What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-11-06 compared with 2024-08-07 · 339 added, 283 removed, 1046 unchanged (37% of the section changed)

3 unchanged sentences

(in thousands, except par value)

September 30,

2024 December 31,

36 unchanged sentences

$ 0.00001 par value;

2,000,000 and nil shares authorized at June 30, 2024 and December 31, 2023, respectively;

none issued and outstanding at June 30, 2024 and December 31, 2023

2,000,000 and nil shares authorized at September 30, 2024 and December 31, 2023, respectively;

none issued and outstanding at September 30, 2024 and December 31, 2023

Common stock;

$ 0.00001 par value;

10,000,000 shares authorized at June 30, 2024 and December 31, 2023;

187,892 and 386,883 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

10,000,000 shares authorized at September 30, 2024 and December 31, 2023;

279,821 and 386,883 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 2,740,279 1,823,260

6 unchanged sentences

(in thousands, except per share amounts)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

16 unchanged sentences

95,510 97,485 299,440 276,312

Gross (loss) profit

( 156 ) 15,419 116,307 84,159

6 unchanged sentences

— — ( 2,757 ) —

Gain (loss) on disposal of property, plant and equipment

Loss on disposal of property, plant and equipment

( 509 ) ( 340 ) ( 4,061 ) ( 514 )

8 unchanged sentences

40,348 26,805 88,655 78,112

Operating income

Operating (loss) income

( 41,219 ) ( 12,044 ) 20,587 5,027

2 unchanged sentences

317 ( 374 ) 487 ( 21,135 )

Interest expense (income), net

Interest expense, net

7,072 2,196 35,934 2,317

2 unchanged sentences

408,520 — 1,144,441 —

Other non-operating expense (income), net

Other non-operating (income) expense, net

( 2,003 ) ( 1,090 ) 144 ( 3,978 )

12 unchanged sentences

292,486 382,483 253,058 378,107

Certain prior year amounts have been reclassified for consistency with the current year presentation.

See accompanying notes to unaudited condensed consolidated financial statements.

1 unchanged sentence

Condensed Consolidated Statements of Changes in Stockholders’ Deficit

For the Three Months Ended June 30, 2024

For the Three Months Ended September 30, 2024

(in thousands)

4 unchanged sentences

Shares Amount

Balance at April 1, 2024 182,237 $ 2 $ 1,891,011 $ ( 2,209,522 ) $ ( 318,509 )

Balance at July 1, 2024 187,892 $ 2 $ 1,930,542 $ ( 3,014,418 ) $ ( 1,083,874 )

— — — ( 455,259 ) ( 455,259 )

Stock-based compensation — — 20,523 — 20,523

Issuance of new common stock in connection with emergence

79 — 399 — 399

Restricted stock awards issued, net of tax withholding obligations

115 — ( 4 ) — ( 4 )

Exercise of warrants

2 unchanged sentences

40,060 — 235,227 — 235,227

Issuance of new common stock for PIK interest

882 — 3,677 — 3,677

Balance at June 30, 2024 187,892 $ 2 $ 1,930,542 $ ( 3,014,418 ) $ ( 1,083,874 )

Balance at September 30, 2024 279,821 $ 3 $ 2,740,279 $ ( 3,469,677 ) $ ( 729,395 )

See accompanying notes to unaudited condensed consolidated financial statements.

1 unchanged sentence

Condensed Consolidated Statements of Changes in Stockholders’ Deficit

For the Six Months Ended June 30, 2024

For the Nine Months Ended September 30, 2024

(in thousands)

34 unchanged sentences

882 — 3,677 — 3,677

Balance at June 30, 2024 187,892 $ 2 $ 1,930,542 $ ( 3,014,418 ) $ ( 1,083,874 )

Balance at September 30, 2024 279,821 $ 3 $ 2,740,279 $ ( 3,469,677 ) $ ( 729,395 )

See accompanying notes to unaudited condensed consolidated financial statements.

1 unchanged sentence

Condensed Consolidated Statements of Changes in Stockholders’ Deficit

For the Three And Six Months Ended June 30, 2023

For the Three and Nine Months Ended September 30, 2023

(in thousands)

4 unchanged sentences

Shares Amount

Balance at April 1, 2023

377,841 $ 36 $ 1,776,641 $ — $ ( 2,174,138 ) $ ( 397,461 )

Balance at July 1, 2023 379,091 $ 36 $ 1,790,921 $ — $ ( 2,183,398 ) $ ( 392,441 )

— — — ( 41,146 ) ( 41,146 )

1 unchanged sentence

Restricted stock awards issued, net of shares withheld for tax withholding obligations 7,154 — — — —

Balance at June 30, 2023

379,091 $ 36 $ 1,790,921 $ ( 2,183,398 ) $ ( 392,441 )

Restricted stock awards forfeited ( 377 ) — — — —

Balance at September 30, 2023 385,868 $ 36 $ 1,805,782 $ ( 2,224,544 ) $ ( 418,726 )

Balance at January 1, 2023

3 unchanged sentences

Restricted stock awards issued, net of shares withheld for tax withholding obligations 11,020 — — — —

Balance at June 30, 2023

379,091 $ 36 $ 1,790,921 $ ( 2,183,398 ) $ ( 392,441 )

Restricted stock awards forfeited ( 377 ) — — — —

Balance at September 30, 2023 385,868 $ 36 $ 1,805,782 $ ( 2,224,544 ) $ ( 418,726 )

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from Operating Activities:

23 unchanged sentences

Digital assets 330,900 277,823

Deposits for equipment

Prepaid expenses and other current assets 2,687 ( 10,650 )

12 unchanged sentences

Proceeds from issuance of new common stock

Proceeds for the issuance of 3 % senior convertible notes, net

Issuance costs for 3 % senior convertible notes

Proceeds from draw from exit facility

4 unchanged sentences

Proceeds from exercise of warrants

Net cash provided by provided by (used in) financing activities

Net cash provided by (used in) financing activities

221,396 ( 26,352 )

11 unchanged sentences

Cash paid for reorganization items

$ 53,835 $ 62,590

Supplemental disclosure of noncash investing and financing activities:

4 unchanged sentences

Reclass of other current and non-current assets to plant, property, and equipment 9,268 —

Decrease in right-of-use assets due to lease termination ( 6,560 ) —

Increase in right-of-use assets due to lease commencement 70,690 —

Increase in lease liability due to lease commencement

Extinguishment of convertible notes upon emergence ( 559,902 ) —

12 unchanged sentences

Cumulative effect of adoption of ASU 2023-08, Accounting for and Disclosure of Crypto Assets 24 —

Issuance of new common stock for convertible notes conversion

Issuance of new common stock for New Secured Convertible Notes conversion

Issuance of new common stock for PIK interest

Noncash exercise of warrants

Property, plant and equipment disposed of through settlements

Purchase of insurance policies financed by short-term note payable

Issuance of notes payable through settlements

See accompanying notes to unaudited condensed consolidated financial statements.

5 unchanged sentences

We operate dedicated, purpose-built facilities for digital asset mining and are a premier provider of digital infrastructure, software solutions and services to our third-party customers.

We employ our own large fleet of computers (“miners”) to earn digital assets for our own account and provide hosting services for large customers at our eight operational data centers in Georgia ( 2 ), Kentucky ( 1 ), North Carolina ( 1 ), North Dakota ( 1 ) and Texas ( 3 ).

We employ our own large fleet of computers (“miners”) to earn digital assets for our own account and we provide hosting services for large bitcoin mining customers and are in the process of allocating and converting a significant portion of our nine operational data centers in Alabama (1), Georgia ( 2 ), Kentucky ( 1 ), North Carolina ( 1 ), North Dakota ( 1 ) and Texas ( 3 ), and our facility in development in Oklahoma to support artificial intelligence-related workloads under a series of contracts that entail the modification of certain of our data centers to deliver hosting services for high-performance computing (“HPC”).

We derive the majority of our revenue from earning bitcoin for our own account (“self-mining”).

The Company focuses primarily on digital asset mining for its own account and has historically focused on providing hosting solutions for third-party digital asset miners.

Beginning on March 6, 2024, we have made a series of announcements relating to new contractual arrangements with a third-party provider of high-performance compute (“HPC”) operations for customers utilizing specialized cloud-based graphics processing units (“GPU”s).

These new arrangements leverage the Company’s existing infrastructure and expertise in third-party hosting solutions.

We believe that using our existing infrastructure for HPC customers provides more consistent dollar-based revenue and substantially less risk than our traditional bitcoin mining customers or our bitcoin self-mining operations.

Going forward we intend to focus our efforts on expanding our HPC customer base while maintaining our bitcoin self-mining operations.

We expect that third-party hosting for traditional mining customers will be limited unless strategically or economically advantageous.

The Company has historically focused on designing, developing and operating digital infrastructure to engage in digital asset mining for its own account and providing hosting solutions for third-party digital asset miners.

Beginning on March 6, 2024, we announced a series of new contractual agreements with a third-party provider of HPC operations for customers using specialized graphics processing units (“GPUs”).

These new agreements leverage the Company’s existing digital infrastructure and expertise in third-party hosting solutions.

We currently operate in three segments:

1 unchanged sentence

Prior to April 1, 2024, we operated only in the Digital Asset Self-Mining and Digital Asset Hosted Mining segments.

We believe our experience in digital asset self-mining can be applied to the design, development and operation of large-scale data centers configured to optimize the performance of specialized computers for other specific, high-value applications such as cloud computing, machine learning and artificial intelligence.

We have secured significant contracts in these areas and intend to pursue additional opportunities therein using our knowledge, experience and digital infrastructure where favorable market opportunities exist.

Our digital asset hosted mining business provides a full suite of services to our digital asset mining customers.

1 unchanged sentence

Our HPC hosting services provide colocation, facilities operations, security and other services to third-party HPC customers to support workloads for machine learning and artificial intelligence.

The extension of our business into the HPC Hosting segment involves significant risk, including risks involving facility construction, supply chain and the risk of nonperformance by our single customer, as disclosed further in Part II, Item 1A.

— “Risk Factors” in this Quarterly Report on Form 10-Q.

Chapter 11 Filing and Emergence from Bankruptcy

7 unchanged sentences

On January 23, 2024 (the “Effective Date”), the conditions to the effectiveness of the Plan of Reorganization were satisfied or waived and the Company emerged from bankruptcy.

The Company was not required to apply fresh start accounting based on the provisions of Accounting Standards Codification (“ASC”) 852, Reorganizations , since the entity’s reorganization value immediately before the date of confirmation is more than the total of all its post-petition liabilities and allowed claims.

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 unchanged sentences

For detailed discussion about the Chapter 11 Cases and our emergence from bankruptcy, refer to Note 3 — Chapter 11 Filing and Emergence from Bankruptcy.

Liquidity and Financial Condition

For the six months ended June 30, 2024, the Company generated net loss of $ 594.2 million.

The Company had unrestricted cash and cash equivalents of $ 96.1 million as of June 30, 2024, compared to $ 50.4 million as of December 31, 2023.

The Company has historically generated cash primarily through sales of digital assets received as digital asset self-mining revenue and through revenue from contracts with customers as well as the issuance of common stock and debt.

As of June 30, 2024, the Company had net working capital of $ 43.0 million and a total stockholders’ deficit of $ 1.1 billion.

We continue to monitor the impact of the fourth halving event in April 2024 on our liquidity.

The Plan of Reorganization at the Effective Date (i) eliminated substantial debt and debt service, (ii) established new debt in the form of a secured credit agreement, publicly traded notes and convertible notes, and debt to equipment lenders, and (iii) new publicly traded equity and warrants.

The Plan of Reorganization (i) eliminated substantial debt and debt service, (ii) established new debt in the form of a secured credit agreement, publicly traded notes and convertible notes, and debt to equipment lenders, and (iii) established new publicly traded equity and warrants.

The settlement of accrued and payable claims through new debt and equity issuance and the extension of debt service to future periods on the Effective Date substantially eliminated the reported working capital deficit at December 31, 2023.

When combined with the additional liquidity of the available delayed-draw term loan and the expected cash flows from operations, management has concluded that as of June 30, 2024, the Company’s capital, liquidity and cash flow from operations is sufficient to fund its operations and debt service obligations for at least the next 12 months from the date these condensed consolidated financial statements were issued.

During the nine months ended September 30, 2024, we converted or repaid substantially all of the notes, credit agreements, and other payable obligations resulting from the Plan of Reorganization on the Effective date.

The majority of this activity occurred during the three months ended September 30, 2024, through the mandatory conversion of the New Secured Convertible Notes (as defined below) and repayment of the Exit Credit Agreement (as defined below) and Secured Notes (as defined below) from proceeds from the 2029 Convertible Notes Offering (as defined below) issuance as described further in Note 6 — Convertible and Other Notes Payable.

Liquidity and Financial Condition

For the nine months ended September 30, 2024, the Company generated a net loss of $ 1.05 billion, of which $ 1.22 billion related to the change in the fair value of warrants which will be settled with common stock shares.

The Company had unrestricted cash and cash equivalents of $ 253.0 million as of September 30, 2024, compared to $ 50.4 million as of December 31, 2023.

The Company has historically generated cash primarily through sales of digital assets received as digital asset self-mining revenue, revenue from contracts with customers, and the issuance of debt and common stock.

As of September 30, 2024, the Company had net working capital of $ 201.3 million and a total stockholders’ deficit of $ 729.4 million.

Management has concluded that as of September 30, 2024, the Company’s capital, cash flow from operations, and other sources of liquidity are sufficient to fund its operations and debt service obligations for at least the next 12 months following the date these condensed consolidated financial statements were issued.

Digital Assets

Currently the Company is required by its existing debt agreements to sell bitcoin it earns within ten days of receipt.

The Company sells bitcoin it receives through mining.

As of August 19, 2024, the Company is no longer required to sell bitcoin it earns through mining within ten days of receipt as provided by the terms of the recently extinguished debt facilities (Exit Credit Agreement, the Secured Notes and the New Secured Convertible Notes).

See Note 6 — Convertible and Other Notes Payable.

In the future, the Company intends to optimize cash received from bitcoin mining which may entail, subject to market conditions, holding bitcoin for future sale at any particular point in time.

Digital assets are classified as current assets on the Company’s Condensed Consolidated Balance Sheets.

11 unchanged sentences

The early adoption did not have a material impact on the Company’s condensed consolidated financial statements.

The Company did not have any digital asset holdings as of June 30, 2024.

The Company did not have any digital asset holdings as of September 30, 2024.

The Company’s digital assets have active markets with observable prices and are considered Level 1 fair value measurements.

The following table presents a roll-forward of total digital assets for the six months ended June 30, 2024, based on the fair value model under ASU 2023-08, and the six months ended June 30, 2023 (in thousands):

June 30, 2024 June 30, 2023

The following table presents a roll-forward of total digital assets for the nine months ended September 30, 2024, based on the fair value model under ASU 2023-08, and the nine months ended September 30, 2023 (in thousands):

September 30, 2024 September 30, 2023

Digital assets, beginning of period

5 unchanged sentences

Mining proceeds from shared hosting

15,693 10,321

Proceeds from sales of digital assets

6 unchanged sentences

Digital assets, end of period

1 As of June 30, 2024 and June 30, 2023, there was $ 0.8 million and $ 1.0 million, respectively, of digital asset receivable included in prepaid expenses and other current assets on the condensed consolidated balance sheets.

1 As of September 30, 2024 and December 31, 2023, there was $ 0.7 million and $ 1.7 million, respectively, of digital asset receivable included in prepaid expenses and other current assets on the condensed consolidated balance sheets.

Use of Estimates

5 unchanged sentences

Cash and cash equivalents include all cash balances and highly liquid investments with original maturities of three months or less from the date of acquisition.

As of June 30, 2024, the Company had cash and cash equivalents of $ 96.1 million, substantially all of which exceeded Federal Deposit Insurance Corporation insured limits.

As of September 30, 2024, the Company had cash and cash equivalents of $ 253.0 million, substantially all of which exceeded Federal Deposit Insurance Corporation insured limits.

Cash equivalents included $ 243.8 million of highly liquid money market funds, which are classified as Level 1 within the fair value hierarchy.

2 unchanged sentences

Notes to Unaudited Condensed Consolidated Financial Statements

Property, Plant and Equipment, Net

Property, plant, and equipment includes the cost of land, buildings, and improvements for datacenter and support facilities and the Company’s corporate office space.

Property and equipment further consists of computer, mining, network, electrical and other equipment, including property and equipment under finance leases.

Property, plant and equipment, net is stated at cost less accumulated depreciation and amortization.

Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets.

Leasehold improvements are capitalized at cost and amortized over the shorter of their estimated useful lives or the lease term.

Future obligations related to finance leases are presented as Finance lease liabilities, current portion and Finance lease liabilities, net of current portion in the Company’s Consolidated Balance Sheets.

Depreciation expense, including amortization of assets held under finance leases, is primarily included in Cost of revenue in the Company’s Consolidated Statements of Operations.

Property, plant and equipment capitalized costs include the directly identifiable costs incurred to acquire, construct, install, or otherwise prepare the asset for its intended use and to put it into service.

Directly identifiable costs include construction payroll and benefits, demolition necessary for construction to purpose, and other direct capital project costs.

Intersegment transfers of property, plant, and equipment are recorded at their net carrying value with no resulting gain or loss.

Revenue Recognition - HPC Hosting Revenue

18 unchanged sentences

The Company has performance obligations associated with commitments in customer digital asset hosted mining contracts for future services that have not yet been recognized in the financial statements.

As of June 30, 2024, for contracts with original terms that exceed one year (typically ranging from 15 to 24 months), we expect to recognize approximately $ 37.7 million of revenue in the future related to performance obligations associated with existing hosted mining contracts.

The Company expects to recognize approximately 92 % of this amount over the next 12 months and the remainder thereafter.

Deferred Revenue

The Company records contract liabilities in Deferred revenue on the Condensed Consolidated Balance Sheets when cash payments are received in advance of performance and recognizes them as revenue when the performance obligations are satisfied.

The Company’s total deferred revenue balance as of June 30, 2024 and December 31, 2023, was $ 7.9 million and $ 9.8 million, respectively.

In the three and six months ended June 30, 2024, the Company recognized $ 0.1 million and $ 6.5 million of revenue, respectively, that was included in the deferred revenue balance as of the beginning of the year.

In the three and six months ended June 30, 2023, the Company recognized $ 14.3 million and $ 25.9 million of revenue, respectively, that was included in the deferred revenue balance as of the beginning of the year.

Advanced payments for hosting services are typically recognized in the following month and are generally recognized within one year.

As of September 30, 2024, for contracts with original terms that exceed one year (typically ranging from 15 to 24 months), we expect to recognize approximately $ 16.2 million of revenue in the future related to performance obligations associated with existing hosted mining contracts.

The Company expects to recognize approximately 100 % of this amount over the next 12 months.

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Deferred Revenue

The Company’s total deferred revenue balance as of September 30, 2024 and December 31, 2023, was $ 16.9 million and $ 9.8 million, respectively.

In the three and nine months ended September 30, 2024, the Company recognized $ 0.1 million and $ 6.6 million of revenue, respectively, that was included in the deferred revenue balance as of the beginning of the year.

In the three and nine months ended September 30, 2023, the Company recognized $ 2.7 million and $ 20.5 million of revenue, respectively, that was included in the deferred revenue balance as of the beginning of the year.

Advanced payments are typically recognized in the following month for hosted mining services and are generally recognized within 30 months of license order commencement for HPC hosting services.

Stock-Based Compensation

19 unchanged sentences

Notes payable are evaluated at issuance to determine whether or not they have features or terms which would be treated as embedded derivatives that are required to be bifurcated under ASC 815, Derivatives and Hedging (“ASC 815”).

As of June 30, 2024 and December 31, 2023, Notes payable did not have any embedded derivatives required to be bifurcated.

As of September 30, 2024 and December 31, 2023, Notes payable did not have any embedded derivatives required to be bifurcated.

Contingent Value Rights Liabilities

As described in Note 7 — Contingent Value Rights and Warrant Liabilities, on the Effective Date, pursuant to the Plan of Reorganization, the Company entered into a contingent value rights agreement (the “Contingent Value Rights Agreement”) which provides for the issuance of the contingent value rights (the “CVRs”) to certain creditors and provides for the issuance of CVRs issued to holders of allowed general unsecured claims (“GUC”) (in such capacity, the “GUC Payees”) (the “GUC CVRs”).

The CVRs and GUC CVRs are equity-linked instruments which are either only cash settled or in some instances share settled at the Company’s sole discretion.

The Company determined that these equity-linked instruments are not indexed to the Company’s stock and are required to be recognized as liabilities which are, initially and subsequently, measured at fair value with changes in value reflected in Net income (loss).

The CVRs and GUC CVRs are equity-linked instruments which are either only cash settled or in some instances share settled at the Company’s sole

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

On the Effective Date, the CVRs and GUC CVRs were recognized at their fair value of $ 86.3 million.

As of June 30, 2024, the CVRs were reported at a fair value of $ 12.9 million in Contingent value rights on the condensed consolidated balance sheets and the GUC CVRs were reported at a fair value of nil.

During the three and six months ended June 30, 2024, the decrease in fair value of $ 31.7 million and $ 73.4 million, respectively, was included in Change in fair value of warrant and contingent value rights on the Company’s Condensed Consolidated Statements of Operations.

On July 1, 2024, the GUC CVR obligations were extinguished as described in Note 7 — Contingent Value Rights and Warrant Liabilities.

As of September 30, 2024, the CVRs were reported at a fair value of $ 7.0 million in Contingent value rights on the Condensed Consolidated Balance Sheets.

During the three and nine months ended September 30, 2024, the decrease in fair value of $ 6.0 million and $ 79.3 million, respectively, was included in Change in fair value of warrant and contingent value rights on the Company’s Condensed Consolidated Statements of Operations.

Warrant Liabilities

2 unchanged sentences

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

On the Effective Date, the warrants were recognized at their fair value of $ 345.9 million.

As of June 30, 2024, the warrants were reported at a fair value of $ 1.16 billion in Warrant liabilities on the Condensed Consolidated Balance Sheets.

During the three and six months ended June 30, 2024, the increase in fair value of $ 827.7 million and $ 809.3 million, respectively, was included in Change in fair value of warrant and contingent value rights on the Company’s Condensed Consolidated Statements of Operations.

As of September 30, 2024, the warrants were reported at a fair value of $ 1.02 billion in Warrant liabilities on the Condensed Consolidated Balance Sheets.

During the three and nine months ended September 30, 2024, the decrease in fair value of $ 414.5 million and the increase in fair value of $ 1.22 billion, respectively, were included in Change in fair value of warrant and contingent value rights on the Company’s Condensed Consolidated Statements of Operations.

Accounting Standards Not Yet Adopted

1 unchanged sentence

Improvements to Reportable Segment Disclosures, which will improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

This update will be effective for the Company during the annual reporting period beginning January 1, 2025.

The amendments in ASU 2023-07 will be applied retrospectively and are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact this ASU will have on its consolidated financial statements and related disclosures.

1 unchanged sentence

Improvements to Income Tax Disclosures.

Under this ASU, public business entities must annually “(1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income [or loss] by the applicable statutory income tax rate).” This update will be effective for the Company during the annual reporting period beginning January 1, 2025.

Under this ASU, public business entities must annually “(1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income [or loss] by the applicable statutory income tax rate).” The amendments in ASU 2023-09 will be applied on a prospective basis and are effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact this ASU will have on its consolidated financial statements and related disclosures.

7 unchanged sentences

and its Affiliated Debtors (with Technical Modifications) with the Bankruptcy Court.

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

On January 16, 2024, the Bankruptcy Court entered the Confirmation Order among other things, confirming the Plan of Reorganization.

7 unchanged sentences

In January 2024, the Replacement DIP Facility was repaid in full and terminated on the Effective Date of the Company’s Plan of Reorganization.

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Reorganization items, net and Liabilities Subject to Compromise

3 unchanged sentences

As of December 31, 2023, liabilities that were affected by the Plan of Reorganization were classified as liabilities subject to compromise at the amounts expected to be allowed by the Bankruptcy Court, even if they may have been settled for lesser amounts as a result of the Plan of Reorganization or negotiations with creditors.

If there was uncertainty about whether a secured claim was undersecured, or would be impaired under the Plan of Reorganization, the entire amount of the claim was included with prepetition claims in liabilities subject to compromise.

If there was uncertainty about whether a secured claim was under secured, or would be impaired under the Plan of Reorganization, the entire amount of the claim was included with prepetition claims in liabilities subject to compromise.

After the Effective Date, any resulting changes in classification were reflected in subsequent financial statements.

7 unchanged sentences

Any damages resulting from the rejection of executory contracts and unexpired leases were treated as general unsecured claims and paid in full.

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Reorganization items, net incurred as a result of the Chapter 11 Cases presented separately in the accompanying Condensed Consolidated Statements of Operations were as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

15 unchanged sentences

Reorganization items, net $ — $ 28,256 $ ( 111,439 ) $ 78,270

During the six months ended June 30, 2024, there were significant reorganization related gains resulting primarily from satisfaction of allowed claims under the Plan of Reorganization on the Effective Date and negotiated settlements, partially offset by professional fees and other bankruptcy related costs.

During the nine months ended September 30, 2024, there were significant reorganization related gains resulting primarily from satisfaction of allowed claims under the Plan of Reorganization on the Effective Date and negotiated settlements, partially offset by professional fees and other bankruptcy related costs.

These reorganization related impacts were classified as Reorganization items, net until the Effective Date.

2 unchanged sentences

These amounts represented the Company's estimate of known or potential obligations to be resolved in connection with the Chapter 11 Cases.

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Liabilities subject to compromise consisted of the following (in thousands):

9 unchanged sentences

Final determination of the value at which liabilities were settled was made when the Plan of Reorganization became effective and the Company emerged from bankruptcy.

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net as of June 30, 2024 and December 31, 2023 consist of the following (in thousands):

June 30, 2024 December 31, 2023 Estimated Useful Lives

Property, plant and equipment, net as of September 30, 2024 and December 31, 2023 consist of the following (in thousands):

September 30, 2024 December 31, 2023 Estimated Useful Lives

Land and improvements 1

18 unchanged sentences

Land is not depreciated.

2 Includes finance lease assets of $ 6.6 million and $ 6.6 million at June 30, 2024 and December 31, 2023, respectively.

3 Includes finance lease assets of $ 0.2 million and $ 40.0 million at June 30, 2024 and December 31, 2023, respectively.

4 Includes finance lease assets of $ 12.6 million and $ 12.7 million at June 30, 2024 and December 31, 2023, respectively.

5 Includes finance lease assets of $ 0.4 million and $ 0.4 million at June 30, 2024 and December 31, 2023, respectively.

6 Includes accumulated amortization for assets under finance leases of $ 10.8 million and $ 43.4 million at June 30, 2024 and December 31, 2023, respectively.

Depreciation expense, including amortization of finance lease assets, for the three months ended June 30, 2024 and 2023, was $ 29.3 million, and $ 20.4 million, respectively, and for the six months ended June 30, 2024 and 2023, was $ 58.1 million and $ 40.7 million, respectively.

Depreciation for the three months ended June 30, 2024 and 2023, allocated to costs of revenue was $ 29.2 million, and $ 20.4 million, respectively, and for the six months ended June 30, 2024 and 2023, was $ 58.0 million and $ 40.5 million, respectively.

2 Includes finance lease assets of $ 1.0 million and $ 6.6 million at September 30, 2024 and December 31, 2023, respectively.

3 Includes finance lease assets of nil and $ 40.0 million at September 30, 2024 and December 31, 2023, respectively.

4 Includes finance lease assets of $ 8.7 million and $ 12.7 million at September 30, 2024 and December 31, 2023, respectively.

5 Includes finance lease assets of $ 0.4 million and $ 0.4 million at September 30, 2024 and December 31, 2023, respectively.

6 Includes accumulated amortization for assets under finance leases of $ 3.8 million and $ 43.4 million at September 30, 2024 and December 31, 2023, respectively.

Depreciation expense, including amortization of finance lease assets, for the three months ended September 30, 2024 and 2023, was $ 28.5 million, and $ 24.0 million, respectively, and for the nine months ended September 30, 2024 and 2023, was $ 86.6 million and $ 64.7 million, respectively.

Lessee Accounting

The Company has entered into non-cancellable operating and finance leases for office, data facilities, computer and networking equipment, electrical infrastructure and office equipment, with lease periods expiring through 2035.

In addition, certain leases contain

The Company has entered into non-cancellable operating and finance leases for office space, data facilities, computer and networking equipment, electrical infrastructure and office equipment, with lease periods expiring through 2051.

Variable lease payments are not included in the initial measurement of leases and are expensed as incurred.

On September 30, 2024, the Company entered into a lease agreement by and between the Company and Aubix, LLC (the "Aubix Lease") for approximately 5.7 acres of land, including a 40,000 square foot building that the Company intends to use for its HPC hosting operations.

The Aubix Lease is anticipated to commence in November 2024 as the Company begins occupancy of the leased space.

The term of the Aubix Lease is 10 years from the commencement date.

The Company has the right to extend the term of the Aubix Lease up to an additional 15 years in 5 year increments.

The total future minimum lease payments related to the Aubix Lease is approximately $ 43.5 million.

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

bargain renewal options extending through 2051.

Variable lease payments are not included in the initial measurement of leases and are expensed as incurred.

The components of operating and finance leases are presented on the Company’s Condensed Consolidated Balance Sheets as follows (in thousands):

Financial statement line item June 30, 2024 December 31, 2023

Financial statement line item September 30, 2024 December 31, 2023

Operating lease right-of-use assets Operating lease right-of-use assets $ 74,733 $ 7,844

10 unchanged sentences

current portion Finance lease liabilities, net of current portion $ 4 $ 35,745

Supplemental disclosure of noncash investing and financing activities in the Company’s Condensed Consolidated Statements of Cash Flows includes a decrease in lease liability due to lease satisfactions on the Effective Date of $ 50.7 million presented in Extinguishment of accounts payable, accrued expenses, finance lease liability, and notes payable upon emergence for the six months ended June 30, 2024.

The components of lease expense were as follows (in thousands):

Three Months Ended June 30,

Three Months Ended September 30,

Financial statement line item 2024 2023

7 unchanged sentences

Total lease expense $ 4,218 $ 3,584

Six Months Ended June 30,

Nine Months Ended September 30,

Financial statement line item 2024 2023

10 unchanged sentences

Information relating to the lease term and discount rate is as follows:

June 30, 2024 June 30, 2023

September 30, 2024 September 30, 2023

Weighted Average Remaining Lease Term (Years)

5 unchanged sentences

Information relating to lease payments is as follows (in thousands):

Three Months Ended June 30,

Lease Payments

Operating lease payments $ 1,651 $ 261

Finance lease payments $ 1,031 $ 1,168

Six Months Ended June 30,

Nine Months Ended September 30,

Lease Payments

3 unchanged sentences

1 Approximately $ 4.6 million of finance lease liabilities were reinstated pursuant to the Plan of Reorganization.

Of the $ 6.2 million of finance lease payments made during the six months ended June 30, 2024, $ 4.4 million related to cure payments from emergence on the Effective Date.

The Company’s minimum payments under noncancelable operating and finance leases having initial terms and bargain renewal periods in excess of one year are as follows at June 30, 2024, and thereafter (in thousands):

Of the $ 7.1 million of finance lease payments made during the nine months ended September 30, 2024, $ 4.4 million related to cure payments from emergence on the Effective Date.

The Company’s minimum payments under noncancelable operating and finance leases having initial terms and bargain renewal periods in excess of one year are as follows at September 30, 2024, and thereafter (in thousands):

Operating leases Finance leases

9 unchanged sentences

Total $ 72,821 $ 2,384

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Lessor Accounting

2 unchanged sentences

The components of lease revenue were as follows (in thousands):

Three and Six Months Ended June 30, 2024

Three Months Ended September 30, 2024 Nine Months Ended

September 30, 2024

Lease Revenue

Operating lease revenue

$ 7,806 $ 11,625

Variable lease revenue

Total lease revenue

The following table represents the maturity analysis of operating lease payments expected to be received at June 30, 2024, and thereafter (in thousands):

$ 10,338 $ 15,857

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

The following table represents the maturity analysis of operating lease payments expected to be received at September 30, 2024, and thereafter (in thousands):

Operating leases

Remaining 2024 $ 3,680

4 unchanged sentences

CONVERTIBLE AND OTHER NOTES PAYABLE

Notes payable as of June 30, 2024 and December 31, 2023, consist of the following (in thousands):

Notes payable as of September 30, 2024 and December 31, 2023, consist of the following (in thousands):

Stated Interest Rate

Effective Interest Rates

Maturities June 30, 2024 December 31, 2023

Maturities September 30, 2024 December 31, 2023

Replacement DIP Credit Agreement 1

9 unchanged sentences

10.0 % 2029 — —

2029 Convertible Notes 3.0 % 3.7 % 2029

Miner Financing:

40 unchanged sentences

Notes to Unaudited Condensed Consolidated Financial Statements

3.00 % Convertible Senior Notes due 2029

On August 19, 2024, the Company completed a private offering (the “2029 Convertible Notes Offering”) of $ 460.0 million aggregate principal amount of 3.00 % Convertible Senior Notes due 2029 (the “2029 Convertible Notes”), which included the exercise in full of the initial purchasers’ option to purchase up to an additional $ 60.0 million aggregate principal amount of 2029 Convertible Notes.

The 2029 Convertible Notes were issued pursuant to, and are governed by, an indenture (the “2029 Convertible Notes Indenture”), dated as of August 19, 2024, between the Company and U.S.

Bank Trust Company, National Association, as trustee (the “2029 Convertible Notes Trustee”).

The 2029 Convertible Notes accrue interest at a rate of 3.00 % per annum, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2025.

The 2029 Convertible Notes will mature on September 1, 2029, unless earlier converted, redeemed or repurchased by the Company.

Noteholders may convert their 2029 Convertible Notes at their option only in the following circumstances:

(i) during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ending on December 31, 2024, if the last reported sale price per share of the Company’s New Common Stock (as defined below), $ 0.00001 par value per share, exceeds 130 % of the conversion price for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;

(ii) during the five consecutive business days immediately after any 10 consecutive trading day period (such 10 consecutive trading day period, the “Measurement Period”) if the trading price per $1,000 principal amount of 2029 Convertible Notes for each trading day of the Measurement Period was less than 98 % of the product of the last reported sale price per share of the New Common Stock on such trading day and the conversion rate on such trading day;

(iii) upon the occurrence of certain corporate events or distributions on the New Common Stock, as described in the 2029 Convertible Notes Indenture;

(iv) if the Company calls any 2029 Convertible Notes for redemption;

and (v) at any time from, and including, June 1, 2029 until the close of business on the scheduled trading day immediately before the maturity date.

The Company will settle conversions by paying or delivering, as applicable, cash, shares of New Common Stock or a combination of cash and shares of New Common Stock, at the Company’s election, based on the applicable conversion rate(s).

The initial conversion rate is 90.9256 shares of New Common Stock per $1,000 principal amount of 2029 Convertible Notes, which represents an initial conversion price of approximately $ 11.00 per share of New Common Stock.

The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events.

In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the 2029 Convertible Notes Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time.

The 2029 Convertible Notes are redeemable, in whole or in part (subject to certain limitations described below), at the Company’s option at any time, and from time to time, on or after September 7, 2027 and on or before the 20 th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2029 Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if certain liquidity conditions are satisfied and the last reported sale price per share of the New Common Stock exceeds 130 % of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice;

and (ii) the trading day immediately before the date the Company sends such notice.

However, the Company may not redeem less than all of the outstanding 2029 Convertible Notes unless at least $ 100.0 million aggregate principal amount of 2029 Convertible Notes are outstanding and not called for redemption as of the time the Company sends the related redemption notice.

In addition, calling any 2029 Convertible Note for redemption will constitute a Make-Whole Fundamental Change with respect to that 2029 Convertible Note, in which case the conversion rate applicable to the conversion of that 2029 Convertible Note will be increased in certain circumstances if it is converted after it is called for redemption.

If a “Fundamental Change” (as defined in the 2029 Convertible Notes Indenture) occurs, then, subject to a limited exception for certain cash mergers, noteholders may require the Company to repurchase their 2029 Convertible Notes at a cash repurchase price equal to the principal amount of the 2029 Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the Fundamental Change Repurchase Date (as defined in the 2029 Convertible Notes Indenture).

The definition of Fundamental Change includes certain business combination transactions involving the Company and certain de-listing events with respect to the New Common Stock.

The 2029 Convertible Notes have customary provisions relating to the occurrence of “Events of Default” (as defined in the 2029 Convertible Notes Indenture), which include the following:

(i) certain payment defaults on the 2029 Convertible Notes (which, in the case of a default in the payment of interest on the 2029 Convertible Notes, will be subject to a 30 -day cure period);

(ii) the Company’s failure to send certain notices under the 2029 Convertible Notes Indenture within specified periods of time;

(iii) the Company’s failure to convert a 2029 Convertible Note in accordance with the 2029 Convertible Notes Indenture upon exercise of the conversion right with respect thereto;

(iv) the Company’s failure to comply with certain covenants in the 2029 Convertible Notes

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Indenture relating to the Company’s ability to consolidate with or merge with or into, or sell, lease or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, to another person;

(v) a default by the Company in its other obligations or agreements under the 2029 Convertible Notes Indenture or the 2029 Convertible Notes if such default is not cured or waived within 60 days after notice is given in accordance with the 2029 Convertible Notes Indenture;

(vi) certain defaults by the Company or any of its “Significant Subsidiaries” (as defined in the 2029 Convertible Notes Indenture) with respect to indebtedness for borrowed money of at least $ 25.0 million;

(vii) the rendering of certain judgments against the Company or any of its Significant Subsidiaries for the payment of at least $ 25.0 million, where such judgments are not discharged or stayed within 60 days after date on which the right to appeal has expired or on which all rights to appeal have been extinguished;

and (viii) certain events of bankruptcy, insolvency and reorganization involving the Company or any of its Significant Subsidiaries.

If an Event of Default involving bankruptcy, insolvency or reorganization events with respect to the Company (and not solely with respect to a Significant Subsidiary of the Company) occurs, then the principal amount of, and all accrued and unpaid interest on, all of the 2029 Convertible Notes then outstanding will immediately become due and payable without any further action or notice by any person.

If any other Event of Default occurs and is continuing, then, the 2029 Convertible Notes Trustee, by notice to the Company, or noteholders of at least 25 % of the aggregate principal amount of 2029 Convertible Notes then outstanding, by notice to the Company and the 2029 Convertible Notes Trustee, may declare the principal amount of, and all accrued and unpaid interest on, all of the 2029 Convertible Notes then outstanding to become due and payable immediately.

However, notwithstanding the foregoing, the Company may elect, at its option, that the sole remedy for an Event of Default relating to certain failures by the Company to comply with certain reporting covenants in the 2029 Convertible Notes Indenture consists exclusively of the right of the noteholders to receive special interest on the 2029 Convertible Notes for up to 365 days at a specified rate per annum equal to 0.25 % of the principal amount thereof for the first 180 days on which special interest accrues and, thereafter, at a rate per annum equal to 0.50 % of the principal amount thereof.

The net proceeds from the 2029 Convertible Notes Offering were approximately $ 447.6 million, after deducting the initial purchasers’ discounts and commissions and the Company’s estimated offering expenses.

The Company used approximately $ 62.0 million of the net proceeds from the 2029 Convertible Notes Offering to repay in full the outstanding loans under the Exit Credit Agreement, of which $ 0.8 million was paid for interest.

Additionally, the Company used approximately $ 154.1 million of the net proceeds from the 2029 Convertible Notes Offering to redeem all of the outstanding Secured Notes, of which $ 4.1 million was paid for interest.

The Company intends to use the remaining net proceeds from the 2029 Convertible Notes Offering for general corporate purposes, including working capital, operating expenses, capital expenditures, acquisitions of complementary businesses, or other repurchases of its securities.

Miner Equipment Lender Agreements (BlockFi and Stonebriar)

On September 6, 2024, the Company paid $ 49.6 million to repay the BlockFi facility in full, of which $ 0.7 million was paid for interest.

On October 2, 2024, the Company paid $ 6.5 million to repay the Stonebriar facility in full, of which $ 0.1 million was paid for interest.

Below is a description of the Miner Equipment Lender Agreements prior to their repayment.

On the Effective Date, under the terms of the Plan of Reorganization, the Company entered into separate New Miner Equipment Lender Agreements (Election 2) with each holder of an Allowed Miner Equipment Lender Secured Claim that was a Settling Miner Equipment Lender that elected on its ballot to receive and was receiving the Miner Equipment Lender Treatment Election 2 (the “Election 2 Miner Equipment Facility Lenders”), in each case, in the principal amount of eighty percent ( 80 %) of each applicable Holders’ Allowed Miner Equipment Lender Claim as of the Effective Date (the “Miner Equipment Lender Facility”).

The maturity date on the Miner Equipment Lender Facility was January 23, 2029.

Loans issued under the Miner Equipment Lender Facility accrued interest (1) from the Effective Date to and including the second anniversary of the Effective Date, (x) if the Company did not deliver an Election Notice (as defined below), at a rate of 13.0 % per annum and was payable 3.0 % in cash interest and 10.0 % paid-in-kind, and (y) if the Company delivered a written notice to the Election 2 Miner Equipment Facility Lenders five (5) business days prior to the due date of any interest payment during this period (an “Election Notice”), the Company could elect to have interest accrue at either (a) 12.0 % per annum, payable 5.0 % in cash and 7.0 % paid-in-kind or (ii) 8.0 % per annum, payable in cash and (2) following the second anniversary of the Effective Date, at a rate of 10.0 % per annum, payable in cash.

Upon the occurrence and during the continuance of an Event of Default (as such term is defined in the New Miner Equipment Lender Agreements (Election 2)), the obligations under the Miner Equipment Lender Facility could, at the option of the Election 2 Miner Equipment Facility Lenders, accrue interest at a rate equal to an additional 2.0 % per annum over the rate otherwise applicable, with such interest being payable in cash on demand.

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Loans issued under the Miner Equipment Lender Facility were secured by a first-priority, duly-perfected and validly enforceable lien on (i) the collateral securing each Election 2 Miner Equipment Facility Lenders’ existing equipment loan/lease and (ii) new, non-financed miners acquired by the Company after the Effective Date, in an aggregate amount of up to $ 18.2 million (collectively, the “Equipment Priority Collateral”).

On the Effective Date, under the terms of the Plan of Reorganization, each Miner Equipment Facility Lender entered into a separate intercreditor agreement with the Secured Convertible Notes Agent, the Secured Notes Agent and the Exit Agent (as defined in the Plan of Reorganization) with respect to the Equipment Priority Collateral.

The present value of the Miner Equipment Lender Facility’s cash flows were estimated to be equal to its par amount, therefore no discount or premium was recorded on issuance.

The Miner Equipment Lender Facility contained customary covenants, representations and warranties.

Previous Indebtedness Extinguished During Fiscal 2024

The Replacement DIP Facility provided for a non-amortizing super-priority senior secured term loan facility in an aggregate principal amount not to exceed $ 70 million.

20 unchanged sentences

The gain on extinguishment is reported in Reorganization items, net.

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

On the Effective Date, pursuant to the Plan of Reorganization, the Company issued the following debt instruments, which are defined and described in further detail below (in thousands):

5 unchanged sentences

In addition, approximately $ 15.0 million of debt was reinstated pursuant to the Plan of Reorganization.

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Exit Credit Agreement

Below is a description of the Exit Credit Agreement prior to its repayment in full on August 19, 2024.

There is currently no outstanding Exit Credit Agreement.

On the Effective Date, under the terms of the Plan of Reorganization, the Company entered into a credit and guaranty agreement, dated as of January 23, 2024 (the “Exit Credit Agreement”), by and among the Company, as borrower, the guarantors named therein, the lenders party thereto and Wilmington Trust, National Association, as administrative agent and collateral agent, consisting of an $ 80 million first-lien credit facility with certain holders of the Company’s April convertible notes and August convertible notes (in such capacity, the “Exit Lenders”) equal to (i) a $ 40 million term loan comprised of (x) a $ 20 million initial term loan and (y) a $ 20 million delayed-draw term loan and (ii) a $ 40 million roll-up of the outstanding balance of the April convertible notes and August convertible notes (the “Exit Facility”).

The Exit Facility will mature on January 23, 2027.

From the Effective Date, cash borrowings under the Exit Facility bear interest at 9.0 % per annum, payable on the first business day of each Fiscal Quarter (as defined in the Exit Credit Agreement), commencing on April 1, 2024.

The Exit Facility amortizes in equal quarterly installments of $ 1.25 million beginning on January 1, 2026.

Upon the occurrence and during the continuance of an Event of Default (as such term is defined in the Exit Credit Agreement), the obligations under the Exit Facility shall automatically bear interest at a rate equal to an additional 2.0 % per annum over the rate otherwise applicable, with such interest being payable in cash on each interest payment date (unless the administrative agent demands prior payment).

The maturity date of the Exit Facility was January 23, 2027.

From the Effective Date, cash borrowings under the Exit Facility bore interest at 9.0 % per annum, payable on the first business day of each Fiscal Quarter (as defined in the Exit Credit Agreement), commencing on April 1, 2024.

The Exit Facility amortized in equal quarterly installments of $ 1.25 million beginning on January 1, 2026.

Upon the occurrence and during the continuance of an Event of Default (as such term is defined in the Exit Credit Agreement), the obligations under the Exit Facility automatically bore interest at a rate equal to an additional 2.0 % per annum over the rate otherwise applicable, with such interest being payable in cash on each interest payment date (unless the administrative agent demands prior payment).

At issuance, the Company identified embedded features in the Exit Facility and evaluated them for potential bifurcation in accordance with ASC 815-15.

1 unchanged sentence

The present value of the Exit Facility’s cash flows were estimated to be equal to its par amount, therefore no discount or premium was recorded on issuance.

Obligations under the Exit Credit Agreement are secured by a valid and perfected lien and security interest on substantially all assets and property of the Company and the guarantors thereof, including a first-priority lien on all new, unencumbered miner equipment purchased by the Company or any subsidiary thereof other than the following, which are each secured by a second priority lien on, (i) Equipment Priority Collateral (as defined below) and (ii) future financed equipment.

Obligations under the Exit Credit Agreement are guaranteed by all direct and indirect subsidiaries of the Company.

The Exit Facility provides for affirmative, negative and financial covenants, that, among other things, limit the ability of the Company and, in certain cases, certain of the Company’s subsidiaries, to incur more indebtedness;

Obligations under the Exit Credit Agreement were secured by a valid and perfected lien and security interest on substantially all assets and property of the Company and the guarantors thereof, including a first-priority lien on all new, unencumbered miner equipment purchased by the Company or any subsidiary thereof other than the following, which were each secured by a second priority lien on, (i) Equipment Priority Collateral (as defined below) and (ii) future financed equipment.

Obligations under the Exit Credit Agreement were guaranteed by all direct and indirect subsidiaries of the Company.

The Exit Facility provided for affirmative, negative and financial covenants, that, among other things, limited the ability of the Company and, in certain cases, certain of the Company’s subsidiaries, to incur more indebtedness;

pay dividends, redeem stock or make other distributions;

4 unchanged sentences

and enter into certain transactions with our affiliates.

The Exit Facility also imposes financial maintenance covenants in the form of a maximum leverage ratio and minimum liquidity requirements.

The Exit Facility contains certain events of default, including, without limitation, nonpayment of principal, nonpayment of interest, fees or other obligations after three business days, bankruptcy events of the Company or any of its subsidiaries and certain changes of control.

Secured Notes Indenture

On the Effective Date, under the terms of the Plan of Reorganization, the Company issued $ 150.0 million aggregate principal amount of senior secured notes due 2028 (the “Secured Notes”) pursuant to a secured notes indenture (the “Secured Notes Indenture”) among (i) the Company, as the issuer, (ii) the guarantors named therein and (iii) Wilmington Trust, National Association, as trustee and collateral agent (the “Secured Notes Agent”).

The maturity date of the Secured Notes is January 23, 2028.

The Secured Notes bear interest at a rate of 12.5 % per annum, payable on March 15, June 15, September 15 and December 15 of each year, beginning on June 15, 2024.

There is no amortization on the Secured Notes prior to maturity.

The Secured Notes are secured by a valid and perfected second lien and security interest on substantially all assets of the Company and the guarantors thereof, which liens are junior in priority to liens securing the Exit Facility and are subject to the terms of the New Intercreditor Agreement.

The Secured Notes are guaranteed by all direct and indirect subsidiaries of the Company.

The Company is entitled to prepay the notes prior to maturity.

If the notes are prepaid after the first year (including in the event that the notes are accelerated), or if the notes are not paid when due at the stated maturity, the Company is required to pay a premium on the outstanding principal amount equal to:

(a) 1.00 % of the aggregate principal amount of the notes then outstanding, if the notes are prepaid on or after the first anniversary of the Issue Date (as such term is defined in the Secured Notes Indenture) and prior to the

The Exit Facility also imposed financial maintenance covenants in the form of a maximum leverage ratio and minimum liquidity requirements.

The Exit Facility contained certain events of default, including, without limitation, nonpayment of principal, nonpayment of interest, fees or other obligations after three business days, bankruptcy events of the Company or any of its subsidiaries and certain changes of control.

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

second anniversary of the Issue Date, (b) 2.00 % of the aggregate principal amount of the notes then outstanding, if the notes are prepaid on or after the second anniversary of the Issue Date and prior to the third anniversary of the Issue Date and (c) 3.00 % of the aggregate principal amount of the notes then outstanding, if the notes are prepaid on or after the third anniversary of the Issue Date or if the notes are not paid when due at maturity, in each case whether such payment is made before or after an event of default or an acceleration (including any acceleration as a result of an insolvency proceeding) of all or part of the notes.

Secured Notes Indenture

Below is a description of the Secured Notes (as defined below) prior to their repayment in full on August 19, 2024.

There are currently no outstanding Secured Notes.

The maturity date of the Secured Notes was January 23, 2028.

The Secured Notes bore interest at a rate of 12.5 % per annum, payable on March 15, June 15, September 15 and December 15 of each year, beginning on June 15, 2024.

There was no amortization on the Secured Notes prior to maturity.

The Secured Notes were secured by a valid and perfected second lien and security interest on substantially all assets of the Company and the guarantors thereof, which liens were junior in priority to liens securing the Exit Facility and were subject to the terms of the New Intercreditor Agreement.

The Secured Notes were guaranteed by all direct and indirect subsidiaries of the Company.

The Company was entitled to prepay the notes prior to maturity.

If the notes were prepaid after the first year (including in the event that the notes are accelerated), or if the notes were not paid when due at the stated maturity, the Company was required to pay a premium on the outstanding principal amount equal to:

(a) 1.00 % of the aggregate principal amount of the notes then outstanding, if the notes were prepaid on or after the first anniversary of the Issue Date (as such term is defined in the Secured Notes Indenture) and prior to the second anniversary of the Issue Date, (b) 2.00 % of the aggregate principal amount of the notes then outstanding, if the notes were prepaid on or after the second anniversary of the Issue Date and prior to the third anniversary of the Issue Date and (c) 3.00 % of the aggregate principal amount of the notes then outstanding, if the notes were prepaid on or after the third anniversary of the Issue Date or if the notes were not paid when due at maturity, in each case whether such payment was made before or after an event of default or an acceleration (including any acceleration as a result of an insolvency proceeding) of all or part of the notes.

No prepayment premium shall be applicable in connection with any prepayment, repayment or refinancing that occurs prior to the first anniversary of the Issue Date.

1 unchanged sentence

The identified embedded features were determined to be clearly and closely related to the debt host and not subject to bifurcation.

The present value of the Secured Notes’ cash flows at issuance were estimated to be $ 149.5 million, the discount is amortized to result in recognition of a level effective interest rate.

The Secured Notes Indenture contains affirmative and negative covenants consistent with those in the Exit Facility and the New Secured Convertible Notes Indenture (as defined below) that, among other things, limit the ability of the Company and, in certain cases, certain of the Company’s subsidiaries to incur more indebtedness;

The present value of the Secured Notes’ cash flows at issuance were estimated to be $ 149.5 million, the discount was amortized to result in recognition of a level effective interest rate.

The Secured Notes Indenture contained affirmative and negative covenants consistent with those in the Exit Facility and the New Secured Convertible Notes Indenture (as defined below) that, among other things, limited the ability of the Company and, in certain cases, certain of the Company’s subsidiaries to incur more indebtedness;

pay dividends, redeem stock or make other distributions;

4 unchanged sentences

and enter into certain transactions with its affiliates.

The Secured Notes Indenture contains certain events of default, including, without limitation, nonpayment of principal, nonpayment of fees, interest or other obligations after three business days, violations of the covenants (subject, in the case of certain affirmative covenants, to certain grace periods), and bankruptcy events of the Company or any of its subsidiaries.

The Secured Notes Indenture contained certain events of default, including, without limitation, nonpayment of principal, nonpayment of fees, interest or other obligations after three business days, violations of the covenants (subject, in the case of certain affirmative covenants, to certain grace periods), and bankruptcy events of the Company or any of its subsidiaries.

New Secured Convertible Notes Indenture;

Interest Payment and Mandatory Conversion

The New Secured Convertible Notes (as defined below) were mandatorily converted as of July 10, 2024 and are no longer outstanding.

On the Effective Date, under the terms of the Plan of Reorganization, the Company issued $ 260.0 million aggregate principal amount of secured convertible notes due 2029 (the “New Secured Convertible Notes”) pursuant to a secured convertible notes indenture (the “New Secured Convertible Notes Indenture”) among (i) Core Scientific, Inc., as the issuer, (ii) the guarantors party thereto and (iii) Wilmington Trust, National Association, as trustee and as collateral agent for the New Secured Convertible Notes (in such capacity, the “Secured Convertible Notes Agent”).

The New Secured Convertible Notes were issued to holders of the Company’s April convertible notes and August convertible notes.

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

The maturity date of the New Secured Convertible Notes was January 23, 2029.

2 unchanged sentences

The Company exercised its option to make the June 15, 2024 interest payment 6 % in cash for approximately $ 6.0 million and 6 % in stock and issued 881,610 shares of its New Common Stock to the holders of the New Secured Convertible Notes on that date for total interest expense of approximately $ 9.8 million.

During the three months ended June 30, 2024, $ 26.4 million of New Secured Convertible Notes including interest were voluntarily converted for 4.5 million shares of New Common Stock.

Prior to the mandatory conversion on July 10, 2024, $ 26.4 million of New Secured Convertible Notes including interest were voluntarily converted for 4.5 million shares of New Common Stock.

On July 5, 2024, the mandatory conversion feature of the New Secured Convertible Notes pursuant to the Indenture, dated as of January 23, 2024 (the “Indenture”), by and among the Company, as issuer, Wilmington Trust, National Association (“Wilmington Trust”), as trustee and collateral agent, and the other parties thereto, was triggered when the trading price of the Company’s New Common Stock on a daily volume weighted average basis (“VWAP”) exceeded the applicable threshold specified in the Indenture for the 20 th consecutive trading day.

1 unchanged sentence

Following the mandatory conversion of the New Secured Convertible Notes, 40.1 million shares of the Company’s New Common Stock in the aggregate were issued in exchange for $ 233.6 million aggregate principal amount of the New Secured Convertible Notes.

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Description of the New Secured Convertible Notes Indenture Prior to the Mandatory Conversion

1 unchanged sentence

There are currently no outstanding New Secured Convertible Notes.

The New Secured Convertible Notes are secured by a valid and perfected third lien and security interest on substantially all assets of the Company and the guarantors thereof, and which liens are junior in priority to liens securing the Exit Facility and Secured Notes and are subject to the terms of the New Intercreditor Agreement.

The New Secured Convertible Notes are guaranteed by all direct and indirect subsidiaries of the Company.

Upon the occurrence of a Fundamental Change (as such term is defined in the New Secured Convertible Notes Indenture), the holders of the New Secured Convertible Notes have the right to require the Company to purchase all or any portion of such holder’s New Secured Convertible Notes at the principal amount thereof plus accrued interest to the repurchase date.

Holders may elect to convert the New Secured Convertible Notes into shares of New Common Stock at any time prior to maturity at an initial conversion rate of 171.48 shares of New Common Stock per $1,000 principal amount of New Secured Convertible Notes (equal to a conversion price of $ 5.8317 per share of New Common Stock), which the Company may deliver in cash, New Common Stock or a combination thereof.

The conversion price is subject to anti-dilution adjustments upon (among other triggering events) the occurrence of certain dilutive transactions, including share dividends, splits, combinations and reclassification.

The New Secured Convertible Notes also automatically convert into New Common Stock if the volume weighted average price for each day for any 20 consecutive trading days is greater than or equal to 133.6 % of the as-adjusted conversion price of $ 7.79 .

The New Secured Convertible Notes were secured by a valid and perfected third lien and security interest on substantially all assets of the Company and the guarantors thereof, and which liens were junior in priority to liens securing the Exit Facility and Secured Notes and were subject to the terms of the New Intercreditor Agreement.

The New Secured Convertible Notes were guaranteed by all direct and indirect subsidiaries of the Company.

Upon the occurrence of a Fundamental Change (as such term is defined in the New Secured Convertible Notes Indenture), the holders of the New Secured Convertible Notes had the right to require the Company to purchase all or any portion of such holder’s New Secured Convertible Notes at the principal amount thereof plus accrued interest to the repurchase date.

Holders could elect to convert the New Secured Convertible Notes into shares of New Common Stock at any time prior to maturity at an initial conversion rate of 171.48 shares of New Common Stock per $1,000 principal amount of New Secured Convertible Notes (equal to a conversion price of $ 5.8317 per share of New Common Stock), which the Company could deliver in cash, New Common Stock or a combination thereof.

The conversion price was subject to anti-dilution adjustments upon (among other triggering events) the occurrence of certain dilutive transactions, including share dividends, splits, combinations and reclassification.

The New Secured Convertible Notes also automatically converted into New Common Stock if the volume weighted average price for each day for any 20 consecutive trading days was greater than or equal to 133.6 % of the as-adjusted conversion price of $ 7.79 .

At issuance, the Company identified embedded features in the New Secured Convertible Notes and evaluated them for potential bifurcation in accordance with ASC 815-15.

5 unchanged sentences

The New Secured Convertible Notes were estimated to have a present value of $ 293.2 million on issuance.

$ 260.0 million was initially recognized as debt and $ 33.2 million was initially recognized as additional paid-in capital.

Under the relevant guidance, neither balance is subject to recognition of recurring remeasurements.

The New Secured Convertible Notes Indenture contains affirmative and negative covenants consistent with those in the Exit Facility and the Secured Notes Indenture that, among other things, limit the ability of the Company and, in certain cases, certain of the Company’s subsidiaries to incur more indebtedness;

$ 260.0 million was initially recognized as debt and $ 33.2 million was

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

initially recognized as additional paid-in capital.

Under the relevant guidance, neither balance was subject to recognition of recurring remeasurements.

The New Secured Convertible Notes Indenture contained affirmative and negative covenants consistent with those in the Exit Facility and the Secured Notes Indenture that, among other things, limited the ability of the Company and, in certain cases, certain of the Company’s subsidiaries to incur more indebtedness;

pay dividends, redeem stock or make other distributions;

4 unchanged sentences

and enter into certain transactions with its affiliates.

The New Secured Convertible Notes Indenture contains certain events of default, including, without limitation, nonpayment of principal, nonpayment of interest, fees or other obligations after three business days, and bankruptcy events of the Company or any of its subsidiaries.

Miner Equipment Lender Agreements (BlockFi and Stonebriar)

On the Effective Date, under the terms of the Plan of Reorganization, the Company entered into separate New Miner Equipment Lender Agreements (Election 2) with each holder of an Allowed Miner Equipment Lender Secured Claim that is a Settling Miner Equipment Lender that elected on its ballot to receive and is receiving the Miner Equipment Lender Treatment Election 2 (the “Election 2 Miner Equipment Facility Lenders”), in each case, in the principal amount of eighty percent ( 80 %) of each applicable Holders’ Allowed Miner Equipment Lender Claim as of the Effective Date (the “Miner Equipment Lender Facility”).

The maturity date on the Miner Equipment Lender Facility is January 23, 2029.

Loans issued under the Miner Equipment Lender Facility accrue interest (1) from the Effective Date to and including the second anniversary of the Effective Date, (x) if the Company does not deliver an Election Notice (as defined below), at a rate of 13.0 % per annum and shall be payable 3.0 % in cash interest and 10.0 % paid-in-kind, and (y) if the Company delivers a written notice to the Election 2 Miner Equipment Facility Lenders five (5) business days prior to the due date of any interest payment during this period (an “Election Notice”), the Company may elect to have interest accrue at either (a) 12.0 % per annum, payable 5.0 % in cash and 7.0 % paid-in-kind or (ii) 8.0 % per annum, payable in cash and (2) following the second anniversary of the Effective Date, at a rate of 10.0 % per annum, payable in cash.

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Equipment Facility Lenders, accrue interest at a rate equal to an additional 2.0 % per annum over the rate otherwise applicable, with such interest being payable in cash on demand.

The Company did not deliver an election notice on the Miner Equipment Lender Facility in June 2024 and paid the standard interest rate of 3.0 % cash interest and 10.0 % paid-in-kind (“PIK”) interest for the second quarter of 2024.

For the three months ended June 30, 2024, the Company paid $ 0.4 million in cash interest and $ 1.2 million in PIK interest on the BlockFi lender facility.

For the six months ended June 30, 2024, the Company paid $ 0.6 million in cash interest and $ 2.1 million in PIK interest on the BlockFi lender facility.

Loans issued under the Miner Equipment Lender Facility are secured by a first-priority, duly-perfected and validly enforceable lien on (i) the collateral securing each Election 2 Miner Equipment Facility Lenders’ existing equipment loan/lease and (ii) new, non-financed miners acquired by the Company after the Effective Date, in an aggregate amount of up to $ 18,204,559 (collectively, the “Equipment Priority Collateral”).

The present value of the Miner Equipment Lender Facility’s cash flows were estimated to be equal to its par amount, therefore no discount or premium was recorded on issuance.

The Miner Equipment Lender Facility contains customary covenants, representations and warranties.

As of June 30, 2024, the Company believes it was in compliance with the provisions and financial covenants in their respective material debt agreements in all material respects.

The New Secured Convertible Notes Indenture contained certain events of default, including, without limitation, nonpayment of principal, nonpayment of interest, fees or other obligations after three business days, and bankruptcy events of the Company or any of its subsidiaries.

CONTINGENT VALUE RIGHTS AND WARRANT LIABILITIES

1 unchanged sentence

On the Effective Date, under the terms of the Plan of Reorganization, the Company entered into the Contingent Value Rights Agreement and recorded the liabilities at fair value as of the Effective Date.

Pursuant to the Contingent Value Rights Agreement, the Company issued 51,783,625 CVRs to holders of the Company’s April convertible notes and August convertible notes who received New Common Stock (as defined in Note 10 — Stockholders' Deficit) (in such capacity, the “Payees”) in an aggregate amount of 51,783,625 shares of New Common Stock (the “Corresponding New Common Stock”).

Pursuant to the Contingent Value Rights Agreement, the Company issued 51,783,625 CVRs to holders of the Company’s April convertible notes and August convertible notes who received New Common Stock (in such capacity, the “Payees”) in an aggregate amount of 51,783,625 shares of New Common Stock (the “Corresponding New Common Stock”).

The CVRs require the Company to make payments to each Payee, of:

1 unchanged sentence

provided that the Year 1 Contingent Payment Obligation will be extinguished if the fair market value of the Corresponding New Common Stock is equal to or in excess of $ 260,000,000 with respect to the first testing date;

as of September 30, 2024, the fair market value of the Corresponding New Common Stock was in excess of $ 260,000,000 .

• (ii) at the second testing date, cash or New Common Stock (or a combination of cash and New Common Stock), in the Company’s sole discretion, equal to such Payee’s pro rata share (the “Year 2 Contingent Payment Obligation”) of the lesser of (a) $ 43,333,333.33 and (b) the difference between (1) $ 260,000,000 minus the First Anniversary Payment Amount and (2) the fair market value of the Corresponding New Common Stock (the “Second Anniversary Payment Amount”);

2 unchanged sentences

provided that the Year 3 Contingent Payment Obligation will be extinguished if the fair market value of the Corresponding New Common Stock is equal to or in excess of $ 260,000,000 minus (1) the First Anniversary Payment amount, if any and (2) the Second Anniversary Payment Amount, if any, with respect to the third testing date.

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

GUC Contingent Value Rights and Extinguishment

On the Effective Date, pursuant to the Plan of Reorganization, the Company issued (i) 20,335,491 shares of New Common Stock to holders of allowed general unsecured claims (the “GUC Equity Distribution”) and (ii) GUC CVRs to holders of allowed general unsecured claims.

The terms of the GUC CVRs provided that unless the value of the GUC Equity Distribution, as implied by the volume weighted average (“VWAP”) of the closing price during any 20 trading days over any consecutive 30 trading day period during the period beginning on the Effective Date and ending on the date 18 months following the Effective Date (the “ GUC CVR Testing Period”), is equal to or in excess of the GUC Equity Distribution at Plan Value, the Company would be required to pay to each GUC Payee New Common Stock in an amount equal to the lesser of (i) such GUC Payee’s pro rata share of the New Common Stock with an aggregate value, based on Plan Value, of $ 7,100,000 and (ii) the difference between (a) the GUC Equity Distribution at Plan Value and (b) the value of the GUC Equity Distribution as implied by the volume weighted average of the closing price of the GUC Equity Distribution during the 60 trading days prior to the GUC CVR Testing Date.

On July 1, 2024, the GUC CVRs were extinguished following the VWAP of the Company’s New Common Stock exceeding the applicable threshold specified therein for 20 trading days within a 30 consecutive trading day period.

As of June 30, 2024, the GUC CVRs were estimated to have no fair value.

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

value of the GUC Equity Distribution as implied by the volume weighted average of the closing price of the GUC Equity Distribution during the 60 trading days prior to the GUC CVR Testing Date.

On July 1, 2024, the GUC CVR obligations were extinguished pursuant to their terms when the VWAP of the Company’s New Common Stock on Nasdaq National Market System exceeded $ 5.02 for 20 trading days within the applicable 30 consecutive trading day period.

Warrant Agreement

3 unchanged sentences

Each whole Tranche 2 Warrant entitles the registered holder to purchase one whole share of New Common Stock at an exercise price of $ 0.01 per share at any time following the time the volume weighted average price per share of New Common Stock equals or exceeds $ 8.72 per share on each trading day for 20 consecutive trading days (the “Triggering Event”), which event occurred on July 11, 2024.

As of June 30, 2024, the Triggering Event for the Tranche 2 Warrants had not occurred.

The Tranche 1 and Tranche 2 Exercise Prices are subject to adjustment for specific events as set forth in the Warrant Agreement.

7 unchanged sentences

The Warrants may be exercised upon prior written notice of such election, payment of the applicable exercise price (together with any applicable taxes and governmental charges) and, with respect to Warrants held through the book-entry facilities of the Depository (as defined in the Warrant Agreement), surrender of the warrant certificate on or prior to the settlement date.

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(as of the business day immediately preceding the date on which the exercise notice was delivered) of one share of New Common Stock, minus the applicable exercise price, divided by (y) such fair market value.

The Tranche 2 Warrants may be exercised on a cashless basis, pursuant to which the holder shall be entitled to receive a number of shares of New Common Stock equal to one share of New Common Stock multiplied by a fraction equal to (x) the fair market value (as of the business day immediately preceding the date on which the exercise notice was delivered) of one share of New Common Stock, minus the applicable exercise price, divided by (y) such fair market value.

Holders of Warrants do not have the rights or privileges of holders of New Common Stock or any voting rights until they exercise their Warrants and receive shares of New Common Stock.

3 unchanged sentences

Effective January 24, 2024, the Tranche 1 Warrants and Tranche 2 Warrants began trading on the Nasdaq Global Select Market under the symbols “CORZW” and “CORZZ,” respectively.

During the three months ended June 30, 2024, 53,870 Tranche 1 Warrants were exercised, which resulted in cash receipts of $ 0.4 million.

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

During the three and nine months ended September 30, 2024, 0.2 million and 0.2 million Tranche 1 Warrants were exercised, respectively, which resulted in cash receipts of $ 1.1 million and $ 1.5 million, respectively.

The Tranche 2 Warrants became exercisable as of the close of trading on July 11, 2024, when the daily volume weighted average trading price of the Company’s New Common Stock exceeded $ 8.72 per share for the 20 th consecutive trading day pursuant to the Warrant Agreement.

During the three and nine months ended September 30, 2024, 51.5 million Tranche 2 Warrants were exercised, which resulted in cash receipts of $ 0.4 million.

FAIR VALUE MEASUREMENTS

10 unchanged sentences

When these instruments were recognized on the Effective Date, observable market data was not available.

As of June 30, 2024, observable Level 1 market data was available for the CVRs and Warrants.

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

The following presents the levels of the fair value hierarchy for the Company's derivatives measured at fair value on a recurring basis as of June 30, 2024 (in thousands):

June 30, 2024

As of September 30, 2024, observable Level 1 market data was available for the CVRs and Warrants.

The following presents the levels of the fair value hierarchy for the Company's derivatives measured at fair value on a recurring basis as of September 30, 2024 (in thousands):

September 30, 2024

Fair value hierarchy

7 unchanged sentences

Total liabilities measured at fair value on a recurring basis $ 1,024,290 $ — $ — $ 1,024,290

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Level 2 Recurring Fair Value Measurements

4 unchanged sentences

Financial statement line item

September 30,

2024 December 31,

2 unchanged sentences

The Company recorded the following losses related to the energy forward purchase contract on the Company’s Condensed Consolidated Statements of Operations (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

Financial statement line item

2 unchanged sentences

Change in fair value of energy derivatives $ — $ — $ ( 2,757 ) $ —

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Level 3 Recurring Fair Value Measurements

The following presents a rollforward of the activity for the GUC CVRs liability measured at fair value on a recurring basis using Level 3 inputs as of June 30, 2024 (in thousands):

Balance at December 31, 2023 $ —

Unrealized gains

Balance at March 31, 2024 3,174

Unrealized gains

Balance at June 30, 2024 $ —

The CVRs and warrants had no balance at December 31, 2023.

On the Effective Date they were measured using Level 3 inputs as no market existed for them at that time.

Since the Effective Date, active markets have developed for those instruments and the Company uses Level 1 quoted market prices for their valuation as of June 30, 2024.

All transfers into and out of Level 3 are assumed to occur at the beginning of the quarterly reporting period in which they occur.

As of December 31, 2023, there were no Level 3 financial instruments.

The fair value of the GUC CVRs was previously estimated using simulated Company stock price paths in a Monte Carlo simulation model.

The inputs into the simulation model are similar to those used in Black-Scholes option models.

They include the Company’s stock price and dividend yield, risk-free rate, term and estimated volatility.

The estimated volatility is considered to be a significant unobservable input into the simulation model.

As of June 30, 2024, the GUC CVRs were estimated to have no fair value.

On July 1, 2024, the GUC CVR Trigger was met and the GUC CVRs were extinguished with no payment or further obligation.

Nonrecurring fair value measurements

1 unchanged sentence

These assets are adjusted to fair value only when an impairment is recognized, or the underlying asset is held for sale.

No non-financial assets were classified as Level 3 as of June 30, 2024 or December 31, 2023.

No non-financial assets were classified as Level 3 as of September 30, 2024 or December 31, 2023.

Fair value of financial instruments

The Company’s financial instruments, that are not subject to recurring fair value measurements, include cash and cash equivalents, restricted cash, accounts receivable, net, accounts payable, leases, notes payable and certain accrued expenses and other liabilities.

The Company’s financial instruments, that are not subject to recurring fair value measurements, include cash and cash equivalents, restricted cash, accounts receivable, accounts payable, leases, notes payable and certain accrued expenses and other liabilities.

Except for the Convertible Notes, the carrying amount of these financial instruments materially approximate their fair values.

As of June 30, 2024, the fair value of the Convertible Notes using Level 1 active market price was $ 390.3 million.

As of September 30, 2024, the fair value of the Convertible Notes using Level 1 active market price was $ 631.1 million.

COMMITMENTS AND CONTINGENCIES

As of September 30, 2024, the Company had open commitments related to construction contracts of approximately $ 660.1 million, substantially all of which is reimbursable by the customer.

On July 5, 2024, the Company entered into a purchase agreement with Block, Inc.

for the purchase of 3 nanometer Application Specific Integrated Circuits chips (“ASIC chips”) representing approximately 15 EH/s of hash rate.

On July 12, 2024, the Company paid a $ 10.0 million deposit which will be applied evenly towards the ASIC chips.

Payments are due in installments, starting six months prior to delivery.

Delivery of the ASIC chips is expected to begin by the end of 2025.

Legal Proceedings —The Company is subject to legal proceedings arising in the ordinary course of business.

The Company accrues losses for a legal proceeding when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated.

However, the uncertainties inherent in legal proceedings make it difficult to reasonably estimate the costs and effects of resolving these matters.

Accordingly, actual costs incurred may differ materially from amounts accrued and could materially adversely affect the Company’s business, cash flows, results of operations, financial condition and prospects.

Unless otherwise indicated, the Company is unable to estimate reasonably possible losses in excess of any amounts accrued.

However, the uncertainties inherent in legal proceedings make it difficult to reasonably estimate the costs and effects of

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

resolving these matters.

Unless otherwise indicated, the Company is unable to estimate reasonably possible losses in excess of any amounts accrued.

Purported Shareholder Class Action (“Pang”)

10 unchanged sentences

On June 7, 2024, Plaintiff refiled its complaint asserting that the individual defendants violated the Securities Exchange Act by allegedly failing to disclose to investors that among other things the Company failed to disclose known trends or uncertainties that would have an impact on the Company’s financial performance.

The Company’s motion to dismiss the refiled complaint is pending with the United States District Court in Austin, Texas.

Purported Shareholder Class Action (“Ihle”)

29 unchanged sentences

As a general unsecured creditor under the Plan of Reorganization, any amount determined to be owed to plaintiff will be paid in common shares of the Company as provided in the Plan of Reorganization.

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Contract Claims

3 unchanged sentences

Additionally, GEM 1 and GEM 4 filed proofs of claim in the Chapter 11 Case asserting approximately $ 8 million in rejection damages.

The Debtors are

Core Scientific, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

currently preparing an objection to these claims along with a reply to GEM’s response to the Debtors’ earlier filed objections.

The Debtors are currently preparing an objection to these claims along with a reply to GEM’s response to the Debtors’ earlier filed objections.

As a general unsecured creditor under the Plan of Reorganization, any amount determined to be owed to plaintiff will be paid in common shares of the Company as provided in the Plan of Reorganization.

As of June 30, 2024 and December 31, 2023, there were no other material loss contingency accruals for legal matters.

As of September 30, 2024 and December 31, 2023, there were no other material loss contingency accruals for legal matters.

Leases —See Note 5 — Leases for additional information.

32 unchanged sentences

In accordance with the Plan of Reorganization, the Company adopted an equity-based management incentive plan on April 26, 2024 (the “Incentive Plan”).

The Incentive Plan provides for the grant of nonqualified stock options, stock appreciation rights, shares of restricted stock, restricted stock units, performance awards, dividend equivalent rights and other stock-based awards.

The Incentive Plan provides for the grant of non-qualified stock options, stock appreciation rights, shares of restricted stock, restricted stock units, performance awards, dividend equivalent rights and other stock-based awards.

The Incentive Plan provides for grants of up to 40,000,000 shares of the Company’s Common Stock in respect of awards, subject to adjustment as provided in the Incentive Plan, and limits the aggregate compensation that may be paid to the Company’s non-employee directors in respect of any single fiscal year (including awards under the Incentive Plan) to a total of $ 800,000 .

4 unchanged sentences

The MSU vesting schedule is proportionate over a three-year service period where such proportions are identified as tranches with separate service conditions and measurement periods for the market conditions.

If certain market-based share price goals are not met during certain tranche measurement periods, the ability to satisfy such goals apply in subsequent measurement periods and permit vesting if such market conditions are then met (and the service conditions are then satisfied).

conditions are then met (and the service conditions are then satisfied).

The following table presents additional information relating to each MSU award:

24 unchanged sentences

Stock-Based Compensation

During the six months ended June 30, 2024, the Company did no t grant any stock options, while 1.9 million stock options expired or were forfeited.

Total unrecognized stock-based compensation expense related to unvested stock options was immaterial as of June 30, 2024.

A summary of RSU and MSU activity for the six months ended June 30, 2024, is as follows (amounts in thousands, except per share amounts):

During the nine months ended September 30, 2024, the Company did no t grant any stock options, while 1.9 million stock options expired or were forfeited.

Total unrecognized stock-based compensation expense related to unvested stock options was immaterial as of September 30, 2024.

A summary of RSU and MSU activity for the nine months ended September 30, 2024, is as follows (amounts in thousands, except per share amounts):

Restricted Stock Units

16 unchanged sentences

( 2,238 ) 18.33 ( 155 ) 3.99

Unvested - June 30, 2024

Unvested - September 30, 2024

20,247 $ 7.29 2,659 $ 6.06

As of June 30, 2024, the Company had approximately $ 124.0 million of unrecognized stock-based compensation expense related to RSUs, which is expected to be recognized over a weighted average time period of 3.0 years, and an additional $ 19.0 million of unrecognized stock-based compensation expense related to MSUs for which some or all of the requisite service has been provided under the service conditions but had market conditions that had not yet been achieved.

As of September 30, 2024, the Company had approximately $ 125.6 million of unrecognized stock-based compensation expense related to RSUs, which is expected to be recognized over a weighted average time period of 2.7 years, and an additional $ 11.4 million of unrecognized stock-based compensation expense related to MSUs for which some or all of the requisite service has been provided under the service conditions but had market conditions that had not yet been achieved.

The unrecognized stock-based compensation expense related to MSUs is expected to be recognized over a weighted average time period of 2.3 years.

Stock-based compensation expense for the three and six months ended June 30, 2024 and 2023, is included in the Company’s Condensed Consolidated Statements of Operations as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Stock-based compensation expense for the three and nine months ended September 30, 2024 and 2023, is included in the Company’s Condensed Consolidated Statements of Operations as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

4 unchanged sentences

15,059 12,507 16,439 35,102

Total stock-based compensation expense

Stock-based compensation expense, net of amounts capitalized

20,288 14,861 27,722 41,414

Capitalized stock-based compensation 1

Total stock-based compensation cost

$ 20,523 $ 14,861 $ 27,957 $ 41,414

1 Represents the amounts of stock-based compensation capitalized to property, plant, and equipment.

Current income tax expense represents the amount expected to be reported on the Company’s income tax returns, and deferred tax expense or benefit represents the change in net deferred tax assets and liabilities.

1 unchanged sentence

Valuation allowances are recorded as appropriate to reduce deferred tax assets to the amount considered likely to be realized.

The income tax expense and effective income tax rate for the three and six months ended June 30, 2024 and 2023 were as follows:

Three Months Ended June 30, Six Months Ended June 30,

The income tax expense and effective income tax rate for the three and nine months ended September 30, 2024 and 2023 were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

3 unchanged sentences

— % ( 0.3 ) % — % ( 0.7 ) %

For the three and six months ended June 30, 2024, the Company recorded $ 0.1 million and $ 0.4 million, respectively, of income tax expense which consisted of discrete state taxes.

For the three and nine months ended September 30, 2024, the Company recorded $ 0.1 million and $ 0.5 million, respectively, of income tax expense which consisted of discrete state taxes.

The Company's estimated annual effective income tax rate without consideration of discrete items is 0.0 %, compared to the U.S.

1 unchanged sentence

The Company has a full valuation allowance on its net deferred tax asset as the evidence indicates that it is not more likely than not expected to realize such asset.

For the three and six months ended June 30, 2023, the Company recorded $ 0.1 million and $ 0.2 million, respectively, of income tax expense.

For the three and nine months ended September 30, 2023, the Company recorded $ 0.1 million and $ 0.3 million, respectively, of income tax expense.

The Company's estimated annual effective income tax rate was ( 0.7 )%, compared to the U.S.

2 unchanged sentences

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS

Basic earnings per share (“EPS”) is measured as the income or loss available to common stockholders divided by the weighted average common shares outstanding for the period.

Approximately 30.5 million shares of common stock issuable upon the exercise of the Tranche 2 Warrants are included in the number of outstanding shares used for the computation of basic net loss per share for the three and nine months ended September 30, 2024.

Additionally, the basic EPS numerator includes an adjustment to eliminate the change in fair value effects that have been recorded in net income from the close of trading on July 11, 2024, the date the Tranche 2 Warrants became exercisable, through September 30, 2024.

Since the shares are issuable for little or no consideration, sometimes referred to as “penny warrants”, they are considered outstanding in the computation of basic EPS, as discussed in ASC 260-10-45-13.

Diluted EPS presents the dilutive effect on a per-share basis from the potential conversion of convertible securities or the exercise of options and/or warrants;

the dilutive impacts of potentially convertible securities are calculated using the if-converted method;

the potentially dilutive effect of options or warrants are computed using the treasury stock method.

Securities that potentially have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the diluted EPS calculation.

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted loss per share (in thousands, except per share amounts):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Net loss $ ( 455,259 ) ( 41,146 ) $ ( 1,049,464 ) $ ( 50,794 )

Change in fair value of Tranche 2 Warrants

111,834 — 111,834 —

Basic and diluted net loss

$ ( 343,425 ) $ ( 41,146 ) $ ( 937,630 ) $ ( 50,794 )

Weighted average shares outstanding - basic

7 unchanged sentences

Potentially dilutive securities are as follows (in common stock equivalent shares, in thousands):

Three and Six Months Ended June 30, 2024

Three and Six Months Ended June 30, 2023

Three and Nine Months Ended

September 30, 2024 September 30, 2023

Stock options

Tranche 1 Warrants

Restricted stock and restricted stock units

Restricted stock units

20,247 38,646

Market condition restricted stock units

Warrants — 14,892

6 unchanged sentences

The Company now has three operating segments:

“Digital Asset Self-Mining”, consisting of digital asset mining for its own account;

“Digital Asset Hosted Mining”, consisting of our digital infrastructure and third-party hosting services for digital asset mining;

and “HPC Hosting”, consisting of our digital infrastructure and third-party hosting services for GPU-based HPC operations.

The Company’s HPC and cloud compute operations met the criteria to be considered a new segment during the second quarter of 2024.

The Digital Asset Self-Mining segment generates revenue from operating owned computer equipment as part of a pool of users that process transactions conducted on one or more blockchain networks.

“Digital Asset Self-Mining”, consisting of performing digital asset mining for its own account;

“Digital Asset Hosted Mining”, consisting of providing hosting services to third-parties for digital asset mining;

and “HPC Hosting”, consisting of providing hosting services to third parties for GPU-based HPC operations.

The Company’s HPC operations met the criteria to be considered a new segment during the second quarter of 2024.

The Digital Asset Self-Mining segment generates revenue from operating owned digital infrastructure and computer equipment as part of a pool of users that process transactions conducted on one or more blockchain networks.

In exchange for these services, the Company receives digital assets.

7 unchanged sentences

The following table presents revenue and gross profit by reportable segment for the periods presented (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

5 unchanged sentences

74,555 72,603 236,120 212,125

Digital Asset Self-Mining gross profit

Digital Asset Self-Mining gross (loss) profit

$ ( 6,417 ) $ 10,453 $ 92,720 $ 66,039

11 unchanged sentences

HPC Hosting gross profit

$ 1,297 $ — $ 1,925 $ —

HPC Hosting gross margin 13 % — % 12 % — %

2 unchanged sentences

$ 95,510 $ 97,485 $ 299,440 $ 276,312

Consolidated gross profit

Consolidated gross (loss) profit

$ ( 156 ) $ 15,419 $ 116,307 $ 84,159

1 unchanged sentence

— % 14 % 28 % 23 %

For the three months ended June 30, 2024 and 2023, cost of revenue included depreciation expense of $ 28.2 million and $ 18.8 million, respectively, for the Digital Asset Self-Mining segment.

For the three months ended June 30, 2024 and 2023, cost of revenue included d epreciation expense of $ 1.0 million and $ 1.5 million, respectively for the Digital Asset Hosted Mining segment.

three months ended June 30, 2024 and 2023, cost of revenue included d epreciation expense of a nominal amount and nil , respectively for the HPC Hosting segment.

For the six months ended June 30, 2024 and 2023, cost of revenue included depreciation expense of $ 55.7 million and $ 38.8 million, respectively for the Digital Asset Self-Mining segment.

For the six months ended June 30, 2024 and 2023, cost of revenue included d epreciation expense of $ 2.3 million and $ 1.8 million, respectively, for the Digital Asset Hosted Mining segment.

For the six months ended June 30, 2024 and 2023, cost of revenue included d epreciation expense of a nominal amount and nil , respectively, for the HPC Hosting segment.

For the three months ended September 30, 2024 and 2023, cost of revenue included depreciation expense of $ 27.4 million and $ 22.0 million, respectively, for the Digital Asset Self-Mining segment.

For the three months ended September 30, 2024 and 2023, cost of revenue included d epreciation expense of $ 0.9 million and $ 1.9 million, respectively for the Digital Asset Hosted Mining segment.

For the three months ended September 30, 2024 and 2023, cost of revenue included d epreciation expense of a nominal amount and nil , respectively for the HPC Hosting segment.

For the nine months ended September 30, 2024 and 2023, cost of revenue included depreciation expense of $ 83.1 million and $ 60.8 million, respectively for the Digital Asset Self-Mining segment.

For the nine months ended September 30, 2024 and 2023, cost of revenue included d epreciation expense of $ 3.2 million and $ 3.7 million, respectively, for the Digital Asset Hosted Mining segment.

For the nine months ended September 30, 2024 and 2023, cost of revenue included d epreciation expense of a nominal amount and nil , respectively, for the HPC Hosting segment.

Concentrations of Revenue and Credit Risk

2 unchanged sentences

The Company places its cash and cash equivalents with major financial institutions, which management assesses to be of high credit quality, in order to limit the exposure to credit risk.

As of June 30, 2024 and December 31, 2023, all of the Company’s fixed assets were located in the United States.

For the three and six months ended June 30, 2024 and 2023, all of the Company’s revenue was generated in the United States.

For the three and six months ended June 30, 2024, 78 % and 81 %, respectively, of the Company’s total revenue was generated from digital asset mining of bitcoin from one customer, which is subject to extreme price volatility.

For the three and six months ended June 30, 2023, 76 % and 79 %, respectively, of the Company’s total revenue was generated from digital asset mining of bitcoin from one customer.

For the three and six months ended June 30, 2024 and 2023, the concentration of customers comprising 10% or more of the Company’s Digital Asset Self-Mining, Digital Asset Hosted Mining, and HPC Hosting segment revenue were as follows:

Three Months Ended June 30, Three Months Ended June 30, Three Months Ended June 30,

As of September 30, 2024 and December 31, 2023, all of the Company’s fixed assets were located in the United States.

For the three and nine months ended September 30, 2024 and 2023, all of the Company’s revenue was generated in the United States.

For the three and nine months ended September 30, 2024, 71 % and 79 %, respectively, of the Company’s total revenue was generated from digital asset mining of bitcoin, which is subject to extreme price volatility, from one customer.

For the three and nine months ended September 30, 2023, 74 % and 77 %, respectively, of the Company’s total revenue was generated from digital asset mining of bitcoin from one customer.

For the three and nine months ended September 30, 2024 and 2023, the concentration of customers comprising 10% or more of the Company’s Digital Asset Self-Mining, Digital Asset Hosted Mining, and HPC Hosting segment revenue were as follows:

Three Months Ended September 30, Three Months Ended September 30, Three Months Ended September 30,

2024 2023 2024 2023 2024 2023

5 unchanged sentences

N/A N/A 19 % 19 % N/A N/A

E (related party) **

N/A N/A N/A 12 % N/A N/A

N/A N/A N/A N/A 100 % N/A

* This customer was labeled as Customer D in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023.

Six Months Ended June 30, Six Months Ended June 30, Six Months Ended June 30,

Nine Months Ended September 30, Nine Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023 2024 2023

4 unchanged sentences

N/A N/A 59 % 48 % N/A N/A

N/A N/A 25 % N/A N/A N/A

N/A N/A 23 % 12 % N/A N/A

E (related party) **

1 unchanged sentence

N/A N/A N/A N/A 100 % N/A

* This customer was labeled as Customer D in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023.

A reconciliation of the reportable segment gross profit to loss before income taxes included in the Company’s C ondensed Consolidated Statements of Operations for the three and six months ended June 30, 2024 and 2023, is as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

A reconciliation of the reportable segment gross (loss) profit to loss before income taxes included in the Company’s C ondensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023, is as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Reportable segment gross profit

Reportable segment gross (loss) profit

$ ( 156 ) $ 15,419 $ 116,307 $ 84,159

5 unchanged sentences

— — ( 2,757 ) —

Gain (loss) on disposal of property, plant and equipment

Loss on disposal of property, plant and equipment

( 509 ) ( 340 ) ( 4,061 ) ( 514 )

8 unchanged sentences

40,348 26,805 88,655 78,112

Operating income

6,579 9,469 61,806 17,071

Operating (loss) income ( 41,219 ) ( 12,044 ) 20,587 5,027

Non-operating (income) expenses, net:

5 unchanged sentences

Change in fair value of warrant and contingent value rights 408,520 — 1,144,441 —

Other non-operating expense (income), net 401 181 2,147 ( 2,888 )

Other non-operating (income) expense, net ( 2,003 ) ( 1,090 ) 144 ( 3,978 )

Total non-operating expenses, net

5 unchanged sentences

The Company had agreements to provide hosting services to various entities that are managed and invested in by individuals who were directors and executives of Core Scientific during fiscal 2023.

For the three and six months ended June 30, 2024, there were no related-party transactions.

For the three and six months ended June 30, 2023, the Company recognized hosting revenue of $ 3.5 million and $ 7.2 million, respectively, from contracts with related parties.

For the three and nine months ended September 30, 2024, there were no related-party transactions.

For the three and nine months ended September 30, 2023, the Company recognized hosting revenue of $ 2.8 million and $ 10.1 million, respectively, from contracts with related parties.

SUBSEQUENT EVENTS

On July 1, 2024, the GUC CVR obligations were extinguished pursuant to their terms when the VWAP of the Company’s New Common Stock on NASDAQ National Market System (“NMS”) exceeded $ 5.02 for 20 trading days within the applicable 30 consecutive trading day period.

On July 5, 2024, the mandatory conversion feature of the New Secured Convertible Notes was triggered when the VWAP of the Company’s New common stock on NASDAQ NMS exceeded the applicable threshold specified in the Indenture for the 20th consecutive trading day pursuant to the Indenture.

In connection with the mandatory conversion of the Notes, each registered holder of the New Secured Convertible Notes was entitled to receive (1) a number of shares of the Company’s New Common Stock equal to the aggregate principal amount of his, her or its notes outstanding, divided by the conversion price of $ 5.8317 (not including fractional shares), and (2) an amount of cash equal to the number of the resulting fractional shares, multiplied by the closing trading price of the Company’s New Common Stock on July 9, 2024.

Following the mandatory conversion of the New Secured Convertible Notes, 40.1 million shares of the Company’s New Common Stock in the aggregate were issued (or will be issued upon presentation for cancellation of the New Secured Convertible

Notes in the case of manual paper notes by the holders thereof) in exchange for the remaining $ 233.6 million aggregate principal amount of the New Secured Convertible Notes.

On July 5, 2024, the Company entered into a purchase agreement with Block, Inc.

for the purchase of 3 nanometer Application Specific Integrated Circuits chips (“ASIC chips”) representing approximately 15 EH/s of hashrate.

On July 12, 2024, the Company paid a $ 10.0 million deposit which will be applied evenly towards the ASIC chips.

Payments are due in installments, starting six months prior to delivery.

Delivery of the ASIC chips is expected to begin by the end of 2025.

From July 1, 2024 through the date these financial statements were issued, approximately 0.1 million Tranche 1 Warrants were exercised upon payment to the Company of $ 0.9 million in the aggregate exercise price.

The Tranche 2 Warrants became exercisable as of the close of trading on July 11, 2024, when the VWAP of the Company’s New Common Stock exceeded $ 8.72 per share for the 20 th consecutive trading day pursuant to the Warrant Agreement.

From July 11, 2024 through the date these financial statements were issued, approximately 36.7 million Tranche 2 Warrants were exercised.

Payment of the Tranche 2 Warrant exercise price in cash resulted in aggregate exercise price proceeds to the Company of approximately $ 0.3 million.

On August 6, 2024, the Company announced the exercise by CoreWeave of its option to contract for an additional 112 MW of infrastructure to host CoreWeave’s GPUs for its HPC operations.

On October 22, 2024, the Company announced the exercise by CoreWeave of its final option to contract for an additional 120 MW of infrastructure to host CoreWeave’s GPUs for its HPC operations.

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-Q

Item 1. Financial Statements