsidiaries.

10 unchanged sentences

The energy efficiency of a mining fleet helps drive profitability, because the most significant direct expense for bitcoin mining is power.

We measure efficiency by the watts of energy required to produce each terahash of processing power.

We measure efficiency by the watts (or joules) of energy required to produce each terahash of processing power.

We believe we operate a highly efficient fleet of miners.

4 unchanged sentences

Miner efficiency (W/TH) (2)

CleanSpark hashrate (in terms of EH/s)

CleanSpark average hashrate (in terms of EH/s) (3)

CleanSpark percentage of total global hashrate

(1) Total global hashrate obtained from mempool (https://mempool.space/graphs/mining/hashrate-difficulty ).

(1) Total global hashrate obtained as of September 30, 2025, 2024 and 2023 were from Hashrate index (https://data.hashrateindex.com/network-data/network) using SMA 7 days and YCHARTS (https://ycharts.com/indicators/bitcoin_network_hash_rate), respectively.

(2) Watts of energy required to produce each terahash of processing power.

Based on miner fleet operating at period end.

(3) The average hashrate obtained as of September 30, 2025, and 2024 were calculated from operating activity for the final month of the reporting period.

As of September 30, 2025, our operating hashrate was approximately 4.30% of the total global hashrate, and we received approximately the same percentage of the global blockchain rewards, which as of that date equaled approximately 19-20 bitcoin per day, excluding the bitcoin earned from network transaction fees.

10 unchanged sentences

Cost to mine one bitcoin - direct energy cost - Owned facilities

Miner depreciation per bitcoin mined (excluding accelerated depreciation and impairment)

Miner depreciation per bitcoin mined

Financing costs per bitcoin mined

Direct cost to mine including direct energy costs, non-cash depreciation and financing costs - Owned facilities

Direct cost to mine including non-cash depreciation and financing costs - Owned facilities

Accelerated depreciation per bitcoin mined

Direct cost to mine including direct energy costs, non-cash depreciation, financing costs and accelerated depreciation - Owned facilities

Direct cost to mine including non-cash depreciation, financing costs and accelerated depreciation - Owned facilities

Average revenue of each bitcoin mined (1)

Direct cost to mine one bitcoin as % of average bitcoin mining revenue - Including direct energy cost only

Direct cost to mine one bitcoin as % of average bitcoin mining revenue - Including direct energy costs, miner depreciation expense and financing costs

Direct cost to mine one bitcoin as % of average bitcoin mining revenue - Including direct energy costs, miner depreciation expense, financing costs and accelerated depreciation expense

Direct cost to mine one bitcoin as % of average bitcoin mining revenue - Including miner depreciation expense

Direct cost to mine one bitcoin as % of average bitcoin mining revenue - Including miner depreciation expense / including miner accelerated depreciation

Owned Facilities

1 unchanged sentence

Bitcoin mining revenue - owned facilities - ($ in thousands)

Total miners in service in owned facilities - as of the period ended

Total KWHs utilized

Total miners in service in owned facilities

Total kWh utilized

5,859,543,539

2,871,574,570

1,360,287,814

Total energy expense - ($ in thousands)

Energy expense as percentage of bitcoin mining revenue, net

Other direct costs of mining - non energy utilities - ($ in thousands)

Energy expense

as a percentage of bitcoin mining revenue, net

Other direct costs of mining - non energy utilities

($ in thousands)

Depreciation expense - miners only - ($ in thousands)

Accelerated Depreciation Expense - Miners Only - ($ in thousands)

Accelerated depreciation expense - miners only

($ in thousands)

Direct miner financing costs - ($ in thousands)

(1) Average revenue of each bitcoin mined is calculated by dividing the sum of bitcoin mining revenue for our owned facilities by the total number of bitcoin mined by our owned facilities during the respective periods.

We have determined that Coinbase is the principal market

for valuing bitcoin transactions and use the closing price of bitcoin at 23:59:59 UTC as the source of recording revenue.

We have determined that Coinbase is the principal market for valuing bitcoin transactions and use the closing price of bitcoin at 23:59:59 UTC as the source of recording revenue.

See the table “Range of intraday bitcoin prices” for information on the range of intraday bitcoin prices for quarterly periods between October 1, 2023 and September 30, 2025.

(2) Includes mining rewards and transaction fees but excludes the reduction for pool operator fees.

Power prices are the most significant cost driver for our wholly owned locations, and energy costs represented 43.9%, 39.7%, and 51.5% as expressed as a percentage of bitcoin mining revenues for the years ended September 30, 2025, 2024 and 2023, respectively.

Energy prices can be highly volatile and global events (including the war in Ukraine and the resulting natural gas shortage) caused power prices to increase nationwide in 2022.

All of our wholly owned and operated sites in Georgia and Mississippi and our hosted miners in New York State are currently subject to variable prices and market rate fluctuations with respect to wholesale power costs.

Energy prices can be highly volatile and global events.

We have a diverse portfolio of power contracts across our sites in the States of Georgia, Mississippi, Tennessee and Wyoming.

The majority of these contracts are currently subject to variable prices and market rate fluctuations with respect to wholesale power costs.

Such prices are governed by power purchase agreements which vary by location, and said prices can change hour to hour.

7 unchanged sentences

likewise, when bitcoin’s value increases and energy prices decrease, our curtailment will decrease.

The management team manages this decision on an hour-by-hour basis across all our sites, both wholly owned and hosted.

The Company did not have significant curtailment greater than 20% during the years ended September 30, 2024, 2023 and 2022.

The management and operations teams manage these decisions on an hour-by-hour basis across all our sites.

The Company did not have significant curtailment and maintained an average uptime greater than 90% during the years ended September 30, 2025, 2024 and 2023.

A large portion of the curtailment during the first quarter related to Hurricane Helene which affected our Georgia sites at the end of September 2024 to the beginning of October 2024.

The southeast Georgia sites were shut down as the hurricane began impacting the region, thus at the beginning of the October 2024, these sites were operating on approximately 200 MW which gradually increased during the same week to their full 365 MW capacity when utility service was restored to the communities.

The Company records depreciation expense (a non-cash expense) on its miners on a straight-line basis over the miners' expected useful life.

Such non-cash depreciation amounts are recorded within the Consolidated Statements of Operations and Comprehensive Loss as "Depreciation and Amortization".

Such non-cash depreciation amounts are recorded within the Consolidated Statements of Operations and Comprehensive Income (Loss) as Depreciation and amortization.

Although the Company recognizes depreciation with respect to its mining assets, it does not consider depreciation in determining whether it is economical to operate its mining equipment since depreciation expense is not an avoidable operating cost, such as energy costs.

3 unchanged sentences

In fiscal 2023, the accelerated depreciation was applicable to certain miners removed from service prior to the conclusion of their originally estimated useful life.

The number of bitcoin received by the Company was reduced by approximately 50% effective April 19, 2024 when the bitcoin algorithm halved the rewards from 6.25 per block to 3.125 per block.

We have financing costs for a limited number of miners in our miner fleet and such costs are recorded within Interest Expense in our Consolidated Statements of Operations and Comprehensive Loss.

The number of bitcoin received by all the miners, including the Company, was reduced by 50% effective April 19, 2024 when the bitcoin algorithm halved the rewards from 6.25 per block to 3.125 per block.

We have financing costs for a limited number of miners in our miner fleet, and such costs are recorded within Interest Expense in our Consolidated Statements of Operations and Comprehensive Income (Loss).

The table above presents financing costs per bitcoin calculated by dividing direct interest expense on our miner financing agreement by the number of bitcoin mined in our owned facilities.

8 unchanged sentences

Direct hosting fees expense per one bitcoin

Miner depreciation per one bitcoin

Direct cost to mine including non-cash depreciation expense - Hosted facilities

Accelerated depreciation per one bitcoin

Direct cost to mine including non-cash depreciation and accelerated depreciation expense- Hosted facilities

Miner depreciation per bitcoin mined

Direct cost to mine including non-cash depreciation - Hosted facilities

Accelerated depreciation per bitcoin mined

Direct cost to mine including non-cash depreciation and accelerated depreciation - Hosted facilities

Average revenue of each bitcoin mined (1)

Direct cost to mine one bitcoin as % of average bitcoin mining revenue - Direct hosting fees only

Direct cost to mine one bitcoin as % of average bitcoin mining revenue - including miner depreciation expense / excluding accelerated depreciation

Direct cost to mine one bitcoin as % of average bitcoin mining revenue - Including miner depreciation expense

Direct cost to mine one bitcoin as % of average bitcoin mining revenue - Including depreciation expense / including accelerated depreciation

2 unchanged sentences

Bitcoin mining revenue - Hosted facilities - ($ in thousands)

Total miners in service in Hosted facilities - as of the period ended

Total KWHs utilized

Total miners in service in hosted facilities

Total kWh utilized

Total hosting fee expense - ($ in thousands)

Hosting fee per kWh

Hosting fee expense as percentage of bitcoin mining revenue, net

Hosting fee expense

as a percentage of bitcoin mining revenue, net

Depreciation expense - miners only - ($ in thousands)

Accelerated depreciation expense - miners only - ($ in thousands)

Accelerated depreciation expense - miners only

($ in thousands)

(1) Average revenue of each bitcoin mined is calculated by dividing the sum of bitcoin mining revenue for hosted facilities by the total number of bitcoin mined within the hosted facilities during the respective periods.

1 unchanged sentence

See the table “Range of intraday bitcoin prices” for information on the range of intraday bitcoin prices for quarterly periods between October 1, 2023 and September 30, 2025.

For our hosted facilities, hosting fees (which comprise direct operating costs of the third-party operator with energy as the largest cost) and profit sharing were a combined 71.5%, 66.9% and 42.4% as a percentage of bitcoin mining revenues for the years ended September 30, 2024, 2023 and 2022, respectively.

At our hosted facilities, the hosting fee as compared to KWHs utilized in the hosted facilities was $0.067, $0.064 and $0.098 per KWH for the years ended September 30, 2024, 2023 and 2022, respectively.

(2) Includes mining rewards and transaction fees but excludes the reduction for pool operator fees.

For our co-locations, hosting fees (which comprise direct operating costs of the third-party operator with energy as the largest cost) and profit-sharing were a combined 96.7%, 71.5% and 66.9% as a percentage of bitcoin mining revenues for the years ended September 30, 2025, 2024 and 2023, respectively.

As of March 31, 2025, we no longer operated mining at co-location hosted facilities.

At our hosted facilities, the hosting fee as compared to kWh utilized in the hosted facilities was $0.078, $0.067, and $0.064 per kWh for the years ended September 30, 2025, 2024 and 2023, respectively.

We did not have significant curtailment greater than 20% during the years ended September 30, 2025, 2024 and 2023.

On a “cost per bitcoin” ratio, miner depreciation expense was $4, $22,374, and $14,872 for the years ended September 30, 2025, 2024 and 2023, respectively.

The increase for the fiscal year 2024 period was mainly due to the decrease of bitcoin production as a result of the bitcoin halving on April 19, 2024 when the bitcoin algorithm halved rewards from 6.25 per block to 3.125 per block.

The decrease for the fiscal year 2025 period was mainly due to the decrease of bitcoin production as we ended our last hosting agreement at Massena, NY in December 2024.

Fiscal year 2024 had an increase as a result of the bitcoin halving on April 19, 2024 when the bitcoin algorithm halved rewards from 6.25 per block to 3.125 per block.

The Company did not have any S19 XP or S21 miners at the hosted facilities during the periods presented and accordingly, there was no accelerated depreciation in the hosted facilities in fiscal 2024 following the reduction in the estimated useful life of our miners from 5 years to 3 years.

1 unchanged sentence

Results of Operations for the Fiscal Years Ended September 30, 2025 and 2024

($ presented in 000's, except for average bitcoin price)

Bitcoin mining revenue

We earned $766,314 in revenues during the year ended September 30, 2025, which was an increase of $387,346, or 102%, as compared with $378,968 in revenues for the year ended September 30, 2024.

Bitcoin mining revenues are recorded net of bitcoin mining fees charged by our sole mining pool operator (Foundry) that equaled approximately 0.17% and 0.16% of gross bitcoin mining revenues for the year ended September 30, 2025 and 2024, respectively, and are determined by two main drivers:

quantity of bitcoin mined and the price of bitcoin on the date the bitcoin is mined.

During the fiscal year ended September 30, 2025, we mined 7,873 bitcoins, gross of Foundry fees, with an average bitcoin price of $97,337 as compared to 7,092 bitcoins with an average bitcoin price of $53,434 during the year ended September 30, 2024.

The increase in bitcoin mining revenue was primarily due to increase in the average bitcoin price and the increase in bitcoin mined year over year.

This occurred as we increased the number of our miners in operation, which rose to 241,934 as of September 30, 2025, compared to 188,500 as of September 30, 2024, an expansion of 53,434 or 28%.

This increase in our miners in operation increased our hashrate, which is our total computational power, and which when understood in the context of global hashrate, determines how much bitcoin we are able to mine.

Cost of revenues (exclusive of depreciation and amortization expense)

Our cost of revenues were $343,101 for the year ended September 30, 2025, an increase of $177,585, or 107%, as compared with cost of revenues of $165,516 for the year ended September 30, 2024.

These costs were primarily related to energy costs to operate miners within our owned facilities, which were $331,348 for the year ended September 30, 2025, an increase of $199,156 as compared to $132,192 for the year ended September 30, 2024.

The increase in energy costs was primarily due to the increase in the volume of miners operating in our owned locations partially offset by the reduction in the average cost per kWh, which approximated $0.057/kWh for the year ended September 30, 2025 as compared to an average cost of $0.046/kWh for the year ended September 30, 2024.

We continually evaluate energy and bitcoin prices and periodically will curtail our mining operations when it is advantageous to do so.

We also incurred hosting and profit-sharing fees of $11,242 for the year ended September 30, 2025, a decrease of $21,503 as compared to $32,745 for the year ended September 30, 2024.

The hosting fees and profit-sharing fees were primarily the result of our co-location agreements with Coinmint and GRIID, which were terminated in February 2025 and October 2024, respectively.

The hosting fees decreased period over period due to the expiration of the hosting agreement, subsequent wind-down procedures and removal of miners during the fiscal year.

Professional fees

Professional fees, which consist primarily of legal, accounting and consulting fees, were $13,785 for the year ended September 30, 2025, an increase of $21, from $13,806 for the year ended September 30, 2024.

Legal expenses were $5,152 for the year ended September 30, 2025, as compared to $5,707 in the prior year.

This remained consistent as legal expenses related to acquisition transaction costs (see Note 5 - Acquisitions) declined, which were offset by higher general legal expenses related to regulatory compliance and debt financing legal services.

Other professional fees, namely accounting, audit and consulting, were $8,633 for the year ended September 30, 2025 as compared to $8,099 for the year ended September 30, 2024, representing an increase of $534, which is relatively consistent as we’ve had no significant changes in auditor or consulting activities.

Payroll expenses

Payroll expenses increased to $104,379 for the year ended September 30, 2025 from $74,095 for the same period ended September 30, 2024, representing a $30,284, or 41%, change.

Our payroll expenses include all compensation related expenses for our employees, primarily consisting of salaries, wages, payroll-related taxes and benefits and non-cash stock-based compensation.

Payroll expenses, excluding non-cash stock-based compensation, were $59,045 the year ended September 30, 2025, representing an increase of 33% from $44,540 in the prior year ended September 30, 2024.

This increase was primarily due to the significant growth in locations, and the increase in employee headcount along with employee incentives and bonuses during the year.

Stock-based awards granted to certain employees are a significant portion of our payroll-related costs.

Stock-based compensation, which is a non-cash expense, was $45,335 for the year ended September 30, 2025, increase of $15,780, or 53%, from $29,555 the prior year ended September 30, 2024.

The increase in stock-based compensation was mainly attributed to the granting of restricted stock units as part of the severance agreement with the Company’s former CEO in August 2025 and to the granting of 2,212,486 restricted stock units in April 2025, most of which represents employee grant awards.

These awards were issued to all employees in recognition of their collective contributions and dedication to helping the Company achieve key operational milestones.

General and administrative expenses

General and administrative fees increase to $52,625 for the year ended September 30, 2025 from $30,185 for the same period ended September 30, 2024, representing an increase of $22,440 or 74%.

This increase was primarily attributable to increases in corporate overhead, including, but not limited to, property taxes and insurance premiums (primarily due to the substantial increase in owned assets), rent (for additional offices and warehouses), maintenance, and marketing expenses in connection with our growth and expansion for the current period.

Gain on fair value of bitcoin, net

Gain on fair value of bitcoin, net for the year ended September 30, 2025 was $425,646 as compared to a gain on fair value of bitcoin of $113,423 for the year ended September 30, 2024, a change of $312,223 or 275%.

The gain pertains to the increase in bitcoin on the balance sheet and the change in bitcoin’s fair value from about $63,300 per bitcoin on September 30, 2024 to about $114,100 per bitcoin on September 30, 2025.

Depreciation and amortization

Depreciation and amortization expense increased to $348,335 for the year ended September 30, 2025, from $154,609 for the same period ended September 30, 2024, an increase of $193,726 or 125%.

Depreciation expense increased by $191,666, or 126%, during the year ended September 30, 2025, to $344,135 from $152,469 for the year ended September 30, 2024, mainly due to an increase in miners and mining-related equipment being placed in service during the comparative period.

Additionally, the Company reduced the expected useful life for miners from 5 years for new miners to 3 years, effective May 1, 2024.

Amortization expense for the year ended September 30, 2025 was $4,200, an increase of $2,060, or 96%, from $2,140 for the prior year ended September 30, 2024.

The increase in amortization expense is primarily due to the Company’s acquisition of software in the amount of $7,000 throughout the current year.

Other income (expense)

Other income was $84,626 for the year ended September 30, 2025, compared with Other income of $6,610 for the year ended September 30, 2024, which is a change of $78,016 or 1180%.

Gain on bitcoin collateral was the primary reason for the increase in Other income since in the prior year there was minimal collateral held by Coinbase due to a lower line of credit (see Note 7 - Receivable from Bitcoin Collateral for more detail).

The gain in the fair value of collateral of $92,190 for the year ended September 30, 2025 pertains to the change in the underlying collateral due to bitcoin's fair value from approximately $63,300 per bitcoin on September 30, 2024 to approximately $114,100 per bitcoin on September 30, 2025.

Interest income in the year ended September 30, 2025 decreased by $4,430 to $4,125 from $8,555 in the prior year ended September 30, 2024 due to a lower balance of cash retained in short-term interest-bearing accounts and the interest earned on the note receivable from GRIID (See Note 8 - Note Receivable from GRIID).

Interest expense in the year ended September 30, 2025 increase by $8,880 to $11,335 from $2,455 in the prior year comparable period due to the amortization of deferred insurance costs from the Convertible Notes, the promissory note, and equipment line of credit, which the Company did not have as of September 30, 2024.

This increase was primarily related to our extended line of credit and additional draws from the Coinbase Line of Credit executed throughout the year (see Note 13 - Indebtedness for more details).

Net income (loss)

Net income for the year ended September 30, 2025 was $364,464, an increase of $510,241 compared to a net loss of $145,777 for the year ended September 30, 2024.

Results of Operations for the Fiscal Years Ended September 30, 2024 and 2023

($ presented in 000's, except for average bitcoin price)

Bitcoin mining revenue

We earned $378,968 in revenues during the year ended September 30, 2024, which was an increase of $210,847, or 125%, as compared with $168,121 in revenues for the year ended September 30, 2023.

Bitcoin mining revenues are recorded net of bitcoin mining fees charged by our sole mining pool operator that equaled approximately 0.16% and 0.09% of gross bitcoin mining revenues for the year ended September 30, 2024 and 2023, respectively, and are determined by two main drivers:

10 unchanged sentences

These costs were primarily related to energy costs to operate miners within our owned facilities, which was $132,192 for the year ended September 30, 2024, an increase of $69,763 as compared to $65,824 for the year ended September 30, 2023.

The increases in energy costs was primarily due to the increase in the volume of miners operating in our owned locations partially offset by the reduction in the average cost per KWHs, which approximated $0.046/KWH for the year ended September 30, 2024 as compared to an average cost of $0.048/KWH for the year ended September 30, 2023.

The increases in energy costs was primarily due to the increase in the volume of miners operating in our owned locations partially offset by the reduction in the average cost per kWh, which approximated $0.046/kWh for the year ended September 30, 2024 as compared to an average cost of $0.048/kWh for the year ended September 30, 2023.

We continually evaluate energy and bitcoin prices and periodically will curtail our mining operations when it is advantageous to do so.

1 unchanged sentence

The hosting fees and profit-sharing fees were primarily the result of our co-location agreements with Coinmint and GRIID.

The hosting fees increased primarily due to increases in utility rates partially offset by a slight reduction in KWHs utilized.

The hosting fees increased primarily due to increases in utility rates partially offset by a slight reduction in kWh utilized.

Professional fees

7 unchanged sentences

Payroll expenses, excluding non-cash stock-based compensation, were $44,540 the year ended September 30, 2024, representing an increase of 106% from $21,572 in the prior year ended September 30, 2023.

This increase was primarily due to the significant growth in locations, increase in employee headcount along with employee bonuses during the year.

This increase was primarily due to the significant growth in locations, and the increase in employee headcount along with employee bonuses during the year.

We grant stock-based awards to certain employees as a significant portion of our payroll-related costs.

38 unchanged sentences

Additionally, we recognized a gain on the change in fair value of contingent consideration of $2,484 for the year ended September 30, 2023 relating to the Mawson acquisition.

Unrealized loss on derivative security of $965 was recorded for the year ended September 30, 2024 as compared to loss for the same prior year period of $259, this change between the periods was the result of a change in fair value of the underlying instrument.

Net Loss from Continuing Operations

Net loss from continuing operations for the year ended September 30, 2024 was $145,777 as compared to net loss of $133,719 for the year ended September 30, 2023 for the reasons discussed above.

Net loss for the year ended September 30, 2024 was $145,777, an increase of $7,628 compared to a net loss of $138,148 for the year ended September 30, 2023.

Results of Operations for the Fiscal Years Ended September 30, 2023 and 2022

Bitcoin mining revenue

We earned $168,121 in revenues during the year ended September 30, 2023, which was an increase of $37,121, or 28%, as compared with $131,000 in revenues for the year ended September 30, 2022 primarily due to increase in revenues from our bitcoin mining operations.

Bitcoin mining revenues are determined by two main drivers:

quantity of bitcoin mined and the price of bitcoin on the date the bitcoin is mined.

During the fiscal year ended September 30, 2023, we mined 6,903 bitcoins with an average bitcoin price of $24,355 as compared to 3,752 bitcoins with an average bitcoin price of $34,916 during the year ended September 30, 2022.

The increase in the quantity of bitcoin mined was primarily driven by the increased number of miners in operation which almost doubled to approximately 88,000 as of September 30, 2023 from 47,000 as of September 30, 2022.

This increase in miners in operation increased our hashrate, which is our total computational power, and which when understood in the context of global hashrate, determines how much bitcoin we are able to mine.

Other services revenues

Other services revenues pertain to our data center operations for which we earned $287 in revenue from our data center operation for the year ended September 30, 2023, which is a decrease of $238, or 45%, as compared to $525 for the year ended September 30, 2022.

This decrease was due to management's decision to divert all capacity within its operations to bitcoin mining.

As of September 30, 2023, we no longer recognize revenues from data center operations.

Cost of revenues (exclusive of depreciation and amortization expense)

Our cost of revenues were $93,580 for the year ended September 30, 2023, an increase of $52,346, or 127%, as compared with cost of revenues of $41,234 for the year ended September 30, 2022.

These costs were primarily related to energy costs to operate the mining equipment within our owned facilities, which was $65,824 for the year ended September 30, 2023, an increase of $52,490 as compared to $13,334 for the year ended September 30, 2022.

The increase in energy costs within our owned facilities relates to the full-year or approximate full-year, as applicable, of mining operations in fiscal year 2023 in our Washington and Sandersville locations which were acquired in August 2022 and October 2022, respectively.

We also incurred hosting fees of $22,974 and profit-sharing fees of $3,991 for the year ended September 30, 2023, an increase of $266 and a decrease of $37, respectively, as compared to $22,708 and $4,028, respectively, for the year ended September 30, 2022.

The hosting fees and profit-sharing fees were primarily the result of our co-location agreement with Coinmint.

The hosting fees remained consistent for both fiscal years since the increase in KWHs utilized was offset by the decrease in the rate charged per KWH.

Professional fees

Professional fees, which consists primarily of legal, accounting and consulting fees, were $10,869 for the year ended September 30, 2023, an increase of $4,400, or 68%, from $6,469 for the year ended September 30, 2022.

Legal expenses were $7,676 for the year ended September 30, 2023, as compared to $2,714 in the prior year.

This increase was primarily attributable to $3,800 in litigation settlement with Darfon America Corp.

and additional activity in litigation and transactional costs.

Other professional fees, namely accounting, audit and consulting, were $3,193 for the year ended September 30, 2023 as compared to $3,755 for the year ended September 30, 2022, a decrease of $562.

Payroll expenses

Payroll expenses increased to $45,714 for the year ended September 30, 2023 from $40,920 for the same period ended September 30, 2022.

Our payroll expenses include all compensation related expenses for our employees, consisting primarily of salaries, wages, payroll-related taxes and benefits and non-cash stock-based compensation.

Payroll expenses, excluding non-cash stock-based compensation, were $21,572 the year ended September 30, 2023, representing an increase of 127% from $9,493 in the prior year ended September 30, 2022.

This increase was primarily due to the Company’s acquisition of both WAHA and Mawson in August 2022 and October 2022, respectively.

We grant stock-based awards to certain employees as a significant portion of our payroll-related costs.

Stock-based compensation, which is a non-cash expense, was $24,142 for the year ended September 30, 2023, a decrease of $7,324, or 23%, from $31,466 the prior year ended September 30, 2022.

General and administrative expenses

General and administrative fees increased to $20,823 for the year ended September 30, 2023 from $10,423 for the same period ended September 30, 2022, representing an increase of $10,400.

This increase was primarily attributable to increases in corporate overhead, including, but not limited to, taxes and licenses, insurance premiums, travel expenses and rent expenses.

Other impairment expense (related to bitcoin)

Impairment expense in the amount of $7,163 was recognized for the year ended September 30, 2023, a decrease of $5,047 as compared to $12,210 for the year ended September 30, 2022.

The impairment expense consists of bitcoin impairments due to the general decrease in bitcoin prices during the year, for which there was a larger general decrease in bitcoin prices during fiscal year ended September 30, 2022 as compared to fiscal year ended September 30, 2023.

Decreases in bitcoin prices for periods subsequent to the mining date are recorded as impairment expense.

Impairment expense was measured utilizing the intraday low bitcoin price during the holding period of bitcoin.

ASC Topic 350 - Goodwill and Other that requires subsequent increases in bitcoin prices are not allowed to be recorded (unrealized gains) unless the bitcoin is sold, at which point the gain is recognized.

As described above, the Company adopted ASC 350-60 - Crypto Assets on October 1, 2023.

Realized gain on sale of bitcoin

Realized gain on sale of bitcoin decreased to $1,357 for the year ended September 30, 2023 from a realized gain of $2,567 for the year ended September 30, 2022.

Realized gain on sale of bitcoin is the difference between the sales proceeds of bitcoin and the carrying amount.

Typically, gains are higher when bitcoin prices are increasing over a holding period.

Depreciation and amortization

Depreciation and amortization expense increased to $120,728 for the year ended September 30, 2023 from $49,045 for the same period ended September 30, 2022, an increase of $71,683.

Depreciation expense increased by $71,533, or 152%, during the year ended September 30, 2023, to $118,615 from $47,082, due to an increase in miners and mining-related equipment being placed in service during the comparative period.

Additionally, in the fourth quarter of fiscal year 2023, the Company purchased Antminer XPs (140 th/s with 21.5 J/TH), and replaced certain less efficient miners with these newly acquired miners.

As a result, the Company recognized an additional $32,721 in accelerated depreciation expense on the replaced miners.

Amortization expense for the year ended September 30, 2023 was $2,113, an increase of $150, or 8%, from $1,963 for the prior year ended September 30, 2022.

Other Income (Expenses)

Other expense was $260 for the year ended September 30, 2023, compared with other expense of $2,225 for the year ended September 30, 2022, which is a variance of $1,965.

We recognized a gain on the change in fair value of contingent consideration of $2,484 for the year ended September 30, 2023 relating to the Mawson acquisition.

Unrealized loss on derivative security of $965 was recorded for the year ended September 30, 2024 as compared to loss for the same prior year period of $259.

Interest expense in the fiscal year ended September 30, 2023 increased by $1,899 to $2,977 from $1,078 in the prior year comparable period.

This increase was primarily related to the Financing Agreement, which was entered into in April 2022 and was outstanding for approximately five months in the fiscal year ended September 30, 2022 as compared to being outstanding during the entire fiscal year ended September 30, 2023.

This change between the periods was the result of a change in fair value of the underlying instrument.

Net loss from continuing operations

16 unchanged sentences

and (viii) severance expenses.

We previously excluded non-cash impairment losses related to bitcoin and realized gains and losses on sales of bitcoin from our calculation of adjusted EBITDA but have determined such items are part of our normal ongoing operations and will no longer be excluding them from our calculation of adjusted EBITDA.

Management believes that providing this non-GAAP financial measure that excludes these items allows for meaningful comparisons between the Company's core business operating results and those of other companies, and provides the Company with an important tool for financial and operational decision making and for evaluating its own core business operating results over different periods of time.

2 unchanged sentences

For example, we expect that share-based compensation expense, which is excluded from Adjusted EBITDA, will continue to be a significant recurring expense over the coming years and is an important part of the compensation provided to certain employees, officers and directors.

Additionally, management does not consider any of the excluded items to be expenses necessary to generate our bitcoin-related revenue.

The Company's Adjusted EBITDA measure may not be directly comparable to similar measures provided by other companies in our industry, as other companies in our industry may calculate non-GAAP financial results differently.

2 unchanged sentences

Accordingly, Adjusted EBITDA is not meant to be considered in isolation of, and should be read in conjunction with, the information contained in our Consolidated Financial Statements, which have been prepared in accordance with GAAP.

The following is a reconciliation of our non-GAAP adjusted EBITDA to its most directly comparable GAAP measure (i.e., net (loss) income) for the periods indicated:

For the Year Ended September 30,

The following is a reconciliation of our non-GAAP Adjusted EBITDA to its most directly comparable GAAP measure (i.e., net income (loss)) for the periods indicated:

($ in thousands)

For the Year Ended September 30,

Reconciliation of non-GAAP Adjusted EBITDA

Net income (loss)

Loss (income) on discontinued operations

Impairment expense - fixed assets

Impairment expense - other

Impairment expense - goodwill

Depreciation and amortization

Share-based compensation expense

Change in fair value of contingent consideration

Realized gain on sale of equity security

Unrealized loss on equity security

Unrealized loss (gain) of derivative security

Loss on derivative securities, net

Interest income

Interest expense

Loss (gain) on disposal of assets

Indirect tax contingency expenses

(Gain) loss on disposal of assets

Income tax expense

2 unchanged sentences

Severance and other expenses

Impairment expense - other

Impairment expense - fixed assets

Loss from discontinued operations

Change in fair value of contingent consideration

Non-GAAP Adjusted EBITDA*

* We have not excluded our Gain on fair value of bitcoin, net of $425,646 and $113,423 in the year ended September 30, 2025 and 2024, respectively, which we now record in our Consolidated Statements of Operations and Comprehensive Income (Loss) as provided in ASC 350-60, as discussed in the Gain on fair value of bitcoin, net section above.

During August 2025, the Company entered into a severance agreement with its Chief Executive Officer.

The stock-based compensation in connection with this severance agreement represents $20,003 and represents a substantial portion of the total Share-based compensation expense reflected in the table above.

Additionally, approximately $4,313 of the total Severance and other expenses relates to the same agreement and is included within Payroll expenses in the Consolidated Statements of Operations and Comprehensive Income (Loss).

This severance related charge is considered a significant, non-recurring item associated with a unique event.

Liquidity and Capital Resources

($ presented in 000's)

Our primary requirements for liquidity and capital are working capital, capital expenditures, loan payments, public company costs and general corporate needs.

We expect these needs to continue as we further develop and grow our business.

For the year ended September 30, 2024, our primary sources of liquidity came from existing cash and cash equivalents, bitcoin and proceeds from our at-the-market ("ATM") equity offering program.

Based on our current plans and business conditions, we believe that existing cash and cash equivalents and bitcoin, together with cash generated from operations, will be sufficient to satisfy our anticipated cash requirements for the next 12 months and for the reasonably foreseeable future until we reach profitability, and we are not aware of any trends or demands, commitments, events or uncertainties that are reasonably likely to result in a decrease in the liquidity of our assets.

We may continue utilizing the ATM program to strategically issue shares of common stock to support our liquidity needs, and we may amend or replace the program as necessary to maintain this funding flexibility.

We are likely to require additional capital to respond to technological advancements, competitive dynamics or technologies, business opportunities, challenges, acquisitions or unforeseen circumstances and in either the short-term or long-term may determine to engage in equity or debt financings or enter into credit facilities for other reasons.

If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited.

In particular, rising inflation and changes in interest rates, and the conflict between Russia and Ukraine, have resulted in, and may continue to result in, significant disruption and volatility in the global financial markets, reducing our ability to access capital.

If we are unable to raise additional funds when or on the terms desired, our business, financial condition and results of operations could be adversely affected.

As of September 30, 2024, we had total current assets of $705,430, primarily consisting of cash and cash equivalents, bitcoin, receivable from bitcoin collateral, the note receivable from GRIID, and prepaid expenses and other current assets, and total assets in the amount of $1,962,662.

For the year ended September 30, 2025, our primary sources of liquidity came from existing cash and cash equivalents, bitcoin and proceeds from our convertible notes, our at-the-market ("ATM") equity offering program and lines of credit secured by bitcoin collateral.

As of September 30, 2025, we had total current assets of $1,320,041, consisting of cash and cash equivalents, prepaid expenses and other current assets, bitcoin and total assets in the amount of $3,183,631.

Our total current liabilities and total liabilities as of September 30, 2025 were $315,765 and $1,008,504, respectively.

We had a working capital of $1,004,276 as of September 30, 2025.

The Company had issued all of the ATM’s remaining capacity through the date of these consolidated financial statements.

Consistent with past activity, management maintains various sources of funding available for the Company’s future needs.

With the recent launch of our bitcoin treasury function in April 2025, we have begun to use a portion of the bitcoin we mine to fund operations and to fund capital expenditures.

In addition, as of September 30, 2025, we had $636,036 zero-coupon convertible notes outstanding, a $174,500 outstanding balance in a line of credit drawn with Coinbase, and an undrawn line of credit with Two Prime as discussed in Note 13 - Indebtedness.

In November 2025, we issued $1,150,000 aggregate principal amount of 0.00% Convertible Senior Notes due 2032 in a private offering.

A portion of the proceeds was used to repurchase shares of our common stock, with the remainder intended for expansion of our power and land portfolio, data-center infrastructure development, repayment of bitcoin-backed credit balances, and general corporate purposes.

Based on our current plans and business conditions, we believe that existing cash and cash equivalents and bitcoin, together with cash generated from operations and our future investing and financing activities, will be sufficient to satisfy our anticipated cash requirements for the next 12 months and for the reasonably foreseeable future until we reach consistent profitability.

Our expansion into HPC, data center and AI infrastructure development is expected to increase capital intensity and shift the timing of cash inflows relative to capital outlays.

Developing and constructing data center campuses requires substantial up-front capital expenditures for land, substations, interconnection and specialized cooling systems, which may temporarily reduce liquidity.

Although we expect to fund a portion of these expenditures through the strategic use of bitcoin holdings and related Digital Asset Management activities, we may also supplement these sources with external financing depending on market conditions and project timing.

This business expansion introduces trends and uncertainties that could impact our liquidity and capital resources in several ways.

First, increased capital expenditure requirements for new HPC, data center and AI infrastructure projects may accelerate cash deployment and increase short-term liquidity needs.

Second, the timing of cash inflows may shift, as hosting and leasing revenues generally materialize after construction completion and customer onboarding, resulting in a lag between capital investment and revenue realization.

Third, although our bitcoin-backed liquidity and treasury activities provide flexibility, we may seek to access additional financing, through debt, equity, or infrastructure-oriented funding, to meet project-scale capital demands or to preserve bitcoin holdings during periods of market volatility.

We are likely to require additional capital to respond to technological advancements, competitive dynamics or technologies, business opportunities, challenges, acquisitions or unforeseen circumstances and, in either the short-term or long-term, may determine to engage in equity or debt financings.

If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited.

In particular, the ongoing impacts of inflation and fluctuations in interest rates, global conflicts including increases in tariffs, have resulted in, and may continue to result in, significant disruption and volatility in the global financial markets, reducing our ability to access capital.

If we are unable to raise additional funds when or on the terms desired, our business, financial condition and results of operations could be adversely affected.

Material Cash Requirements

1 unchanged sentence

These obligations impact our short-term and long-term liquidity and capital resource needs.

Certain contractual obligations are reflected on the consolidated balance sheet as of September 30, 2024, while others are considered future commitments.

Certain contractual obligations are reflected on the condensed consolidated balance sheet as of September 30, 2025, while others are considered future commitments.

Our contractual obligations primarily consist of cancelable purchase commitments with various parties to purchase goods or services, primarily miners and equipment, entered into in the normal course of business, loans and both finance and operating leases.

For information regarding our other contractual obligations, refer to Note 19 - Commitments and Contingencies included elsewhere in our notes to consolidated financial statements.

We regularly evaluate opportunities to expand our business, including through potential acquisitions of businesses or assets.

1 unchanged sentence

We may also use the Company’s stock as transaction consideration, as we have done in the past.

For information regarding our contractual obligations, refer to Note 18 - Commitments and Contingencies included elsewhere in our Notes to Consolidated Financial Statements.

Digital Asset Management Treasury Activity

During the year ended September 30, 2025, the Company instituted a Digital Asset Management (“DAM”) treasury strategy designed to enhance liquidity and generate incremental income from the Company’s bitcoin holdings.

The Company selectively engages in derivative transactions, primarily covered call and put option contracts, that are collateralized by bitcoin held in treasury.

These transactions are structured to manage operating liquidity and monetize near-term volatility while maintaining long-term exposure to bitcoin price appreciation.

During periods of rising bitcoin prices, the Company’s realized derivative results may reflect accounting losses on written call options that are settled in bitcoin or cash, as the strike price is below the prevailing market price of bitcoin.

However, such losses are offset economically and accounted for by an increase in the fair value of the underlying bitcoin retained by the Company through the settlement date.

This strategy, referred to internally as “Spot+” trading, provides the Company with steady proceeds from the sale of options while managing the regular and ongoing bitcoin for operating needs.

The Company also generates premium proceeds from the sale of far out-of-the-money call options with low delta exposure.

While bitcoin subject to these contracts may get called from time to time, these options typically expire unexercised and provide proceeds without requiring disposition of bitcoin.

In the event of an exercise, the company may adjust the pace of Spot+ and yield activities to replenish bitcoin HODL balances, or use the additional cash generated for operating or capital expenditures.

The proceeds generated from these activities provide a steady stream of revenue for the company while acting as economic hedges for the company’s wider operating activities.

While the Company’s use of purchased or written call options has been limited to date, these are expected to be a growing portion of the Company’s holistic and growing treasury management and hedging activities.

The table below reconciles the Company’s derivative income to its related proceeds from DAM activities for the period presented:

For the Year Ended

($ in thousands)

September 30, 2025

Loss on derivative securities, net

Fair value in excess of strike price on settled written DAM Options

Loss on value assigned to costless Bitmain contract option

Loss on other non-DAM Investments

Proceeds from premiums

These activities provided approximately $12.1 million of proceeds from premiums and incremental Spot+ trading during the fiscal year, supplementing operating cash flows from bitcoin mining.

Management views DAM activities as an integrated component of its treasury strategy and liquidity management, rather than as speculative trading.

The Company expects to continue its Spot+ and yield strategies at measured levels relative to its total bitcoin balance and operating requirements.

The Bitmain options are bitcoin-linked derivatives but were not a result of the Company’s DAM strategy and are not included in DAM activity.

The Company had no DAM derivative positions open as of September 30, 2025.

The table below presents the Company’s DAM derivative activity for the year ended September 30, 2025, which supports the proceeds reconciliation above:

Average BTC Price at Contract Date

Average BTC Strike Price

BTC Equivalent Contracts

Proceeds from Premiums ($000's)

Effective Sales Price to Spot

Annualized Premium Yield

Bitmain options hedge

Operating Activities from Continuing Operations

The Company generates non-cash revenue through mining Bitcoin, which it retains based on its long-term value strategy, while funding all operating expenses with cash.

As a result, net cash used in operating activities was $233,154 for the year ended September 30, 2024 primarily due to net loss of $145,777, adjusted by adding non-cash adjustment to reconcile net loss to net cash of impairment of goodwill, fixed assets and other of $197,757, depreciation and amortization of $154,609, stock based compensation of $29,555 and loss on disposal of assets of $5,466 and subtracting non-cash bitcoin mining revenues of $378,968, gain on fair value of bitcoin, net of $113,423 and gain on fair value of receivable for bitcoin collateral of $1,384.

The Company generates non-cash revenue through mining bitcoin, a portion of which is sold to fund operating and investing activities, and a portion may be retained as collateral for borrowing or for use in derivative transactions.

Only bitcoin sold nearly immediately after being mined qualifies as cash flows from operating activities.

As a result, net cash used in operating activities was $461,032 for the year ended September 30, 2025 primarily due to net income of $364,464, adjusted by adding non-cash activity to reconcile net loss to net cash including depreciation and amortization of $348,335 and stock based compensation of $45,335 and subtracting non-cash bitcoin mining revenues of $766,314, gain on fair value of bitcoin, net of $425,646 and gain on fair value of receivable for bitcoin collateral of $92,190.

Changes in operating assets and liabilities generated a net total of $19,503 of cash.

Net cash used in operating activities was $18,573 for the year ended September 30, 2023 primarily due to net loss of $138,148, adjusted by adding non-cash adjustment to reconcile net loss to net cash of depreciation and amortization of $120,728, stock based compensation of $24,142, impairment of bitcoin of $7,163 and loss on disposal of assets of $1,931 and subtracting non-cash bitcoin mining revenues of $168,121.

We also generated cash proceeds from selling bitcoin of $116,271.

Net cash used in operating activities was $233,154 for the year ended September 30, 2024 primarily due to net loss of $145,777, adjusted by adding non-cash adjustment to reconcile net loss to net cash of impairment of goodwill, fixed assets and other of $197,757, depreciation and amortization of $154,609, stock based compensation of $29,555 and loss on disposal of assets of $5,466 and subtracting non-cash bitcoin mining revenues of $378,968, gain on fair value of bitcoin, net of $113,423 and gain on fair value of receivable for bitcoin collateral of $1,384.

Changes in operating assets and liabilities generated a net total of $13,185 of cash.

1 unchanged sentence

Cash flows used by investing activities during the year ended September 30, 2025 was $305,656 as compared with $920,398 for the year ended September 30, 2024.

Our payments on miner equipment purchase and deposits of $740,296, purchase of fixed assets of $66,100, the combined asset purchases of land and locations of $97,647, and the note receivable from GRIID in the amount of $60,919 were the main cash outflows.

The Company generated $43,126 of cash flows from the sales of bitcoin during the year ended September 30, 2024.

Our purchase of fixed assets of $61,460, payments on mining equipment (including deposits) of $239,416 and purchase of Mawson for $22,518, and the acquisition of Coinmaker LLC for $9,389 were the main components of our negative investing cash flow for the year ended September 30, 2023.

Our payments on miner equipment purchase and deposits of $418,212, purchase of fixed assets of $144,661, the purchase of bitcoin of $160,184, and the combined asset purchases of land and locations of $15,008 were the main cash outflows in the current year.

The Company generated $378,158 of cash flows from the sales of bitcoin and settlement of bitcoin linked derivatives during the year ended September 30, 2025.

Our payments on miner equipment purchase and deposits of $740,296, purchase of fixed assets of $66,100, purchase of land and locations for $97,647 and the Note receivable from GRIID in the amount of $60,919 were the main components of our investing cash outflows for the year ended September 30, 2024.

Financing Activities from Continuing Operations

Cash flows generated by financing activities during the year ended September 30, 2025 amounted to $688,866, as compared with $1,249,123 for the year ended September 30, 2024.

Our cash flows from financing activities for the year ended September 30, 2025 consisted primarily of proceeds from our convertible debt offering and line of credit draws totaling $889,195 and the remainder of our at-the-market offering facility of $186,808, partially offset by repayments of the line of credit and other debt of $135,980 as well as using funds from the convertible debt issuance for purchases of treasury stock totaling $145,000 and purchase of a capped calls totaling $90,350.

Our cash flows from financing activities for the year ended September 30, 2024 consisted primarily of proceeds from our at-the-market offering facility of $1,231,834 (106,969,819 shares at a weighted average price of $11.43 per share and $9,590 collections from receivable from equity offerings) and borrowings under our credit facility with Coinbase of $50,000.

Our cash flows from financing activities for the year ended September 30, 2023 consisted of $376,200 in proceeds from offerings (98,829,525 shares at a weighted average price of $3.88 per share less 7,576 net collections on receivable for equity offerings) partially offset by payments on loans of $14,466.

Cash Flows from Discontinued Operations

Cash used in discontinued operations of $508 for the year ended September 30, 2024 was primarily based on the winding down of operations, which includes payments on warranty service.

In the year ended September 30, 2023, operating cash flows generated was $1,326 mainly due to payments received from accounts receivable, payments made on accounts payable and cash generated from the sale of assets during the fiscal year.

Compensation Recovery Analysis

As a result of our correction of errors in the prior year financial statements, the Compensation Committee of our Board of Directors, consisting entirely of independent directors, conducted a recovery analysis of incentive-based compensation received by our executive officers during the relevant period, as contemplated by Rule 10D-1 under the Exchange Act and in accordance with our Executive Officer Incentive Compensation Recoupment (Clawback) Policy.

Based on this analysis, no recovery of incentive-based compensation is required, as the financial statement adjustments did not impact the metrics used to determine incentive compensation during the relevant recovery period, and thus there was no erroneously awarded compensation.

There was no cash used in discontinued operations for the year ended September 30, 2025.

Cash used in discontinued operations was $508 for the year ended September 30, 2024, primarily related to payments for warranty services.

Recently Issued and Proposed Accounting Pronouncements

29 unchanged sentences

The guidance requires the reduction of deferred tax assets by a valuation allowance, if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

We have recorded a valuation allowance on our deferred tax assets.

We have recorded a partial valuation allowance on our deferred tax assets.

The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which those temporary differences are deductible.

To fully utilize the net operating loss (“NOL”) carryforward, we will need to generate sufficient future taxable income in each respective jurisdiction.

Due primarily to our history of losses, it is more likely than not that all or a portion of its deferred tax assets as of September 30, 2024 will not be realized.

Future estimates of taxable income could have a material impact our utilization of our NOL’s.

Due primarily to our history of losses, it is more likely than not that a portion of our deferred tax assets as of September 30, 2025 will not be realized.

Future estimates of taxable income could have a material impact our utilization of our NOLs.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis