What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-03-02 compared with 2025-02-27 · 566 added, 784 removed, 94 unchanged (93% of the section changed)

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

Unless the context otherwise requires, all references in this section to “we,” “us,” “our,” the “Company,” “Core Scientific,” or “Core” refer to Core Scientific, Inc.

Unless the context otherwise requires, all references in this section to “we,” “us,” “our,” the “Company,” “Core Scientific,”

or “Core” refer to Core Scientific, Inc.

and its subsidiaries.

The following Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to promote understanding of the results of operations and financial condition.

This MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying Notes to Financial Statements (Part II, Item 8 of this Form 10-K).

The following Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is

intended to promote understanding of the results of operations and financial condition.

This MD&A is provided as a supplement to,

and should be read in conjunction with, our consolidated financial statements and the accompanying Notes to Financial Statements

(Part II, Item 8 of this Form 10-K).

This section generally discusses the results of operations for 2025 compared to 2024.

For discussion related to the results of operations and changes in consolidated financial condition for 2023 compared to 2022 refer to Part II, Item 7.

— “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our fiscal year 2023 Annual Report on Form 10-K, which was filed with the SEC on March 13, 2024.

As discussed in the section titled “Cautionary Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements.

Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” under Part I, Item 1A in this Annual Report on Form 10-K.

discussion related to the results of operations and changes in consolidated financial condition for 2024 compared to 2023 refer to

Part II, Item 7.

— “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our fiscal year 2024

Annual Report on Form 10-K, which was filed with the SEC on February 20, 2025.

Unless otherwise indicated, references to “2025” and “2024” in this MD&A refer to the years ended December 31, 2025

and 2024, respectively.

As described in Note 3 — Restatement of Previously Issued Financial Statements in Part II, Item 8 to the consolidated

financial statements included in this Annual Report, during the preparation of the consolidated financial statements for the year ended

December 31, 2025, the Company identified errors in its previously issued consolidated financial statements related to the accounting

for property, plant and equipment demolished in connection with the conversion of certain facilities from digital asset mining

operations to high-density colocation infrastructure.

The Company is concurrently filing an amended Annual Report on Form 10-K/A

for the year ended December 31, 2024 and amended Quarterly Reports on Forms 10-Q/A for the quarterly periods ended March 31,

2025, June 30, 2025, and September 30, 2025.

The discussion that follows presents 2024 comparative data on an as-restated basis .

As discussed in the section titled “Cautionary Note Regarding Forward-Looking Statements,” the following discussion and

analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never

materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking

Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those

discussed in the section titled “Risk Factors” under Part I, Item 1A in this Annual Report on Form 10-K.

Core Scientific, Inc.

(“we,” “us,” “our,” the “Company,” “Core Scientific,” or “Core”) is a leader in designing, building and operating digital infrastructure for high-performance computing.

Since our inception in 2018, we have been a premier provider and operator of dedicated, purpose-built facilities and software solutions for digital asset mining for ourselves and our third-party

and in March 2024, we announced the provision of digital infrastructure colocation services to a third party engaged in high-performance computing (“HPC”).

In May 2024, we expanded our relationship with CoreWeave, Inc.

(“CoreWeave”) the artificial intelligence (“AI”) hyperscaler, to provide approximately 200 megawatts (“MW”) of digital infrastructure to host CoreWeave’s HPC operations and provided CoreWeave options with respect to the Company’s existing facilities to provide approximately 500 MW of digital infrastructure on similar terms.

In June and August 2024, the Company announced CoreWeave’s execution of options to secure an additional 70 MW and 112 MW, respectively, of infrastructure to host its HPC operations.

In October 2024, the Company announced that CoreWeave had exercised its final option for an additional 120 MW of infrastructure.

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

We believe that using our existing infrastructure for HPC hosting operations will provide more consistent dollar-based revenue and represents substantially less risk than our traditional hosted bitcoin mining or our bitcoin self-mining operations.

As a result, we intend to focus our business development and marketing efforts on expanding our HPC hosting customer base.

As a result, we initiated a significant strategic transition from bitcoin mining to hosting and colocation services for customers employing hosting services for HPC workloads such as artificial intelligence-related applications.

During 2024, we were substantially engaged in constructing, refurbishing, reallocating or converting a substantial portion of our ten facilities in Alabama (1), Georgia (2), Kentucky (1), North Carolina (1), North Dakota (1), Oklahoma (1), and Texas (3) to support artificial intelligence related workloads, primarily for our one existing HPC customer, but also to support our commitment to meeting the growing demand for HPC solutions and diversifying our revenue streams.

(“we,” “us,” “our,” the “Company,” “Core Scientific,” or “Core”) designs, builds and operates large-scale

purpose-built data centers that support high-density colocation services and digital asset mining for b oth our own account and to a

lesser extent, third-party customers.

Our data centers are optimized for power-intensive, mission-critical computing workloads, with a

focus on artificial intelligence (“AI”) and other high-performance computing (“HPC”) applications.

In 2024, the Company announced its first high-density colocation contract with CoreWeave, Inc.

(“CoreWeave), a provider of

high-performance computing (“HPC”) services, which subsequently had been expanded to 590 megawatts (“MW”) of leased customer

power capacity over the exercise of several contractual options.

We believe leveraging our existing infrastructure for high-density

colocation services will provide more stable and predictable revenue streams, and represents substantially less risk over time than our

traditional hosted bitcoin mining or self-mining operations.

We are constructing, refurbishing , reallocating or converting our ten facilities in Alabama (1), Georgia (2), Kentucky (1), North

Carolina (1), North Dakota (1), Oklahoma (1), and Texas (3) to support artificial intelligence related workloads, in support of our

existing colocation customer, but also to support our commitment to meeting the growing demand for high-density colocation

solutions and diversifying our c ustomer base.

This will be done as circumstances allow and in a manner designed to retain access to

electrical power under our control, maximize the value of our digital asset mining equipment to third parties, and fulfill existing

obligations to suppliers and customers.

We intend to convert every megawatt in our portfolio to high-density colocation infrastructure

over the next three years .

In addition to converting our existing portfolio, we are actively pursuing the acquisition of new sites,

including land and power capacity, to expand our data center footprint beyond our current facilities.

Currently, the vast majority of our revenue is from mining bitcoin for our own account (“self-mining”).

We remain committed to maintaining the efficiency of our digital asset mining while capitalizing on the opportunities presented by the growing HPC hosting business.

We had an average hourly operating power demand of approximately 572 megawatts (“MW”) for the year ended December 31, 2024.

We had secured approximately 1,317 MW of contracted power capacity at our sites as of December 31, 2024.

We also operate and manage one of the largest data center infrastructure asset bases among publicly listed North American miners with operational capacity of approximately 784 MW in support of our mining and HPC operations.

Our average self-mining fleet energy efficiency for the year ended December 31, 2024 was 25.1 joules per terahash, compared to 27.9 joules per terahash for the year ended December 31, 2023.

Self-mining fleet energy efficiency is a measure of our fleet’s average actual energy efficiency over the period presented.

Our total revenue was $510.7 million, $502.4 million and $640.3 million for the years ended December 31, 2024, 2023, and 2022, respectively.

We generated an operating loss of $19.2 million and operating income of $9.0 million for the years ended December 31, 2024 and 2023, respectively, and an operating loss of $2.11 billion for the year ended December 31, 2022.

We incurred net loss of $1.32 billion, $246.5 million and $2.15 billion for the years ended December 31, 2024, 2023 and 2022, respectively.

Our adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) was $157.4 million, $169.5 million and $(11.6) million for the years ended December 31, 2024, 2023 and 2022, respectively.

We will continue to

mine digital assets and manage our self-mining fleet with a focus on power expense coverage and cash generation while we convert

our data centers for alternative high-density colocation service business opportunities.

We expect to increase revenue derived from

high-density colocation (“HDC”) services as capacity gets delivered to our current end customer as well as when we sign and begin

generating revenue from new colocation customers.

As of December 31, 2025, we operated a diversified portfolio of ten data centers across seven U.S.

states, representing

approximately 1.4 gigawatts (“GW”) of gross utility power capacity, or approximately 920 megawatts (“MW”) of total leasable

customer power capacity.

We continue to be in active discussions with both our existing and future potential utility providers

regarding additional power allocations.

During 2025, total revenue decreased to $319.0 million from $510.7 million , primarily due to lower digital asset self-mining

revenue and digital asset hosted mining revenue as we shifted capital and infrastructure toward colocation , partially offset by higher

colocation revenue from incremental billable customer power capacity.

Operating loss increased to $245.6 million in 2025 from

$142.1 million in 2024.

Net loss was $288.6 million in 2025 and included significant non-cash items, including changes of $33.1

million in the fair value of warrants and contingent value rights.

Adjusted EBITDA decreased to $29.7 million in 2025 from $157.4

million in 2024.

Adjusted EBITDA is a non-GAAP financial measure.

See “ Key Business Operating Metrics and Non-GAAP Financial Measures ” below for our definition of, and additional information related to Adjusted EBITDA.

See “ Key Business Operating Metrics and Non-GAAP

Financial Measures ” below for our definition of, and additional information related to Adjusted EBITDA.

Developments During 2025

CoreWeave HPC Hosting Agreements

On February 29, 2024, the Company entered into a long-term contract with CoreWeave, Inc.

(“CoreWeave”) to deliver 16 MW of infrastructure at the Company’s Austin, Texas facility.

Following the commencement of operations in the Austin, Texas facility, on June 3, 2024, the Company entered into a series of long-term contracts with CoreWeave to deliver approximately 200 MW of infrastructure to host CoreWeave’s HPC operations, which will require the Company to modify multiple existing sites.

The site modifications commenced in the second half of fiscal 2024 and operational status is expected to begin in the first half of fiscal 2025.

On June 25, 2024, the Company announced CoreWeave’s execution of an option to secure an additional 70 MW of infrastructure to host its HPC operations.

Operational status for the additional 70 MW is expected in the second half of 2025.

Further, on August 6, 2024, the Company announced that CoreWeave had executed an option to secure an additional 112 MW of infrastructure to host its

HPC operations.

On October 22, 2024, the Company announced that CoreWeave had exercised its final option for an additional 120 MW of infrastructure.

Convertible Notes Offerings

On December 5, 2024, the Company completed a private offering (the “2031 Convertible Notes Offering”) of $625.0 million aggregate principal amount of 0.00% Convertible Senior Notes due 2031 (the “2031 Convertible Notes”).

The net proceeds from the 2031 Convertible Notes Offering were approximately $608.7 million, after deducting the initial purchasers’ discounts and commissions and the Company’s estimated offering expenses.

The Company intends to use the net proceeds from the 2031 Convertible Notes Offering for general corporate purposes, including working capital, operating expenses, capital expenditures, acquisitions of complementary businesses or assets, or other repurchases of its securities.

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”).

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.

Further, the Company paid $49.6 million to repay the BlockFi facility in full, of which $0.7 million was paid for interest, and paid $6.5 million to repay the Stonebriar facility in full, of which $0.1 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 assets, or other repurchases of its securities.

For more detailed information regarding the 2031 Convertible Notes Offering and the 2029 Convertible Notes Offering conversion, refer to Note 8 — Convertible and Other Notes Payable to our consolidated financial statements in Item 8 of Part II of this Annual Report on Form 10-K.

On April 19, 2024, the Bitcoin protocol executed its fourth planned halving, wherein the bitcoin rewards issued for each solved block declined from 6.25 bitcoin to 3.125 bitcoin, reducing the bitcoin received from bitcoin mining by 50% (excluding transaction fee rewards).

As a result, revenue generated from bitcoin mining declined, adversely impacting gross profit.

Emergence from Bankruptcy

On January 15, 2024, the Company and certain of its affiliates (collectively, the “Debtors”) filed with the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) the Fourth Amended Joint Chapter 11 Plan of Core Scientific, Inc.

and its Affiliated Debtors (with Technical Modifications) (the “Plan of Reorganization”).

On January 16, 2024, the Bankruptcy Court entered an order confirming the Plan of Reorganization.

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.

On January 24, 2024, the Company’s common shares began trading on the Nasdaq market under the ticker symbol CORZ.

On the Effective Date, the obligations of the Company under the Company’s notes sold pursuant to (i) the Secured Convertible Note Purchase Agreement, dated as of April 19, 2021 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time), by and among Core Scientific, Inc.

(as successor of Core Scientific Holding Co.), the guarantors party thereto from time to time, U.S.

Bank National Association, as note agent and collateral agent, and the purchasers of the notes issued thereunder (the “Secured Convertible Notes”), and (ii) the Convertible Note Purchase Agreement, dated as of August 20, 2021 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time), by and among Core Scientific, Inc.

(as successor of Core Scientific Holding Co.), the guarantors party thereto from time to time, U.S.

Bank National Association, as note agent and collateral agent, and the purchasers of the notes issued thereunder (the “Other Convertible Notes,” and together with the Secured Convertible Notes, the “Convertible Notes”), replacement debtor-in-possession credit agreement, stock certificates, book entries, and any other certificate, share, note, bond, indenture, purchase right, option, warrant, or other instrument or document, directly or indirectly, evidencing or creating any indebtedness or obligation of or ownership interest in the Debtors giving rise to any claim or interest (except such certificates, notes or other instruments or documents evidencing indebtedness or obligations of, or interests in, the Debtors that are specifically reinstated pursuant to the Plan of Reorganization) were cancelled, and the duties and obligations of all parties thereto were deemed satisfied in full, canceled, released, discharged, and of no force or effect.

On the Effective Date, Pursuant to the Plan of Reorganization

• The Company entered into a credit and guaranty agreement (the “Exit Credit Agreement”), consisting of an $80 million first-lien credit facility with certain holders of the Company’s Convertible Notes.

The Exit Credit Agreement was paid in full on August 19, 2024.

• 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”).

The Secured Notes were paid in full on August 19, 2024.

• 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”).

The New Secured Convertible Notes were issued to holders of the Company’s Convertible Notes.

The New Secured Convertible notes were mandatorily converted as of July 10, 2024 and are no longer outstanding.

• The Company entered into an agreement which provided for the issuance of contingent value rights (the “CVRs”) to holders of the Company’s Convertible Notes and provided for the issuance of CVRs issued to holders of allowed general unsecured claims (the GUC CVRs”).

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.

• The holders of our pre-emergence Secured Convertible Notes and Other Convertible Notes received Secured Notes Indenture, New Secured Convertible Notes Indenture, post-emergence common stock and CVRs.

Certain holders of New Secured Convertible Notes also funded and received the Exit Credit Agreement.

For more detailed information regarding our emergence from bankruptcy, refer to Notes 3 — Chapter 11 Filing and Emergence from Bankruptcy, 8 — Convertible and Other Notes Payable, 9 — Contingent Value Rights and Warrant Liabilities and 12 — Stockholders' Deficit to our consolidated financial statements in Item 8 of Part II of this Annual Report on Form 10-K.

On July 7, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with CoreWeave, Inc.

(“CoreWeave”) pursuant to which CoreWeave would acquire the Company in an all-stock transaction, subject to stockholder approval

and other customary closing conditions.

On October 30, 2025, the Company terminated the Merger Agreement in accordance with its

terms following Company stockholder rejection of the terms of the Merger Agreement at a special meeting of stockholders on that

The Company incurred $21.6 million of advisory, legal, and other professional or consulting fees related to the proposed

transaction which are reflected in our results of operations for the year ended December 31, 2025.

Other than these costs , the

termination of the Merger Agreement did not result in any termination fees and did not have a material impact on the Company’s

financial position or results of operations.

Our Business Model

Business Overview

As a large-scale owner and operator of high-power digital infrastructure for digital asset mining and hosting services, we believe that we are well positioned to serve customers in digital asset mining and an expanding market for HPC operations.

As noted in the “Business Strategy” section below, we believe that opportunities for growth exist in various applications of our data centers for third-party customers focused on cloud computing as well as machine learning and artificial intelligence, which has driven our recent expansion into providing HPC hosting services.

Furthermore, we believe that the adoption and mainstream use of bitcoin and the blockchain technology on which it is based has accelerated the demand for bitcoin and other digital currencies.

We focus primarily on contracting our digital infrastructure for HPC hosting, and mining and selling bitcoin for cash, enhancing efficiencies in our operations (reducing our cost to mine).

Our digital asset mining operation is focused on earning bitcoin by solving complex cryptographic algorithms to validate transactions on specific bitcoin blockchains, which is commonly referred to as “mining.” Our digital asset self-mining activity competes with myriad mining operations throughout the world to complete new blocks on the blockchain and earn the reward in the form of bitcoin.

Our data centers house bitcoin mining computers and will increasingly house graphics processing units (“GPUs”).

These specialized facilities lever our specialized design and construction proficiency by employing high-density, low-cost engineering, power designs and modular construction.

For digital asset mining, our proprietary thermodynamic structural design manages heat and airflow to deliver best-in-class uptime and, ultimately, increased mining rewards to us and our customers.

We are allocating a significant portion of our current and future data centers to support other forms of high-value computing, such as HPC hosting operations, in connection with our short-, medium- and long-term strategic plan.

As a large-scale owner and operator of high-power digital infrastructure, we generate revenue primarily through (i) Colocation

services (ii) Digital Asset Self‑Mining, and (iii) Digital Asset Hosted Mining services.

We are in the process of r eallocating significant

portions of our infrastructure and capital from bitcoin mining to HDC services for AI and HPC workloads.

We focus primarily on contracting our digital infrastructure for Colocation, mining bitcoin , and enhancing efficiencies in our

In self‑mining, we earn bitcoin by operating our owned mining fleet through mining pool arrangements, and in hosted

mining and colocation we earn fees for providing infrastructure, power and related services to third parties.

Our data centers house bitcoin mining computers and will increasingly house specialized compute accelerators, including

graphics processing units (“ GPUs ”).

These facilities leverage our specialized design and construction capabilities by employing high-

density, innovative engineering , power designs and modular construction.

For digital asset mining, our proprietary thermodynamic

structural design manages heat and airflow to deliver reliable operations to us and our customers.

As part of our go-forward strategy,

w e are in the process of converting our entire data center portfolio to support our high-density Colocation operations for AI and HPC

Business Strategy

Our business strategy is to grow our revenue and profitability by expanding our existing large-scale data center infrastructure portfolio configured for specialized computers performing specific, high-value applications such as cloud computing, machine learning and artificial intelligence, and maximizing the portion of our existing infrastructure portfolio contracted for HPC hosting.

We intend to continue to strategically develop and make operational the infrastructure necessary to support our existing contractual commitments to our existing HPC customer and to support expected customer growth and additional demand by leveraging our data center expertise and capabilities.

We intend to seek additional opportunities and to engage additional customers in the HPC Hosting

segment to expand our business into these areas using our knowledge, expertise, existing and future infrastructure where favorable market opportunities exist.

Our strategy is focused on hyperscale cloud-based providers and enterprises, including potential customers we believe have significant data center infrastructure needs that have not yet been outsourced or will require additional data center space and power to support their growth and their increasing reliance on technology infrastructure in their operations.

We believe our capabilities for serving the needs of large hyperscale providers and enterprises will continue to enable us to capitalize on the growing demand for outsourced data center facilities in our markets and in new markets where our customers are located or plan to be located in the future.

Our strategy is to grow our revenue and profitability by converting and expanding our large-scale data center infrastructure

portfolio to deliver high-density colocation services for artificial intelligence and HPC workloads.

We plan to develop and bring

online the infrastructure required to meet our existing contractual commitments to our high-density colocation customer, expand our

infrastructure portfolio by securing additional land and power at new and existing sites, and sign additional colocation customers to

diversify our revenue base.

Our customer strategy targets hyperscale cloud-based providers, neoclouds, and enterprises, including customers we believe

have significant data center infrastructure needs that have not yet been outsourced or will require additional data center space and

power to support their growth and their increasing reliance on technology infrastructure in their operations.

We have three operating segments:

“Digital Asset Self-Mining,” consisting of performing digital asset mining for our 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 hosting operations.

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

Our Digital Asset Self-Mining operation segment generates revenue from the deployment and operation our own large fleet of miners within our owned digital infrastructure as part of a pool of users that process transactions conducted on one or more blockchain networks.

“Colocation,” consisting of providing high-density colocation services to customers

employing AI and HPC related workloads, “Digital Asset Self-Mining,” consisting of performing digital asset mining for our own

account, and “Digital Asset Hosted Mining,” consisting of providing hosting services to third parties for digital asset mining .

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

Our Colocation segment provides space, power, cooling, facilities operations, security and other services to third-party

customers to support workloads for machine learning and artificial intelligence.

Our Digital Asset Self-Mining operation segment generates revenue from the deployment and operation of our own large fleet

of miners within our owned digital infrastructure as part of a pool of users that process transactions conducted on one or more

blockchain networks.

In exchange for this activity, we receive digital assets in the form of bitcoin.

We began digital asset mining at scale in 2018 and in 2020 became one of the largest North American providers of hosting services primarily for third-party mining customers.

We had an average hourly operating power demand of approximately 572 MW for the year ended December 31, 2024.

Our Digital Asset Hosted Mining operation segment generates revenue through the sale of electricity-based consumption contracts for our hosting services, which are recurring in nature.

Our Digital Asset Hosted Mining operation segment provides a full suite of services to our digital asset mining customers.

We provide deployment, monitoring, troubleshooting, optimization and maintenance of our customers’ digital asset mining equipment and provide necessary electrical power, repair and other infrastructure services necessary for our customers to operate, maintain and efficiently mine digital assets.

We do not expect to further expand our Digital Asset Hosted Mining operations in 2025 and future years.

Our HPC Hosting operation segment generates revenue by providing colocation, cloud and connectivity services to customers in exchange for a fee.

Our HPC Hosting operation segment provides colocation, facilities operations, security and other services to third-party HPC customers to support workloads for machine learning and artificial intelligence.

As of December 31, 2024, we have operational capacity of approximately 784 MW to support of our existing and planned HPC operations.

Our Digital Asset Hosted Mining operation segment generates revenue from recurring hosting services, which are generally

priced based on power usage and other service components.

Our Digital Asset Hosted Mining operation segment provides a full suite

of services to our digital asset mining customers.

We provide deployment, monitoring, troubleshooting, optimization and maintenance

of our customers’ digital asset mining equipment and provide necessary electrical power, repair and other infrastructure services

necessary for our customers to operate, maintain and efficiently mine digital assets.

We do not currently expect to further expand our

Digital Asset Hosted Mining operations in future years.

Mining Equipment

We own and host specialized computers (“miners”) configured for the purpose of validating transactions on multiple digital asset network blockchains (referred to as, “mining”), predominantly the Bitcoin network.

Substantially all of the miners we own and host were manufactured by Bitmain Technologies Limited (“Bitmain”) and incorporate application-specific integrated circuit (“ASIC”) chips specialized to solve blocks on the bitcoin blockchains using the 256-bit secure hashing algorithm (“SHA-256”) in return for bitcoin digital asset rewards.

We have entered into and facilitated agreements with vendors to supply mining equipment for our digital asset mining operations.

The majority of our purchases are made on multi-month contracts with installment payments due in advance of scheduled deliveries.

Delivery schedules have ranged from one month to 12 months.

As of December 31, 2023, we had two active purchase agreements with Bitmain.

The first agreement was for the acquisition of Antminer S19J XP miners with a combined exahash of 4.1 or 28,400 miners.

The second agreement was for the acquisition of Antminer S21 miners with a combined exahash of 2.5 or approximately 12,900 miners.

As of December 31, 2024, the Company had received all of the miners and completed all 2024 payments due on miners ordered for deployment this year.

The tables below summarize the total number of self- and hosted miners in operation as of December 31, 2024 and December 31, 2023 (miners in thousands):

On July 5, 2024, we entered into an arrangement with Block, Inc.

(“Block”), a technology company developing ASICs,

pursuant to which we received ASICs during 2025 and expect to receive additional ASICs during 2026 .

As of December 31, 2025, we

estimate approximately $64.8 million of remaining cash payments associated with this arrangement, of which approximately $36.6

million was paid upon delivery in January 2026, with the remaining balance payable on a deferred basis primarily during 2026 and

extending into early 2027.

Aside from the miners received in 2025 and those expected from Block, we do not anticipate entering into new large-scale

bitcoin mining equipment procurement agreements as we continue to shift capital allocation toward HDC infrastructure.

we expect future capital expenditures related to mining equipment to decline.

See “Liquidity and Capital Resources” for a discussion

of our material cash requirements and expected sources of funding, including capital expenditures and commitments.

The tables below summarize the total number of self- and hosted miners in operation as of December 31, 2025 and

December 31, 2024 (miners in thousands):

Bitcoin Miners in Operation as of December 31, 2025

Mining Equipment Hash rate (EH/s) Number of Miners

Self-miners 19.1 164.0

Mining Equipment

Hash rate (EH/s)

Number of Miners

Hosted miners

1 unchanged sentence

Bitcoin Miners in Operation as of December 31, 2024

Mining Equipment Hash rate (EH/s) Number of Miners

Self-miners 16.9 158.0

Mining Equipment

Hash rate (EH/s)

Number of Miners

Hosted miners

Total mining equipment

Summary of Digital Asset Activity

Activity related to our digital asset balances for the years ended December 31, 2024 and 2023, were as follows (in thousands):

December 31, 2024 December 31, 2023

Digital assets, beginning of period $ 2,284 $ 724

Cumulative effect of ASU 2023-08, adopted January 1, 2024 1

Digital assets, beginning of period, as adjusted

Digital asset self-mining revenue, net of receivables 2

409,560 389,456

Mining proceeds from shared hosting 15,693 17,626

Proceeds from sales of digital assets (402,461) (404,686)

Change in fair value of digital assets (1,052) —

Gain from sale of digital assets

Impairment of digital assets — (4,406)

Payment of board fee (89) (316)

Digital assets, end of period $ 23,893 $ 2,284

1 Reflects the impact of the Company’s adoption of Accounting Standards Update (“ASU”) 2023-08, Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60):

Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”) effective January 1, 2024.

2 As of December 31, 2024 and December 31, 2023, there was $0.9 million and $1.7 million, respectively, of digital asset receivable included in prepaid expenses and other current assets on the consolidated balance sheets.

Performance Metrics

Miners perform computational operations in support of digital asset blockchains measured in “hash rate” or “hashes per second.” A “hash” is the computation run by mining hardware in support of the blockchain;

therefore, a miner’s “hash rate” refers to the rate at which it is capable of solving such computations.

The equipment originally employed for mining bitcoin used the central processing unit (“CPU”) of a computer to mine various forms of digital assets.

Due to performance limitations, CPU mining was rapidly replaced by the GPU, which offers significant performance advantages over CPUs.

General purpose chipsets like CPUs and GPUs have since been replaced as the standard in the mining industry by ASIC chips such as those found in the miners we and our customers use to mine bitcoin (although they continue to have uses in other industries).

These ASIC chips are designed specifically to maximize the rate of hashing operations.

Network Hash Rate

In digital asset mining, hash rate is a measure of the processing speed at which a mining computer operates in its attempt to secure a specific digital asset.

A participant in a blockchain network’s mining function has a hash rate equivalent to the total of all its miners seeking to mine a specific digital asset.

System-wide, the total network hash rate reflects the sum total of all miners seeking to mine each specific type of digital asset.

A participant’s higher total hash rate relative to the system-wide total hash rate generally results in a corresponding higher success rate in digital asset rewards over time as compared to mining participants with relatively lower total hash rates.

However, as the relative market price for a digital asset, such as bitcoin, increases, more users are incentivized to mine for that digital asset, which increases the network’s overall hash rate.

As a result, a mining participant must increase its total hash rate in order to maintain its relative possibility of solving a block on the network blockchain.

Achieving greater hash rate power by deploying increasingly sophisticated miners in ever greater quantities has become one of the bitcoin mining industry’s great sources of competition.

Our goal is to deploy a powerful fleet of self- and hosted-miners, while operating as energy-efficiently as possible.

See “ Key Business Operating Metrics and Non‑GAAP Financial Measures ” below for definitions and discussion of the

operating metrics management uses to evaluate our performance.

Key Factors Affecting Our Financial Performance

Market Price of Digital Assets

Our results of operations, liquidity and cash flows are affected by a number of factors , including (i) our ability to execute our

strategic transition toward high‑density colocation services, (ii) bitcoin market conditions and network fundamentals that drive

self‑mining economics, (iii) broader macroeconomic and regulatory developments, (iv) power prices and curtailment activity, and (v)

the competitive landscape for our industry.

The factors below highlight key drivers that have affected, and may continue to affect, our

financial performance.

Our financial performance depends in part on our ability to operate our self‑mining fleet profitably and, as we transition our

business, to execute and expand our colocation operations and attract and retain colocation customers.

Increases in power costs,

inability to mine digital assets efficiently and to sell digital assets at favorable prices will reduce our operating margins and could have

a material near-term adverse effect on our business, financial condition and results of operations.

In addition, sustained declines in

bitcoin prices or adverse changes in network conditions could reduce cash generated from self‑mining during periods where

self‑mining remains a significant contributor to our results.

Strategic Transition to High-Density Colocation Services

As we grow our Colocation operations over the next several years by converting the remaining bitcoin mining sites and adding

new infrastructure and customers, we expect Colocation to represent a larger share of our results and gradually reduce our exposure to

bitcoin spot price volatility.

The Colocation segment is characterized by the implementation of long-term contracts with customers

spanning 10+ years with terms and conditions resulting in stable, predictable revenue and cash flows over each period.

The pace of this transition, and the timing of related revenue and cash flows, depends on (i) customer deployment schedules

under existing and future contracts and (ii) the timing and cost of converting and commissioning incremental billable customer power

Conversion capital expenditures and timelines are sensitive to equipment lead times and availability, labor constraints,

permitting and interconnection sequencing, and supply chain and logistical challenges.

Changes in these inputs can affect when

incremental capacity becomes billable and therefore may affect the timing of colocation revenue, cost of services and related cash

Bitcoin Market Conditions

Our Digital Asset Self-Mining segment is heavily dependent on the spot price of bitcoin.

The prices of digital assets, specifically bitcoin, have experienced substantial volatility, meaning that high or low prices may have little or no relationship to identifiable market forces, may be subject to rapidly changing investor sentiment, and may be influenced by factors such as technology, regulatory void or changes, fraudulent actors, manipulation, and media reporting.

Bitcoin (as well as other digital assets) may have value based on various factors, including their acceptance as a means of exchange by consumers and others, scarcity, and market demand.

Our financial performance and continued growth depend in large part on our ability to mine for digital assets profitably and to attract customers for our digital asset hosted mining services.

Increases in power costs, inability to mine digital assets efficiently and to sell digital assets at favorable prices will reduce our operating margins, impact our ability to attract customers for our services, may harm our growth prospects and could have a material adverse effect on our business, financial condition and results of operations.

Over time, we have observed a positive trend in the total market capitalization of digital assets, which suggests increased adoption.

However, historical trends are not indicative of future adoption, and it is possible that the adoption of digital assets and blockchain technology may slow, take longer to develop, or never be broadly adopted, which would negatively impact our business and operating results.

Network Hash Rate

Our business is not only impacted by the volatility in digital asset prices, but also by increases in the competition for digital asset production.

For bitcoin, this increased competition is described as the network hash rate resulting from the growth in the overall quantity and quality of miners working to solve blocks on the bitcoin blockchain, and the difficulty index associated with the secure hashing algorithm employed in solving the blocks.

The increase in bitcoin’s network hash rate results in a regular increase in the cryptographic complexity associated with solving blocks on its blockchain, or its difficulty.

Increased difficulty reduces the mining proceeds of the equipment proportionally and eventually requires bitcoin miners to upgrade their mining equipment to remain profitable and compete effectively with other miners.

Similarly, a decline in network hash rate results in a decrease in difficulty, increasing mining proceeds.

Transaction Fees

Bitcoin miners receive a transaction fee in the form of a portion of bitcoin for validating transactions on the Bitcoin network.

The prices of digital assets,

specifically bitcoin, have experienced substantial volatility, meaning that high or low prices may have little or no relationship to

identifiable market forces, may be subject to rapidly changing investor sentiment, and may be influenced by factors such as

technology, regulatory developments and enforcement actions.

Bitcoin (as well as other digital assets) may have value based on

various factors, including their acceptance as a means of exchange by consumers and others, scarcity, and market demand.

the market price of bitcoin can materially affect (i) revenue recognized from self‑mining, (ii) the fair value of digital assets we hold

and related gains or losses recognized in our results of operations, and (iii) liquidity to the extent we sell bitcoin as part of our treasury

Bitcoin miners also receive a transaction fee in the form of a portion of bitcoin for validating transactions on the Bitcoin

The transaction fee can vary in value over time, with higher fees prioritizing certain transactions over those with lower fees.

An increase in Bitcoin network transaction fees increases mining proceeds.

The table below provides a summary of the impact to revenue from the increase or decrease in the market price of bitcoin, difficulty and our hash rate.

The impact to revenue in each scenario assumes only one driver increases or decreases and all others are held constant.

Impact to Revenue

Driver Increase in Driver Decrease in Driver

Market Price of Bitcoin Favorable Unfavorable

Core Scientific Hash Rate

Difficulty Unfavorable Favorable

Transaction Fees Favorable Unfavorable

Further affecting the industry, and particularly for the bitcoin blockchain, the digital asset reward for solving a block is subject to periodic incremental halving.

Halving is a process designed to control the overall supply and reduce the risk of inflation in digital assets using a proof-of-work consensus algorithm.

At a predetermined block, the mining reward is reduced by half, hence the term “halving.” A reduction in the number of bitcoins rewarded per block would result in a reduction of revenue to those mining bitcoin, barring any increase in the spot price of bitcoin or decrease in Bitcoin network hash rate or difficulty.

Historically, the network hash rate has tended to decline, for a period of time, post-halving as less efficient mining servers become less profitable to operate and their operators discontinue or limit their use.

For bitcoin, our most significant digital asset to which our mining power is devoted, the reward was initially set at 50 bitcoin rewards per block.

The bitcoin blockchain has undergone halving four times since its inception, as follows:

(1) on November 28, 2012, at block 210,000;

(2) on July 9, 2016 at block 420,000;

(3) on May 11, 2020 at block 630,000;

and (4) on April 19, 2024 at block 840,000, when the reward was reduced to its current level of 3.125 bitcoin per block.

The next halving for the bitcoin blockchain is anticipated to occur in 2028 at block 1,050,000.

This process will repeat until the total amount of bitcoin rewards issued reaches 21 million and the theoretical supply of new bitcoin is exhausted, which is expected to occur around the year 2140.

Many factors influence the price of bitcoin and the other digital assets we may mine for, and potential increases or decreases in prices in advance of or following a future halving are unknown.

Business Mix Shift to HPC

The planned growth of our HPC data center hosting operations business, through increased investment in conversion of several of our bitcoin mining sites to HPC data center hosting sites over the next several years, should gradually reduce our overall exposure to volatility in the spot price of bitcoin as HPC begins to account for a comparatively larger percentage of our financial results.

The HPC data center hosting business is characterized by implementation of long-term contracts with customers spanning several years with terms and conditions outlining and resulting in stable, predictable revenue and cash flows over each period.

Higher power costs, lower realized bitcoin prices, or reduced mining efficiency would reduce self-mining margins and cash

generation during periods when self-mining remains a significant contributor to our results.

As we transition, the timing of colocation

conversions and customer deployments, and our ability to execute and scale colocation operations and retain colocation customers,

will increasingly influence our revenue mix and profitability.

Bitcoin Network Fundamentals

Our business is not only impacted by the volatility in digital asset prices and transaction fees, but also by increases in the

competition for digital asset production.

For bitcoin, this increased competition is described as the network hash rate resulting from the

growth in the overall quantity and quality of miners working to solve blocks on the bitcoin blockchain, and the difficulty index

associated with the secure hashing algorithm employed in solving the blocks.

Increases in network hash rate generally increase

network difficulty over time, which can reduce the amount of bitcoin earned for a given level of deployed hash rate and power

Increased difficulty reduces the mining proceeds of the equipment proportionally and eventually requires bitcoin miners to

upgrade their mining equipment to remain profitable and compete effectively with other miners.

Difficulty and network conditions are

outside of our control and can materially affect our self‑mining revenue and margins.

Beginning on February 1, 2025, the United States government announced a series of additional tariffs on goods imported to the

United States, raising concerns about material price inflation and delivery delays with respect to equipment and materials needed for

our high-density colocation data center conversions and also with respect to parts, machinery and hardware used in our digital asset

mining business.

T o date, tariffs have had no material impact on our costs or business operations, but we continue to analyze the

impact of these tariffs on our business and actions we can take to minimize any future impact.

Our agreement with our HDC customer

is funded almost entirely by the customer and our financial contribution is capped at a fixed dollar amount, limiting the overall

potential impact of tariffs on our existing and future capital expenditures.

Tariffs, however, could have additional impacts on our

results of operations in future years.

To the extent tariffs increase the cost and/or lead time of key equipment and materials, they could

affect conversion economics, timelines and/or operating costs, which could affect the timing and profitability of our colocation

Electricity Costs

Electricity cost is the major operating cost for the mining fleet, as well as for the hosting services provided to customers and related parties.

The cost and availability of electricity are affected primarily by changes in seasonal demand, with peak demand during the summer months driving higher costs and increased curtailments to support grid operators.

Severe winter weather can increase the cost of electricity and the frequency of curtailments when it results in damage to power transmission infrastructure that reduces the grid’s ability to deliver power.

Geopolitical and macroeconomic factors, such as overseas military or economic conflict between states, can adversely affect electricity costs by raising the cost of power generation inputs such as natural gas.

Other events out of our control can also impact electricity costs and availability.

In certain power markets, financial hedging can be employed to protect buyers from the financial impact of significant increases in power prices.

Equipment Costs

Increases in the market value of digital assets increases the demand for new miners, which can result in a scarcity in the supply of, and increases in the price of, those miners.

Declines in the market value of digital assets can result in excess supply of miners and a general decline in their prices.

As a result, the cost of new miners can be unpredictable and could be significantly different than our historical cost for new miners.

Electricity cost is the major operating cost for our mining fleet, as well as for the hosted mining services provided to customers.

The cost and availability of electricity are affected primarily by changes in seasonal demand, with peak demand during the summer

months driving higher costs and increased curtailments to support grid operators.

Severe winter weather can increase the cost of

electricity and the frequency of curtailments when it results in damage to power transmission infrastructure that reduces the grid’s

ability to deliver power.

Geopolitical and macroeconomic factors, such as overseas military or economic conflict between states, can

adversely affect electricity costs by raising the cost of power generation inputs such as natural gas.

Other events out of our control can

also impact electricity costs and availability.

In our self‑mining and hosted mining operations, increases in power prices and/or

increased curtailments can materially reduce margins and cash generation.

In our colocation operations, power costs are passed

through to customers and changes in power prices may increase revenue and cost of colocation services without a corresponding

change in gross profit.

Our Competition and Customers

In addition to factors underlying our mining business growth and profitability, the success of our HPC hosting business greatly depends on our ability to retain and develop opportunities with our existing customers, secure additional infrastructure and attract new customers.

Our business environment is constantly evolving.

However, digital asset mining is now dominated by large-scale, industrial miners operating large dedicated facilities around the world, including sovereign nation states with vast resources who mine directly or support mining operations through their sovereign wealth funds, all of whom compete to solve new blocks, acquire new and used miners, and purchase and consume energy and supplies to build mining facilities.

We face significant competition in every aspect of our business, including, but not limited to, the acquisition of new miners, the ability to raise capital, obtaining low-cost electricity, obtaining access to sites with reliable sources of high power, and evaluating new technology developments in the industry.

Presently, the information concerning the activities of digital asset miners may not be readily available as most of the participants in this sector do not publish information publicly, or the information may be unreliable.

Published sources of information include “bitcoin.org” and “blockchain.info;” however, the reliability of that information and its continued availability cannot be assured.

Based on available data, we believe that an increase in the scale and sophistication of competition in the digital asset mining industry has continued to increase network hash rate, with new entrants and existing competitors increasing the number of miners mining for bitcoin.

Despite this trend, we believe we have continued to maintain a competitive hash rate capacity among both public and private bitcoin miners.

However, remaining competitive in our evolving industry, both against new entrants into the market and existing competitors, will require the expansion of our existing miner fleet by purchasing new and available used miners, as well as innovating to develop and implement new technologies and mining solutions.

In HPC hosting, we compete with other providers of high-power data center capacity, such as major data center real estate investment trusts (“REITs”), developers of data centers, hyperscalers and bitcoin miners with capacity suitable for HPC hosting.

This competition focuses primarily on the identification and acquisition of new, high-power sites, but also includes competition for the capital required to build or modify existing sites to support HPC hosting.

Additionally, the modification of some of our data centers to accommodate HPC hosting involves the procurement of critical equipment, technologies and skilled labor, which are in high demand from other entities seeking to address the same market opportunity, thereby putting us into competition with many other organizations for those resources.

We believe that because of our operational high-power data center capacity and the experience, knowledge, capabilities and relationships of our data center development and operations team, we are uniquely qualified to address the current strong demand for high-power data center capacity to support HPC applications successfully.

Differentiation, Innovation and Expansion of Our Platform

Our investments in research and development drive differentiation of our service offerings, core technology innovation and our ability to bring new products to market.

We believe that we differentiate ourselves by offering premium products and services, including our ability to manage our power sourcing and construct proprietary, passively-cooled digital asset mining data centers at scale.

Our operational digital asset mining facilities lever our specialized design and construction proficiency by employing high-density, low-cost engineering and power designs.

Our proprietary thermodynamic solution manages heat and airflow to deliver best-in-class uptime and, ultimately, increases mining rewards to us and to our hosted mining customers.

We design our facilities to maximize both the efficiency and lifespan of our mining equipment.

We have developed expertise in the installation, operation, optimization and repair of digital mining equipment.

We continue to refine and develop our data center design and technology solutions to optimize our operations with the knowledge gained from our considerable digital asset mining experience, including optimizing the location of miners in our data centers to increase profitability.

Our approach to data center design enables us to deliver efficiency at scale.

We believe we possess unique knowledge of data center design principles and systems integration architectures, as well as extensive experience designing, constructing and operating data centers that differentiates and informs our plans for modifying digital

asset mining data centers to support HPC hosting, and for developing new data centers designed to support future high-value computing requirements.

This knowledge includes designs for higher rack energy densities than currently offered in the legacy data center market to satisfy emerging requirements for advanced technologies supporting emerging workloads such as artificial intelligence.

We develop proprietary hardware and software solutions that support our current operations and represent potential future growth opportunities.

We intend to continue to invest judiciously in research and development activities to extend our platform management and software solutions in order to manage our infrastructure and mining fleet more efficiently and productively.

Due to the relatively short history of digital assets, and their emergence as a new asset class, government regulation of blockchain and digital assets is constantly evolving, with increased interest expressed by U.S.

and internal regulators.

In October 2020, the Cyber-Digital Task Force of the U.S.

Department of Justice published a report entitled “Cryptocurrency:

An Enforcement Framework” that detailed the Department’s view with respect to digital assets and the tools at the Department’s disposal to deal with threats posed by digital assets.

In February 2021, representatives of the government of Inner Mongolia, China announced plans to ban digital asset mining within the province due to the energy and rare earth mineral demands of the industry.

In March 2021, the nominee for Chair of the SEC expressed the need for investor protection along with promotion of innovation in the digital asset space.

In March 2022, former President Biden signed an Executive Order outlining an “whole-of-government” approach to addressing the risks and harnessing the potential benefits of digital assets and its underlying technology.

The executive order lays out a national policy for digital assets over six highlighted priorities.

In January 2023, the U.S.

House of Representatives created a new congressional subcommittee focused on digital assets, the Subcommittee of Digital Assets, Financial Technology and Inclusion, operating under the House Financial Services Committee.

Most recently, in January 2025, the Acting SEC Chairman announced the launch of a crypto task force dedicated to developing a comprehensive and clear regulatory framework for crypto assets, in contrast to the SEC’s prior reliance on enforcement actions to regulate cryptocurrencies.

The extent and content of any forthcoming laws and regulations are not yet ascertainable with certainty, and they may not be ascertainable in the near future.

In addition to the activities of the United States federal government and its various agencies and regulatory bodies, government regulation of blockchain and digital assets is also under active consideration by similar entities in other countries and transnational organizations, such as the European Union.

State and local regulations within the United States also may apply to our activities and other activities in which we may participate in the future.

Other governmental or semi-governmental regulatory bodies have shown an interest in regulating or investigating companies engaged in blockchain or digital asset businesses.

For instance, the SEC has taken an active role in regulating the use of public offerings of proprietary coins (so-called “initial coin offerings”) and has made statements and official promulgations as to the status of certain digital assets as “securities” subject to regulation by the SEC.

In addition to factors underlying our mining business growth and profitability, the success of our Colocation business greatly

depends on our ability to retain and develop opportunities with our existing customers, secure additional infrastructure and attract new

Competition in digital asset mining is driven in part by access to low‑cost power, scale, fleet efficiency and capital availability,

and can contribute to increases in network hash rate and difficulty.

We face significant competition in every aspect of our business,

including, but not limited to, the acquisition of new miners, the ability to raise capital, obtaining low-cost electricity, obtaining access

to sites with reliable sources of high power, and evaluating new technology developments in the industry.

Based on available data, we believe that an increase in the scale and sophistication of competition in the digital asset mining

industry has continued to increase network hash rate, with new entrants and existing competitors increasing the number of miners

mining for bitcoin.

Despite this trend, our ability to compete in self‑mining will depend on managing fleet efficiency, power costs and capital

allocation as we shift resources toward colocation.

In our Colocation operations, we compete with other providers of high-power data center capacity, such as major data center

real estate investment trusts, developers of data centers, hyperscalers and bitcoin miners with capacity suitable for high-density

colocation services.

This competition focuses primarily on the identification and acquisition of new, high-power sites, but also

includes competition for the capital required to build or modify existing sites to support high-density colocation.

Competition in colocation may affect pricing, contract terms, and the pace at which we can secure additional power and sites,

and therefore may affect revenue growth and required capital expenditures.

We operate in a dynamic regulatory environment.

For a discussion of federal, state, and international regulatory developments

affecting our digital asset mining and colocation activities, see “Government Regulation” in the Part I, Item 1 “Business” section in

this Annual Report on Form 10-K.

We continue to evaluate whether any such developments present known trends or uncertainties that

may materially impact our operations, energy costs, or customer demand.

Regulatory developments affecting digital assets, data

centers, energy markets and environmental matters could affect compliance costs, power availability and pricing, and customer

demand, which could impact our results of operations and liquidity.

Key Business Operating Metrics and Non-GAAP Financial Measures

In addition to our financial results, we use the following business operating metrics and non-GAAP financial measures to evaluate our business, measure our performance, identify trends affecting our business, and make strategic decisions.

For a definition of these key business operating metrics, see the sections titled “Self-Mining Hash Rate,” and “Cost of Self-Mining One Bitcoin and Hash Cost,” (below), and for non-GAAP financial measures, see the section titled “Adjusted EBITDA” (below).

2024 2023 2022

Self-Mining Hash rate (Exahash per second)

19.1 16.9 15.7

Adjusted EBITDA (in millions) $ 157.4 $ 169.5 $ (11.6)

Year Ended December 31,

2024 2023 2022

Cash Costs per Bitcoin

Power cost per bitcoin self-mined

$ 24,375 $ 12,464 $ 10,545

Operational costs per bitcoin self-mined 1

6,012 2,443 1,736

Total cost to self-mine one bitcoin 2

$ 30,387 $ 14,907 $ 12,281

Cash-Based Hash Cost 3

Power cost per terahash

$ 0.025 $ 0.033 $ 0.044

Operational costs per terahash 1

0.006 0.006 0.007

Total cash-based hash cost 3

$ 0.031 $ 0.039 $ 0.051

1 Includes personnel and related costs, software, telecommunications, security, etc.

Amount excludes stock-based compensation and depreciation.

2 Represents our direct cash costs of power and operational costs based on our self-mining/hosting mix divided by total bitcoin self-mined during the periods presented.

3 Represents the cash expense of power and facilities operation cost divided by our self-mining fleet hash rate, in terahash.

Self-Mining Hash Rate

We operate mining hardware which performs computational operations in support of the blockchain measured in “hash rate” or “hashes per second.” A “hash” is the computation run by mining hardware in support of the blockchain;

therefore, a miner’s “hash rate” refers to the rate at which the hardware is capable of solving such computations.

Our hash rate represents the hash rate of our miner fleet, which drives the digital asset rewards that will be earned by our fleet.

We calculate and report our hash rate in exahash per second (“EH/s”).

One exahash equals one quintillion hashes per second.

We measure the hash rate produced by our mining fleet through our management software Minder TM , which consolidates the reported hash rate from each miner.

The method by which we measure our hash rate may differ from how other operators present such a measure.

Generally, miners with a greater hash rate relative to the global Bitcoin network hash rate at a given time will over time, have a greater chance of earning a bitcoin, as compared to miners with relatively lower total hash rates.

Further, with the increase in demand for bitcoin contributing to an increase in computational resources for digital asset mining, the global network hash rate has increased, and we expect it to continue to increase.

As such, our self-mining hash rate provides useful information to investors because it demonstrates our capacity, and our competitive advantage, for mining bitcoin, which contributes to our digital asset self-mining revenue.

Management uses our self-mining hash rate to monitor our performance and competitive advantage in mining bitcoin as global competition also increases.

Our self-mining hash rate was 19.1 EH/s and 16.9 EH/s as of December 31, 2024 and 2023, respectively representing a 13% increase year over year.

Our combined self-mining and customer and related party hosting hash rate decreased 13%, to 20.1 EH/s as of December 31, 2024, from 23.2 EH/s as of December 31, 2023.

Cost of Self-Mining One Bitcoin and Hash Cost

Our profitability with respect to self-mining is heavily dependent upon our cost to mine a bitcoin, calculated during a particular period as the actual cash expense for power and other mining facility operations cash expenditures attributable to bitcoin self-mined, divided by the total bitcoin self-mined during the period presented.

Our cost efficiency with respect to solving computations on the Bitcoin network to mine bitcoin is reflected in our cash-based hash cost, which is calculated as the actual cash expense for power and other mining facility operations cash expenditures attributable to bitcoin self-mined, divided by our self-mining hash rate, in terahash.

The Company excludes stock-based compensation and depreciation from calculations of these operating metrics.

Cash Costs per Bitcoin and Cash-Based Hash Cost are key business operating metrics.

The cost of self-mining one bitcoin metric provides useful information to investors as it demonstrates our capacity to profitably mine bitcoin when comparing it to the

price of bitcoin, particularly given volatility in energy prices as well as in the price of bitcoin.

Management uses this metric to monitor both our cost efficiency in mining bitcoin as compared to our past performance and the performance of competitors, as well as our continued ability to profitably mine bitcoin.

Similarly, the hash cost provides useful information to investors as it demonstrates our cost efficiency in solving computations on the Bitcoin network to mine bitcoin.

Management uses this information to monitor our cost efficiency in mining bitcoin as compared to our past performance and the performance of our competitors.

In addition to our financial results, we use the following business operating metrics and non-GAAP financial measures to

evaluate our business, measure our performance, identify trends affecting our business, and make strategic decisions.

These operating

metrics and non‑GAAP financial measures should be considered in addition to, and not as a substitute for, our consolidated financial

statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).

Management also uses the following data center capacity and power metrics (measured in megawatts) to evaluate the scale of

our utility power footprint and customer IT load capacity, monitor customer commitments and remaining available capacity, assess

commissioning progress and deployment pacing, and inform capital allocation and site planning decisions.

Unless otherwise indicated,

these metrics are presented as of period end and represent management estimates based on operational and engineering data and may

not be comparable to similarly titled measures used by other operators.

How management uses it

Gross Utility Power Capacity

Total electric utility power capacity agreements

associated with our data center sites under our

control as of period end, including capacity that

is commissioned for future use.

Used for portfolio planning and utility power

allocation discussions.

Total Leasable Customer Power

Our estimate of the total non-redundant

customer IT load that our data center sites could

support in the aggregate as of period end,

regardless of whether such capacity has been

contracted with customers or remains available

This metric is representative of the

amount of power available for customer use in

servicing their workloads.

Used to assess total customer‑usable IT load

available for leasing, evaluate leased versus

unleased capacity, and plan conversion/

development sequencing and sales capacity.

Leased Customer Power

Power capacity that is committed to customers

under executed customer contracts, regardless of

whether service has commenced as of period

Used to monitor signed customer commitments

and contracted backlog and to plan future

deployment/commissioning requirements.

Unleased Customer Power

The portion of Total Leasable Customer Power

not committed under customer contracts as of

This metric is calculated as Total

Leasable Customer Power minus Leased

Customer Power Capacity.

Used to monitor remaining uncommitted

customer IT load and to prioritize incremental

contracting and conversion/commissioning

Billable Customer Power

Portion of Leased Customer Power Capacity for

which service has commenced and we are

actively billing as of period end.

Used to monitor in-service customer power that

is billing and to track deployment/

commissioning pace and near-term revenue

The following table presents the values for these metrics as of December 31, 2025 (in megawatts).

Gross Utility Power Capacity

Total Leasable Customer Power Capacity

Leased Customer Power Capacity

Unleased Customer Power Capacity

Billable Customer Power Capacity

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure defined as our net loss, adjusted to eliminate the effect of (i) interest income, interest expense, and other income (expense), net;

We report our financial results in accordance with GAAP.

To supplement our consolidated financial statements, we provide

investors with Adjusted EBITDA, which is a non‑GAAP financial measure.

Adjusted EBITDA is defined as our net loss, adjusted to

eliminate the effect of (i) interest income, interest expense, and other income (expense), net;

(ii) provision for income taxes;

2 unchanged sentences

(v) Reorganization items, net;

(vi) unrealized fair value adjustment on energy derivatives;

(vi) unrealized fair value

adjustment on energy derivatives;

(vii) change in fair value of warrant and contingent value rights;

(viii) HPC organizational startup costs which are not reflective of the ongoing costs incurred after startup, (ix) post-emergence bankruptcy advisory costs incurred related to reorganization which are not reflective of the ongoing costs incurred in post-emergence operations, and (x) certain additional non-cash items that do not reflect the performance of our ongoing business operations.

For additional information, including the reconciliation of net loss to Adjusted EBITDA, please refer to the table below.

We believe Adjusted EBITDA is an important measure because it allows management, investors, and our Board of Directors to evaluate and compare our operating results, including our return on capital and operating efficiencies, from period-to-period by making the adjustments described above.

In addition, it provides useful information to investors and others in understanding and evaluating our results of operations, as well as provides a useful measure for period-to-period comparisons of our business, as it removes the effect of net interest expense, taxes, certain non-cash items, variable charges and timing differences.

Moreover, we have included Adjusted EBITDA in this Annual Report on Form 10-K because it is a key measurement used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic and financial planning.

The above items are excluded from our Adjusted EBITDA measure because these items are non-cash in nature or because the amount and timing of these items are not related to the current results of our core business operations which renders evaluation of our current performance, comparisons of performance between periods and comparisons of our current performance with our competitors less meaningful.

However, you should be aware that when evaluating Adjusted EBITDA, we may incur future expenses similar to those excluded when calculating this measure.

Our presentation of this measure should not be construed as an inference that its future results will be unaffected by unusual items.

Further, this non-GAAP financial measure should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).

We compensate for these limitations by relying primarily on GAAP results and using Adjusted EBITDA on a supplemental basis.

Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies because not all companies calculate this measure in the same fashion.

You should review the reconciliation of net loss to Adjusted EBITDA below and not rely on any single financial measure to evaluate our business.

The following table presents a reconciliation of net loss to Adjusted EBITDA for the years ended December 31, 2024, 2023 and 2022, (in thousands):

(viii) Colocation segment startup

costs primarily related to the initial ramp up of new colocation sites, (ix) impairment of property, plant and equipment, (x) site

demolition costs incurred in connection with the conversion of existing facilities to colocation data center operations, (xi) post-

emergence bankruptcy advisory costs incurred related to reorganization, (xii) transaction costs incurred in connection with the Merger

Agreement, including advisory, legal, and other professional or consulting fees, (xiii) loss on legal settlements, and (xiv) certain

additional non-cash items that do not reflect the performance of our ongoing business operations.

The most directly comparable

GAAP measure to Adjusted EBITDA is net loss.

For additional information, including a reconciliation of net loss to Adjusted

EBITDA, please refer to the table below.

We believe Adjusted EBITDA is an important measure because it allows management, investors, and our Board of Directors to

evaluate and compare our operating results, including our return on capital and operating efficiencies, from period-to-period by

making the adjustments described above.

In addition, it provides useful information to investors and others in understanding and

evaluating our results of operations, as well as provides a useful measure for period-to-period comparisons of our business, as it

removes the effect of net interest expense, taxes, certain non-cash items, variable charges and timing differences.

Moreover, we have

included Adjusted EBITDA in this Annual Report on Form 10-K because it is a key measurement used by our management internally

to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic and financial

The above items are excluded from our Adjusted EBITDA measure because these items are non-cash in nature or because the

amount and timing of these items are not related to the current results of our core business operations which renders evaluation of our

current performance, comparisons of performance between periods and comparisons of our current performance with our competitors

less meaningful.

However, you should be aware that when evaluating Adjusted EBITDA, we may incur future expenses similar to

those excluded when calculating this measure.

Our presentation of this measure should not be construed as an inference that its future

results will be unaffected by unusual items.

Further, this non-GAAP financial measure should not be considered in isolation from, or

as a substitute for, financial information prepared in accordance with GAAP.

We compensate for these limitations by relying primarily

on GAAP results and using Adjusted EBITDA on a supplemental basis.

Our computation of Adjusted EBITDA may not be

comparable to other similarly titled measures computed by other companies because not all companies calculate this measure in the

same fashion.

You should review the reconciliation of n et loss to Adjusted EBITDA below and not rely on any single financial

measure to evaluate our business.

The following table presents a reconciliation of n et loss to Adjusted EBITDA for the year s ended December 31, 2025 and 2024

(in thousands):

Year Ended December 31,

1 unchanged sentence

$ (1,437,874)

Interest expense, net 37,070 86,238 96,826

Income tax expense (benefit)

859 683 (17,091)

Interest (income) expense, net

Income tax expense

Depreciation and amortization

1 unchanged sentence

Unrealized fair value adjustment on energy derivatives

Impairment of goodwill and other intangibles — — 1,059,265

Loss on disposal of property, plant and equipment

Impairment of property, plant and equipment

Losses on exchange or disposal of property, plant and equipment 4,210 1,956 28,025

Gain on sale of intangible assets

Loss (gain) on debt extinguishment 487 (20,065) 287

Cash restructuring charges

Fair value adjustment on acquired vendor liability

Equity line of credit expenses

HPC organizational startup costs

Site conversion demolition costs

Loss on debt extinguishment

Colocation startup costs

Merger Agreement related costs

Post-emergence bankruptcy advisory costs

Change in fair value of convertible notes — — 186,853

Fair value adjustment on derivative warrant liabilities — — (37,937)

Reorganization items, net

Change in fair value of warrants and contingent value rights

1,369,157 — —

Other non-operating expenses (income), net (325) (2,530) 5,232

123 1,474 5,276

Loss on legal settlements

Other non-operating expense (income), net

Adjusted EBITDA

$ 157,437 $ 169,548 $ (11,579)

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

Components of Results of Operations

Our revenue consists primarily of digital asset self-mining income, and fees from our digital asset hosting and HPC hosting operations.

The Company’s HPC and cloud compute operations began during the second quarter of 2024.

• Digital asset self-mining rev enue.

We operate a digital asset self-mining operation using specialized computers equipped with ASIC chips (known as “miners”) to solve complex cryptographic algorithms in support of the bitcoin blockchain (in a process known as “solving a block”) in exchange for digital asset rewards (primarily bitcoin).

The Company participates in “mining pools” organized by “mining pool operators” in which we share our mining power (known as “hash rate”) with the hash rate generated by other miners participating in the pool to earn digital asset rewards.

The mining pool operator provides a service that coordinates the computing power of the independent mining enterprises participating in the mining pool.

The pool uses software that coordinates the pool members’ mining power, identifies new block rewards, records how much hash rate each participant contributes to the pool, and assigns digital asset rewards earned by the pool among its participants in proportion to the hash rate each participant contributed to the pool in connection with solving a block.

Revenues from digital asset self-mining are impacted by volatility in bitcoin prices, as well as increases in the bitcoin blockchain’s network hash

rate resulting from the growth in the overall quantity and quality of miners working to solve blocks on the bitcoin blockchain and the difficulty index associated with the secure hashing algorithm employed in solving the blocks.

• Digital asset hosted mining revenue from customers and related parties.

Digital asset hosted mining revenue from customers and related parties is based on electricity-based consumption contracts with our customers and related parties.

Most contracts are renewable, and our customers are generally billed on a fixed and recurring basis each month for the duration of their contract, which vary from one to three years in length.

During the second quarter of 2023, we initiated our first new digital asset hosted mining customer contracts based on proceed sharing.

Under these new contracts, customers pay for the cost of digital asset hosting and infrastructure, and we share the proceeds that are generated.

• HPC hosting revenue.

HPC hosting revenue is generated by licensing data center space and related services to licensees at our Austin, Texas data center.

These licensing agreements and orders include lease components, nonlease components (such as power delivery, physical security, maintenance and other billable expenses), as well as noncomponent elements such as taxes.

Under these contracts, customers pay fixed payments (based on electric capacity) and variable payments on a recurring basis.

HPC hosting power fees are passed through to the customer without markup and are included on a gross basis in HPC hosting revenue.

Cost of revenue

The Company’s cost of digital asset self-mining and digital asset hosted mining services, primarily consist of electricity costs, salaries, stock-based compensation, depreciation of property, plant and equipment used to perform mining operations and hosting services and other related costs.

Cost of HPC hosting services relate to our Austin, Texas data center, and primarily consists of facility operations expense, which includes maintenance and lease expense, power fees, payroll and benefits expense and stock-based compensation expense.

HPC hosting power fees are passed through to the customer without markup and are included on a gross basis in Cost of HPC hosting services.

Change in fair value of digital assets

The Company adopted ASU 2023-08 effective January 1, 2024.

Under ASU 2023-08, the Company measures digital assets at fair value with the changes in fair value during the reporting period recognized in change in fair value of digital assets.

Recognition of digital asset results prior to adoption are described below.

Gain from sale of digital assets

Prior to the adoption of ASU 2023-08 effective January 1, 2024, gain from sale of digital assets consisted of the excess of sales proceeds over the carrying value of the digital assets at the time of sale.

Gains were recognized as they were realized upon sale(s).

Impairment of digital assets

Prior to the adoption of ASU 2023-08 effective January 1, 2024, impairment losses were recognized in the period in which the impairment was identified.

The impaired digital assets were written down to their fair value at the time of impairment and the new carrying value would not be adjusted upward for any subsequent increase in fair value until sale.

Change in fair value of energy derivatives

The Change in fair value of energy derivatives represents changes in the fair value of the derivative liability related to the energy forward purchase contract described in more detail in “Energy Forward Purchase Contract” in Note 2 — Summary of Significant Accounting Policies to our consolidated financial statements in Item 8 of Part II of our Annual Report on Form 10-K.

Losses on exchange or disposal of property, plant and equipment

Losses on exchange or disposal of property, plant and equipment are measured as the differences between the carrying value of the property, plant and equipment disposed of and fair value of the consideration received upon disposal.

Operating expenses

Operating expenses consist of research and development, sales and marketing, and general and administrative expenses.

Each is outlined in more detail below.

• Research and development.

We invest in research and development to enhance the efficiency and effectiveness of our mining operations and hosting services and to support our efforts to capture business opportunities in adjacent high-value computing markets.

Research and development costs include compensation and benefits, stock-based compensation, other personnel related costs and professional fees.

• Sales and marketing.

Sales and marketing expenses consist of marketing expenses, trade shows and events, professional fees, compensation and benefits, stock-based compensation and other personnel-related costs.

• General and administrative.

General and administrative expenses include compensation, benefits, other personnel-related expenses for employees who are not part of our operating sites, research, development, sales, or marketing functions.

Also included are stock-based compensation, rent, HPC organizational and site startup costs, post-emergence bankruptcy advisor fees related to the reorganization, professional fees, business insurance, auditor fees, bad debt, amortization of intangibles, franchise taxes, and bank fees.

HPC organizational startup costs were primarily consulting costs that were specifically incurred preparing for and entering into the HPC hosting business, and are not expected to be incurred in the ongoing operations of the HPC hosting business.

HPC site startup costs are noncapitalizable costs associated with the administration of converting and building of future HPC hosting operating sites, and include compensation and other personnel-related expenses, including stock-based compensation.

Similar costs will be incurred in the future operations of the HPC hosting sites.

Non-operating expenses (income), net:

Non-operating expenses (income), net includes loss (gain) on debt extinguishment, interest expense, net, reorganization items, net, fair value adjustments of convertible notes, warrants and contingent value rights, and other non-operating (income) expenses, net.

Reorganization items, net consists of costs directly associated with the reorganization during the bankruptcy period, including professional fees (including reimbursed third-party professional fees) and other bankruptcy related costs, negotiated settlements, satisfaction of allowed claims, and debtor-in-possession finance fees.

Income tax expense

Income tax expense consists of U.S.

federal and state income taxes.

We maintain a full valuation allowance against our U.S.

federal and state net deferred tax assets as realization of deferred tax assets is dependent upon the generation of future taxable income, the timing and amount of which are uncertain and therefore have concluded it is not more likely than not that we will realize our net deferred tax assets.

Income tax expense consists of federal and state tax expense on our operating activity, and changes to our deferred tax asset and deferred tax liability.

Deferred income tax expense consists of income taxes recorded using the asset and liability method.

Under this method, deferred tax assets and liabilities are recorded based on the estimated future tax effects of differences between the financial reporting and tax bases of existing assets and liabilities.

These differences are measured using the enacted tax rates that are expected to be in effect when these differences are anticipated to reverse.

Deferred tax assets are reduced by a valuation allowance to the extent management believes it is not more likely than not to be realized.

Results of Operations for the Year Ended December 31, 2025 and 2024

The following table sets forth our selected Consolidated Statements of Operations for each of the periods indicated (in thousands).

The following table sets forth our selected consolidated statements of operations for each of the periods indicated (in

Year Ended December 31,

2024 2023 $ Change

Colocation revenue

Digital asset self-mining revenue

$ 408,740 $ 390,333 $ 18,407

Digital asset hosted mining revenue from customers

77,554 102,005 (24,451)

Digital asset hosted mining revenue from related parties

— 10,062 (10,062)

HPC hosting revenue 24,378 — 24,378

Total revenue

Cost of revenue:

Cost of colocation services

Cost of digital asset self-mining

314,335 291,696 22,639

Cost of digital asset hosted mining services

53,558 87,245 (33,687)

Cost of HPC hosting services 21,709 — 21,709

Total cost of revenue

121,070 123,459 (2,389)

Change in fair value of digital assets

(1,052) — (1,052)

Gain from sale of digital assets

— 3,893 (3,893)

Impairment of digital assets — (4,406) 4,406

Change in fair value of energy derivatives

(2,757) (3,918) 1,161

Decrease in fair value of digital assets

Decrease in fair value of energy derivatives

Loss on disposal of property, plant and equipment

(4,210) (1,956) (2,254)

Operating expenses:

Research and development 11,830 7,184 4,646

Sales and marketing 9,969 7,019 2,950

General and administrative 110,448 93,908 16,540

Total operating expenses 132,247 108,111 24,136

Operating (loss) income

(19,196) 8,961 (28,157)

Non-operating expenses (income), net:

Loss (gain) on debt extinguishment

487 (20,065) 20,552

Interest expense, net

37,070 86,238 (49,168)

Reorganization items, net (111,439) 191,122 (302,561)

Impairment of property, plant and equipment

Colocation organizational and site startup costs

Selling, general and administrative

Operating loss

Non-operating expense (income), net:

Loss on debt extinguishment

Interest (income) expense, net

Change in fair value of warrants and contingent value rights

1,369,157 — 1,369,157

Other non-operating income, net

(325) (2,530) 2,205

Total non-operating expenses, net

1,294,950 254,765 1,040,185

Reorganization items, net

Loss on legal settlements

Other non-operating expense (income), net

Total non-operating expense, net

Loss before income taxes

(1,314,146) (245,804) (1,068,342)

Income tax expense

$ (1,437,874)

The following table summarizes gross profit and gross margin by reportable segment for 2025 and 2024.

Year Ended December 31,

2024 2023 $ Change

Colocation Segment

Colocation gross profit

Colocation gross margin

Digital Asset Self-Mining Segment

Digital asset self-mining gross profit

Digital asset self-mining gross margin

Digital Asset Hosted Mining Segment

Digital asset hosted mining gross profit

Digital asset hosted mining gross margin

Gross profit represents segment revenue less segment cost of revenue.

Accordingly, the year over year changes in gross profit

and gross margin by segment are primarily driven by the changes in revenue and cost of revenue discussed in the “ Revenue” and

“ Cost of revenue” sections below.

Year Ended December 31,

Colocation revenue

Digital asset self-mining revenue

$ 408,740 $ 390,333 $ 18,407

Digital asset hosted mining revenue from customers

77,554 102,005 (24,451)

Digital asset hosted mining revenue from related parties

— 10,062 (10,062)

HPC hosting revenue 24,378 — 24,378

Total revenue

Percentage of total revenue:

Colocation revenue

Digital asset self-mining revenue

Digital asset hosted mining revenue from customers

Digital asset hosted mining revenue from related parties — % 2 %

HPC hosting revenue 5 % — %

Total revenue

Total revenue increased by $8.3 million or 2%, to $510.7 million for the year ended December 31, 2024, from $502.4 million for the year ended December 31, 2023, as a result of the factors described below.

Digital asset self-mining revenue increased by $18.4 million or 5%, to $408.7 million for the year ended December 31, 2024, from $390.3 million for the year ended December 31, 2023.

The year over year increase in self-mining revenue was driven primarily by:

• a 128% increase in the average price of bitcoin to $65,894 for the year ended December 31, 2024, compared to $28,859 for the year ended December 31, 2023;

• a 13% increase in self-mining hash rate to 19.1 EH/s for the year ended December 31, 2024, from 16.9 EH/s for the same period in the prior year;

• an approximate net increase of 6,000 mining units deployed;

• and an increase in our average self-mining hash rate fleet mix and efficiency to 25.1 joules per terahash.

This increase in self-mining revenue was partially offset by:

• a 52% decrease in bitcoin mined to 6,595 for the year ended December 31, 2024, compared to 13,762 for the year ended December 31, 2023, driven primarily by:

◦ a 50% decrease in block rewards as a result of the April 2024 halving;

◦ the operational shift from digital asset self-mining to HPC hosting;

◦ a 66% increase in the twelve-month average network hash rate over prior year.

Total digital asset hosted mining revenue from customers decreased by $24.5 million or 24%, to $77.6 million for the year ended December 31, 2024, from $102.0 million for the year ended December 31, 2023.

The decrease in hosted mining revenue from customers was primarily driven by the termination of contracts with several customers since 2023, due primarily to our shift to HPC hosting.

Total digital asset hosted mining revenue from related parties was nil for the year ended December 31, 2024, compared to $10.1 million for the year ended December 31, 2023.

There were no related-party transactions during the year ended December 31, 2024.

Total HPC hosting revenue was $24.4 million for the year ended December 31, 2024, compared to nil for the same period in the prior year due to the initiation of HPC hosting operations at our Austin, Texas data center during the quarter ended June 30, 2024.

Cost of revenue

Colocation revenue

Colocation revenue consists of fees charged to customers for licensed data center space, power and related services.

contracts, customers generally pay fixed monthly fees based on billable customer power capacity and variable usage‑based charges

and other billable services.

P ower fees are passed through to customers without markup and are recognized as revenue on a gross

basis, with a corresponding charge to cost of colocation services.

As a result, changes in power prices can cause fluctuations in

colocation revenue that are not indicative of changes in our underlying colocation margins.

The year over year increase in colocation revenue was primarily attributable to incremental billable customer power capacity at

our Denton, Texas and Marble, North Carolina data centers.

In addition, lease operations at our Austin, Texas data center, which

commenced in the second quarter of 2024, contributed to higher colocation revenue.

Digital asset self-mining revenue

Digital asset self‑mining revenue consists primarily of bitcoin earned from operating our owned mining fleet.

We participate in

mining pools under which we receive consideration based on the hash rate we contribute to the pool.

The year over year decrease in self-mining revenue was driven primarily by lower bitcoin production, partially offset by higher

average bitcoin prices.

Year Ended December 31,

2024 2023 $ Change

Bitcoin mined

Average price of bitcoin

Self-mining hash rate

The decrease in bitcoin mined was driven primarily by (i) a reduction in our deployed mining fleet due primarily to our

strategic shift to colocation, (ii) the Bitcoin network’s halving, which reduced bitcoin earned per unit of hash rate beginning in April

2024, and (iii) more challenging network conditions, including higher network difficulty.

Digital asset hosted mining revenue

Digital asset hosted mining revenue represents fees earned for providing infrastructure, power and related services to third‑party

Under our hosting contracts, customers are generally billed monthly based on power capacity and/or power consumption over

the term of the arrangement, which typically ranges from one to three years.

The year over year decrease in hosted mining revenue from customers was primarily driven by our shift to our Colocation

Cost of revenue

$ 389,602 $ 378,941 $ 10,661

121,070 123,459 (2,389)

Cost of revenue increased by $10.7 million or 3%, to $389.6 million for the year ended December 31, 2024, from $378.9 million for the year ended December 31, 2023.

As a percentage of total revenue, cost of revenue totaled 76% and 75% for the year ended December 31, 2024 and 2023, respectively.

The increase in cost of revenue was primarily attributable to:

• a $21.7 million increase in HPC hosting costs, primarily rent and power incurred during the current fiscal year with no comparable activity for the same period in fiscal 2023;

• a $16.7 million increase in depreciation expense driven by the increase in the number of miners in service;

• a $5.9 million increase in payroll and benefits is due to increases in bonuses and salaries driven primarily by an increase in employee headcount;

• a $1.9 million i ncrease in stock-based compensation expense;

partially offset by

• a $32.0 million decrease in power costs from lower rates and usage and $3.3 million lower facility operations expense.

Change in fair value of digital assets

Year Ended December 31,

2024 2023 $ Change

Change in fair value of digital assets

$ (1,052) $ — $ (1,052)

Percentage of total revenue

Change in fair value of digital assets was $1.1 million for the year ended December 31, 2024, and reflects the Company’s adoption of ASU 2023-08 effective January 1, 2024.

Gain from sale of digital assets

Year Ended December 31,

2024 2023 $ Change

Gain from sale of digital assets

$ — $ 3,893 $ (3,893)

Percentage of total revenue

Gain from sale of digital assets was nil for the year ended December 31, 2024, compared to a gain of $3.9 million for the year ended December 31, 2023.

There are no gains from sale of digital assets recorded in fiscal 2024 due to the Company’s adoption of ASU 2023-08 effective January 1, 2024.

For the year ended December 31, 2023, the carrying value of our digital assets sold was $400.8 million and the sales price was $404.7 million.

Impairment of digital assets

Cost of revenue:

Cost of colocation services

Cost of digital asset self-mining

Cost of digital asset hosted mining services

Total cost of revenue

Cost of revenue includes the costs to operate our colocation, digital asset self‑mining, and digital asset hosted mining

businesses, including power fees, depreciation, personnel and facility-related costs.

Colocation cost of revenue

The year over year increase in cost of colocation services was driven primarily by incremental billable capacity at our Denton,

Texas and Marble, North Carolina data centers during 2025.

In addition, costs related to lease operations at our Austin, Texas data

center, which commenced in the second quarter of 2024, contributed to higher colocation cost of revenue in 2025.

Digital asset self-mining cost of revenue

The year over year decrease in cost of digital asset self-mining was driven primarily by reduced self-mining activity during

2025, including lower power consumption and depreciation.

Digital asset hosted mining cost of revenue

The year over year decrease in cost of digital asset hosted mining services was driven primarily by the wind-down of hosted

mining arrangements, which resulted in lower power consumption.

Decrease in fair value of digital assets

Year Ended December 31,

2024 2023 $ Change

Impairment of digital assets $ — $ (4,406) $ 4,406

Decrease in fair value of digital assets

Percentage of total revenue

Impairment of digital assets was nil for the year ended December 31, 2024, compared to $4.4 million for the year ended December 31, 2023.

Upon the Company’s adoption of ASU 2023-08 effective January 1, 2024, the Company measures digital assets at fair value each reporting period with changes in fair value recognized in net income.

Prior to the adoption of ASU 2023-08, impairment existed when the carrying amount exceeded its fair value.

Impairment was measured using quoted prices of the digital asset at the time its fair value was being assessed.

Quoted prices, including intraday low prices, were collected and utilized in impairment testing and measurement on a daily basis.

If the then current carrying value of a digital asset exceeded the fair value so determined, an impairment loss occurred with respect to those digital assets in the amount equal to the difference between their carrying value and the price determined.

The carrying value of our digital assets amounted to $23.9 million as of December 31, 2024, and $2.3 million as of December 31, 2023.

Change in fair value of energy derivatives

The year over year change in fair value of digital assets was primarily driven by higher bitcoin holdings in 2025 under our

bitcoin holding strategy and bitcoin price declines during portions of 2025.

Impairment of property, plant and equipment

Year Ended December 31,

2024 2023 $ Change

Change in fair value of energy derivatives

$ (2,757) $ (3,918) $ 1,161

Impairment of property, plant and equipment

Percentage of total revenue

Change in fair value of energy derivatives, which is related to the change in fair value of the derivative liability of the energy forward purchase contract entered into in October 2023, was $2.8 million for the year ended December 31, 2024, compared to $3.9 million for the year ended December 31, 2023.

Losses on exchange or disposal of property, plant and equipment

The year over year decrease was primarily driven by a lower volume of assets committed to demolition in connection with the

conversion of data center facilities from digital asset mining to high-density colocation operations, compared to a significantly higher

volume of such charges recognized in 2024 .

We expect to incur future impairments of PP&E at the point at which the assets become

committed to demolition, which is generally expected to occur at the time of colocation customer contract execution.

Colocation organizational and site startup costs

Year Ended December 31,

2024 2023 $ Change

Losses on exchange or disposal of property, plant and equipment $ (4,210) $ (1,956) $ (2,254)

Colocation organizational and site startup costs

Percentage of total revenue

Losses on exchange or disposal of property, plant and equipment increased by $2.3 million to $4.2 million for the year ended December 31, 2024, from $2.0 million for the year ended December 31, 2023.

This loss was due to the disposal of mining equipment.

Operating Expenses

Colocation organizational and site startup costs primarily consist of employee compensation, including stock-based

compensation.

The year over year increase was primarily driven by site startup costs incurred to convert facilities from digital asset

mining to colocation operations, partially offset by the absence of organizational startup costs incurred in 2024 in connection with the

formation of the colocation segment.

Selling, general and administrative

Year Ended December 31,

2024 2023 $ Change

Operating expenses:

Research and development

$ 11,830 $ 7,184 $ 4,646

Sales and marketing

9,969 7,019 2,950

General and administrative

110,448 93,908 16,540

Total operating expenses

$ 132,247 $ 108,111 $ 24,136

Selling, general and administrative

Percentage of total revenue

Total operating expenses increased $24.1 million or 22%, to $132.2 million for the year ended December 31, 2024, from $108.1 million for the year ended December 31, 2023.

Research and development expenses increased by $4.6 million or 65%, to $11.8 million for the year ended December 31, 2024, from $7.2 million for the year ended December 31, 2023.

The increase was driven by a $3.1 million increase in payroll and benefits expense due to increases in bonuses and salaries driven primarily by an increase in employee headcount, and a $1.5 million increase in stock-based compensation expense .

Sales and marketing expenses increased by $3.0 million to $10.0 million for the year ended December 31, 2024, from $7.0 million for the year ended December 31, 2023.

The increase was driven primarily by:

• a $1.1 million increase in advertising and marketing expenses;

Selling, general and administrative expenses (“SG&A”) consist primarily of personnel-related costs and professional fees.

The increase in SG&A was driven primarily by:

• a $34.1 million increase in stock-based compensation expense;

• a $0.5 million increase in payroll and benefits expense due to increases in bonuses and salaries driven primarily by an increase in employee headcount;

• a $0.4 million increase in travel and training expense.

General and administrative expenses increased by $16.5 million or 18%, to $110.4 million for the year ended December 31, 2024, from $93.9 million for the year ended December 31, 2023.

The increase was primarily driven by:

• an $18.2 million increase in payroll and benefits expense due to increases in bonuses and salaries driven primarily by an increase in employee headcount to support our transition to HPC operations;

• a $6.8 million increase in payroll expense;

• a $6.4 million increase in professional fees.

• a $4.8 million in post-emergence bankruptcy advisor fees;

• a $0.9 million increase in property tax;

• a $0.9 million increase in advertising and marketing;

• a $0.7 million increase in software subscriptions.

This increase in general and administrative expenses was partially offset by:

• $12.3 million lower stock-based compensation primarily due to cancellation and forfeitures of equity-based awards during the year ended December 31, 2024, and also due to no new equity awards granted during fiscal 2023;

• a $2.2 million decrease in other operating expense primarily driven by decreased business insurance expense.

For the year ended December 31, 2024, $9.1 million of general and administrative expenses are classified as HPC site startup costs.

These costs are primarily payroll, benefits, and stock-based compensation for activities related to the startup of our HPC sites that have transitioned from digital asset site operations and administration.

Non-operating expenses (income), net

Year Ended December 31,

2024 2023 $ Change

Non-operating expenses (income), net:

Loss (gain) on debt extinguishment

$ 487 $ (20,065) $ 20,552

Interest expense, net 37,070 86,238 (49,168)

Loss on debt extinguishment

Interest (income) expense, net

Change in fair value of warrants and contingent value rights

1,369,157 — 1,369,157

Reorganization items, net

Other non-operating income, net

(325) (2,530) 2,205

Total non-operating expenses, net

$ 1,294,950 $ 254,765 $ 1,040,185

Total non-operating expenses, net increased by $1.04 billion, to $1.29 billion for the year ended December 31, 2024, from total non-operating expenses, net of $254.8 million for the year ended December 31, 2023.

The increase in total non-operating expenses, net was primarily driven by:

• the Company’s entry into a warrant agreement and Convertible Value Rights Agreement pursuant to the Plan of Reorganization.

During the year ended December 31, 2024, we incurred a $1.37 billion Change in fair value of warrant and contingent value rights due to the increase in the price of the underlying instruments driven by the increase in the Company’s stock price to $14.05 per share as of December 31, 2024, from $3.44 per share as of the Effective Date.

The increase in stock price resulted in a $1.45 billion increase in the fair value of the warrant liabilities during the year ended December 31, 2024, partially offset by a $82.1 million decrease in fair value of contingent value rights;

• a $20.1 million Gain on extinguishment of debt recognized during the same period in the prior year.

This increase was partially offset by:

• a $302.6 million decrease in Reorganization items, net related to a $238.4 million gain associated with the satisfaction of allowed claims, a $70.7 million decrease in professional fees and other bankruptcy costs, and a $24.5 million decrease in debtor-in-possession financing costs, partially offset by a $18.2 million increase in negotiated settlements and a $12.8 million increase in reimbursed claimant professional fees;

• a $49.2 million decrease in Interest expense, net resulting from lower average debt balances during the year ended December 31, 2024.

Income tax expense

Year Ended December 31,

2024 2023 $ Change

Income tax expense

$ 859 $ 683 $ 176

Percentage of total revenue

Income tax expense consists of U.S.

federal, state and local income taxes.

For the years ended December 31, 2024 and 2023, our income tax expense was $0.9 million and $0.7 million, respectively.

The Company's effective tax rate for the year ended December 31, 2024, was lower than the federal statutory rate of 21% primarily due to a valuation allowance on the Company’s deferred tax assets and certain non-deductible expenses.

Segment Total Revenue and Gross Profit

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

Year Ended December 31,

2024 2023 $ Change

Digital Asset Self-Mining Segment

Digital asset self-mining revenue

$ 408,740 $ 390,333 $ 18,407

Cost of digital asset self-mining:

Power fees 160,833 165,848 (5,015)

Depreciation expense 108,499 88,628 19,871

Employee compensation 26,129 16,853 9,276

Facility operations expense 13,274 14,055 (781)

Other segment items 5,600 6,312 (712)

Total cost of digital asset self-mining 314,335 291,696 22,639

Digital Asset Self-Mining gross profit $ 94,405 $ 98,637 $ (4,232)

Digital Asset Self-Mining gross margin 23 % 25 % (2) %

Digital Asset Hosted Mining Segment

Digital asset hosted mining revenue from customers $ 77,554 $ 112,067 $ (34,513)

Cost of digital asset hosted mining services:

Power fees 35,408 62,366 (26,958)

Depreciation expense 3,604 6,806 (3,202)

Employee compensation 4,933 6,337 (1,404)

Facility operations expense 2,765 5,285 (2,520)

Other segment items 6,848 6,451 397

Total cost of digital asset hosted mining services 53,558 87,245 (33,687)

Digital Asset Hosted Mining gross profit $ 23,996 $ 24,822 $ (826)

Digital Asset Hosted Mining gross margin 31 % 22 % 9 %

HPC Hosting Segment

HPC hosting revenue:

License fees $ 17,498 $ — $ 17,498

Maintenance and other 73 — 73

Licensing revenue

17,571 — 17,571

Power fees passed through to customer 6,807 — 6,807

Total HPC hosting revenue 24,378 — 24,378

Cost of HPC hosting services:

Depreciation expense 3 — 3

Employee compensation

2,514 — 2,514

Facility operations expense 11,907 — 11,907

Other segment items 478 — 478

Cost of licensing revenue 14,902 — 14,902

Power fees passed through to customer

6,807 — 6,807

Total cost of HPC hosting services 21,709 — 21,709

HPC Hosting gross profit $ 2,669 $ — $ 2,669

HPC Hosting licensing gross margin 15 % — % 15 %

HPC Hosting gross margin

11 % — % 11 %

Consolidated total revenue $ 510,672 $ 502,400 $ 8,272

Consolidated cost of revenue $ 389,602 $ 378,941 $ 10,661

Consolidated gross profit $ 121,070 $ 123,459 $ (2,389)

Consolidated gross margin 24 % 25 % (1) %

Digital Asset Self-Mining

For the year ended December 31, 2024, gross profit in the Digital Asset Self-Mining segment decreased by $4.2 million compared to the year ended December 31, 2023, reflecting a Digital Asset Self-Mining segment gross margin of 23% for the year ended December 31, 2024, compared to 25% for the year ended December 31, 2023.

The decrease in the Digital Asset Self-Mining segment gross profit was primarily due to:

• a $22.6 million or 8% increase in the total cost of digital asset self-mining driven by:

◦ a $19.9 million or 22% increase in depreciation expense, which was driven primarily by an approximate net increase of 6,000 miners placed in service during the current year;

◦ a $9.3 million or 55% increase in employee compensation due to increases in bonuses and salaries driven primarily by an increase in employee headcount;

partially offset by

◦ a $5.0 million decrease in power costs due primarily to lower power rates.

This increase in the total cost of digital asset self-mining was partially offset by:

• a 5% increase in self-mining revenue driven by:

◦ a 128% increase in the average price of bitcoin;

◦ a 13% increase in our self-mining hash rate to 19.1 EH/s for the year ended December 31, 2024, compared to 16.9 EH/s for the year ended December 31, 2023;

◦ an approximate net increase of 6,000 mining units deployed;

partially offset by

◦ a 52% decrease in bitcoin mined to 6,595 for the year ended December 31, 2024, compared to 13,762 for the year ended December 31, 2023, driven primarily by:

▪ a 50% decrease in block rewards as a result of the April 2024 halving;

▪ the operational shift from digital asset self-mining to HPC hosting;

▪ a 66% increase in the twelve-month average network hash rate over prior year.

Digital Asset Hosted Mining

For the year ended December 31, 2024, gross profit in the Digital Asset Hosted Mining segment decreased by $0.8 million compared to the year ended December 31, 2023, reflecting a Digital Asset Hosted Mining segment gross margin of 31% for the year ended December 31, 2024, compared to a gross margin of 22% for the year ended December 31, 2023.

The increase in Digital Asset Hosted Mining segment gross margin for the year ended December 31, 2024, compared to the year ended December 31, 2023 was primarily due to:

• a $34.5 million or 31% decrease in the digital asset hosted mining revenue driven primarily by a $24.5 million decrease from the termination of contracts with several customers since 2023, due primarily to our shift to HPC hosting, and a $10.1 million decrease in digital asset hosted mining revenue from related parties as there were no related party transactions during fiscal 2024, partially offset by:

• a $33.7 million or 39% decrease in the total cost of digital asset hosted mining services driven primarily by a $27.0 million decrease in power costs from lower rates and usage.

For the years ended December 31, 2024 and 2023, the top three hosting customers accounted for approximately 89% and 72%, respectively, of the Digital Asset Hosting’s segment total revenue.

For the year ended December 31, 2024, gross profit in the HPC Hosting segment was $2.7 million compared to nil for the year ended December 31, 2023, due to the HPC Hosting segment starting operation during the quarter ended June 30, 2024.

HPC hosting revenue includes a base license fee as well as the direct pass-through of power costs to our client, with no margin added.

HPC hosting costs at our Austin, Texas data center consist primarily of lease expense, the direct pass-through of power costs, and direct and indirect facilities operations expenses, including personnel and benefit costs and stock-based compensation.

A reconciliation of the reportable segment gross profit to loss before income taxes included in our Consolidated Statements of Operations for the years ended December 31, 2024 and 2023, is as follows (in thousands):

Year Ended December 31,

2024 2023 $ Change

Reportable segment gross profit

$ 121,070 $ 123,459 $ (2,389)

Change in fair value of digital assets (1,052) — (1,052)

Gain from sale of digital assets — 3,893 (3,893)

Impairment of digital assets — (4,406) 4,406

Change in fair value of energy derivatives

(2,757) (3,918) 1,161

Loss on exchange or disposal of property, plant and equipment

(4,210) (1,956) (2,254)

Operating expenses:

Research and development 11,830 7,184 4,646

Sales and marketing 9,969 7,019 2,950

General and administrative 110,448 93,908 16,540

Total operating expenses 132,247 108,111 24,136

Operating (loss) income (19,196) 8,961 (28,157)

Non-operating expenses (income), net:

Loss (gain) on debt extinguishment

487 (20,065) 20,552

Interest expense, net

37,070 86,238 (49,168)

Reorganization items, net (111,439) 191,122 (302,561)

Change in fair value of warrants and contingent value rights 1,369,157 — 1,369,157

Other non-operating (income) expense, net (325) (2,530) 2,205

Total non-operating expenses, net

1,294,950 254,765 1,040,185

Loss before income taxes

Loss on legal settlements

Other non-operating expense (income), net

Total non-operating expense, net

$ (1,252,506)

Non-operating expenses (income), net primarily reflects (i) non-cash changes in the fair value of warrants and contingent value

rights and (ii) interest (income) expense, net, and reorganization-related items.

• The year over year decrease in change in fair value of warrants and contingent value rights was driven by changes in our

stock price, which increased by $0.51 per share during 2025, compared to an increase of $10.61 from January 23, 2024, the

date of our emergence from bankruptcy, to December 31, 2024 ;

• The absence of Reorganization items, net in 2025 was due to our emergence from bankruptcy on January 23, 2024.

• The year over year decrease in Interest (income) expense, net was driven primarily by a $23.2 million decrease in interest

expense due to lower interest rates on outstanding debt, including the repayment of certain higher-interest notes during 2025 ,

and a $17.3 million increase in interest income earned on money market funds.

Liquidity and Capital Resources

Sources and Uses of Cash

We finance our operations primarily through cash generated from operations, including the sale of self-mined bitcoin and fees from licensing HPC data center space, debt issuances, equipment financing arrangements, and sales of equity securities.

Although our present needs will likely still result in sales of a significant portion of our self-mined bitcoin, we also may employ strategies intended to optimize cash received from self-mined bitcoin which may entail, subject to market conditions, holding bitcoin for future sale at any particular point in time.

Historically, a substantial portion of our liquidity needs arose from debt service on our outstanding indebtedness and from funding the costs of operations, working capital and capital expenditures.

During the fiscal year ended December 31, 2024, the Company successfully repaid a significant portion of its outstanding loans, notes, and obligations, issued in accordance with the Plan of Reorganization.

This extinguishment of these loans, notes and obligations was achieved either through mandatory conversion events triggered by the Company's stock price or through proactive measures taken by the Company to settle its debts ahead of schedule.

In part, the Company used its net proceeds from its 2029 Convertible Notes Offering and 2031 Convertible Notes Offering to extinguish its debt.

For further information regarding the extinguishment of the Company’s debt and its private debt offerings, refer to Notes 8 — Convertible and Other Notes Payable and 9 — Contingent Value Rights and Warrant Liabilities to our consolidated financial statements in Item 8 of Part II of this Annual Report on Form 10-K.

We have assessed our current and expected operating and capital expenditure requirements and our current and expected sources of liquidity, and have determined, based on our forecasted financial results and financial condition as of December 31, 2024, that our operating cash flows, existing cash balances, and continued access to debt markets will be sufficient to satisfy our cash requirements over the next twelve months and beyond.

Cash, Cash Equivalents, Restricted Cash and Cash Flows

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.

2024 2023 $ Change

We finance our operating and capital requirements primarily through a combination of (i) cash and cash equivalents, (ii) cash

generated from operations, (iii) sales of digital assets (bitcoin), subject to market conditions and our treasury strategy , and (iv)

financing activities, including debt financing arrangements.

We also receive customer prepayments under our colocation

arrangements, which are associated with, and are expected to offset a significant portion of, the capital expenditures required to build

out and convert facilities for those arrangements.

During 2026, we currently expect to monetize substantially all of our bitcoin holdings, subject to market conditions, to enhance

liquidity and fund our planned capital expenditures and other cash requirements.

We currently anticipate that the majority of these

sales would occur during the first quarter of 2026.

However, the timing and amount of any sales will depend on market conditions and

our liquidity needs and may change .

Our planned capital expenditures and other cash requirements may require additional external financing.

We may from time to

time seek additional financing to fund our operations and capital expenditures.

If we are unable to obtain financing on acceptable

terms, we may be required to reduce, delay or modify planned expenditures or pursue other alternatives.

We have assessed our current and expected operating and capital expenditure requirements and our current and expected

sources of liquidity, and have determined, based on our forecasted financial results and financial condition as of December 31, 2025 ,

that our available liquidity, including cash and cash equivalents and expected operating cash flows and customer funding related to our

colocation arrangements, will be sufficient to satisfy our cash requirements for at least the next twelve months.

The following table summarizes our cash and cash equivalents and the fair value of our digital assets (in thousands):

Cash and cash equivalents

Restricted cash 783 19,300 (18,517)

Total cash, cash equivalents and restricted cash $ 836,980 $ 69,709 $ 767,271

As of December 31, 2024 and December 31, 2023, restricted cash of $0.8 million and $19.3 million, consisted of cash held in escrow to pay for construction and development activities.

The following table summarizes our cash, cash equivalents and restricted cash and cash flows for the periods indicated.

Digital assets

The following table presents our cash flows (in thousands):

Year Ended December 31,

(in thousands)

Cash, cash equivalents and restricted cash – beginning of period

$ 69,709 $ 52,240

Net cash provided by (used in)

Operating activities

42,896 65,114

Investing activities

(95,192) (2,996)

Financing activities

819,567 (44,649)

Cash, cash equivalents and restricted cash - end of period

$ 836,980 $ 69,709

Our principal uses of cash in recent periods have been funding our operations and investing in capital expenditures.

Operating Activities

Changes in net cash from operating activities results primarily from cash received from hosting customers payments for power fees and equipment purchases.

Other drivers of the changes in net cash from operating activities include research and development costs, sales and marketing costs and general and administrative expenses (including personnel expenses and fees for professional services) and interest payments on debt.

Net cash provided by operating activities was $42.9 million for the year ended December 31, 2024 and $65.1 million for the year ended December 31, 2023.

The decrease in net cash provided by operating activities was primarily due to a increase in net loss of $1.07 billion, a $194.6 million decrease in working capital components, a $143.8 million increase in non-cash reorganization items, a $82.1 million decrease in the fair value of contingent value rights, a $18.2 million increase in digital asset self-mining and shared hosting revenue, and a $7.0 million decrease in stock-based compensation.

The decrease in net cash provided by operating activities was partially offset by a $1.45 billion increase in the fair value of warrant liabilities, a $20.6 million decrease in loss on debt extinguishment, and a $17.2 million increase in depreciation and amortization.

Investing Activities

Our net cash used in investing activities consists primarily of purchases of property, plant and equipment.

Net cash used in investing activities for the years ended December 31, 2024 and 2023, was $95.2 million and $3.0 million, respectively.

The increase in net cash used in investing activities was driven primarily by a $78.8 million increase in purchases of property, plant and equipment, partially offset by $14.0 million of proceeds from the sale of the Cedarvale, Texas facility for the year ended December 31, 2023.

Financing Activities

Net cash provided by (used in) financing activities consists of proceeds from stock issuances, issuances of debt, net of issuance costs and principal payments on debt, including notes payable and finance leases.

Net cash provided by financing activities for the year ended December 31, 2024 was $819.6 million.

Net cash used by financing activities for the year ended December 31, 2023 was $44.6 million.

The change was due primarily to an inflow of $610.2 million from the proceeds for the issuance of the 0.00% convertible senior notes, net, $447.6 million from the proceeds for the issuance of the 3.00% convertible senior notes, net, $55.0 million from the issuance of common stock during the year ended December 31, 2024, and a $20.0 million draw from the Exit Facility.

The increase in net cash provided by financing activities was partially offset by an increase in principal payments on debt of $263.8 million.

Future Commitments and Contractual Obligations

Our material cash commitments from known contractual and other obligations consist primarily of obligations for long-term debt and related interest, leases for property and equipment, and capital expenditures related to the conversion of a significant portion of our data centers to hosting HPC operations.

Certain amounts included in our contractual obligations as of December 31, 2024, are based on our estimates and assumptions about these obligations, including their duration, anticipated actions by third parties and other factors.

Debt Obligations and Interest Payments

As of December 31, 2024, future principal payment obligations on our convertible notes and other notes payable totaled $1.12 billion, of which $17.7 million is expected to be due within one year.

Cash payments for expected interest on our convertible notes and other notes payable is $15.8 million within the next twelve months and $56.1 million thereafter.

For more information, refer to Note 8 — Convertible and Other Notes Payable, to our consolidated financial statements in Item 8 of Part II of this Annual Report on Form 10-K.

Operating Lease Payments

As of December 31, 2024, our future payments under operating leases are $151.5 million, of which $18.6 million is due within one year.

For more information, refer to Note 7 — Leases, to our consolidated financial statements in Item 8 of Part II of this Annual Report on Form 10-K.

Capital Expenditure Commitment

As of December 31, 2024, the Company was contractually committed for approximately $1.14 billion of capital expenditures, primarily related to infrastructure modifications, equipment procurement, and labor associated with the conversion of a significant portion of its data centers to deliver hosting services for HPC.

Of this amount, $899.3 million is reimbursable by our customer under our agreements.

These capital expenditures are expected to occur over the next year.

For additional discussion of Commitments and Contractual Obligations, refer to Note 11 — Commitments and Contingencies to our consolidated financial statements in Item 8 of Part II of this Annual Report on Form 10-K.

Purchase Agreement

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

for the purchase of 3 nanometer 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 second half of 2025.

On January 15, 2025, the Company made a $21.3 million prepayment under the agreement.

The Company expects to make additional payments over the next year in connection with the agreement, subject to the timing of anticipated deliveries.

Net cash provided by operating activities

Net cash used in investing activities

Net cash (used in) provided by financing activities

Net cash provided by operating activities increased to $278.3 million in 2025 from $42.9 million in 2024, primarily due to

higher cash inflows from operating working capital driven by deferred revenue associated with colocation services.

Net cash used in investing activities increased to $740.8 million in 2025 from $95.2 million in 2024, primarily reflecting capital

expenditures related to our colocation expansion.

Net cash used in financing activities was $63.1 million in 2025 compared to net cash provided of $819.6 million in 2024,

primarily due to the absence of prior-year financing proceeds.

Material Cash Requirements

Our material cash requirements from known contractual and other obligations consist primarily of (i) obligations for long-term

debt and related interest, (ii) operating lease obligations for property, and (iii) capital expenditure commitments related to the

conversion of a significant portion of our data centers to high-density colocation operations.

During 2025 and 2024, we spent $729.0 million and $95.0 million on capital expenditures, respectively.

We expect to increase

capital expenditures in 2026 relative to 2025 to support our strategic shift to colocation services.

For additional information regarding our operating lease obligations, convertible notes, and purchase commitments, refer to

Note 7 — Leases , Note 8 — Convertible and Other Notes Payable , and Note 11 — Commitments and Contingencies , respectively , to

our consolidated financial statements included in Item 8 of Part II of this Annual Report on Form 10-K.

Critical Accounting Estimates

The critical accounting estimates, assumptions, judgments and the related policies that we believe have the most significant impact on our consolidated financial statements are described below.

Revenue From Contracts With Customers - Digital Asset Self-Mining Revenue

The recognition of digital asset mining revenue involves estimation uncertainty due to the variable and non-cash nature of the consideration received.

We receive non-cash compensation in the form of bitcoin, less operator fees, for providing hash calculation services to mining pools.

These amounts vary based on factors such as our share of the total network hash rate, Bitcoin network block rewards, and transaction fees.

Operator fees also fluctuate depending on these rewards and fees.

We determine the fair value of this non-cash consideration using the spot rate for bitcoin as quoted on Coinbase Global, Inc., our principal market.

The critical accounting estimates, assumptions, judgments and the related policies that we believe have the most significant

impact on our consolidated financial statements are described below.

Property, Plant, and Equipment

The Company has made significant investments in Bitcoin mining equipment, which constitutes a substantial portion of its property, plant, and equipment.

Accounting for this equipment involves significant judgment and estimation uncertainty, particularly regarding the determination of its estimated useful life for depreciation purposes and the assessment of potential impairment.

The Company depreciates its Bitcoin mining equipment using the straight-line method over an estimated useful life of three years.

The Company has made significant investments in Bitcoin mining equipment, which constitutes a substantial portion of its

property, plant, and equipment.

Accounting for this equipment involves significant judgment and estimation uncertainty, particularly

regarding the determination of its estimated useful life for depreciation purposes and the assessment of potential impairment.

The Company depreciates its Bitcoin mining equipment using the straight-line method over an estimated useful life of three

This estimate reflects management’s judgment based on the current state of technology and industry practices.

However, the actual useful life of this equipment is uncertain due to the rapid pace of technological advancements in the Bitcoin mining industry.

The Company evaluates its Bitcoin mining equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of the equipment may not be recoverable.

Recoverability is assessed by comparing the carrying amount of the asset to the sum of the undiscounted futures cash flows expected from its use and disposal.

If the carrying amount is not recoverable, the impairment loss is measured as the difference between the carrying amount and the asset's fair value.

Potential impairment triggers include a significant decline in the market price of Bitcoin or the introduction of new technologies that reduce the efficiency or profitability of the Company’s existing equipment.

These assessments rely on significant judgment and require assumptions about future events and conditions, including Bitcoin prices, mining difficulty rates, electricity costs, and anticipated technological advancements.

actual useful life of this equipment is uncertain due to the rapid pace of technological advancements in the Bitcoin mining industry .

The Company evaluates its Bitcoin mining equipment for impairment whenever events or changes in circumstances indicate

that the carrying amount of the equipment may not be recoverable.

Recoverability is assessed by comparing the carrying amount of the

asset to the sum of the undiscounted futures cash flows expected from its use and disposal.

If the carrying amount is not recoverable,

the impairment loss is measured as the difference between the carrying amount and the asset's fair value.

Potential impairment triggers

include a significant decline in the market price of Bitcoin or the introduction of new technologies that reduce the efficiency or

profitability of the Company’s existing equipment.

These assessments rely on significant judgment and require assumptions about

future events and conditions, including Bitcoin prices, mining difficulty rates, electricity costs, and anticipated technological

advancements.

Management believes that its current estimates and assumptions are reasonable based on the information available.

Actual results may differ, and any such differences could materially impact the Company’s financial condition and results of operations.

results may differ, and any such differences could materially impact the Company’s financial condition and results of operations.

Stock-Based Compensation

The valuation of market condition restricted stock units ("MSUs") involves judgment due to the uncertainty in assumptions used in the Monte Carlo pricing model on the date of grant, which required inputs that were both unobservable and significant to the overall fair value measurement, including estimated volatility, which reflects anticipated variability in the Company’s stock price over time.

If we had used different assumptions or estimates, the estimated fair value and expense recognition of the MSUs could have been materially different.

Management believes its estimates are reasonable based on the information available.

Contingent Value Rights Liabilities

On the Effective Date, pursuant to the Plan of Reorganization, the Company entered into a contingent value rights agreement which provided for the issuance of the CVRs to certain creditors.

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

The Monte Carlo simulation model was used to determine their fair value, which required inputs that were both unobservable and significant to the overall fair value measurement, including expected volatility, which reflects anticipated variability in the Company’s stock price over time.

If we had used different assumptions or estimates, the estimated fair value of the CVRs could have been materially different.

At each reporting date subsequent to the Effective Date, the fair value of the CVRs has been determined based on the observable listed trading price for such CVRs, thereby eliminating the significant level of estimation uncertainty in periods subsequent to the initial recognition of the CVRs.

Warrant Liabilities

On the Effective Date, pursuant to the Plan of Reorganization, holders of the Company’s previous common stock received warrants.

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

If we had used different assumptions or estimates, the estimated fair value of the warrants could have been materially different.

At each reporting date subsequent to the Effective Date, the fair value of the warrants has been determined based on the observable listed trading price for such warrants, thereby eliminating the significant level of estimation uncertainty in periods subsequent to the initial recognition of the warrants.

Liabilities Subject to Compromise

As a result of the commencement of the Chapter 11 Cases, the payment of pre-petition liabilities was subject to compromise or other treatment pursuant to a plan of reorganization.

The determination of how liabilities were ultimately settled or treated was determined by the confirmed Chapter 11 plan of reorganization when it became effective.

Accordingly, the ultimate amount of such claims is not determinable until such time as the Bankruptcy Court determines their allowed amount.

Pre-petition liabilities that are subject to compromise are reported at the amounts management expects to become allowed by the Bankruptcy Court, even if they may be settled for different amounts upon confirmation.

The amounts currently classified as Liabilities subject to compromise are preliminary and may be subject to future adjustments depending on Bankruptcy Court actions, further developments with respect to disputed claims, determinations of the secured status of certain claims, the values of any collateral securing such claims, rejection of executory contracts, continued reconciliation or other events.

The valuation of equity awards that contain market conditions, including the 2025 performance restricted stock units with a

relative total shareholder return condition, requires the use of a Monte Carlo pricing model.

The model incorporates assumptions that

are both unobservable and significant to the overall fair value measurement, including expected volatility of the Company’s common

stock and its correlation with the Russell 2000 Index, which reflect anticipated variability and relative performance of the Company’s

stock price over the performance period.

These assumptions involve judgment and are based on a combination of historical data and

market information.

If different assumptions had been used, the resulting grant-date fair value of these awards, and the related stock-

based compensation expense recognized over the requisite service period, could have been materially different.

Management believes

the estimates and assumptions used in the valuation of these awards are reasonable based on information available at the time of grant.

Recent Accounting Pronouncements

For a discussion of new accounting standards relevant to our business, refer to Note 2 — Summary of Significant Accounting Policies to our consolidated financial statements in Item 8 of Part II of this Annual Report on Form 10-K.

Emerging Growth Company

Prior to December 31, 2024, we qualified as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act.

We were able to take advantage of certain exemptions from various public company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm under Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and any golden parachute payments.

On the last business day of the second quarter in 2024, the aggregate market value of the Company’s shares of common stock held by non-affiliate stockholders exceeded $700 million.

As a result, as of December 31, 2024, the Company qualified as a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, and ceased to be an emerging growth company as defined in the JOBS Act.

The impact of this change in filing status includes being subject to the requirements of large accelerated filers, which includes shortened filing timelines, no delayed adoption of certain accounting standards, and attestation of the Company’s internal control over financial reporting by its independent auditor.

For a discussion of new accounting standards relevant to our business, refer to Note 2 — Summary of Significant Accounting

Policies to our consolidated financial statements in Item 8 of Part II of this Annual Report on Form 10-K .

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

What changed 10-K

Item 7. Management’s Discussion and Analysis