Core Scientific, Inc./tx 10-K

Item 8. Financial Statements and Supplementary Data Our consolidated financial statements and the notes thereto, included in Part IV, Item 15(1)(a) herein, are incorporated by reference into this Item 8. CONSOLIDATED FINANCIAL STATEMENT TABLE OF CONTENTS Report of Independent Registered Public Accounting Firm (PCAOB ID 185 ) 65 Report of Independent Registered Public Accounting Firm (PCAOB ID 688) 67 Consolidated Balance Sheets 68 Consolidated Statements of Operations 69 Consolidated Statements of Changes in Stockholders’ Deficit 70 Consolidated Statements of Cash Flows 72 Notes to Consolidated Financial Statements 74 1 — Organization and Description of Business 74 2 — Summary of Significant Accounting Policies 74 3 — Restatement of Previously Issued Financial Statements 83 4 — Emergence from Bankruptcy 83 5 — Property, Plant, and Equipment 85 6 — Balance Sheet Components 86 7 — Leases 87 8 — Convertible and Other Notes Payable 90 9 — Warrant Liabilities and Contingent Value Rights 91 10 — Fair Value Measurements 92 11 — Commitments and Contingencies 95 12 — Income Taxes 96 13 — Stockholders' Deficit 100 14 — Net Loss Per Share 103 15 — Segment Reporting 104 16 — Supplemental Cash Flow and Noncash Information 109 17 — Related Party Transactions 109 18 — Subsequent Event 110 65 Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors Core Scientific, Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheet of Core Scientific, Inc. and subsidiaries (the Company) as of December 31, 2025, the related consolidated statements of operations, changes in stockholders’ deficit, and cash flows for the year then ended, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 2, 2026 expressed an adverse opinion on the effectiveness of the Company’s internal control over financial reporting. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Evaluation of the sufficiency of audit evidence over self-mining revenue As discussed in Note 2 to the consolidated financial statements, the Company provides hash calculations to third-party pool operators as a participant in mining pools. Contract inception and the Company’s enforceable right to consideration begin when the Company commences providing hash calculation services to the mining pool operators. The Company is entitled to non-cash compensation based on the Full-Pay-Per-Share (“FPPS”) model of the mining pool in which it participates. The Company recognizes non-cash consideration on the same day that control of the contracted service is transferred to the pool operator, which is the same day as the contract inception. For the year ended December 31, 2025, revenue from digital assets self-mining revenue was $229.2 million. We identified the evaluation of the sufficiency of audit evidence over self-mining revenue as a critical audit matter. Subjective auditor judgment was required to evaluate the nature and extent of procedures performed over completeness, existence, and accuracy of the self-mining revenue recognized. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain controls over the completeness, existence, and accuracy of self-mining revenue. We obtained confirmations from third-party mining pool operators of the total mining rewards earned, the hashrate contributed by the Company and the digital asset wallet addresses in which the rewards were deposited. We performed procedures around period end to evaluate 66 whether self-mining revenue was recognized in the appropriate accounting period. For a sample of the Company’s self-mining revenue transactions, we: • recalculated the Company’s recorded self-mining revenue • compared the Company’s record of self-mining revenue to the records of the public blockchain using a proprietary software audit tool • evaluated the reasonableness of the digital asset prices utilized by the Company to record digital assets received as self- mining revenue by obtaining independent digital asset prices and comparing those to the prices selected by the Company. /s/ KPMG LLP We have served as the Company’s auditor since 2025. Chicago, Illinois March 2, 2026 67 Report of Independent Registered Public Accounting Firm (PCAOB ID 688 ) To the Stockholders and Board of Directors of Core Scientific, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheet of Core Scientific, Inc. (the “Company”) as of December 31, 2024, the related consolidated statements of operations, changes in stockholders’ deficit, and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, based on our audits, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Marcum LLP Marcum LLP We served as the Company’s auditor from 2022 through 2025. Costa Mesa, CA February 26, 2025, except for the effects of the restatement disclosed in Note 3 (not presented herein) to the consolidated financial statements appearing under Item 8 of the Company’s 2024 annual report on Form 10-K/A, as to which the date is March 2, 2026. 68 Core Scientific, Inc. Consolidated Balance Sheets (in thousands, except par value) December 31, 2025 December 31, 2024 Assets Current Assets: Cash and cash equivalents $ 311,378 $ 836,197 Restricted cash — 783 Digital assets 222,000 23,893 Customer funding receivable and other current assets 362,159 43,089 Total Current Assets 895,537 903,962 Property, plant and equipment, net 1,293,299 433,473 Operating lease right-of-use assets 108,484 114,472 Other noncurrent assets 50,324 24,039 Total Assets $ 2,347,644 $ 1,475,946 Liabilities and Stockholders’ Deficit Current Liabilities: Accounts payable $ 126,106 $ 19,265 Accrued expenses 511,957 64,670 Deferred revenue 127,561 18,134 Other current liabilities 15,777 32,493 Total Current Liabilities 781,401 134,562 Convertible and other notes payable, net of current portion 1,060,325 1,073,990 Warrant liabilities 936,107 1,097,285 Deferred revenue, net of current portion 428,290 — Other noncurrent liabilities 104,261 113,158 Total Liabilities 3,310,384 2,418,995 Commitments and contingencies (Note 11) Stockholders’ Deficit: Preferred stock; $ 0.00001 par value; 2,000,000 shares authorized; none issued and outstanding at December 31, 2025 and December 31, 2024 — — Common stock; $ 0.00001 par value; 10,000,000 shares authorized at December 31, 2025 and December 31, 2024 ; 314,231 and 292,606 shares issued and outstanding at December 31, 2025 and December 31, 2024 , respectively 3 3 Additional paid-in capital 3,183,960 2,915,035 Accumulated deficit ( 4,146,703 ) ( 3,858,087 ) Total Stockholders’ Deficit ( 962,740 ) ( 943,049 ) Total Liabilities and Stockholders’ Deficit $ 2,347,644 $ 1,475,946 Certain prior year amounts have been reclassified for consistency with the current year presentation. See accompanying notes to consolidated financial statements. 69 Core Scientific, Inc. Consolidated Statements of Operations (in thousands, except per share amounts) Year Ended December 31, 2025 2024 2023 Revenue: Colocation revenue $ 65,424 $ 24,378 $ — Digital asset self-mining revenue 229,207 408,740 390,333 Digital asset hosted mining revenue from customers 24,388 77,554 102,005 Digital asset hosted mining revenue from related parties — — 10,062 Total revenue 319,019 510,672 502,400 Cost of revenue: Cost of colocation services 45,679 21,709 — Cost of digital asset self-mining 218,868 314,335 291,696 Cost of digital asset hosted mining services 16,574 53,558 87,245 Total cost of revenue 281,121 389,602 378,941 Gross profit 37,898 121,070 123,459 Decrease in fair value of digital assets 31,603 1,052 — Gain from sale of digital assets — — ( 3,893 ) Impairment of digital assets — — 4,406 Decrease in fair value of energy derivatives — 2,757 3,918 Loss on disposal of property, plant and equipment 9,680 4,210 1,956 Impairment of property, plant and equipment 11,359 122,869 — Colocation organizational and site startup costs 48,249 13,734 — Advisor fees 23,372 4,822 — Selling, general and administrative 159,224 113,691 108,111 Operating (loss) income ( 245,589 ) ( 142,065 ) 8,961 Non-operating expenses (income), net: Loss (gain) on debt extinguishment 1,933 487 ( 20,065 ) Interest (income) expense, net ( 3,277 ) 37,070 86,238 Change in fair value of warrants and contingent value rights 33,059 1,369,157 — Reorganization items, net — ( 111,439 ) 191,122 Loss on legal settlements 10,690 2,070 — Other non-operating expense (income), net 39 ( 2,395 ) ( 2,530 ) Total non-operating expense, net 42,444 1,294,950 254,765 Loss before income taxes ( 288,033 ) ( 1,437,015 ) ( 245,804 ) Income tax expense 583 859 683 Net loss $ ( 288,616 ) $ ( 1,437,874 ) $ ( 246,487 ) Net loss per share, basic and diluted $ ( 0.88 ) $ ( 4.87 ) $ ( 0.65 ) Weighted average shares outstanding, basic and diluted 318,068 255,832 379,863 See accompanying notes to consolidated financial statements. 70 Core Scientific, Inc. Consolidated Statements of Changes in Stockholders’ Deficit (in thousands) Common Stock Additional Paid-In Capital Accumulated Deficit Total Stockholders’ Deficit Shares Amount Balance at January 1, 2023 375,225 36 1,764,368 ( 2,173,750 ) ( 409,346 ) Net loss — — — ( 246,487 ) ( 246,487 ) Stock-based compensation — — 58,892 — 58,892 Exercise of stock options 3 — — — — Restricted stock awards issued, net of shares withheld for tax withholding obligations 12,046 — — — — Restricted stock awards forfeited ( 391 ) — — — — Balance at December 31, 2023 386,883 $ 36 $ 1,823,260 $ ( 2,420,237 ) $ ( 596,941 ) Cumulative effect of adoption of ASU 2023-08, Accounting for and Disclosure of Crypto Assets — — — 24 24 Balance at January 1, 2024, adjusted 386,883 36 1,823,260 ( 2,420,213 ) ( 596,917 ) Net loss — — — ( 1,437,874 ) ( 1,437,874 ) Stock-based compensation — — 52,411 — 52,411 Cancellation of common stock in connection with emergence ( 386,883 ) ( 36 ) 36 — — Issuance of new common stock in connection with emergence 152,576 2 296,893 — 296,895 Issuance of new common stock under the Equity Rights Offering 15,649 — 55,000 — 55,000 Issuance of new common stock for the Equity Rights Offering backstop commitment 2,111 — 5,475 — 5,475 Issuance of new common stock for Bitmain obligation 10,735 — 27,839 — 27,839 Conversion premium on the issuance of the New Secured Convertible Notes — — 33,202 — 33,202 Issuance of warrants — — ( 345,856 ) — ( 345,856 ) Exercise of stock options — — 9 — 9 Restricted stock awards issued, net of tax withholding obligations 4,543 — ( 3,393 ) — ( 3,393 ) Restricted stock awards forfeited ( 40 ) — — — — Exercise of warrants 61,565 1 704,710 — 704,711 Issuance of new common stock for New Secured Convertible Notes conversion 44,585 — 261,772 — 261,772 Issuance of new common stock for PIK interest 882 — 3,677 — 3,677 Balance at December 31, 2024 292,606 $ 3 $ 2,915,035 $ ( 3,858,087 ) $ ( 943,049 ) 71 Core Scientific, Inc. Consolidated Statements of Changes in Stockholders’ Deficit (cont’d) (in thousands) Common Stock Additional Paid-In Capital Accumulated Deficit Total Stockholders’ Deficit Shares Amount Balance at Balance at January 1, 2025 292,606 3 2,915,035 ( 3,858,087 ) ( 943,049 ) Net loss — — — ( 288,616 ) ( 288,616 ) Stock-based compensation — — 99,200 — 99,200 Restricted stock awards issued 9,835 — 39 — 39 Restricted stock awards withheld for tax withholding obligations ( 2,074 ) — ( 32,335 ) — ( 32,335 ) Equity issuance costs — — ( 21 ) — ( 21 ) Exercise of warrants 13,864 $ — 202,042 — 202,042 Balance at December 31, 2025 314,231 $ 3 $ 3,183,960 $ ( 4,146,703 ) $ ( 962,740 ) See accompanying notes to consolidated financial statements. 1 Proceeds from digital assets received as noncash revenue consideration liquidated nearly immediately after receipt as a routine operating activity. 72 Core Scientific, Inc. Consolidated Statements of Cash Flows (in thousands) Year Ended December 31, 2025 2024 2023 Cash flows from Operating Activities: Net loss $ ( 288,616 ) $ ( 1,437,874 ) $ ( 246,487 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 68,913 113,205 96,003 Loss on disposal of property, plant and equipment 9,680 4,210 1,956 Impairment of property, plant and equipment 11,359 122,869 — Change in right-of-use assets 11,266 6,916 442 Stock-based compensation 98,236 51,924 58,892 Digital asset self-mining ( 229,710 ) ( 425,253 ) ( 407,082 ) Proceeds from sale of digital assets generated by self-mining and shared hosting revenues 1 — 402,461 — 404,686 Decrease in fair value of digital assets 31,603 1,052 — Impairment of digital assets — — 4,406 Gain from sale of digital assets — — ( 3,886 ) Change in fair value of energy derivatives — ( 2,262 ) — Increase in fair value of warrant liabilities 33,965 1,451,210 — Decrease in fair value of contingent value rights ( 906 ) ( 82,053 ) — Loss (gain) on debt extinguishment 1,933 487 ( 20,065 ) Loss on issuance of notes payable through settlements — — 8,515 Amortization of debt discount 5,994 3,756 752 Non-cash reorganization items — ( 143,791 ) — Non-cash PIK interest expense — 3,676 — Changes in operating assets and liabilities: Accounts receivable, net — 659 ( 767 ) Accounts receivable from related parties — — 23 Deposits for equipment for sales to customers — — ( 2,403 ) Customer funding receivable and other current assets 16,223 ( 20,393 ) ( 18,351 ) Accounts payable 10,782 ( 12,272 ) 118,911 Accrued expenses ( 17,400 ) 1,880 130,382 Deferred revenue from colocation services 536,093 17,785 — Deferred revenue from hosted mining services 1,624 ( 9,481 ) ( 47,807 ) Other noncurrent assets and liabilities, net ( 22,789 ) ( 5,815 ) ( 13,006 ) Net cash provided by operating activities 278,250 42,896 65,114 Cash flows from Investing Activities: Purchases of property, plant and equipment ( 729,000 ) ( 94,961 ) ( 16,161 ) Proceeds from sales of property and equipment 3,461 — — Proceeds from sale of Cedarvale — — 13,998 Purchase of equity investments ( 5,000 ) — — Investments in intangible assets ( 10,211 ) ( 231 ) ( 833 ) Net cash used in investing activities ( 740,750 ) ( 95,192 ) ( 2,996 ) Cash flows from Financing Activities: Principal repayments of finance leases ( 1,672 ) ( 6,038 ) ( 3,658 ) Principal payments on debt ( 8,613 ) ( 304,819 ) ( 40,991 ) Debt extinguishment payments ( 27,512 ) — — Taxes paid related to net share settlement of equity awards ( 32,216 ) — — Proceeds from the issuance of 3.00 % convertible senior notes, net — 447,609 — Issuance costs for 3.00 % convertible senior notes — ( 2,529 ) — Proceeds from the issuance of 0.00 % convertible senior notes, net — 610,156 — Issuance costs for 0.00 % convertible senior notes — ( 1,313 ) — 73 Proceeds from issuance of new common stock — 55,000 — Proceeds from draw from exit facility — 20,000 — Restricted stock tax holding obligations — ( 3,393 ) — Proceeds from exercise of warrants 6,911 4,885 — Proceeds from exercise of stock options — 9 — Net cash (used in) provided by financing activities ( 63,102 ) 819,567 ( 44,649 ) Net (decrease) increase in cash, cash equivalents and restricted cash ( 525,602 ) 767,271 17,469 Cash, cash equivalents and restricted cash—beginning of period 836,980 69,709 52,240 Cash, cash equivalents and restricted cash—end of period $ 311,378 $ 836,980 $ 69,709 Reconciliation of cash, cash equivalents, and restricted cash within the consolidated balance sheets to the amounts shown in the consolidated statements of cash flows above: Cash and cash equivalents $ 311,378 $ 836,197 $ 50,409 Restricted cash — 783 19,300 Total cash, cash equivalents and restricted cash $ 311,378 $ 836,980 $ 69,709 See accompanying notes to consolidated financial statements. 74 Core Scientific, Inc. Notes to Consolidated Financial Statements 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Core Scientific, Inc. (“Core Scientific” or the “Company”) provides digital infrastructure for high-density colocation services and digital asset mining. We operate facilities for high-density colocation services and provide digital infrastructure, software solutions and services to our third-party customers. We currently derive the majority of our revenue from earning digital assets for our own account but expect to increase revenue derived from high-density colocation (“HDC”) as additional customer capacity becomes billable . W e are converting our existing facilities to support artificial intelligence-related (“AI”) workloads and next generation colocation services 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 our existing obligations to suppliers and customers. Our facilities are located in Alabama ( 1 ), Georgia ( 2 ), Kentucky ( 1 ), North Carolina ( 1 ), North Dakota ( 1 ), Oklahoma ( 1 ), and Texas ( 3 ). The Company had historically focused on designing, building and operating digital infrastructure to engage in digital asset mining for its own account and providing hosting solutions for third-party digital asset miners. In 2024, the Company announced its first high-density colocation contract with CoreWeave, Inc. (“CoreWeave), an artificial intelligence-focused hyperscaler. These agreements leverage the Company’s existing digital infrastructure and expertise in third-party hosting solutions. We operate in three segments: “Colocation,” consisting of providing high-density colocation services to customers employing AI and high-performance computing (“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 . Prior to April 1, 2024, we operated primarily in the Digital Asset Self-Mining and Digital Asset Hosted Mining segments. Our high-density colocation services provide space, power, cooling, facilities operations, security and other services to third- party colocation customers to support workloads for machine learning and AI. Colocation segment revenue is concentrated with a single customer; see Note 15 — Segment Reporting . Our digital asset hosted mining business 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. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying consolidated financial statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes to the consolidated financial statements. Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Some of the more significant estimates include assumptions used in property, plant and equipment, the initial measurement of lease liabilities, stock- based compensation, the fair value of derivative liabilities, and income taxes. These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ from management’s estimates. Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents include all cash balances and highly liquid investments, including money market funds, with original maturities of three months or less from the date of acquisition. As of December 31, 2025 and 2024, substantially all cash and cash equivalents exceeded Federal Deposit Insurance Corporation insured limits. Restricted cash as of December 31, 2024, consisted of a deposit held at a lender’s bank in accordance with the terms of a note agreement. 75 Core Scientific, Inc. Notes to Consolidated Financial Statements Accounts Receivable and Allowance for Doubtful Accounts The Company’s accounts receivable balance consists of amounts due from its hosting customers. The Company records accounts receivable at the invoiced amount less an allowance for any potentially uncollectible accounts under the current expected credit loss (“CECL”) impairment model and presents the net amount of the financial instrument expected to be collected. The CECL impairment model requires an estimate of expected credit losses, measured over the contractual life of an instrument, which considers forecasts of future economic conditions in addition to information about past events and current conditions. Based on this model, the Company considers many factors, including the age of the balance, collection history, and current economic trends. Bad debts are written off after all collection efforts have ceased. Allowances for credit losses are recorded as a direct reduction from an asset’s amortized cost basis. Credit losses and recoveries are recorded in general and administrative expenses in the consolidated statements of operations. Recoveries of financial assets previously written off are recorded when received. For the years ended December 31, 2025, 2024 and 2023, the Company did not record any credit losses or recoveries. The Company’s allowance for doubtful accounts was nil as of December 31, 2025 and 2024. Digital Assets In December 2023, the Financial Accounting Standards Board (“FASB”) issued 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”). ASU 2023-08 is intended to improve the accounting for certain crypto assets by requiring an entity to measure those crypto assets at fair value each reporting period with changes in fair value recognized in net income (loss). The amendments also improve the information provided to investors about an entity’s crypto asset holdings by requiring disclosure about significant holdings, contractual sale restrictions, and changes during the reporting period. ASU 2023-08 was effective for annual and interim reporting periods beginning after December 15, 2024, with early adoption permitted. The Company’s digital assets are within the scope of ASU 2023-08 and the Company early adopted the new standard effective January 1, 2024 on a modified retrospective basis. The transition guidance required a cumulative-effect adjustment as of the beginning of the fiscal year of adoption for any difference between the carrying amount of the Company’s digital assets and fair value. The early adoption did not have a material impact on the Company’s consolidated financial statements. As of August 19, 2024, the Company is no longer required to sell bitcoin it earns through mining within ten days of receipt as previously required by the terms of extinguished debt facilities. The Company intends to optimize cash from the sale of bitcoin received from mining activities, which may entail, subject to market conditions, holding bitcoin for future sale at any particular point in time. Digital assets are classified as current assets on the Company’s consolidated balance sheets, reflecting management's current intent and expectation to convert these assets to cash within the next year. The classification of digital assets is evaluated regularly, and any change in management's intent or expectations regarding the timing of conversion to cash could result in a reclassification of these assets. Cash from s ales of digital assets awarded to the Company through its self-mining activities are classified as cash flows from operating activities if sold nearly immediately. The Company does not have any off-balance sheet holdings of digital assets and does not safeguard digital assets for third parties. The Company tracks its cost basis of digital assets in accordance with the first-in- first-out method of accounting. 76 Core Scientific, Inc. Notes to Consolidated Financial Statements The Company’s digital assets have active markets with observable prices and their fair value measurements are considered Level 1. The following table presents a roll-forward of total digital assets for the year s ended December 31, 2025 and 2024 (in thousands): December 31, 2025 December 31, 2024 Digital assets, beginning of period $ 23,893 $ 2,284 Cumulative effect of ASU 2023-08, adopted January 1, 2024 1 — 24 Digital assets, beginning of period, as adjusted 23,893 2,308 Digital asset self-mining revenue, net of receivables 2 229,710 409,560 Mining revenue from shared hosting — 15,693 Proceeds from sales of digital assets and shared hosting — ( 402,461 ) Decrease in fair value of digital assets ( 31,603 ) ( 1,052 ) Payment of board fee — ( 89 ) Other — ( 66 ) Digital assets, end of period $ 222,000 $ 23,893 1 Reflects the impact of the Company’s early 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 on a modified retrospective basis. 2 As of December 31, 2025 , and December 31, 2024 , there was $ 0.4 million and $ 0.9 million , respectively, of digital asset receivable included in Customer funding receivable and other current assets on the Company’s consolidated balance sheets. The following table presents the Company’s bitcoin holdings (in thousands, except for quantity) : Quantity Cost Basis Fair Value December 31, 2025 2,537 $ 254,694 $ 222,000 December 31, 2024 256 $ 24,991 $ 23,893 Deposits for Equipment The Company has entered into agreements with vendors to supply equipment for its digital asset mining operations. These agreements generally require significant refundable deposits payable months in advance of delivery and additional advance payments in monthly installments thereafter. The Company classifies deposits for digital asset mining equipment based on the expected predominant source and use of the cash flows for the equipment that has been contracted for purchase. The Company expects that the predominant source and use of cash flows for digital asset mining equipment will be related to the Company’s own self-mining operations. Therefore, the Company has classified deposits for equipment as cash flows from investing activities. Property, Plant and Equipment, Net Property, plant, and equipment includes the cost of land, buildings, and improvements for datacenter and support facilities and the Company’s corporate office space. Property and equipment further consists of computer, mining, network, electrical and other equipment, including property and equipment under finance leases. Property, plant and equipment, net is stated at cost less accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are capitalized at cost and amortized over the shorter of their estimated useful lives or the lease term. Future obligations related to finance leases are presented as Finance lease liabilities, current portion and Finance lease liabilities, net of current portion in the Company’s consolidated balance sheets. Depreciation expense, including amortization of assets held under finance leases, is primarily included in Cost of revenue in the Company’s consolidated statements of operations. Property, plant and equipment capitalized costs include the directly identifiable costs incurred to acquire, construct, install, or otherwise prepare the asset for its intended use and to put it into service. Directly identifiable costs include construction payroll and benefits and other direct capital project costs. 77 Core Scientific, Inc. Notes to Consolidated Financial Statements When management decides to abandon long-lived assets before the end of their previously estimated useful life, the Company considers whether an impairment of the related asset group has been triggered. If that asset group is no longer recoverable, an impairment is recognized for any excess of the asset group’s carrying value above its fair value. Thereafter, the estimated useful life, salvage value, and prospective depreciation of the affected assets are revised to reflect their shortened remaining useful life. The historical cost of assets, and related accumulated depreciation, are written off at the time that assets are removed from service. Leases The Company has entered into operating and finance leases for office space, data facilities, computer and networking equipment, electrical infrastructure and office equipment, with lease periods expiring through 2051. The Company determines whether an arrangement contains a lease at the inception of the arrangement. If a lease is determined to exist, the term of such lease is assessed based on the commencement date on which the underlying asset is made available for the Company’s use by the lessor. The Company’s assessment of the lease term reflects the non-cancelable term of the lease, inclusive of any rent-free periods and periods covered by early-termination options which the Company is reasonably certain of not exercising, as well as periods covered by renewal options which the Company is reasonably certain of exercising. The Company also determines lease classification as either operating or finance at lease commencement, which governs the pattern of expense recognition and presentation over the lease term. For leases with a term exceeding 12 months, a lease liability is recognized on the Company’s consolidated balance sheets at lease commencement, reflecting the present value of its fixed payment obligations over the lease term. A corresponding right-of-use asset equal to the initial lease liability is also recognized, adjusted for any prepaid rent and initial direct costs incurred in connection with the execution of the lease and reduced by any lease incentives received. For purposes of measuring the present value of its fixed payment obligations for a given lease, the Company uses rates implicit in its leasing arrangements, if readily determinable, otherwise the Company uses its incremental borrowing rate. The Company’s incremental borrowing rate reflects the rate it would pay to borrow on a similarly secured basis and term, the economic environment of the associated lease, and other information available to management. For leases with a term of 12 months or less at commencement, and that do not include an option to purchase the underlying assets, the Company has elected the exemption to not measure and recognize an associated lease liability or right-of-use asset. For the Company’s operating leases, fixed lease payments are recognized as lease expense on a straight-line basis over the lease term. Variable lease costs are recognized as the obligation for payment is incurred and primarily consist of insurance and property tax reimbursements to the lessor. The Company addresses lease modifications that are not accounted for as separate leases at the effective date of the modification. If the terms and conditions of the lease are changed, the lease payments are adjusted accordingly and the lease liability is remeasured using a revised discount rate. Any resulting changes in the lease liability are recognized in the carrying amount of the related right-of-use asset. Long-Lived Asset Impairments The Company tests long-lived asset groups for recoverability whenever events or changes in circumstances have occurred that may affect the recoverability or the estimated useful lives of long-lived assets. Long-lived assets include property, plant and equipment and intangible assets subject to amortization. A long-lived asset may be impaired when the estimated future undiscounted cash flows are less than the carrying amount of the asset. If that comparison indicates that the asset’s carrying value may not be recoverable, the impairment is measured based on the difference between the carrying amount and the estimated fair value of the asset. Long-lived assets to be disposed of are reported at the lower of the carrying amount or estimated fair value less costs to sell. Deferred Revenue Deferred revenue from colocation services relate to prepaid base license fees for colocation lease arrangements which are accounted for under Accounting Standards Codification (“ASC”) 842, Leases (“ASC Topic 842”) . Prepaid base license fees relate to capital expenditures on colocation facility site development funded by the customer. Deferred revenue from hosted mining services relates to customer contracts for digital asset hosted mining services which are accounted for under ASC 606, Revenue Recognition (“ASC Topic 606”). Advanced payments are typically recognized in the following month for hosted mining services and are generally recognized within 30 months of license order commencement for colocation services. 78 Core Scientific, Inc. Notes to Consolidated Financial Statements The following table presents a rollforward of deferred revenue for the year s ended December 31, 2025 and 2024 (in thousands): Deferred Revenue From Colocation Services Deferred Revenue From Hosted Mining Services Total Deferred Revenue Balance at December 31, 2023 $ — $ 9,830 $ 9,830 Revenue recognized that was included in the deferred revenue balance as of the beginning of the year — 6,651 6,651 Additional customer funding received (reduced) 17,785 ( 16,132 ) 1,653 Balance at December 31, 2024 $ 17,785 $ 349 $ 18,134 Revenue recognized that was included in the deferred revenue balance as of the beginning of the year ( 5,124 ) ( 329 ) ( 5,453 ) Base license fee earned, not yet due ( 13,633 ) — ( 13,633 ) Additional customer funding received 554,850 1,953 556,803 Balance at December 31, 2025 $ 553,878 $ 1,973 $ 555,851 Current portion at December 31, 2025 $ 127,561 Non-current portion at December 31, 2025 $ 428,290 Convertible and Other Notes Payable Convertible and other notes payable (“Notes payable”) are accounted for under ASC 470, Debt and are presented at their carrying value, which is their remaining par or face amount net of any related unamortized premium, discount and issuance costs. Notes payable are initially recognized at their present value. When cash proceeds are received for the issuance of Notes payable, the proceeds are used to establish their present value. When cash proceeds are not received for the issuance of Notes payable, their present value is based on the consideration exchanged. This present value generally will be the Notes payable’s cash flows discounted at a market rate when it is more evident than the noncash consideration exchanged. When the present value of Notes payable on issuance varies from its par or face amount, an original discount or premium results and any related issuance costs are used to determine an effective interest rate. Original premium, discount and issuance costs are amortized using the level effective rate interest method. Amortization is recognized as a component of current interest expense. Notes payable are evaluated at issuance to determine whether or not they have features or terms which would be treated as embedded derivatives that are required to be bifurcated under ASC 815, Derivatives and Hedging (“ASC Topic 815”). As of December 31, 2025 and 2024 , Notes payable did not have any embedded derivatives required to be bifurcated. Debt Issuance Costs Debt issuance costs are capitalized and amortized over the term of the associated debt using the effective interest rate method. Debt issuance costs are presented in the Company’s consolidated balance sheets as a direct deduction from the carrying amount of the debt liability consistent with the debt discount. Warrant Liabilities The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. The classification of derivative instruments, including whether such instruments should be classified as liabilities or as equity, is re-assessed at the end of each reporting period. Prior to the Company’s emergence from bankruptcy on January 23, 2024 (the “Effective Date”), t he Company had public warrants and private placement warrants that were recognized as derivative liabilities. Accordingly, the Company recognized the warrant instruments as liabilities at fair value and adjusted the instruments to fair value at each reporting period. The liabilities were subject to re-measurement at each balance sheet date, and any change in fair value was recognized in the Company’s consolidated statements of operations and presented as Change in fair value of warrants and contingent value rights . The initial and subsequent estimated fair value of both the public warrants and private placement warrants was based on the listed price in an active market for the public warrants. 79 Core Scientific, Inc. Notes to Consolidated Financial Statements As described in Note 9 — Warrant Liabilities and Contingent Value Rights , o n the Effective Date, pursuant to the Company’s plan of reorganization, holders of the Company’s previous common stock received warrants. The warrants are equity-linked instruments. The Company determined that these equity-linked instruments are not indexed to the Company’s stock and are required to be recognized as liabilities which are, initially and subsequently, measured at fair value with changes in value reflected in Net loss. Contingent Value Rights Liabilities As described in Note 9 — Warrant Liabilities and Contingent Value Rights , on the Effective Date, pursuant to the Company’s plan of reorganization, the Company entered into a contingent value rights agreement (the “Contingent Value Rights Agreement”) which provides for the issuance of the contingent value rights (the “CVRs”) to certain creditors and provides for the issuance of CVRs issued to holders of allowed general unsecured claims (“GUC”) (in such capacity, the “GUC Payees”) (the “GUC CVRs”). The CVRs and GUC CVRs are equity-linked instruments which are either only cash settled or in some instances share settled at the Company’s sole discretion. The Company determined that these equity-linked instruments are not indexed to the Company’s stock and are required to be recognized as liabilities which are, initially and subsequently, measured at fair value with changes in value reflected in Net loss. Revenue Recognition - Colocation Revenue The Company’s Colocation segment generates revenue by licensing data center space to customers under licensing agreements. These arrangements contain lease components for the right to use data center space and nonlease components for power delivery, physical security, and maintenance services. The Company has elected the practical expedient available under ASC Topic 842, to combine the nonlease revenue components that have the same pattern of transfer as the related operating lease components into a single combined component. The single combined component is accounted for under ASC Topic 842 as an operating lease if the lease components are the predominant components and is accounted for under ASC Topic 606 if the nonlease components are the predominant components. The lease components are the predominant components in the Company’s current licensing arrangements and the single combined component in these arrangements is accounted for under the operating lease guidance of ASC Topic 842. The Company has concluded that it is probable that substantially all of the payments will be collected over the term of the arrangements and recognizes the total combined component license payments under the agreements on a straight-line basis over the non-cancellable term. The difference between straight-line license revenue and amounts billed or received is recorded as deferred revenue in the consolidated balance sheets. Certain arrangements include options to extend the term. These extension options are not reasonably certain to be exercised and are excluded from the lease term and calculation of lease payments at lease commencement. Certain licensing arrangements provide for variable payments for power delivery services and maintenance services on customer assets and reimbursements for lessor costs such as taxes. Payments for physical security and other routine maintenance services are included in the fixed lease payments. Power delivery services represent a stand ready obligation to make power available to the customer over the coterminous lease term and have the same pattern of transfer as the related operating lease components. Customers may request and the Company may provide maintenance services on customer assets during the coterminous lease term. Customers are charged monthly for fees incurred on these maintenance services delivered and actual power costs incurred at current utility or fuel cost rates. These payments from customers for power delivery and maintenance services are recognized as variable lease payments in accordance with the practical expedient elected. Variable lease payments are presented on a gross basis and are included in Colocation revenue in the c onsolidated statements of operations. Revenue From Contracts With Customers - Digital Asset Self-Mining Revenue The Company recognizes revenue in accordance with ASC Topic 606. One of the Company’s ongoing major or central operations is to provide hash calculations to third-party pool operators as a participant in mining pools. The Company considers the third-party mining pool operators to be its customers under ASC Topic 606. Contract inception and the Company’s enforceable right to consideration begin when the Company commences providing hash calculation services to the mining pool operators. Each party to the contract has the unilateral right to terminate the contract at any time without any compensation to the other party for such termination. As such, the duration of a contract is less than a day and may be continuously renewed multiple times throughout the day. The implied renewal option is not a material right because there are no upfront or incremental fees in the initial contract and the terms, conditions, and compensation amount for the renewal options are at the then market rates. 80 Core Scientific, Inc. Notes to Consolidated Financial Statements The Company is entitled to non-cash compensation based on the Full-Pay-Per-Share (“FPPS”) model of the mining pool in which it participates. FPPS pools pay block rewards and transaction fees, net of mining pool fees, and participants are entitled to non- cash consideration even if a block is not successfully validated by the mining pool operator. The Company is entitled to compensation once it begins to perform hash calculations for the pool operator in accordance with the operator’s specifications over a daily 24-hour period beginning 00:00:00 UTC and ending 23:59:59 UTC. The non-cash consideration for providing hash calculations to the pool operator under the FPPS payout method is comprised of block rewards and transaction fees net of pool operator fees, determined as follows: • The non-cash consideration in the form of a block reward is based on the total blocks expected to be generated on the Bitcoin Network for the daily 24-hour period beginning 00:00:00 UTC and ending 23:59:59 UTC in accordance with the following formula: the daily hash calculations that the Company provided to the pool operator as a percent of the Bitcoin Network’s implied hash calculations as determined by the network difficulty, multiplied by the total Bitcoin Network block rewards expected to be generated for the same daily period. • The non-cash consideration in the form of transaction fees paid by transaction requestors is based on the share of total actual fees paid over the daily 24-hour period beginning 00:00:00 UTC and ending 23:59:59 UTC in accordance with the following formula: total actual transaction fees generated on the Bitcoin Network during the 24-hour period as a percent of total block rewards the Bitcoin Network actually generated during the same 24-hour period, multiplied by the block rewards the Company earned for the same 24-hour period noted above. • The block reward and transaction fees earned by the Company are reduced by mining pool fees charged by the operator for operating the pool based on a rate schedule per the mining pool contract. The mining pool fee is only incurred to the extent the Company performs hash calculations and generate revenue in accordance with the pool operator’s payout formula during the same daily 24-hour period. The above non-cash consideration is variable, since the amount of block reward earned depends on the amount of hash calculations the Company performs; the amount of transaction fees the Company is entitled to depends on the actual Bitcoin Network transaction fees over the same 24-hour period; and the operator fees for the same 24-hour period are variable since they are determined based on the total block rewards and transaction fees in accordance with the pool operator’s agreement. The Company estimates variable consideration at contract inception and includes amounts for which it is probable that a significant reversal in the amount of revenue recognized will not occur when the uncertainty is subsequently resolved. The Company recognizes the non-cash consideration on the same day t hat control is transferred of the underlying bitcoin , which is the same day as contract inception. The Company measures the non-cash consideration using the spot rate for Bitcoin as quoted on Coinbase Global, Inc., the Company’s principal market. The Company recognizes non-cash consideration on the same day that control of the contracted service is transferred to the pool operator, which is the same day as the contract inception. Direct expenses associated with providing hash calculation services to a third-party operated mining pool are recorded as cost of revenues. Depreciation and amortization expenses on fixed and right-of-use assets, including digital asset mining equipment, used to provide the services are also recorded as a component of cost of revenues. Revenue From Contracts With Customers - Digital Asset Hosted Mining Services The Company generates revenue from contracts with customers from digital asset hosted mining services. The Company recognizes revenue when the promised service is performed. Revenue excludes any amounts collected on behalf of third parties, including sales and indirect taxes. Hosting Services The Company regularly enters contracts that include hosting services, for which revenue is recognized as services are performed on a variable basis. The Company performs hosting services that enable customers to run blockchain and other high- performance computing operations. The Company’s performance obligation related to these services is satisfied over time. The Company recognizes revenue for services that are performed on a consumption basis, such as the amount of electricity used in a period, based on the customer’s use of such resources. The Company recognizes variable consumption usage hosting revenue each month as the uncertainty related to the consideration is resolved, hosting services are provided to our customers, and our customers utilize the hosting services (the customer simultaneously receives and consumes the benefits of the Company’s performance). The Company generally bills its customers in advance based on estimated consumption under the contract. The Company recognizes 81 Core Scientific, Inc. Notes to Consolidated Financial Statements revenue based on actual consumption in the period and invoices adjustments in subsequent periods or retains credits toward future consumption. The term between invoicing and when payment is due typically does not exceed 30 days . Performance Obligation Commitments As of December 31, 2025 , the Company had no outstanding performance obligations for contracts with original terms exceeding one year. As of December 31, 2024 , the Company’s performance obligation commitments related to digital asset hosted mining services. The Company had performance obligations associated with commitments in customer digital asset hosted mining contracts for future services that have not yet been recognized in the financial statements. As of December 31, 2024 , for contracts with original terms that exceed one year (typically ranging from 15 to 24 months ), the Company expected to recognize approximately $ 8.4 million of revenue in the future related to performance obligations associated with existing hosted mining contracts. The Company recognized approximately 100 % of this amount over the next 12 months . Costs of Revenue The Company’s Cost of colocation services, Cost of digital asset self-mining and Cost of digital asset hosted mining services primarily consist of p ower fees, depreciation expense, facility operations expense and employee compensation, including stock-based compensation . Stock-Based Compensation Under ASC 718, Stock Compensation , the Company accounts for stock-based compensation expense using a fair-value-based method. Stock-based compensation expense is measured at the grant date based on the estimated fair value of the equity award. The estimated fair value of restricted stock units (“RSUs”) with only service conditions is based on the closing market price of the Company’s common stock on the date of grant. The estimated fair value of RSUs that include market conditions (“MSUs”) is estimated on the date of grant using the Monte Carlo pricing model for each service and market condition tranche. The estimated fair value of RSUs that include performance conditions (“PSUs”) is generally based on the closing market price of the Company’s common stock on the date of grant; however, for PSUs that include market conditions, the estimated fair value is on the date of grant using a Monte Carlo pricing model. For RSU awards with only service conditions, the estimated fair value of the equity awards is recognized as expense on a straight-line basis, less actual forfeitures as they occur, over the requisite service period for the entire award, which is generally the vesting period. For RSU awards with service and market conditions, the compensation expense is recognized for each separately vesting portion of the award, or tranche, as if it were a separate award with its own vesting and exercise conditions (i.e., on an accelerated attribution basis). The estimated fair value of each tranche is recognized as expense on a straight-line basis, less actual forfeitures as they occur, over the requisite service for the tranche. The requisite service period of each tranche is the greater of the derived service period from the market condition or the service condition vesting period. For RSU awards with performance conditions, compensation expense is recognized over the requisite service period based on the number of awards expected to vest. The Company recognizes compensation expense for awards with performance conditions only when it is probable that the performance condition will be achieved and adjusts compensation expense using a cumulative catch-up approach for changes in the expected outcome. Compensation expense for awards with performance conditions is reversed for awards that do not vest due to the failure to satisfy the performance condition. Compensation expense for awards with market conditions is not reversed if the market condition is not achieved, provided that the requisite service is rendered. See Note 13 — Stockholders' Deficit for more information about the service, market and performance conditions associated with the Company’s equity awards. Income Taxes The Company is subject to income taxes mainly in the jurisdictions in which it provides various infrastructure, technology and hosting services. The Company’s tax position requires significant judgment in order to properly evaluate and quantify tax positions and to determine the provision for income taxes. The Company uses the assets and liabilities method to account for income taxes, which requires that deferred tax assets and deferred tax liabilities be determined based on the differences between the financial statement and tax basis of assets and liabilities, using enacted tax rates in effect for the years in which the differences are expected to be reversed. The Company estimates its actual 82 Core Scientific, Inc. Notes to Consolidated Financial Statements current tax expense, including permanent charges and benefits, and the temporary differences resulting from differing treatment of items, for tax and financial accounting purposes. The Company assesses whether it is more likely than not that its deferred tax assets will be realized by considering both positive and negative evidence. If the Company believes that recovery of these deferred tax assets is not more likely than not, the Company establishes a valuation allowance. Significant judgment is required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation allowance, the Company considered all available evidence, including recent operating results, projections of future taxable income, the reversal of taxable temporary differences, and the feasibility of tax planning strategies. GAAP sets forth a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon examination, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. Interest and penalties related to unrecognized tax benefits are included within Income Tax Expense. Accrued interest and penalties are included in the related tax liability line in the Company’s consolidated balance sheets. The Company adjusts its reserves for tax positions in light of changing facts and circumstances, such as the closing of a tax audit, the refinement of an estimate based on new facts or changes in tax laws. To the extent that the final tax outcome of these matters is different than the amounts recorded, the differences are recorded as adjustments to the provision for income taxes in the period in which such determination is made. The provision (benefit) for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. The Company’s future effective tax rates could be adversely affected by changes in the valuation of the Company’s deferred tax assets or liabilities, or changes in tax laws, regulations, accounting principles or interpretations thereof. In addition, the Company is subject to examination of income tax returns by various tax authorities. The Company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of its provisions for income taxes. Recently Adopted Accounting Standards In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which enhances income tax disclosure requirements, including (i) additional disaggregation of income tax information and (ii) additional rate reconciliation disclosures, including specified categories and further disaggregation of items meeting a quantitative threshold. The amendments in ASU 2023-09 are effective for annual periods beginning after December 15, 2024, and are to be applied prospectively (retrospective application is permitted). The Company adopted ASU 2023-09 effective January 1, 2025, applied prospectively, and the required disclosures are included in this Annual Report on Form 10-K for the year ended December 31, 2025 . Accounting Standards Not Yet Adopted In November 2024 , the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments (“ASU 2024-04”), which clarifies the accounting for certain settlements of convertible debt instruments as induced conversions versus extinguishments. The guidance is effective for fiscal years beginning after December 15, 2025. The Company expects to adopt ASU 2024-04 on its required effective date and apply the guidance prospectively. The Company does not expect adoption to have a material impact on its consolidated financial statements and related disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. In January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03 for all public business entities. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments should be applied prospectively; retrospective application is also permitted. The Company is currently evaluating the impact these ASUs will have on its consolidated financial statements and related disclosures. 83 Core Scientific, Inc. Notes to Consolidated Financial Statements 3. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS During the preparation of the consolidated financial statements for the year ended December 31, 2025, the Company determined that property, plant and equipment was overstated as a result of the improper continued capitalization of carrying values of assets committed to demolition in connection with the conversion of certain facilities from digital asset mining operations to high- performance colocation infrastructure, which impacted the Company’s previously issued consolidated financial statements as of and for the year ended December 31, 2024, as well as the condensed consolidated financial statements as of and for the three and six months ended June 30, 2024, the three and nine months ended September 30, 2024, the three months ended March 31, 2025, the three and six months ended June 30, 2025 and the three and nine months ended September 30, 2025. Specifically, the carrying values of assets committed to demolition were improperly capitalized rather than being written down to fair value through the recognition of impairment charges in the periods in which the commitment to demolish was made. The Company assessed the materiality of the errors, individually and in the aggregate, and concluded that the errors were material to the previously issued consolidated financial statements and condensed consolidated statements set forth above and such previously issued financial statements should no longer be relied upon. As a result, the Company has restated its previously issued financial statements through the filing of an amended Annual Report on Form 10-K for the year ended December 31, 2024 and amended Quarterly Reports on Forms 10-Q for the quarterly periods ended March 31, 2025, June 30, 2025, and September 30, 2025, which are being filed concurrently with this Annual Report on Form 10-K. 4. EMERGENCE FROM BANKRUPTCY On January 16, 2024, the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) entered an order confirming the Fourth Amended Joint Chapter 11 Plan of Core Scientific, Inc. and certain of its affiliates (collectively, the “Debtors”) (with technical modifications) (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 Nasdaq under the ticker symbol “CORZ”. On the Effective Date, the Company’s obligations under its 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) (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) (the “Other Convertible Notes,” and together with the Secured Convertible Notes, the “Convertible Notes”), as well as the replacement debtor-in-possession credit agreement and substantially all other instruments 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 for instruments specifically reinstated pursuant to the Plan of Reorganization), were canceled, 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”) providing for 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 that provided for the issuance of contingent value rights (the “CVRs”) to holders of the Company’s Convertible Notes and contingent value rights 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 volume-weighted 84 Core Scientific, Inc. Notes to Consolidated Financial Statements average price (“VWAP”) of the Company’s New Common Stock on Nasdaq exceeded $ 5.02 for 20 trading days within the applicable 30 consecutive trading day period. • Under the Plan of Reorganization, holders of the Company’s pre-emergence Secured Convertible Notes and Other Convertible Notes received Secured Notes, New Secured Convertible Notes, post-emergence common stock and CVRs. Certain holders of New Secured Convertible Notes also funded and received the Exit Credit Agreement. See Notes 8 — Convertible and Other Notes Payable , 9 — Warrant Liabilities and Contingent Value Rights , and 13 — Stockholders' Deficit for additional information about the Company’s emergence from bankruptcy. Settlements During the years ended December 31, 2024 and 2023, settlements of claims with various entities were ordered by the Bankruptcy Court and the satisfaction of those claims was recorded as Reorganization items, net in the Company’s consolidated statements of operations. In 2020, the Company entered into a master equipment finance agreement with NYDIG and received loans to finance the Company’s acquisition of blockchain computing equipment (“NYDIG Loan”). On February 26, 2023, the Bankruptcy Court entered an order approving a settlement with NYDIG which the Debtors agreed to transfer the miners serving as collateral under the NYDIG Loan back to NYDIG over a period of several months in exchange for the full extinguishment of the NYDIG Loan. The final shipment of miners serving as collateral under the NYDIG Loan occurred during the quarter ended March 31, 2023, after which the NYDIG Loan was extinguished in full and the Company recorded a $ 20.8 million gain on debt extinguishment in the Company’s consolidated statements of operations for the year ended December 31, 2023. Reorganization items, net Effective December 21, 2022 , the date the Debtors filed voluntary petitions for relief under chapter 11 of the U.S. Bankruptcy Code (the “Chapter 11 Cases”), the Company began to apply the provisions of ASC 852, Reorganizations (“ASC Topic 852”), which is applicable to companies under bankruptcy protection and requires amendments to the presentation of certain financial statement line items. ASC Topic 852 requires that the financial statements for periods including and after the filing of the Chapter 11 Cases distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Expenses (including professional fees), realized gains and losses, and provisions for losses that can be directly associated with the reorganization must be reported separately as Reorganization items, net in the consolidated statements of operations beginning December 21, 2022, the petition date. 85 Core Scientific, Inc. Notes to Consolidated Financial Statements Reorganization items, net incurred as a result of the Chapter 11 Cases presented separately in the accompanying c onsolidated statements of operations for the years ended December 31, 2024 and 2023 , were as follows (in thousands): Year Ended December 31, 2024 2023 Professional fees and other bankruptcy related costs $ 21,480 $ 92,195 Negotiated settlements ( 2,269 ) ( 20,525 ) Satisfaction of allowed claims: Extinguishment of secured and other convertible notes ( 10,831 ) — Extinguishment of miner equipment lender loans and leases ( 102,024 ) — Satisfaction of general unsecured creditor claims ( 31,167 ) — Satisfaction of cures and other claims 231 94,567 Total satisfaction of allowed claims ( 143,791 ) 94,567 Reimbursed claimant professional fees 12,802 — Debtor-in-possession financing costs 339 24,885 Reorganization items, net $ ( 111,439 ) $ 191,122 During the year ended December 31, 2024, there were significant reorganization related gains resulting primarily from satisfaction of allowed claims under the Plan of Reorganization on the Effective Date and negotiated settlements, partially offset by professional fees and other bankruptcy related costs. These reorganization related impacts were classified as Reorganization items, net through the Effective Date. For the year ended December 31, 2025 and 2024, post-emergence bankruptcy advisory costs of $ 1.8 million and $ 4.8 million , respectively, were recorded as Advisor fees in the Company’s consolidated statements of operations. 5. PROPERTY, PLANT, AND EQUIPMENT Property, plant and equipment, net as of December 31, 2025 and 2024 consist of the following (in thousands): December 31, 2025 December 31, 2024 Estimated Useful Lives Land and improvements 1 $ 21,769 $ 17,215 20 years Building and improvements 278,222 186,267 10 to 39 years Mining and network equipment 408,777 413,296 3 to 10 years Electrical equipment 77,348 74,077 15 years Other property, plant and equipment 3,010 2,764 5 to 7 years Total 789,126 693,619 Less: accumulated depreciation and amortization 406,893 372,112 Total 382,233 321,507 Add: Construction in progress 911,066 111,966 Property, plant and equipment, net $ 1,293,299 $ 433,473 1 Estimated useful life of improvements. Land is not depreciated. 86 Core Scientific, Inc. Notes to Consolidated Financial Statements Property, plant and equipment, net being leased to customers were immaterial as of December 31, 2024. As of December 31, 2025, property, plant and equipment, net being leased to customers consisted of the following (in thousands): December 31, 2025 Land and improvements $ 5,546 Building and improvements 146,082 Mining and network equipment 8 Electrical equipment 19,146 Other property, plant and equipment 218 Total 171,000 Less: accumulated depreciation and amortization 9,856 Property, plant and equipment, net leased to customers $ 161,144 Depreciation expense for the year s ended December 31, 2025 , 2024 and 2023 , was $ 68.1 million , $ 112.3 million , and $ 95.7 million , respectively . During the years ended December 31, 2025 and 2024 , $ 153.1 million and $ 169.3 million , respectively, of construction in progress was placed into service. During the years ended December 31, 2025 and 2024, the Company recognized impairment charges of $ 11.4 million and $ 122.9 million , respectively, related to property, plant and equipment committed to demolition in connection with the conversion of data center facilities from digital asset mining to high-density colocation operations. These charges represent the excess of the carrying value of the identified assets over their estimated fair value. The fair value measurement date is the date on which the commitment to demolish is made, which generally coincides with the execution of a colocation customer contract and commitment to site redevelopment plans. Fair value was determined using a market approach based on estimated salvage and scrap proceeds for the affected assets, which were determined to be nominal. These are non-recurring Level 3 fair value measurements, and the significant unobservable input is the estimated salvage and scrap value of the affected assets, which was determined to be nominal. These charges are presented as impairment of property, plant and equipment in the consolidated statements of operations. There were no other indicators of impairment of long-lived asset groups for the years ended December 31, 2025 and 2024. 6. BALANCE SHEET COMPONENTS Customer funding receivable and other current assets as of December 31, 2025 and 2024 consisted of the following (in thousands): December 31, 2025 December 31, 2024 Customer funding receivable $ 337,158 $ 7,442 Other 25,001 35,647 Total customer funding receivable and other current assets $ 362,159 $ 43,089 Customer funding receivable represents amounts due from our customer for construction related payables and accrued expenses incurred on their behalf. The Company collects these amounts from the customer prior to payment to vendors. The net impact of the account balance changes are reflected in the working capital components of the statement of cash flows. Obligations related to customer items are paid soon after reimbursement. As of December 31, 2025 , approximately $ 290.6 million of the related obligations were included in accrued expenses and approximately $ 46.6 million were included in accounts payable. Accrued expenses as of December 31, 2025 and 2024 consisted of the following (in thousands): 87 Core Scientific, Inc. Notes to Consolidated Financial Statements December 31, 2025 December 31, 2024 Accrued customer funded construction $ 290,603 $ — Accrued capital expenditures 197,888 17,395 Other 23,466 47,275 Total accrued expenses $ 511,957 $ 64,670 Other noncurrent liabilities as of December 31, 2025 and 2024 consisted of the following (in thousands): December 31, 2025 December 31, 2024 Operating lease liabilities, net of current portion 89,011 97,843 Other 15,250 15,315 Total other noncurrent liabilities $ 104,261 $ 113,158 7. LEASES Lessee Accounting The components of operating and finance leases are presented on the Company’s Consolidated Balance Sheets as follows (in thousands): Financial statement line item December 31, 2025 December 31, 2024 Assets: Operating lease right-of-use assets Operating lease right-of-use assets $ 108,484 114,472 Finance lease right-of-use assets Other noncurrent assets $ 1,843 5,873 Liabilities: Operating lease liabilities, current portion Other current liabilities $ 12,343 9,974 Operating lease liabilities, net of current portion Other noncurrent liabilities $ 89,011 97,843 Finance lease liabilities, current portion Other current liabilities $ — 1,669 Finance lease liabilities, net of current portion Other noncurrent liabilities $ 844 3 88 Core Scientific, Inc. Notes to Consolidated Financial Statements The components of lease expense were as follows (in thousands): Year Ended December 31, Financial statement line item 2025 2024 2023 Operating lease expense Cost of colocation services $ 13,853 $ 10,274 $ — Operating lease expense Cost of digital asset self-mining 327 413 — Operating lease expense Cost of digital asset hosted mining services 35 87 — Operating lease expense Selling, general and administrative 4,964 2,129 1,024 Short-term lease expense Cost of digital asset self-mining 1,205 383 — Variable lease expense Cost of colocation services 1,270 1,455 — Finance lease expense: Amortization of right-of-use assets Cost of digital asset self-mining 570 1,106 11,424 Interest on lease liabilities Interest expense, net 119 1,200 1,787 Total finance lease expense 689 2,306 13,211 Total lease expense $ 22,343 $ 17,047 $ 14,235 Information relating to the lease term and discount rate is as follows: December 31, 2025 December 31, 2024 Weighted Average Remaining Lease Term (Years) Operating leases 7.5 8.5 Finance leases 4.9 0.7 Weighted Average Discount Rate Operating leases 8.5 % 8.5 % Finance leases 7.4 % 12.5 % Information relating to lease payments is as follows (in thousands): Year Ended December 31, 2025 2024 2023 Lease Payments Operating cash flows from operating leases $ 16,961 $ 16,328 $ 956 Operating cash flows from finance leases $ 82 $ 1,856 $ 964 Financing cash flows from finance leases $ 1,672 $ 6,038 $ 3,495 Supplemental Noncash Information Finance lease right-of-use assets obtained in exchange for lease obligations $ 1,916 $ — $ — Operating lease right-of-use assets obtained in exchange for lease obligations $ 3,952 $ 111,736 $ — Increase in operating right-of-use assets due to lease modification $ 1,327 $ — $ — 89 Core Scientific, Inc. Notes to Consolidated Financial Statements The Company’s minimum payments under noncancelable operating and finance leases having terms in excess of one year are as follows at December 31, 2025 , and thereafter (in thousands) : Operating Leases Finance Leases 2026 $ 20,301 $ — 2027 20,734 — 2028 21,019 257 2029 20,754 440 2030 21,079 403 Thereafter 33,239 — Total lease payments 137,126 1,100 Less: imputed interest 35,773 256 Total $ 101,353 $ 844 Lessor Accounting We generate revenue by leasing property to a customer under licensing agreements. The manner in which we recognize these transactions in our financial statements is described in Note 2 — Summary of Significant Accounting Policies , Revenue Recognition — Colocation Segment . There was no lease revenue during the year ended December 31, 2023. The components of lease revenue were as follows (in thousands): Year Ended December 31, 2025 2024 Lease Revenue Operating lease revenue $ 47,861 $ 17,498 Variable lease revenue 17,563 6,880 Total lease revenue $ 65,424 $ 24,378 The following table represents the maturity analysis of operating lease payments expected to be received at December 31, 2025 , and thereafter (in thousands): Operating Leases 1 2026 $ 86,479 2027 89,386 2028 136,190 2029 164,823 2030 170,461 Thereafter 1,123,444 Total $ 1,770,783 1 O perating lease payments expected to be received excludes $ 8.17 billion in total future noncancellable minimum lease payments for operating leases that have not yet commenced as of December 31, 2025, which have initial lease terms of 12 years from commencement. 90 Core Scientific, Inc. Notes to Consolidated Financial Statements 8. CONVERTIBLE AND OTHER NOTES PAYABLE Notes payable as of December 31, 2025 and 2024 , consists of the following (in thousands): Stated Interest Rate Effective Interest Rates Maturities December 31, 2025 December 31, 2024 Convertible Notes: 2031 Convertible Notes — % 0.4 % 2031 $ 625,000 $ 625,000 2029 Convertible Notes 3.0 % 3.7 % 2029 460,000 460,000 Equipment and Settlement: Bremer loan 5.5 % 5.5 % 2027 — 10,669 Didado note 5.0 % 15.0 % 2027 — 8,964 HMC note 5.0 % 15.0 % 2026 — 9,042 Harper note 5.0 % 15.0 % 2026 — 3,119 Trilogy note 5.0 % 15.0 % 2026 — 2,107 Other: ACM note — % 15.0 % 2025 — 3,023 Other 7.1 % - 7.7 % 7.1 % - 7.7 % 2025 — 129 Notes payable 1,085,000 1,122,053 Less: Unamortized discounts 24,675 31,773 Total notes payable, net 1,060,325 1,090,280 Less: current portion 1 — 16,290 Convertible and other notes payable, net of current portion $ 1,060,325 $ 1,073,990 1 The current portion is included in Other current liabilities on the Company’s consolidated balance sheets. During the year ended December 31, 2025 , the Company fully repaid five higher-interest debt facilities, including the Bremer loan, Didado note, HMC note, Harper note, and Trilogy note , totaling approximately $ 26.6 million in principal. The repayment resulted in an aggregate of $ 1.4 million loss on debt extinguishment . Interest expense on the 2029 Convertible Notes and 2031 Convertible Notes (together “Convertible Notes”) was as follows (in thousands): Year Ended December 31, 2025 2024 Coupon interest $ 13,800 $ 5,060 Amortization of debt discount and issuance costs 5,230 $ 995 Total $ 19,030 $ 6,055 Maturities on convertible and other notes payable, gross of unamortized discounts, are as follows (in thousands): Convertible Notes Other Notes Payable 2026 $ — $ — 2027 — — 2028 — — 2029 460,000 — 2030 — — Thereafter 625,000 — Total $ 1,085,000 $ — 91 Core Scientific, Inc. Notes to Consolidated Financial Statements Convertible Notes 0.00 % Convertible Senior Notes due 2031 On December 5, 2024, the Company issued $ 625.0 million aggregate principal amount of 0.00 % Convertible Senior Notes due 2031 (the "2031 Convertible Notes"). The 2031 Convertible Notes mature on June 15, 2031, unless earlier converted, redeemed, or repurchased. Noteholders may convert their 2031 Convertible Notes at their option only upon the occurrence of certain events, including if the Company’s common stock price exceeds 130 % of the conversion price for a specified period or upon certain corporate events. The Company may redeem the 2031 Convertible Notes, in whole or in part, at its option on or after June 22, 2028, subject to certain conditions. Noteholders may require the Company to repurchase their 2031 Convertible Notes upon the occurrence of a “Fundamental Change” (as defined in the 2031 Convertible Notes Indenture) or on December 15, 2027. The 2031 Convertible Notes Indenture includes customary provisions relating to Events of Default, including payment defaults and certain bankruptcy or insolvency events. The initial conversion rate is 44.4587 shares of common stock per $1,000 principal amount of 2031 Convertible Notes (equivalent to an initial conversion price of approximately $ 22.49 per share). The conversion rate is subject to adjustment upon the occurrence of certain events. The net proceeds from the offering were approximately $ 608.7 million , after deducting the initial purchasers’ discounts and commissions and the Company’s estimated offering expenses. The Company will recognize interest expense on the 2031 Convertible Notes using the effective interest method over the term of the notes. The Company intends to use the net proceeds for general corporate purposes. 3.00 % Convertible Senior Notes due 2029 On August 19, 2024, the Company issued $ 460.0 million aggregate principal amount of 3.00 % Convertible Senior Notes due 2029 (the "2029 Convertible Notes"). The 2029 Convertible Notes mature on September 1, 2029, unless earlier converted, redeemed, or repurchased. Noteholders may convert their 2029 Convertible Notes at their option only upon the occurrence of certain events, including if the Company’s common stock price exceeds 130 % of the conversion price for a specified period or upon certain corporate events. The Company may redeem the 2029 Convertible Notes, in whole or in part, at its option on or after September 7, 2027, subject to certain conditions. Noteholders may require the Company to repurchase their 2029 Convertible Notes upon the occurrence of a “Fundamental Change” (as defined in the 2029 Convertible Notes Indenture). The 2029 Convertible Notes Indenture includes customary provisions relating to Events of Default, including payment defaults and certain bankruptcy or insolvency events. The initial conversion rate is 90.9256 shares of common stock per $1,000 principal amount of 2029 Convertible Notes (equivalent to an initial conversion price of approximately $ 11.00 per share). The conversion rate is subject to adjustment upon the occurrence of certain events. The net proceeds from the offering were approximately $ 447.6 million , after deducting the initial purchasers’ discounts and commissions and the Company’s estimated offering expenses. The Company will recognize interest expense on the 2029 Convertible Notes using the effective interest method over the term of the notes. The Company used approximately $ 62.0 million of the net proceeds from the 2029 Convertible Notes Offering to repay in full the outstanding loans under the Exit Credit Agreement, of which $ 0.8 million was paid for interest. Additionally, the Company used approximately $ 154.1 million of the net proceeds from the 2029 Convertible Notes Offering to redeem all of the outstanding Secured Notes, of which $ 4.1 million was paid for interest. The Company intends to use the remaining net proceeds from the 2029 Convertible Notes Offering for general corporate purposes. 9. WARRANT LIABILITIES AND CONTINGENT VALUE RIGHTS Warrant Agreement On the Effective Date and pursuant to the Plan of Reorganization and the Confirmation Order, the Company entered into a warrant agreement (the “Warrant Agreement”) providing for the issuance of 98,313,313 warrants, each exercisable for one share of New Common Stock at an exercise price of $ 6.81 per share (the “Tranche 1 Warrants”) and (ii) an aggregate of 81,927,898 warrants, each exercisable for one share of New Common Stock at an exercise price of $ 0.01 per share (the “Tranche 2 Warrants” and, together with the Tranche 1 Warrants, the “Warrants”). Each whole Tranche 1 Warrant entitles the registered holder to purchase one whole share of New Common Stock at an exercise price of $ 6.81 per share (the “Tranche 1 Exercise Price”). Each whole Tranche 2 Warrant entitles the registered holder to purchase one whole share of New Common Stock at an exercise price of $ 0.01 per share at any time following the time the volume weighted average price per share of New Common Stock equals or exceeds $ 8.72 per share on each trading day for 20 consecutive trading days (the “Triggering Event”), which event occurred on July 11, 2024. The Tranche 1 and Tranche 2 Exercise Prices are subject to adjustment for specific events as set forth in the Warrant Agreement. The Tranche 2 Warrants may be exercised on a cashless basis. The Tranche 1 Warrants will expire on January 23, 2027, and the Tranche 2 Warrants will expire on January 23, 2029, in each case, unless earlier terminated in accordance with the Warrant Agreement. 92 Core Scientific, Inc. Notes to Consolidated Financial Statements During the year ended December 31, 2025 , 1.0 million Tranche 1 Warrants were exercised, which resulted in cash receipts of $ 6.8 million . As of December 31, 2025 , there were 96.7 million unexercised Tranche 1 Warrants. During the year ended December 31, 2025 , 12.9 million Tranche 2 Warrants were exercised, which resulted in cash receipts of $ 0.1 million . As of December 31, 2025 , there were 8.1 million unexercised Tranche 2 Warrants. Contingent Value Rights Agreement On the Effective Date, under the terms of the Plan of Reorganization, the Company entered into the Contingent Value Rights Agreement and recorded the liabilities at fair value as of the Effective Date. Pursuant to the Contingent Value Rights Agreement, the Company issued 51,783,625 CVRs to holders of the Company’s Convertible Notes who received New Common Stock (in such capacity, the “Payees”) in an aggregate amount of 51,783,625 shares of New Common Stock (the “Corresponding New Common Stock”). The CVRs require the Company to make payments to each Payee, of: • (i) at the first testing date, cash equal to such Payee’s pro rata share (the “Year 1 Contingent Payment Obligation”) of the lesser of (a) $ 43,333,333.33 and (b) the difference between (1) $ 260,000,000 and (2) the fair market value of the Corresponding New Common Stock (the “First Anniversary Payment Amount”); provided that the Year 1 Contingent Payment Obligation will be extinguished if the fair market value of the Corresponding New Common Stock is equal to or in excess of $ 260,000,000 with respect to the first testing date; as of December 31, 2024, the fair market value of the Corresponding New Common Stock was in excess of $ 260,000,000 . On January 23, 2025, the first testing date, the fair market value of the Corresponding New Common Stock was in excess of $ 260,000,000 and the Year 1 Contingent Payment Obligation was extinguished. • (ii) at the second testing date, cash or New Common Stock (or a combination of cash and New Common Stock), in the Company’s sole discretion, equal to such Payee’s pro rata share (the “Year 2 Contingent Payment Obligation”) of the lesser of (a) $ 43,333,333.33 and (b) the difference between (1) $ 260,000,000 minus the First Anniversary Payment Amount and (2) the fair market value of the Corresponding New Common Stock (the “Second Anniversary Payment Amount”); provided that the Year 2 Contingent Payment Obligation will be extinguished if the fair market value of the Corresponding New Common Stock is equal to or in excess of $ 260,000,000 minus the First Anniversary Payment Amount, if any, with respect to the second testing date; and • (iii) at the third testing date, cash or New Common Stock (or a combination of cash and New Common Stock), in the Company’s sole discretion, equal to such Payee’s pro rata share (the “Year 3 Contingent Payment Obligation”) of the lesser of (a) $ 43,333,333.33 and (b) the difference between (1) $ 260,000,000 minus the sum of the First Anniversary Payment Amount and the Second Anniversary Payment Amount and (2) the fair market value of the Corresponding New Common Stock (the “Third Anniversary Payment Amount”); provided that the Year 3 Contingent Payment Obligation will be extinguished if the fair market value of the Corresponding New Common Stock is equal to or in excess of $ 260,000,000 minus (1) the First Anniversary Payment amount, if any and (2) the Second Anniversary Payment Amount, if any, with respect to the third testing date. 10. FAIR VALUE MEASUREMENTS The Company measures certain assets and liabilities at fair value on a recurring or non-recurring basis in certain circumstances. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets. Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3 — Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. The Company uses observable market data when determining fair value whenever possible and relies on unobservable inputs only when observable market data is not available. 93 Core Scientific, Inc. Notes to Consolidated Financial Statements Recurring Fair Value Measurements The CVRs, GUC CVRs and Warrants are recognized as derivative liabilities in accordance with ASC Topic 815, and are initially and subsequently measured at fair value with changes in fair value reflected in Net loss. When these instruments were recognized on the Effective Date, observable market data was not available. As of December 31, 2025 , observable Level 1 market data was available for the CVRs and Warrants. On the Effective Date, the CVRs and GUC CVRs were recognized at their fair value of $ 86.3 million . During the year ended December 31, 2024 , a decrease in fair value of $ 82.1 million was included in C hange in fair value of warrant and contingent value rights on the Company’s c onsolidated statements of operations. During the year ended December 31, 2025, a decrease in fair value of CVRs of $ 0.9 million was included in Change in fair value of warrants and contingent value rights in the Company’s consolidated statements of operations. On the Effective Date, the warrants were recognized at their fair value of $ 345.9 million . During the year ended December 31, 2024 , an increase in fair value of $ 1.45 billion was included in Change in fair value of warrant and contingent value rights on the Company’s consolidated statements of operations. During the year ended December 31, 2025, an increase in fair value of Warrants of $ 34.0 million was included in Change in fair value of warrants and contingent value rights in the Company’s consolidated statements of operations. The following presents the levels of the fair value hierarchy for the Company's assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 (in thousands): Fair Value Hierarchy Level 1 Level 2 Level 3 Fair value Assets: Cash and cash equivalents Money market funds $ 267,721 $ — $ — $ 267,721 Digital assets 222,000 — — 222,000 Total assets measured at fair value on a recurring basis $ 489,721 $ — $ — $ 489,721 Liabilities: Contingent value rights 1 $ 3,366 $ — $ — $ 3,366 Warrants 936,107 — — 936,107 Total liabilities measured at fair value on a recurring basis $ 939,473 $ — $ — $ 939,473 1 The fair value of contingent value rights is included within Other current liabilities and Other noncurrent liabilities on the Company’s consolidated balance sheets, based on the expected timing of settlement. 94 Core Scientific, Inc. Notes to Consolidated Financial Statements The following presents the levels of the fair value hierarchy for the Company's assets and liabilities measured at fair value on a recurring basis as of December 31, 2024 (in thousands): Fair Value Hierarchy Level 1 Level 2 Level 3 Fair value Assets: Cash and cash equivalents Money market funds $ 832,213 $ — $ — $ 832,213 Digital assets 23,893 — — 23,893 Total assets measured at fair value on a recurring basis $ 856,106 $ — $ — $ 856,106 Liabilities: Contingent value rights 1 $ 4,272 $ — $ — $ 4,272 Warrants 1,097,285 — — 1,097,285 Total liabilities measured at fair value on a recurring basis $ 1,101,557 $ — $ — $ 1,101,557 1 The fair value of contingent value rights is included within Other current liabilities and Other noncurrent liabilities on the Company’s consolidated balance sheets, based on the expected timing of settlement. Financial Instruments Not Carried at Fair Value The Convertible Notes are recorded at amortized cost in the condensed consolidated balance sheets. The fair value is disclosed for informational purposes only in accordance with ASC Topic 825-10, Financial Instruments, and is determined using trading activity in over-the-counter markets. The following tables present the carrying amounts and estimated fair values of the Convertible Notes as of December 31, 2025 and December 31, 2024 (in thousands): December 31, 2025 Carrying Amount Fair Value Fair Value Hierarchy 3.00 % Convertible Senior Notes due 2029 $ 460,000 $ 718,609 Level 1 0.00 % Convertible Senior Notes due 2031 $ 625,000 $ 657,735 Level 1 December 31, 2024 Carrying Amount Fair Value Fair Value Hierarchy 3.00 % Convertible Senior Notes due 2029 $ 460,000 $ 703,100 Level 1 0.00 % Convertible Senior Notes due 2031 $ 625,000 $ 615,800 Level 1 Level 2 Recurring Fair Value Measurements In October 2023, the Company entered into an energy forward purchase contract to fix a specified component of the energy price related to forecasted energy purchases at the Pecos, Texas facility from November 1, 2023 through May 31, 2024 (the “Energy Derivatives”). The energy forward purchase contract is not designated as a hedging instrument for accounting. The Energy Derivatives are recognized as derivatives in accordance with ASC Topic 815 initially and subsequently measured at fair value with changes in value reflected in Net loss. The Company measures the fair value of its energy forward purchase contract using the discounted cash flow model and uses Intercontinental Exchange forward curves and risk-free rates as observable market inputs. 95 Core Scientific, Inc. Notes to Consolidated Financial Statements The Company recorded the following losses related to the energy forward purchase contract on the Company’s consolidated statements of operations (in thousands): Year Ended December 31, Financial statement line item 2025 2024 2023 Energy forward purchase contract Decrease in fair value of energy derivatives $ — $ 2,757 $ 3,918 Nonrecurring Fair Value Measurements The Company’s non-financial assets, including property, plant and equipment, and intangible assets (other than digital assets) are measured at estimated fair value on a nonrecurring basis and are adjusted only upon impairment or when held for sale. Prior to the adoption of ASU 2023-08, digital assets were subject to nonrecurring fair value adjustments only when impairment was recognized. Refer to Note 2 — Summary of Significant Accounting Policies and Note 5 — Property, Plant, and Equipment , for more information regarding fair value considerations when measuring impairment. No non-financial assets were classified as Level 3 as of December 31, 2025 or December 31, 2024 . The Company’s financial instruments, that are not subject to recurring fair value measurements, include cash and cash equivalents (other than money market funds), restricted cash, accounts receivable, accounts payable, leases, notes payable and certain accrued expenses and other liabilities. Except for the 2029 Convertible Notes and 2031 Convertible Notes , the carrying amount of these financial instruments materially approximate their fair values. 11. COMMITMENTS AND CONTINGENCIES Commitments As of December 31, 2025 , the Company was contractually committed approximately $ 989.8 million of capital expenditures, primarily related to infrastructure modifications, equipment procurement, and labor associated with the conversion of a significant portion of our data centers to deliver high-density colocation services to customers. Of this amount, $ 716.8 million will be passed through to the Company’s customer as invoiced and $ 30.1 million will be funded by the customer as prepaid base license fees for the Colocation segment. These capital expenditures are expected to occur within the next 12 to 24 months . Subsequent to December 31, 2025, and through February 26, 2026 , the Company contractually committed for an additional $ 418.1 million of capital expenditures. Of this amount, $ 107.4 million will be passed through to the Company’s customer as invoiced. Legal Proceedings The Company is subject to legal proceedings arising in the ordinary course of business. The Company accrues losses for a legal proceeding when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. However, the uncertainties inherent in legal proceedings make it difficult to reasonably estimate the costs and effects of resolving these matters. Accordingly, actual costs incurred may differ materially from amounts accrued and could materially adversely affect the Company’s business, cash flows, results of operations, financial condition and prospects. Unless otherwise indicated, the Company is unable to estimate reasonably possible losses in excess of any amounts accrued. Purported Shareholder Class Action (“Pang”) On November 14, 2022, Plaintiff Mei Pang filed a purported class-action complaint against Core Scientific, Inc., its former chief executive officer, Michael Levitt, and others in the United States District Court, Western District (Austin) of Texas asserting that the Company violated the Securities Act and Exchange Act by allegedly failing to disclose to investors that among other things the Company was vulnerable to litigation given its decision to pass power costs to its customers, that certain clients had breached their contracts, and that this impacted the Company’s profitability and ability to continue as a going concern. The complaint seeks monetary damages. Core filed a notice of suggestion of bankruptcy stating that its petition for bankruptcy—filed on December 21, 2022— operates as a stay to the continuation of this matter. Plaintiff subsequently withdrew its claims against Core. A lead plaintiff was appointed in April 2023 and proofs of claim were filed in the Company’s Chapter 11 Cases. After the Company filed its motion to dismiss and a subsequent motion for consideration with respect to remaining claims not dismissed, all remaining claims in the complaint against the individual defendants were subsequently dismissed without prejudice in April 2024. 96 Core Scientific, Inc. Notes to Consolidated Financial Statements On December 7, 2023, the United States Bankruptcy Court for the Southern District of Texas in Houston, sustained the Company’s objection to the filed class proof of claim without prejudice to re-file a proof of claim on an individual basis by December 20, 2023; and denied plaintiff’s Motion for Class Treatment under Fed. R. Bankr. P. 7023. No individual proof of claim was filed by any of the class representatives of the purported class action by December 20, 2023, and a separately filed objection to confirmation of Debtors’ Fourth Amended Chapter 11 Plan and Disclosure Statement was overruled by the Bankruptcy Court on January 16, 2024. On January 29, 2024, plaintiff filed a notice of appeal of the order confirming the Company’s Plan of Reorganization. On June 7, 2024, Plaintiff refiled its complaint asserting that the individual defendants violated the Securities Exchange Act by allegedly failing to disclose to investors that among other things the Company failed to disclose known trends or uncertainties that would have an impact on the Company’s financial performance. The Company’s motion to dismiss the refiled complaint is pending with the United States District Court in Austin, Texas. On March 7, 2025, the United States District Court for the Western District (Austin) of Texas referred Plaintiff's complaint to the United States Bankruptcy Court for the Southern District of Texas in Houston for determination of the issues raised by the Company's motion to dismiss, dismissed without prejudice Company's motion to dismiss as moot and administratively closed the case. On March 19, 2025, the United States Bankruptcy Court Southern District of Texas Houston Division dismissed Plaintiff's appeal of the order confirming the Company's Plan of Reorganization as it related to the Plaintiffs as moot in light of the administrative closure of the securities case brought by the Plaintiffs in the United States District Court Western District of Texas. On April 2, 2025, the Plaintiff's filed a Motion for Reconsideration of the orders entered in each of the United States District Court for the Southern District of Texas Houston Division and the United States District Court for the Western District of Texas (Austin) and the Company filed its motions opposing each of Plaintiff’s motions for reconsideration. Shareholder Class Action (“Ihle”) On July 24, 2023, Plaintiff Brad Ihle filed a class action complaint against certain officers and directors of Power & Digital Infrastructure Acquisition Corp. (the former name of the current corporate entity operating our business, or “XPDI”) and XMS Sponsor LLC et al, in the Court of Chancery State of Delaware. The complaint alleges breach of fiduciary duties arising out of the merger of XPDI and the entity that conducted our business operations prior to the merger and the marketing and solicitation of shareholders pursuant to that merger agreement dated July 20, 2021. Certain of the defendants have notified the Company of their intention to seek defense and indemnification in this matter pursuant to Delaware law and the Company’s bylaws. The matter was settled during the quarter ended December 31, 2025, with the Company’s payment in satisfaction of its existing indemnification obligation. This payment is reflected in the Loss on legal settlements in the Company’s consolidated statements of operations. Patent Infringement Claim Malikie Innovations Ltd and Key Patents Innovations Ltd. (“Malikie”), filed suit in the United States District Court Eastern District of Texas Marshall Division against Core Scientific, Inc. (the “Company”) alleging infringement in the Company’s bitcoin mining business of U.S. Patent Nos. 8,788,827; 10,284,370; 8,666,062; 7,372,960; and 8,532,286. On July 20, 2025 the Company filed a motion to dismiss the claims on the basis that the patents are invalid under 35 U.S.C §101 and on July 25, 2025 the Company filed a motion to transfer the case to the United States District Court for the Western District of Texas (Austin). On November 14, 2025 Malikie filed a motion to amend the complaint to add allegations of infringement of U.S. Patent No. 8,712,039 by the Company’s bitcoin mining business and its high performance computing business. Malikie also asserted infringement of the previously asserted 8,532,286 patent against the Company’s high performance computing business. All motions are pending. The court set a trial date of January 25, 2027. As of December 31, 2025 and December 31, 2024 , there were no other material loss contingency accruals for legal matters. Leases —See Note 7 — Leases for additional information. 12. INCOME TAXES Current income tax expense represents the amount expected to be reported on the Company’s income tax returns, and deferred tax expense or benefit represents the change in net deferred tax assets and liabilities. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities as measured by the enacted tax rates that will be in effect when these differences reverse. Valuation allowances are recorded as appropriate to reduce deferred tax assets to the amount considered likely to be realized. The Company had $ 0.6 million , $ 0.9 million , and $ 0.7 million of income tax expense, for the years ended December 31, 2025, 2024 and 2023, respectively. 97 Core Scientific, Inc. Notes to Consolidated Financial Statements L oss from continuing operations before income tax expense: Year Ended December 31, 2025 Domestic $ ( 288,033 ) Foreign — Total $ ( 288,033 ) The income tax expense and effective income tax rate for the years ended December 31, 2025, 2024 and 2023 were as follows: Year Ended December 31, 2025 2024 2023 Current tax: Federal $ — $ — $ — State 583 859 683 Total current tax 583 859 683 Deferred tax: Federal — — — State — — — Total deferred tax — — — Total income tax expense $ 583 $ 859 $ 683 Income taxes paid, net of refunds received (in thousands): Year Ended December 31, 2025 Federal $ — State North Carolina ( 559 ) Texas 759 Other State 5 Total State 205 Foreign — Total income taxes paid $ 205 98 Core Scientific, Inc. Notes to Consolidated Financial Statements The reconciliation between the U.S. statutory tax rate and the Company’s effective tax is presented as follows for the periods presented (in thousands): Year Ended December 31, 2024 2023 U.S. federal statutory income tax benefit applied to loss before income taxes $ ( 301,774 ) $ ( 51,619 ) State income taxes, net of federal benefit 5,746 12,325 Stock compensation 14,319 16,578 Non-deductible interest 2,875 11,659 Fair value adjustment - convertible notes 287,523 — Reorganization costs 1,508 40,572 Valuation allowance ( 9,500 ) ( 29,195 ) Other permanent items 162 363 Total income tax expense (benefit) $ 859 $ 683 The reconciliation between the U.S. statutory tax rate and the Company’s effective tax is presented as follows for the period presented (in thousands, except percentages): Year Ended December 31, 2025 US Federal statutory income tax rate $ ( 60,487 ) 21.00 % State and local income taxes, net of federal effect 1 536 ( 0.19 ) % Change in valuation allowance 64,365 ( 22.35 ) % Nontaxable and nondeductible items Fair value adjustment - convertible notes 6,942 ( 2.41 ) % Stock compensation 8,785 ( 3.05 ) % Cancellation of debt income ( 25,796 ) 8.96 % Other non-deductible items ( 3,428 ) 1.19 % Tax credits ( 1,339 ) 0.46 % Deferred tax adjustments 10,201 ( 3.54 ) % Worldwide changes in unrecognized tax benefits 638 ( 0.22 ) % Other 166 ( 0.05 ) % Total $ 583 ( 0.20 ) % 1 State and local income taxes in Texas comprise the majority of the state and local income taxes, net of federal effect category. 99 Core Scientific, Inc. Notes to Consolidated Financial Statements The Company’s deferred tax assets and liabilities are detailed as follows (in thousands): Year Ended December 31, 2025 2024 2023 Deferred tax assets: Net operating loss carryforward $ 159,384 $ 70,530 $ 73,272 Capital loss carryforward 48,055 48,007 50,313 Deferred interest carryforward 26,454 23,858 18,438 Research tax credit carryforward 1,705 1,005 483 Reserves and accruals 48 4,773 2,440 Stock-based compensation 7,421 6,705 17,614 Derivatives 7,119 228 — Property, plant and equipment, net 27,285 48,586 53,334 Digital asset impairment loss — — 6 Debt extinguishment loss — — 2,446 Intangibles (other than goodwill) 2,018 2,266 2,660 Leases 22,255 23,455 2,099 Capitalized research and development expenses 3,575 4,872 4,226 Other 42 470 6 Gross deferred tax assets 305,361 234,755 227,337 Valuation allowance ( 275,497 ) ( 209,852 ) ( 219,515 ) Deferred tax assets, net of valuation allowance 29,864 24,903 7,822 Deferred tax liabilities: Deferred revenue ( 5,839 ) — ( 6,031 ) Operating lease ROU assets ( 24,025 ) ( 24,903 ) ( 1,791 ) Deferred tax liabilities, net ( 29,864 ) ( 24,903 ) ( 7,822 ) Total net deferred tax assets (liabilities) $ — $ — $ — The changes in the Company’s valuation allowance were as follows (in thousands): Year Ended December 31, 2025 2024 2023 Balance at beginning of period $ 209,852 $ 219,515 $ 248,710 Change related to current net operating losses and impairments 50,460 16,612 ( 561 ) Change related to deferred tax adjustments 20,080 ( 2,488 ) ( 37,485 ) Change related to prior period adjustments ( 4,895 ) 6,409 8,851 Change related to restructuring — ( 30,196 ) — Balance at end of period $ 275,497 $ 209,852 $ 219,515 Realization of deferred tax assets is dependent upon the generation of future taxable income, if any, the timing and amount of which are uncertain. The assessment regarding whether a valuation allowance is required on deferred tax assets considers the evaluation of both positive and negative evidence when concluding whether it is more likely than not that deferred tax assets are realizable. After reviewing the positive and negative evidence available, the Company has recorded a valuation allowance of $ 275.5 million . The valuation allowance primarily relates to deferred tax assets for fixed assets, deferred interest carryforwards, net operating loss carryforwards and capital loss carryforwards. As of December 31, 2025, the Company has federal and state net operating loss carryforwards in the amount of $ 727.8 million and $ 184.2 million , respectively. As of December 31, 2024, the Company has federal and state net operating loss carryforwards in the amount of $ 312.4 million and $ 128.1 million , respectively. The federal net operating loss can be carried forward indefinitely, however 100 Core Scientific, Inc. Notes to Consolidated Financial Statements the utilization of the federal net operating loss for a tax year is equal to the lesser of (1) the aggregate of the net operating loss carryovers to such year, plus the net operating carrybacks to such tax year, or (2) 80% of taxable income determined without regard to the deduction. The Company's state net operating loss carryforwards expiration periods range from 2035 to indefinite. As of December 31, 2025, the Company had U.S. federal and state capital loss carryforwards of $ 220.7 million and $ 47.8 million , respectively. The capital loss carryforwards begin to expire in 2027. In addition, the Company's net operating loss and research and development credits may be subject to utilization limitations due to changes of control, as defined by tax law under Internal Revenue Code Sections 382. Similar provisions may subject the capital loss carryforwards to utilization limitation. The “One Big Beautiful Bill Act” (“OBBBA”) enacted on July 4, 2025, introduced notable changes to the U.S. Internal Revenue Code, including immediate expensing of domestic Section 174 costs. Section 174 costs are expenditures, which represent research and development costs that are incident to the development or improvement of a product, process, formula, invention, computer software, or technique. As previously required under the Tax Cuts and Jobs Act, we capitalized research and development expenditures in the years ended December 31, 2022 through December 31, 2024. With the enactment of OBBBA, we began deducting domestic Section 174 costs in 2025. As of December 31, 2025, we have a deferred tax asset of $ 3.6 million related to capitalized Section 174 expenditures. The Company also has net research and development credit carryforwards of $ 2.7 million and $ 1.9 million as of December 31, 2025 and 2024, respectively, which are available to reduce future tax liabilities. Accrued interest and penalties related to unrecognized tax benefits are recorded as income tax expense. The Company continues to believe its positions are supportable; however, due to uncertainties in any tax audit outcome, the Company's estimates of the ultimate settlement of uncertain tax positions may change and the actual tax benefits may differ from the estimates. The summary of the Company’s unrecognized tax benefit activity is presented as follows for the periods presented (in thousands); Year Ended December 31, 2025 2024 Balance at beginning of period $ 587 $ 278 Gross increases to tax positions in current periods 638 309 Balance at end of period $ 1,225 $ 587 The Company files income tax returns in the U.S. federal and various state jurisdictions. The Company’s 2021 through 2025 tax years are subject to U.S. federal and state examination. 13. STOCKHOLDERS' DEFICIT Emergence from Bankruptcy On the Effective Date, the Plan of Reorganization became effective in accordance with its terms and the Debtors emerged from the Chapter 11 Cases. On the Effective Date, in connection with the effectiveness of, and pursuant to the terms of, the Plan of Reorganization and the Confirmation Order, the Company’s common stock outstanding immediately before the Effective Date was canceled and is of no further force or effect, and the new organizational documents of the Company became effective, authorizing the issuance of shares of common stock, par value $ 0.00001 per share (the “New Common Stock”). In accordance with the foregoing, on the Effective Date, the Company, as reorganized on the Effective Date and in accordance with the Plan of Reorganization, issued the: (i) New Common Stock, (ii) Warrants, (iii) CVRs, (iv) New Secured Convertible Notes, (v) Secured Notes and (vi) the GUC CVRs. Such securities, rights, or interests were issued in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) provided by section 1145 of the Bankruptcy Code. On the Effective Date, all equity interests in the Company that existed immediately prior to the Effective Date were cancelled, including the Company’s then-existing common stock and warrants, and the Company issued or caused to be issued the New Common Stock in accordance with the terms of the Plan of Reorganization. On the Effective Date, pursuant to the Plan of Reorganization, the Company issued or held in reserve as issuable: 101 Core Scientific, Inc. Notes to Consolidated Financial Statements • 176,266,782 shares of New Common Stock; • 4,725,091 shares of New Common Stock held in reserve for disputed claims; • 180,241,211 Warrants, composed of 98,313,313 Tranche 1 Warrants and 81,927,898 Tranche 2 Warrants; • 51,783,625 CVRs; and • GUC CVRs. See Notes 4 — Emergence from Bankruptcy and 9 — Warrant Liabilities and Contingent Value Rights for additional information on Warrants, CVRs and GUC CVRs. New Common Stock and Preferred Stock The Company is authorized to issue 10,000,000,000 shares of New Common Stock and 2,000,000,000 shares of preferred stock (the “Preferred Stock”), each having a par value of $ 0.00001 per share. The rights and preferences of the New Common Stock shall at all times be subject to the rights of the Preferred Stock as may be set forth in one or more certificates of designations filed with the Secretary of State of the State of Delaware from time to time in accordance with the Delaware General Corporation Law and the Charter. The Charter authorized the Board of Directors to provide for the issuance of a share or shares of Preferred Stock in one or more series and to fix for each such series (i) the number of shares constituting such series and the designation of such series, (ii) the voting powers (if any) of the shares of such series, (iii) the powers, preferences, and relative, participating, optional or other special rights of the shares of each such series, and (iv) the qualifications, limitations, and restrictions thereof. The authority of the Board of Directors with respect to the Preferred Stock shall include, but not be limited to, determination of (i) the number of shares constituting any series, (ii) the dividend rate or rates on the shares of any series, (iii) the voting rights, if any, of such series and the number of votes per share, (iv) conversion privileges, (v) whether the shares of any series shall be redeemable, (vi) whether any series shall have a sinking fund for the redemption or purchase of shares of such series, (vii) the rights of the shares in the event of voluntary or involuntary liquidation, dissolution or winding up of the Company and (viii) any other powers, preferences, rights, qualifications, limitations and restrictions of any series. Incentive Plan The Company adopted an equity-based management incentive plan on April 26, 2024 (the “Incentive Plan”). The Incentive Plan provides for the grant of non-qualified stock options, stock appreciation rights, shares of restricted stock, restricted stock units, performance awards, dividend equivalent rights and other stock-based awards. The Incentive Plan, was amended and restated on May 12, 2025 to increase the number of shares authorized for issuance from 40,000,000 shares to 48,000,000 shares of the Company’s Common Stock in respect of awards, subject to adjustment as provided in the Incentive Plan, and limits the aggregate compensation that may be paid to the Company’s non-employee directors in respect of any single fiscal year (including awards under the Incentive Plan) to a total of $ 800,000 . The form of outstanding grants under the Incentive Plan currently includes RSUs and MSUs . The participants in the Incentive Plan, the timing and allocations of the awards to participants, and the other terms and conditions of such awards (including, but not limited to, vesting, exercise prices, base values, hurdles, forfeiture, repurchase rights and transferability) is determined by the Compensation Committee of the Board of Directors in its discretion, as plan administrator. Under the Incentive Plan, certain executives have been granted MSUs which are subject to the achievement of market-based share price goals and the executives’ continued service until the relevant vesting date. The number of shares which vest as of the end of each measurement period on each vesting date are conditioned on the highest 20 -day volume weighted average price of the Company's share price achieved during the tranche’s measurement vesting period since grant. The MSU vesting schedule is proportionate over a three -year service period where such proportions are identified as tranches with separate service conditions and measurement periods for the market conditions. If certain market-based share price goals are not met during certain tranche measurement periods, the ability to satisfy such goals apply in subsequent measurement periods and permit vesting if such market conditions are then met (and the service conditions are then satisfied). The following table presents additional information relating to each MSU award: 102 Core Scientific, Inc. Notes to Consolidated Financial Statements Share Price Goal Incremental Units Tranche Cumulative Units December 31, 2025 Vesting: $ 3.14 144,041 144,041 $ 5.00 144,041 288,082 $ 8.00 144,041 432,123 $ 10.00 144,041 576,164 $ 12.00 144,041 720,205 $ 14.00 144,041 864,246 December 31, 2026 Vesting: $ 3.14 142,049 142,049 $ 5.00 142,049 284,099 $ 8.00 142,049 426,148 $ 10.00 142,049 568,197 $ 12.00 142,049 710,247 $ 14.00 142,049 852,296 Performance Share Units In April 2025, the Company granted PSUs to certain executive officers under the Incentive Plan. The PSUs are eligible to vest in three equal installments on April 15, 2026, March 15, 2027, and March 15, 2028, subject to satisfaction of the service condition and the achievement of three separate market or performance conditions during the respective performance measurement period (for a total of nine tranches). The performance measurement period is generally the calendar year preceding each vesting date. The number of shares earned at each vesting date range from 0 % to 300 % of target based on measures of satisfaction of the market or performance condition for each tranche. Market conditions include RTSR metric, which is a measure of the performance of the Company’s own stock relative to the Russell 2000. Performance conditions include aggregate energized MW growth and colocation customer acquisition targets. The grant date fair value of the PSU tranches with RTSR market conditions were estimated using a Monte Carlo simulation model. The following assumptions were used to determine the grant date fair value: Year Ended December 31, 2025 Expected term of awards in years 0.5 - 1.0 Expected volatility 95 % - 96 % Risk-free interest rate 3.7 % - 4.3 % Expected dividend yield 0 % Stock-Based Compensation Stock Options —Stock options granted under the 2018 Plan were granted at a price per share not less than the fair value at the date of grant. Options granted vest over 4 years and are exercisable for up to 10 years . No stock options were granted during the years ended December 31, 2025 and 2024. As of December 31, 2025, stock options outstanding and exercisable are immaterial, and the total unrecognized stock-based compensation expense related to unvested stock options is immaterial . Restricted Stock Units — RSUs granted in 2025 and 2024 generally vest over a 3 -year service period. Market Condition Restricted Stock Units — See “ Incentive Plan ” above for the vesting conditions of the MSUs. 103 Core Scientific, Inc. Notes to Consolidated Financial Statements A summary of RSU, MSU and PSU activity for the year ended December 31, 2025 , is as follows (amounts in thousands, except per share amounts) : Restricted Stock Units Market Condition Restricted Stock Units Performance & Market Condition Restricted Stock Units Number of Shares Weighted- Average Grant Date Fair Value Number of Shares Weighted- Average Grant Date Fair Value Number of Shares Weighted- Average Grant Date Fair Value Unvested - December 31, 2024 18,341 $ 7.68 1,728 $ 6.11 — $ — Granted 4,694 11.39 — — 5,519 11.57 Vested ( 8,971 ) 8.33 ( 864 ) 6.13 — — Forfeited ( 794 ) 7.19 ( 20 ) 3.99 — — Unvested - December 31, 2025 13,270 $ 8.58 844 $ 6.14 5,519 $ 11.57 As of December 31, 2025 , unrecognized compensation cost and the related weighted-average period over which the cost is expected to be recognized for each award type were as follows (in thousands): Unrecognized Compensation Cost Weighted-Average Recognition Period RSUs $ 92,538 1.9 years PSUs 37,060 2.3 years MSUs 1,972 1.0 year Total $ 131,570 Stock-based compensation expense for the year s ended December 31, 2025 , 2024 and 2023 , is included in the Company’s c onsolidated statements of operations as follows (in thousands): Year Ended December 31, 2025 2024 2023 Cost of revenue $ 4,656 $ 7,950 $ 5,050 Colocation organizational and site startup costs 20,537 5,046 — Selling, general and administrative 73,043 38,928 53,842 Stock-based compensation expense, net of amounts capitalized 1 98,236 51,924 58,892 Capitalized stock-based compensation 2 964 487 — Total stock-based compensation cost $ 99,200 $ 52,411 $ 58,892 1 The year ended December 31, 2025 , includes $ 3.0 million of stock-based compensation expense as a result of accelerated vesting of outstanding RSUs for former board members. 2 Represents the amounts of stock-based compensation capitalized to property, plant, and equipment. 14. NET LOSS PER SHARE Basic earnings per share (“EPS”) is measured as the income or loss available to common stockholders divided by the weighted average common shares outstanding for the period. Upon exercise of the Tranche 2 Warrants, shares are issuable for little or no consideration, sometimes referred to as “penny warrants”. Under ASC 260-10-45-13, those issuable shares are considered outstanding in the computation of basic EPS whether or not related warrants have been exercised. At December 31, 2025 , approximately 8.2 million shares of common stock remain issuable upon the exercise of the Tranche 2 Warrants and are included in the number of outstanding shares used for the computation of basic EPS for the year then ended. The basic EPS numerator excludes changes in the fair value of the Tranche 2 Warrants recognized in net loss during periods in which the warrants were exercisable. Accordingly, changes in fair value recognized from the close of trading on July 11, 2024 through 104 Core Scientific, Inc. Notes to Consolidated Financial Statements December 31, 2024, as well as for the year ended December 31, 2025, have been eliminated from net loss for purposes of calculating basic EPS. Changes in fair value recognized prior to July 11, 2024 remain included in net loss for the year ended December 31, 2024. Diluted EPS includes and presents the dilutive effect on EPS from the potential issuance of shares from unvested restricted stock units, conversion of convertible securities, or the exercise of options and/or warrants. The potentially dilutive effect of convertible securities are calculated using the if-converted method. The potentially dilutive effect of options or warrants are computed using the treasury stock method. When potentially dilutive securities have an anti-dilutive effect (i.e., increase income per share or decrease loss per share), they are excluded from the diluted EPS calculation. The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted loss per share (in thousands, except per share amounts): Year Ended December 31, 2025 2024 2023 Numerator: Net loss $ ( 288,616 ) $ ( 1,437,874 ) $ ( 246,487 ) Add: Change in fair value of Tranche 2 Warrants 7,876 192,585 — Basic and diluted net loss $ ( 280,740 ) $ ( 1,245,289 ) $ ( 246,487 ) Denominator: Weighted average shares outstanding - basic and diluted 318,068 255,832 379,863 Net loss per share - basic and diluted $ ( 0.88 ) $ ( 4.87 ) $ ( 0.65 ) Pote ntially dilutive securities include securities excluded from the calculation of diluted EPS because to do so would be anti- dilutive. Shares which may be issued from potentially dilutive securities are as follows (in thousands): Year Ended December 31, 2025 2024 2023 Tranche 1 Warrants 96,676 97,673 — Convertible Notes 69,611 69,611 69,998 RSUs, PSUs, and MSUs 19,633 20,069 38,358 Stock options 344 369 22,575 Warrants — — 14,892 SPAC Vesting Shares — — 1,725 Total shares issuable from potentially dilutive securities 186,264 187,722 147,548 15. SEGMENT REPORTING The Company’s operating segments are aggregated into reportable segments only if they exhibit similar economic characteristics and have similar business activities. The Company has three operating segments: “Colocation”, consisting of providing high-density colocation services to customers employing AI and HPC related workloads . The Company’s Colocation operations met the criteria to be considered a new segment during the second quarter of 2024. During fiscal year 2024, our “Colocation” segment was referred to as “HPC Hosting.”; “Digital Asset Self-Mining”, consisting of performing digital asset mining for its own account; and “Digital Asset Hosted Mining”, consisting of providing hosting services to third-parties for digital asset mining. The Colocation operation generates revenue through licensing agreements and orders with licensees that include fixed and variable payments on a recurring basis. The Digital Asset Self- Mining segment generates revenue from operating owned digital infrastructure and computer equipment as part of a pool of users that process transactions conducted on one or more blockchain networks. In exchange for these services, the Company receives digital assets. The Digital Asset Hosted Mining business generates revenue through the sale of consumption-based contracts for its digital asset hosted mining services which are recurring in nature. 105 Core Scientific, Inc. Notes to Consolidated Financial Statements The Company’s Chief Executive Officer is the chief operating decision maker (“CODM”). The CODM uses gross profit to evaluate performance and allocate resources. Gross profit is used to evaluate actual results against expectations, which are based on comparable prior results, current budget, and current forecast. Gross profit is also used in deciding how profits and cash flows will be reinvested or otherwise deployed. The CODM does not evaluate performance or allocate resources based on segment asset or liability information; accordingly, the Company has not presented a measure of assets by segment. The segments’ accounting policies are the same as those described in the summary of significant accounting policies. The Company excludes certain operating expenses and other expenses from the allocations to operating segments. 106 Core Scientific, Inc. Notes to Consolidated Financial Statements The following table presents revenue and gross profit by reportable segment for the periods presented (in thousands): Year Ended December 31, 2025 2024 2023 (in thousands, except percentages) Colocation Segment Colocation revenue: License fees $ 47,861 $ 17,498 $ — Power fees passed through to customer 15,914 6,807 — Maintenance and other 1,649 73 — Total colocation revenue 65,424 24,378 — Cost of colocation services: Power fees passed through to customer 15,914 6,807 — Depreciation expense 1,065 3 — Employee compensation 7,208 2,514 — Facility operations expense 18,927 11,907 — Other segment items 2,565 478 — Total cost of colocation services 45,679 21,709 — Colocation gross profit $ 19,745 $ 2,669 $ — Colocation gross margin 30 % 11 % — % Digital Asset Self-Mining Segment Digital asset self-mining revenue $ 229,207 $ 408,740 $ 390,333 Cost of digital asset self-mining: Power fees 122,408 160,833 165,848 Depreciation expense 65,565 108,499 88,628 Employee compensation 18,530 26,129 16,853 Facility operations expense 9,570 13,274 14,055 Other segment items 2,795 5,600 6,312 Total cost of digital asset self-mining 218,868 314,335 $ 291,696 Digital Asset Self-Mining gross profit $ 10,339 $ 94,405 $ 98,637 Digital Asset Self-Mining gross margin 5 % 23 % 25 % Digital Asset Hosted Mining Segment Digital asset hosted mining revenue from customers $ 24,388 $ 77,554 $ 112,067 Cost of digital asset hosted mining services: Power fees 12,597 35,408 62,366 Depreciation expense 1,173 3,604 6,806 Employee compensation 1,635 4,933 6,337 Facility operations expense 904 2,765 5,285 Other segment items 265 6,848 6,451 Total cost of digital asset hosted mining services 16,574 53,558 $ 87,245 Digital Asset Hosted Mining gross profit $ 7,814 $ 23,996 $ 24,822 Digital Asset Hosted Mining gross margin 32 % 31 % 22 % Consolidated Consolidated total revenue $ 319,019 $ 510,672 $ 502,400 Consolidated cost of revenue $ 281,121 $ 389,602 $ 378,941 Consolidated gross profit $ 37,898 $ 121,070 $ 123,459 Consolidated gross margin 12 % 24 % 25 % 107 Core Scientific, Inc. Notes to Consolidated Financial Statements A reconciliation of the reportable segment gross profit to loss before income taxes included in the Company’s c onsolidated statements of operations for the year s ended December 31, 2025 , 2024 and 2023 , is as follows (in thousands): Year Ended December 31, 2025 2024 2023 Reportable segment gross profit $ 37,898 $ 121,070 $ 123,459 Decrease in fair value of digital assets 31,603 1,052 — Gain from sale of digital assets — — ( 3,893 ) Impairment of digital assets — — 4,406 Decrease in fair value of energy derivatives — 2,757 3,918 Loss on disposal of property, plant and equipment 9,680 4,210 1,956 Impairment of property, plant and equipment 11,359 122,869 — Colocation organizational and site startup costs 48,249 13,734 — Advisor fees 23,372 4,822 — Selling, general and administrative 159,224 113,691 108,111 Operating (loss) income ( 245,589 ) ( 142,065 ) 8,961 Non-operating expenses (income), net: Loss (gain) on debt extinguishment 1,933 487 ( 20,065 ) Interest (income) expense, net ( 3,277 ) 37,070 86,238 Change in fair value of warrants and contingent value rights 33,059 1,369,157 — Reorganization items, net — ( 111,439 ) 191,122 Loss on legal settlements 10,690 2,070 — Other non-operating expense (income), net 39 ( 2,395 ) ( 2,530 ) Total non-operating expense, net 42,444 1,294,950 254,765 Loss before income taxes $ ( 288,033 ) $ ( 1,437,015 ) $ ( 245,804 ) Concentrations of Revenue and Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. Credit risk with respect to accounts receivable is concentrated with a small number of customers. The Company places its cash and cash equivalents with major financial institutions, which management assesses to be of high credit quality, in order to limit the exposure to credit risk. As of December 31, 2025 and December 31, 2024 , all of the Company’s fixed assets were located in the United States. For the year s ended December 31, 2025 , 2024 and 2023 , all of the Company’s revenue was generated in the United States. For the year s ended December 31, 2025 , 2024 and 2023 , 72 % , 80 % , and 78 % , respectively, of the Company’s total revenue was generated from digital asset mining of bitcoin from one customer. As of December 31, 2025 and 2024 , substantially all of our digital assets were held by one third-party digital asset service . 108 Core Scientific, Inc. Notes to Consolidated Financial Statements For the year s ended December 31, 2025 , 2024 and 2023 , the concentration of customers comprising 10% or more of the Company’s Colocation, Digital Asset Self-Mining, and Digital Asset Hosted Mining segment revenue were as follows: Year Ended December 31, Year Ended December 31, Year Ended December 31, 2025 2024 2023 2025 2024 2023 2025 2024 2023 Percent of Colocation segment revenue: Percent of Digital Asset Self-Mining segment revenue: Percent of Digital Asset Hosted Mining segment revenue: Customer F 1 N/A N/A N/A N/A N/A N/A 31 % 61 % 49 % G N/A N/A N/A 100 % 100 % 100 % N/A N/A N/A H N/A N/A N/A N/A N/A N/A N/A 21 % 15 % J 100 % 100 % N/A N/A N/A N/A N/A N/A N/A L N/A N/A N/A N/A N/A N/A 65 % N/A N/A 1 On the Effective Date, Customer F became a minority shareholder of the Company. 109 Core Scientific, Inc. Notes to Consolidated Financial Statements 16. SUPPLEMENTAL CASH FLOW AND NONCASH INFORMATION The following table presents supplemental cash flow and non-cash information for the periods presented (in thousands): Year Ended December 31, 2025 2024 2023 Supplemental disclosure of other cash flow information: Cash paid for interest $ 15,201 $ 28,798 $ 4,708 Income tax payments (refunds) $ 205 $ ( 159 ) $ ( 370 ) Cash paid for reorganization items $ — $ 53,835 $ 86,539 Supplemental disclosure of noncash investing and financing activities: Purchases of PP&E in accounts payable and accrued expense $ 247,491 $ 13,411 $ 2,731 Noncash exercise of warrants 25,631 39,828 — Reclass of other current and non-current assets to plant, property, and equipment — 6,867 — Reduction in plant, property, and equipment basis related to Bitmain purchase — ( 26,101 ) — Increase in right-of-use assets due to lease commencement — 111,736 — Increase in lease liability and right-of-use assets due to lease modification — 695 — Extinguishment of convertible notes upon emergence — ( 559,902 ) — Extinguishment of accounts payable, accrued expenses, finance lease liability, and notes payable upon emergence — ( 473,244 ) — Cancellation of common stock in connection with emergence — ( 36 ) — Issuance of new common stock in connection with emergence — 296,893 — Issuance of new common stock for Bitmain obligation — 27,839 — Issuance of new common stock for the Equity Rights Offering backstop commitment — 5,475 — Issuance of contingent value rights — 86,325 — Issuance of warrants — 345,856 — Issuance of New Secured Convertible Notes — 260,000 — Issuance of Secured Notes, net of discount — 149,520 — Issuance of Exit Credit Agreement including $ 1.2 million paid in kind upfront fee — 41,200 — Issuance of miner equipment lender facility loans — 52,947 — Issuance of notes related to settlement — 9,092 38,547 Cumulative effect of adoption of ASU 2023-08, Accounting for and Disclosure of Crypto Assets — 24 — Issuance of new common stock for PIK interest on New Secured Convertible Notes — 3,677 — Issuance of new common stock for New Secured Convertible Notes conversion — 261,772 — Property, plant and equipment disposed of through settlements — — 6,301 Purchase of insurance policies financed by short-term note payable — — 5,011 Decrease in equipment related to debt extinguishment — — 17,849 Decrease in notes payable in exchange for equipment — — ( 38,610 ) 17. RELATED PARTY TRANSACTIONS There were no related party transactions during the years ended December 31, 2025 and 2024. During the year ended December 31, 2023. the Company had entered into various transactions with related parties in the ordinary course of business. The Company previously had agreements to provide digital asset hosted services to various entities that are managed and invested in by individuals that were directors and executives of the Company. For the year ended December 31, 2023, the Company recognized digital asset hosted revenue from the contracts with these entities of $ 10.1 million . 110 Core Scientific, Inc. Notes to Consolidated Financial Statements 18. SUBSEQUENT EVENTS Subsequent to December 31, 2025 and through February 26, 2026 , the Company sold 1,924 bitcoin for aggregate proceeds of $ 175.9 million . In January 2026, the Company entered into a long-term power supply arrangement under which the Company is obligated to purchase firm utility power capacity beginning in 2028. In connection with this arrangement, the Company made a cash deposit of $ 80 million into a restricted, interest-bearing escrow account, subject to contractual terms, including termination provisions. 111 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures Not applicable.