MARA Holdings, Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Index to Consolidated Financial Statements Report of Independent Registered Public Accounting Firm (PCAOB ID No. 688 ) F- 2 Consolidated Balance Sheets as of December 31, 2024 and 2023 F- 5 Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022 F- 7 Consolidated Statements of Equity for the years ended December 31, 2024, 2023 and 2022 F- 8 Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022 F- 9 Notes to Consolidated Financial Statements F- 11 The accompanying notes are an integral part to these audited Consolidated Financial Statements. F-1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors of MARA Holdings, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of MARA Holdings, Inc. (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, equity, and cash flows for each of the three 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 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. 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, 2024, based on the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013 and our report dated March 3, 2025, expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. Change in Accounting Principle As discussed in Note 5 to the financial statements, the Company changed its method of accounting for digital assets during the year ended December 31, 2023 by early adopting ASU 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Topic 350-60): Accounting for and Disclosure of Crypto Assets, effective January 1, 2023 using the modified retrospective method. 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. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. The accompanying notes are an integral part to these audited Consolidated Financial Statements. F-2 Table of Contents Revenue Recognition from Mining Operations As disclosed in Note 4 to the financial statements, the Company’s ongoing major or central operation is to provide bitcoin transaction verification services to the transaction requestor, in addition to the bitcoin network through a Company-operated mining pool as the operator, and to provide a service of performing hash calculations to third-party pool operators alongside collectives of third-party bitcoin miners as a participant. We identified the procedures performed related to revenue recognition as a critical audit matter due to the nature and extent of audit effort required to perform audit procedures over the completeness, and occurrence of revenue recognized. Addressing this matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included, among others: • We performed site visits at the Company’s facilities where the mining hardware is located, which included observations of the physical controls and mining equipment inventory. • We independently traced certain financial and performance data directly to the blockchain network to test the completeness, occurrence and accuracy of mining revenue as the operator. • We independently confirmed with the third-party mining pool operator the significant contractual terms utilized in the determination of mining revenue, total mining rewards earned, and the digital asset wallet addresses in which the rewards are deposited to test the occurrence and accuracy of mining revenue as the participant. • We confirmed the year-end digital asset balances directly with the custodians of the Company’s wallets. Assets Acquired and Liabilities Assumed in Business Combinations As disclosed in Note 3 to the financial statements, the Company completed acquisitions of two operational data centers and three operational bitcoin mining sites. The Company accounted for these transactions under the acquisition method for business combinations. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair values, including identified property, plant and equipment, customer relationship related intangible assets, and contingent earnouts. We identified the fair valuation of property, plant and equipment, customer relationship related intangible assets and contingent earnouts as a critical audit matter because of the significant estimates and assumptions made by management in the process. This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s forecast of future cash flows, and use of significant unobservable inputs and assumptions, including the need to involve our fair value specialists. Addressing this matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included, among others: • We obtained an understanding of management’s process over the valuation of these identified assets and liabilities. • We evaluated the reasonableness of management’s forecast of future cash flows used in the fair valuation of customer relationship related intangible assets by comparing to contracts, historical results and other metrics. • With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodology, and significant unobservable inputs and assumptions by: ◦ Testing the source information underlying the determination of certain significant unobservable inputs and assumptions; The accompanying notes are an integral part to these audited Consolidated Financial Statements. F-3 Table of Contents ◦ Developing a range of independent estimates for other unobservable assumptions and comparing them to the assumptions used by management; and ◦ Testing the mathematical accuracy of the calculations. /s/ Marcum LLP Marcum LLP We have served as the Company’s auditor since 2021 . Costa Mesa, CA March 3, 2025 The accompanying notes are an integral part to these audited Consolidated Financial Statements. F-4 Table of Contents MARA HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, December 31, (in thousands, except share and per share data) 2024 2023 ASSETS Current assets: Cash and cash equivalents $ 391,771 $ 357,313 Restricted cash 12,000 — Digital assets, current portion 4,327 639,660 Other receivables 6,345 — Deposits 18,778 7,240 Derivative instrument, current portion 1,542 — Prepaid expenses and other current assets 35,610 25,590 Total current assets 470,373 1,029,803 Digital assets, net of current portion 3,223,989 — Digital assets - receivable, net 960,057 — Property and equipment, net 1,549,491 671,772 Advances to vendors 121,298 95,589 Investments 111,493 106,292 Long-term deposits 240,651 59,790 Long-term prepaids 14,221 27,284 Operating lease right-of-use assets 16,874 443 Derivative instrument, net of current portion 7,405 — Goodwill 82,751 — Intangible assets, net 2,714 — TOTAL ASSETS $ 6,801,317 $ 1,990,973 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 12,556 $ 11,343 Accrued expenses 76,887 22,291 Operating lease liabilities, current portion 239 124 Finance lease liability, current portion 168 — Other current liabilities 5,347 — Total current liabilities 95,197 33,758 Notes payable 2,246,578 325,654 Line of credit 200,000 — Operating lease liabilities, net of current portion 22,977 354 Finance lease liability, net of current portion 3,709 — Deferred tax liabilities 88,503 15,286 Other long-term liabilities 8,411 — Total long-term liabilities 2,570,178 341,294 The accompanying notes are an integral part to these audited Consolidated Financial Statements. F-5 Table of Contents Commitments and Contingencies (Note 19) Equity: Preferred stock, par value $ 0.0001 per share, 50,000,000 shares authorized; no shares issued and outstanding at December 31, 2024 and December 31, 2023 — — Common stock, par value $ 0.0001 per share, 500,000,000 shares authorized; 340,258,453 shares and 242,829,391 shares issued and outstanding at December 31, 2024 and December 31, 2023, respectively 34 24 Additional paid-in capital 4,155,386 2,183,537 Accumulated deficit ( 26,387 ) ( 567,640 ) Total stockholders’ equity attributable to MARA 4,129,033 1,615,921 Noncontrolling interest 6,909 — Total equity 4,135,942 1,615,921 TOTAL LIABILITIES AND EQUITY $ 6,801,317 $ 1,990,973 The accompanying notes are an integral part to these audited Consolidated Financial Statements. F-6 Table of Contents MARA HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Year Ended December 31, (in thousands, except share and per share data) 2024 2023 2022 Total revenues $ 656,378 $ 387,508 117,753 Costs and expenses Cost of revenues Mining and hosting services ( 412,045 ) ( 223,338 ) ( 72,715 ) Depreciation and amortization ( 403,706 ) ( 179,513 ) ( 78,709 ) Total cost of revenues ( 815,751 ) ( 402,851 ) ( 151,424 ) Operating expenses General and administrative expenses ( 272,078 ) ( 92,418 ) ( 56,641 ) Change in fair value of digital assets 813,814 331,484 ( 14,460 ) Change in fair value of derivative instrument ( 2,043 ) — — Research and development ( 13,229 ) ( 2,812 ) ( 98 ) Early termination expenses ( 38,061 ) — — Amortization of intangible assets ( 22,919 ) — — Legal reserves — — ( 26,131 ) Impairment of deposits due to vendor bankruptcy filing — — ( 24,661 ) Impairment of digital assets — — ( 182,891 ) Impairment of patents — — ( 919 ) Impairment of mining equipment and advances to vendors — — ( 332,933 ) Gain on sale of equipment, net of disposals — — 83,879 Losses on digital assets held within investment fund — — ( 85,017 ) Total operating expenses 465,484 236,254 ( 639,872 ) Operating income (loss) 306,111 220,911 ( 673,543 ) Change in fair value of digital assets - receivable, net 299,796 — — Gain on investments 4,236 — — Loss on hedge instruments ( 580 ) ( 17,421 ) — Equity in net earnings of unconsolidated affiliate ( 1,505 ) ( 617 ) — Impairment of loan and investment due to vendor bankruptcy filing — — ( 31,013 ) Net gain from extinguishment of debt 13,121 82,267 — Interest income 16,711 2,809 1,021 Interest expense ( 12,996 ) ( 10,350 ) ( 14,981 ) Other non-operating income (loss) ( 8,391 ) — 262 Income (loss) before income taxes 616,503 277,599 ( 718,254 ) Income tax benefit (expense) ( 75,495 ) ( 16,426 ) 24,232 Net income (loss) $ 541,008 $ 261,173 $ ( 694,022 ) Net loss attributable to noncontrolling interest 245 — — Net income (loss) attributable to MARA $ 541,253 $ 261,173 $ ( 694,022 ) Series A preferred stock accretion to redemption value — ( 2,121 ) — Net income (loss) attributable to common stockholders $ 541,253 $ 259,052 $ ( 694,022 ) Net income (loss) per share of common stock - basic $ 1.87 $ 1.41 $ ( 6.12 ) Weighted average shares of common stock - basic 289,961,989 183,855,570 113,467,837 Net income (loss) per share of common stock - diluted $ 1.72 $ 1.06 $ ( 6.12 ) Weighted average shares of common stock - diluted 311,841,347 192,293,277 113,467,837 The accompanying notes are an integral part to these audited Consolidated Financial Statements. F-7 Table of Contents MARA HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders’ Equity Noncontrolling Interest Total Equity (in thousands, except share data) Number Amount Balance at December 31, 2021 102,733,273 $ 10 $ 835,694 $ ( 146,319 ) $ 689,385 $ — $ 689,385 Stock-based compensation, net of tax withholding 490,910 1 24,514 — 24,515 — 24,515 Issuance of common stock, net of offering costs 42,141,733 4 361,482 — 361,486 — 361,486 Common stock issued for service and license agreements 200,000 — 4,577 — 4,577 — 4,577 Net loss — — — ( 694,022 ) ( 694,022 ) — ( 694,022 ) Balance at December 31, 2022 145,565,916 $ 15 $ 1,226,267 $ ( 840,341 ) $ 385,941 $ — $ 385,941 Stock-based compensation, net of tax withholding 1,269,230 — 32,264 — 32,264 — 32,264 Issuance of common stock, net of offering costs 64,271,828 6 608,359 — 608,365 — 608,365 Series A preferred stock accretion to redemption value — — ( 2,121 ) — ( 2,121 ) — ( 2,121 ) Exchange of convertible notes for common stock 31,722,417 3 318,768 — 318,771 — 318,771 Cumulative effect of the adoption of ASU 2023-08 — — — 11,483 11,483 — 11,483 Other — — — 45 45 — 45 Net income — — — 261,173 261,173 — 261,173 Balance at December 31, 2023 242,829,391 $ 24 $ 2,183,537 $ ( 567,640 ) $ 1,615,921 $ — $ 1,615,921 Stock-based compensation, net of tax withholding 5,894,877 — 155,095 — 155,095 — 155,095 Issuance of common stock, net of offering costs 93,411,158 10 1,851,611 — 1,851,621 — 1,851,621 Repurchase of shares in settlement of restricted stock ( 1,876,973 ) — ( 34,857 ) — ( 34,857 ) — ( 34,857 ) Contribution from noncontrolling interest — — — — — 7,154 7,154 Net income (loss) — — — 541,253 541,253 ( 245 ) 541,008 Balance at December 31, 2024 340,258,453 $ 34 $ 4,155,386 $ ( 26,387 ) $ 4,129,033 $ 6,909 $ 4,135,942 The accompanying notes are an integral part to these audited Consolidated Financial Statements. F-8 Table of Contents MARA HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, (in thousands) 2024 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ 541,008 $ 261,173 $ ( 694,022 ) Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 403,706 179,513 78,709 Amortization of prepaid service contract — — 22,781 Gain on sale of equipment, net of disposals — — ( 83,879 ) Deferred tax expense 73,217 15,286 ( 24,968 ) Losses on digital assets held within investment fund — — 85,017 Change in fair value of digital assets and digital assets - receivable, net ( 1,113,610 ) ( 331,484 ) 14,460 Impairment of digital assets — — 182,891 Impairment of mining equipment and advances to vendors — — 332,933 Allowance for credit losses 8,379 — — Gain on investments ( 4,236 ) — — Loss on hedge instruments 580 17,421 — Stock-based compensation 157,642 32,644 24,595 Change in fair value of derivative instrument 2,043 — — Early termination expenses 38,061 — — Amortization of intangible assets 22,919 — — Amortization of debt issuance costs 2,714 3,168 3,945 Equity in net earnings of unconsolidated affiliate 1,505 617 — Impairment of patents — — 919 Impairment of deposits due to vendor bankruptcy filing — — 55,674 Gain on extinguishment of debt, net ( 13,121 ) ( 82,267 ) — Other adjustments from operations, net 801 484 1,030 Changes in operating assets and liabilities: Revenues from digital assets production ( 624,740 ) ( 385,959 ) ( 117,747 ) Accounts receivable ( 9,319 ) — — Deposits ( 189,605 ) ( 23,777 ) ( 24,469 ) Prepaid expenses and other assets 11,836 ( 1,881 ) ( 48,887 ) Accounts payable and accrued expenses 13,198 ( 589 ) 13,369 Legal reserve payable — — 1,171 Net cash used in operating activities ( 677,022 ) ( 315,651 ) ( 176,478 ) CASH FLOWS FROM INVESTING ACTIVITIES Advances to vendors ( 817,297 ) ( 158,940 ) ( 483,840 ) Acquisitions, net of cash acquired ( 335,630 ) — — Purchase of property and equipment ( 250,825 ) ( 27,611 ) ( 41,108 ) Proceeds from sale of property and equipment 3,506 — 178,371 Purchase of intangible assets ( 2,633 ) — — Proceeds from sale of digital assets 152,290 264,945 — Payments on hedge settlements — ( 2,004 ) — Purchase of digital assets ( 1,946,860 ) — — Investment in equity method investments ( 21,654 ) ( 71,795 ) — Purchase of equity investments ( 9,956 ) — ( 44,000 ) Deconsolidation of fund — — ( 500 ) The accompanying notes are an integral part to these audited Consolidated Financial Statements. F-9 Table of Contents Sale of digital assets in investment fund — — 849 Net cash (used in) provided by investing activities ( 3,229,059 ) 4,595 ( 390,228 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of common stock, net of issuance costs 1,851,621 608,365 361,486 Proceeds from issuance of Series A preferred stock, net of issuance costs — 13,629 — Proceeds from issuance of Convertible Notes, net of issuance costs 2,178,679 — — Redemption of Series A preferred stock — ( 15,750 ) — Repurchase of shares in settlement of restricted stock ( 34,857 ) — — Proceeds from term loan borrowings, net of issuance costs — — 49,250 Borrowings from revolving credit agreement — — 120,000 Line of credit 200,000 — — Repayment of finance lease liabilities ( 163 ) — — Repayment of Convertible Notes ( 247,348 ) — — Repayment of term loan borrowings — ( 50,000 ) ( 120,000 ) Contribution from noncontrolling interest 7,154 — — Value of shares withheld for taxes ( 2,547 ) ( 380 ) ( 81 ) Net cash provided by financing activities 3,952,539 555,864 410,655 Net increase in cash, cash equivalents and restricted cash 46,458 244,808 ( 156,051 ) Cash, cash equivalents and restricted cash — beginning of period 357,313 112,505 268,556 Cash, cash equivalents and restricted cash — end of period $ 403,771 $ 357,313 $ 112,505 The accompanying notes are an integral part to these audited Consolidated Financial Statements. F-10 Table of Contents MARA HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS MARA Holdings, Inc. (together with its subsidiaries, the “Company” or “MARA”) leverages digital asset compute that develops and deploys innovative technologies to build a more sustainable future. MARA secures the world’s preeminent blockchain ledger and supports the energy transformation by converting clean, stranded, or otherwise underutilized energy into economic value. The Company also offers advanced technology solutions to optimize data center operations, including next-generation liquid immersion cooling and firmware for bitcoin miners. The Company is primarily focused on computing for, acquiring, and holding digital assets as a long-term investment. The term “Bitcoin” with a capital “B” is used to denote the Bitcoin protocol which implements a highly available, public, permanent, and decentralized ledger. The term “bitcoin” with a lower case “b” is used to denote the coin, bitcoin. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying Consolidated Financial Statements include the accounts of the Company and its wholly owned and controlled subsidiaries. Consolidated subsidiaries’ results are included from the date the subsidiary was formed or acquired. All significant intercompany accounts and transactions, including any noncontrolling interest, have been eliminated in consolidation. Use of Estimates and Assumptions The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant accounting estimates inherent in the preparation of the Company’s financial statements include fair value of assets acquired and liabilities assumed in a business combination, estimates associated with the useful lives of property and equipment, realization of long-lived assets, impairment of goodwill, valuation of derivative instruments, deferred income taxes, unrealized tax positions, measurement of digital assets and related receivables and loss contingencies. Actual results could differ from those estimates. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications have no effect on the reported financial position, results of operations, or cash flows. The impact on any prior period disclosures were immaterial. Segment Information Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), or decision–making group, in deciding how to allocate resources and assess performance. The Company’s CODM group is composed of the Chief Executive Officer and Chief Financial Officer. The Company operates as one operating segment and uses net income as measures of profit or loss on a consolidated basis in making decisions regarding resource allocation and performance assessment. Additionally, the Company’s CODM regularly reviews the Company’s expenses on a consolidated basis. The financial metrics used by the CODM help make key operating decisions, such as determination of digital asset purchases and significant acquisitions and allocation of budget between cost of revenues, general and administrative and research and development expenses. F-11 Table of Contents Cash and Cash Equivalents The Company considers all highly liquid investments and other short-term investments with a maturity of three months or less, when purchased, to be cash equivalents. The Company maintains cash and cash equivalent balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”). During March 2023, the Company began to participate, to the extent practicable, in insured cash sweep programs which “sweep” its deposits across multiple FDIC insured accounts, each with deposits of no more than $250.0 thousand. As of December 31, 2024, substantially all of the Company’s cash and cash equivalents were FDIC insured. Restricted Cash Restricted cash as of December 31, 2024 principally represented those cash balances that support commercial letters of credit and are restricted from withdrawal. Digital Assets On July 25, 2024, the Company adopted a full holding onto bitcoin (“HODL”) approach towards its bitcoin treasury policy, retaining all bitcoin mined in its operations, and may periodically make strategic open market purchases of bitcoin. As a result, bitcoin digital assets are included in non-current assets on the Consolidated Balance Sheets due to the Company’s intent to retain and hold bitcoin. Kaspa digital assets held with the intent to fund operating expenses are included in current assets on the Consolidated Balance Sheets. In addition, digital assets loaned and collateralized were reported as “Digital assets - receivable, net” at December 31, 2024 and classified as long-term assets on the Consolidated Balance Sheets as it is the Company’s intent to maintain the loaned and collateralized bitcoin consistent with its HODL policy. Proceeds from the sale of digital assets are included within investing activities in the accompanying Consolidated Statement of Cash Flows. Following the adoption of Accounting Standards Update (“ASU”) 2023-08, Accounting for and Disclosure of Crypto Assets , effective January 1, 2023, the Company measures digital assets at fair value with changes recognized in operating expenses on the Consolidated Statements of Operations. The Company tracks its cost basis of digital assets by-wallet in accordance with the first-in-first-out method of accounting. Refer to Note 5 – Digital Assets, for further information. Digital Assets - Receivable, net The Company lends digital assets to counterparties under fixed term loans. In addition, the Company pledged bitcoin as collateral for a line of credit. Digital asset receivables that do not have a prespecified maturity date are repayable at the option of the Company, and the borrower may repay at any time, without penalty or premium. While the loan is outstanding, the borrower has the right and the ability to use the digital assets at its discretion, including the ability to sell or pledge the borrowed digital assets to third parties. At the conclusion of the loan, the borrower is obligated to return the same type and quantity of digital assets as those lent by the Company. The digital asset receivables are initially measured upon transfer at fair value and subsequently remeasured at fair value each reporting period. The changes in fair value is recognized on the Consolidated Statements of Operations, in accordance with ASC 2023-08. A loan fee is accrued daily based on the amount owing, paid on a monthly basis consistent with each loan’s terms. The digital asset receivable balance is evaluated for possible credit losses, in accordance with ASC 326 - Financial Instruments - Credit Losses (“ASC 326”). The allowance for credit losses on digital assets receivables under the current expected credit loss (“CECL”) model is determined by utilizing the profitability of default (“PD”) loss given default (“LGD”) approach. In order to apply the PD LGD approach, management considers the remaining expected life of the loans and forecasts of future economic conditions. Allowance for credit losses are included in “Other non-operating income (loss)” on the Consolidated Statements of Operations. Refer to Note 6 - Digital Assets - Receivable, Net for further information. F-12 Table of Contents Other Receivable The Company acquired accounts receivable as a result of its acquisition of GC Data Center Acquisition on January 12, 2024, which consist of trade receivables. Refer to Note 3 - Acquisitions, for further information. The Company provides an allowance for credit losses equal to the estimated uncollectible amounts, based on historical and customer specific experience and current economic and market conditions. The allowance for credit losses was $ 8.6 million as of December 31, 2024. Derivatives The Company enters into derivative contracts to manage its exposure to fluctuations in the price of bitcoin and energy costs and not for any other purpose. In addition, the Company evaluates its financing and service arrangements to determine whether certain arrangements contain features that qualify as embedded derivatives requiring bifurcation in accordance with Accounting Standard Codification (“ASC”) 815 - Derivatives and Hedging . Embedded derivatives that are required to be bifurcated from the host instrument or arrangement are accounted for and valued as separate financial instruments. There were no embedded derivatives requiring separation from the host instrument as of December 31, 2024 and December 31, 2023. The Company does not elect to designate derivatives as hedges for accounting purposes and as such, records derivatives at fair value with subsequent changes in fair value and settlements recognized in earnings. The Company classifies derivative assets or liabilities on the Consolidated Balance Sheets as current or non-current based on whether settlement of the instrument could be required within 12 months of the balance sheet date of the Balance Sheets and for derivatives with multiple settlements, based on the term of the contract. Bitcoin Derivatives From time to time the Company enters into derivative contracts to mitigate bitcoin market pricing volatility risk. During the year ended December 31, 2024, the Company recorded a $ 0.6 million loss on derivatives as a non-operating charge on the Consolidated Statements of Operations, all settled through cash payments. There were various derivative instruments to mitigate bitcoin market pricing volatility risk outstanding as of December 31, 2024, and no derivatives instruments outstanding as of December 31, 2023. Energy Derivatives The Company acquired a commodity swap contract as a result of its acquisition of GC Data Center Acquisition on January 12, 2024, refer to Note 3 - Acquisitions, for further information. The commodity swap contract hedges price variability in electricity purchases and expires on December 31, 2027. The commodity swap contract meets the definition of a derivative due to terms that provide for net settlement. As of December 31, 2024, the estimated fair value of the Company’s derivative asset instrument was $ 8.9 million, estimated using observable market-based inputs classified under Level 2 of the fair value hierarchy. The significant assumptions used in the discounted cash flow model to estimate fair value include the discount rate and electricity forward curves. Accordingly, the Company records the “ Change in fair value of derivative instrument ” on the Consolidated Statements of Operations. The following table presents the changes in fair value of the derivative instrument: (in thousands) Balance at December 31, 2023 $ — Commodity swap contract 10,989 Change in fair value of derivative instrument ( 2,043 ) Balance at December 31, 2024 $ 8,947 F-13 Table of Contents Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and impairment, as applicable. Property and equipment acquired through business combinations are measured at fair value at the acquisition date. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The Company’s property and equipment is primarily composed of digital asset mining rigs, which are largely homogeneous and have approximately the same useful lives. Accordingly, the Company utilizes the group method of depreciation for its digital asset mining rigs. The Company will update the estimated useful lives of its digital asset mining server group periodically if information on the operations of the mining equipment indicates changes are required. The Company will assess and adjust the estimated useful lives of its mining equipment when there are indicators that the productivity of the mining assets is longer or shorter than the assigned estimated useful lives. Goodwill Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination. Goodwill is not subject to amortization, and instead, assessed for impairment annually at the end of each fiscal year, or more frequently when events or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount in accordance with ASC 350 - Intangibles - Goodwill and Other . The Company has the option to first assess qualitative factors to determine whether events or circumstances indicate it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, in which case a quantitative impairment test is not required. As provided for by ASU 2017-04, Simplifying the Test for Goodwill Impairment , the quantitative goodwill impairment test is performed by comparing the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not impaired. An impairment loss is recognized for any excess of the carrying amount of the reporting unit over its fair value up to the amount of goodwill allocated to the reporting unit. Income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit are considered when measuring the goodwill impairment loss, if applicable. Finite-Lived Intangible Assets Intangible assets are recorded at cost less any accumulated amortization and any accumulated impairment losses. Intangible assets acquired through business combinations are measured at fair value at the acquisition date. Intangible assets with finite lives are comprised of customer relationships and intellectual property and are amortized over their estimated useful lives on an accelerated basis over the projected pattern of economic benefits, which range from two to three years . Finite-lived intangible assets are reviewed for impairment annually, or more frequently when events or changes in circumstances indicate that it is more likely than not that the fair value has been reduced to less than its carrying amount. Business Combinations The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805 - Business Combinations , by recognizing the identifiable tangible and intangible assets acquired and liabilities assumed, measured at the acquisition date fair value. The determination of fair value involves assumptions, estimates and judgments. The initial allocation of the purchase price is considered preliminary and therefore subject to change until the end of the measurement period (up to one year from the acquisition date). Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net assets acquired. Contingent consideration is included within the purchase price and is initially recognized at fair value as of the acquisition date. Contingent consideration, classified as either an asset or a liability, is remeasured to fair value each reporting period, until the contingency is resolved. Changes in fair value of contingent consideration period-over-period are recognized in earnings. Acquisition related expenses are recognized separately from the business combination and are expensed as incurred. F-14 Table of Contents Investments Investments, which may be made from time-to-time for strategic reasons, are included in non-current assets on the Consolidated Balance Sheets. Refer to Note 9 - Investments, for further information. Equity Method Investments The Company accounts for investments in which it owns between 20% and 50% of the common stock and has the ability to exercise significant influence, but not control, over the investee using the equity method of accounting in accordance with ASC 323 - Equity Method Investments and Joint Ventures . Under the equity method, an investor initially records its investment in the investee at cost and adjusts the carrying amount of its investment to recognize its proportionate share of the earnings or losses of the investee after the date of investment. Other Investments Investments in which the Company does not have the ability to exercise significant influence and does not have readily determinable fair values, are recorded at cost minus impairment, plus or minus changes from observable price changes in orderly transactions for identical or similar investments of the same issuer, in accordance with the measurement alternative described in ASC 321 - Investments – Equity Securities . As part of the Company’s policy to maximize return on strategic investment opportunities, while preserving capital and limiting downside risk, the Company may at times enter into equity investments or Simple Agreements for Future Equity (“SAFE”). The nature and timing of the Company’s investments will depend on available capital at any particular time and the investment opportunities identified and available to the Company. However, the Company generally does not make investments for speculative purposes and does not intend to engage in the business of making investments. Leases The Company determines if an arrangement contains a lease at inception based on whether or not the Company has the right to control the asset during the contract period and other facts and circumstances. At lease inception, the Company determines the lease classification as either an operating or finance lease, with classification effecting the expense recognition on the Consolidated Statements of Operations. For leases with terms longer than 12 months, a lease liability is recorded on the Company’s Consolidated Balance Sheets for the present value of its fixed minimum payment obligations over the lease term, including renewal extension options, and a corresponding right-of-use (“ROU”) asset equal to the initial lease liability is recorded, adjusted for any prepayments, indirect costs and lease incentives, as well as adjustments to reflect favorable or unfavorable terms of an acquired lease when compared to market terms at the time of an acquisition. Refer to Note 18 - Leases, for further information. Stock-based Compensation The Company recognizes stock-based compensation expense for awards to employees and non-employees based on the grant date fair value of the award and uses the graded-vesting method to recognize expense on a straight-line basis over the requisite service period from the date of grant of the award for each separately vesting tranche. The Company classifies its stock-based compensation within “General and administration expenses” on the Consolidated Statements of Operations as any portion of mining activities related to Cost of revenues is immaterial. Refer to Note 14 – Stockholders' Equity, for further information. The Company accounts for forfeitures as they occur and reverses compensation cost previously recognized in the period the award is forfeited. Impairment of Long-lived Assets Management reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. F-15 Table of Contents Revenues The Company recognizes revenue under ASC 606 – Revenue from Contracts with Customers . The core principle of the revenue standard is that a reporting entity should recognize revenues to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Refer to Note 4 – Revenues, for further information. Research and Development Research and development costs consist primarily of contractor costs, equipment, supplies, personnel, and related expenses for research and development activities. Research and development costs are expensed as incurred in accordance with ASC 730 - Research and Development , and are included in operating expenses on the Consolidated Statements of Operations. Research and development costs were $ 13.2 million, $ 2.8 million and $ 0.1 million, for the years ended December 31, 2024, 2023 and 2022 respectively. Income Taxes The Company accounts for income taxes under the asset and liability method, in which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. A valuation allowance is required to the extent any deferred tax assets may not be realizable. ASC 740 - Income Taxes , also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. Recent Accounting Pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement may affect the Company’s financial reporting, the Company undertakes an analysis to determine any required changes to its Consolidated Financial Statements and assures that there are proper controls in place to ascertain that the Company’s Consolidated Financial Statements properly reflect the change. In December 2024, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2024-04, Debt - Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. ASU 2024-04 clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion to improve relevance and consistency. The new standard is effective for the Company for its annual periods beginning January 1, 2026 and interim periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of adopting the standard. In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 requires additional disclosures of certain expenses in the notes of the financial statements, to provide enhanced transparency into the expense captions presented on the Consolidated Statements of Operations. Additionally, in January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), to clarify the effective date of ASU 2024-03. The new standard is effective for the Company for its annual periods beginning January 1, 2027 and for interim periods F-16 Table of Contents beginning January 1, 2028, with early adoption permitted. The Company is currently evaluating the impact of adopting the standard. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires entities to disclose specific rate reconciliations, amount of income taxes separated by federal and individual jurisdiction, and the amount of income (loss) from continuing operations before income tax expense (benefit) disaggregated between federal, state, and foreign. The new standard is effective for the Company for its annual periods beginning January 1, 2025, with early adoption permitted. The Company is currently evaluating the impact of adopting the standard. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 is designed to improve the reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses that are regularly provided to the Company’s chief operating decision–making group (the “CODM”). The new standard is effective for the Company for its annual periods beginning January 1, 2024 and for interim periods beginning January 1, 2025, with early adoption permitted. The Company adopted ASU 2023-07 on January 1, 2024, which did not have a material impact on the Consolidated Financial Statements. NOTE 3 – ACQUISITIONS Arkon Acquisition ( Hannibal and Hopedale, Ohio ) On November 5, 2024, the Company acquired two operational data centers located in Hannibal and Hopedale, Ohio, with 222 megawatts of interconnect-approved capacity from Arkon Energy US Holdco LLC and Arkon Energy Hopedale, LLC (the “Arkon Acquisition”) for a total cash consideration of $ 67.0 million, including working capital adjustments that were paid during the three months ended December 31, 2024 plus up to an additional $ 10.0 million of cash, which amount is contingent on the attainment of certain average bitcoin hash price and additional land expansion during the one year period following the date of valuation. The acquisition is intended to improve efficiencies and the scale of operations through the integration of the Company’s technology stack and realization of synergies. The following table summarizes the components of total purchase consideration: (in thousands) November 5, 2024 Initial cash consideration, net of cash acquired $ 59,897 Estimate fair value contingent earn-out and other 7,098 Total purchase consideration $ 66,995 The acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805 - Business Combinations . F-17 Table of Contents The following table summarizes the preliminary allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed as of November 5, 2024: (in thousands) November 5, 2024 Assets Other current assets $ 2,881 Property and equipment 30,000 Right-of-use asset 12,497 Goodwill 37,389 Customer relationships 1,000 Total assets $ 83,767 Liabilities Lease liability $ 12,497 Other long-term liabilities 4,275 Total liabilities 16,772 Total purchase consideration $ 66,995 Goodwill is calculated as the excess of the purchase price over the net assets acquired. The Company expects the goodwill balance to be deductible for tax purposes over a period of 15 years. Goodwill is primarily attributed to growth and efficiency opportunities as well as expected synergies from combining the operations of bitcoin mining sites with the Company. The fair value of property and equipment was estimated by applying the cost approach, which estimates fair value using replacement or reproduction cost of an asset of comparable utility, adjusted for loss in value due to depreciation and economic obsolescence, which are considered Level 3 inputs. The fair value of the contingent earn-out was estimated using a discounted cash flow approach, which included assumptions regarding the probability-weighted cash flows of achieving certain capacity development milestones, which are considered Level 3 inputs. The fair value of the lease liability was estimated using a discounted cash flow approach, which included assumptions regarding current market prices for similar assets, estimated term and discount rates, which are considered Level 3 inputs. The fair value of the customer relationships intangible asset was determined using a discounted cash flow model that incorporates the excess earnings method, which are considered Level 3 inputs, and will be amortized on an accelerated basis over the projected pattern of economic benefits of approximately 1.5 years. Garden City Acquisition ( Garden City, Texas ) On April 1, 2024, the Company acquired an operational bitcoin mining site located in Garden City, Texas with 132 megawatts of operational capacity and 200 megawatts of nameplate capacity from APLD - Rattlesnake Den I, LLC (the “Garden City Acquisition”) for total cash consideration of $ 96.8 million, including working capital adjustments that were paid during the three months ended June 30, 2024. The acquisition is intended to improve efficiencies and the scale of operations through the integration of the Company’s technology stack and realization of synergies. The following table summarizes the components of total purchase consideration: (in thousands) April 1, 2024 Initial cash consideration, net of cash acquired $ 92,025 Working capital adjustment 4,748 Total purchase consideration $ 96,773 The acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805 - Business Combinations . F-18 Table of Contents The following table summarizes the preliminary allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed as of April 1, 2024: (in thousands) April 1, 2024 Assets Other current assets $ 4,644 Property and equipment 78,759 Finance lease right-of-use asset 4,040 Goodwill 14,510 Total assets $ 101,953 Liabilities Finance lease liability $ 5,180 Total liabilities 5,180 Total purchase consideration $ 96,773 Goodwill is calculated as the excess of the purchase price over the net assets acquired. The Company expects the goodwill balance to be deductible for tax purposes over a period of 15 years. Goodwill is primarily attributed to growth and efficiency opportunities as well as expected synergies from combining the operations of bitcoin mining sites with the Company. The fair value of property and equipment was estimated by applying the cost approach, which estimates fair value using replacement or reproduction cost of an asset of comparable utility, adjusted for loss in value due to depreciation and economic obsolescence, which are considered Level 3 inputs. The fair value of the finance lease liability was estimated using a discounted cash flow approach, which included assumptions regarding current market prices for similar assets, estimated term and discount rates, which are considered Level 3 inputs. GC Data Center Acquisition ( Granbury, Texas and Kearney, Nebraska ) On January 12, 2024, the Company acquired two operational bitcoin mining sites located in Granbury, Texas and Kearney, Nebraska, totaling 390 megawatts of nameplate capacity from GC Data Center Equity Holdings, LLC (the “GC Data Center Acquisition”) for total consideration of $ 189.6 million, including a working capital adjustment that was paid during the three months ended March 31, 2024, plus up to an additional $ 19.6 million of cash, which amount is contingent on the expansion of additional megawatt capacity at the acquired facilities by certain milestone dates during the three year period following the anniversary of closing. The acquisition is intended to improve efficiencies and the scale of operations through the integration of the Company’s technology stack and realization of synergies. The Company will not be taking on any new hosting services customers at these locations and will transition to self-mining at these two sites as existing customer agreements expire or are terminated early. The following table summarizes the components of total purchase consideration: (in thousands) January 12, 2024 Initial cash consideration, net of cash acquired $ 175,734 Working capital adjustments 8,081 Estimate fair value contingent earn-out and other 5,832 Total purchase consideration $ 189,647 The acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805 - Business Combinations . F-19 Table of Contents The following table summarizes the preliminary allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed as of January 12, 2024: (in thousands) January 12, 2024 Assets Accounts receivable $ 20,411 Other current assets 8,506 Property and equipment 132,148 Right-of-use asset 8,852 Goodwill 30,852 Customer relationships 22,000 Derivative instrument 10,989 Other non-current assets 6,250 Total assets $ 240,008 Liabilities Accounts payable and accrued expenses $ 13,940 Lease liability 13,992 Other long-term liabilities 22,429 Total liabilities 50,361 Total purchase consideration $ 189,647 Goodwill is calculated as the excess of the purchase price over the net assets acquired. The Company expects the goodwill balance to be deductible for tax purposes over a period of 15 years. Goodwill is primarily attributed to growth and efficiency opportunities as well as expected synergies from combining the operations of bitcoin mining sites with the Company. The gross contractual amounts receivable were $ 24.0 million, of which, $ 3.6 million is expected to be uncollectible. During the year ended December 31, 2024, the Company terminated various customer agreements and recognized an $ 18.4 million charge recorded to “Early termination expenses” on the Consolidated Statements of Operations. The fair value of property and equipment was estimated by applying the cost approach, which estimates fair value using replacement or reproduction cost of an asset of comparable utility, adjusted for loss in value due to depreciation and economic obsolescence, which are considered Level 3 inputs. The fair value of the derivative was estimated using a discounted cash flow approach that considers various assumptions including current market prices and electricity forward curves, time value, as well as other relevant economic measures, which are considered Level 2 inputs. The fair value of the contingent earn-out was estimated using a discounted cash flow approach, which included assumptions regarding the probability-weighted cash flows of achieving certain capacity development milestones, which are considered Level 3 inputs. The fair value of the lease liability was estimated using a F-20 Table of Contents discounted cash flow approach, which included assumptions regarding current market prices for similar assets, estimated term and discount rates, which are considered Level 3 inputs. The following table presents the changes in the estimated fair value of the GC Data Center Acquisition contingent consideration liability: (in thousands) Balance at December 31, 2023 $ — Contingent consideration liability 3,523 Change in fair value of contingent earn-out 15 Balance at December 31, 2024 $ 3,538 Intangible assets were determined to meet the criterion for recognition apart from tangible assets acquired and liabilities assumed. The fair values of intangible assets were estimated based on various valuation techniques including the use of discounted cash flow analyses, and multi-period excess earnings valuation approaches, which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy. These valuation inputs included estimates and assumptions about forecasted future cash flows, long-term revenue growth rates, and discount rates. The fair value of the customer relationships intangible asset was determined using a discounted cash flow model that incorporates the excess earnings method and will be amortized on an accelerated basis over the projected pattern of economic benefits of approximately 4 years. As of December 31, 2024, the Company fully amortized customer relationships acquired for $ 22.0 million. The results of the acquired facilities have been included in the Company’s Consolidated Statements of Operations as of the acquisition date. The following unaudited pro forma financial information reflects the acquisition of the acquired facilities forementioned by the application of pro forma adjustments to the Company’s historical financial statements as if the acquisition had occurred on January 1, 2023, for the indicated periods: Year Ended December 31, (in thousands) 2024 2023 Revenue $ 675,045 $ 492,057 Income before income taxes 623,764 223,636 Earnings per common share: Basic $ 1.89 $ 1.14 Diluted 1.76 0.81 The unaudited pro forma financial information should not be considered indicative of actual results that would have been achieved had the acquisition of the acquired facilities actually been consummated on the date indicated and does not purport to be indicative of the Company's future financial position or results of operations. These pro forma results include the impact of amortizing certain purchase accounting adjustments such as intangible assets and the impact of the acquisition on interest and income tax expense. No adjustments have been reflected in the pro forma financial information for anticipated growth and efficiency opportunities. There were no material nonrecurring pro forma adjustments directly attributable to the acquisition included within the unaudited pro forma financial information. NOTE 4 – REVENUES The Company recognizes revenue in accordance with ASC 606. The core principle of the revenue standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: • Step 1: Identify the contract with the customer; F-21 Table of Contents • Step 2: Identify the performance obligations in the contract; • Step 3: Determine the transaction price; • Step 4: Allocate the transaction price to the performance obligations in the contract; and • Step 5: Recognize revenue when the Company satisfies a performance obligation. In order to identify the performance obligations in a contract with a customer, an entity must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: • The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct); and • The entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following: • Variable consideration • Constraining estimates of variable consideration • The existence of a significant financing component in the contract • Noncash consideration • Consideration payable to a customer Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized under the accounting contract will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time, as appropriate. Application of the Five-Step Model to the Company’s Mining and Hosting Operations The Company’s ongoing major or central operation is to provide bitcoin transaction verification services to the transaction requestor, in addition to the Bitcoin network through a Company-operated mining pool as the operator (“Operator”) (such activity, “mining”) and to provide a service of performing hash calculations to third-party pool operators alongside collectives of third-party bitcoin miners (such collectives, “mining pools”) as a participant (“Participant”). F-22 Table of Contents On January 12, 2024, the Company acquired two operational bitcoin mining sites for the purpose of improving efficiencies and the scale of the Company’s mining operations. In addition, the Company acquired two bitcoin mining sites within the Arkon Acquisition on November 5, 2024, that provide hosting services to a single customer. The Company provides hosting services to institutional-scale crypto mining companies at these sites. The Company will not be taking on any new hosting services customers at these locations and will transition to self-mining at these sites as existing customer agreements expire or are terminated early. Refer to Note 3 - Acquisitions, for further information. The following table presents the Company’s revenues disaggregated for those arrangements in which the Company is the Operator and Participant: Year Ended December 31, (in thousands) 2024 2023 2022 Revenues from contracts with customers Mining operator - transaction fees $ 32,884 $ 32,598 $ 5,231 Mining participant 32,002 25,101 4,652 Hosting services (1) 31,638 — — Total revenues from contracts with customers 96,524 57,699 9,883 Mining operator - block rewards and other revenue 559,854 329,809 107,870 Total revenues $ 656,378 $ 387,508 $ 117,753 (1) Includes revenue beginning January 12, 2024, the date of the GC Data Center Acquisition and November 5, 2024, the date of the Arkon Acquisition. The Company made a strategic decision to exit hosting services upon acquisition of the GC Data Center Acquisition. Intercompany transactions have been eliminated in consolidation. Refer to Note 3 - Acquisitions, for further information. Mining Operator As Operator, the Company provides transaction verification services to the transaction requestor, in addition to the Bitcoin network. Transaction verification services are an output of the Company’s ordinary activities; therefore, the Company views the transaction requestor as a customer and recognizes the transaction fees as revenue from contracts with customers under ASC 606. The Bitcoin network is not an entity such that it may not meet the definition of a customer; however, the Company has concluded that it is appropriate to apply ASC 606 by analogy to block rewards earned from the Bitcoin network. The Company is currently entitled to the block reward of 3.125 bitcoin, subsequent to the halving that occurred on April 19, 2024. Prior to the halving, the Company was entitled to the block reward of 6.25 bitcoin from each successful validation of a block. The Company is also entitled to the transaction fees paid by the transaction requester payable in bitcoin for each successful validation of a block. The Company assessed the following factors in the determination of the inception and duration of each individual contract to validate a block and satisfaction of its performance obligation as follows: • For each individual contract, the parties’ rights, the transaction price, and the payment terms are fixed and known as of the inception of each individual contract. • The transaction requestor and the Bitcoin network each have a unilateral enforceable right to terminate their respective contracts at any time without penalty. • For each of these respective contracts, contract inception and completion occur simultaneously upon block validation; that is, the contract begins upon, and the duration of the contract does not extend beyond, the validation of an individual blockchain transaction; and each respective contract contains a single performance obligation to perform a transaction validation service and this performance obligation is satisfied at the point-in-time when a block is successfully validated. From September 2021 until May 2022, the Company engaged unrelated third-party mining enterprises (“pool participants”) to contribute hash calculations, and in exchange, remitted transaction fees and block rewards to pool participants on a pro rata basis according to each respective pool participant’s contributed hash calculations. The MaraPool wallet (owned by the Company as Operator) is recorded on the distributed ledger as the winner of proof of F-23 Table of Contents work block rewards and assignee of all validations and, therefore, the transaction verifier of record. The pool participants entered into contracts with the Company as Operator; they did not directly enter into contracts with the network or the requester and were not known verifiers of the transactions assigned to the pool. As Operator, the Company delegated mining work to the pool participants utilizing software that algorithmically assigned work to each individual miner. By virtue of its selection and operation of the software, the Company as Operator controlled delegation of work to the pool participants. This indicated that the Company directed the mining pool participants to contribute their hash calculations to solve in areas that the Company designated. Therefore, the Company determined that it controlled the service of providing transaction verification services to the network and requester. Accordingly, the Company recorded all of the transaction fees and block rewards earned from transactions assigned to MaraPool as revenue, and the portion of the transaction fees and block rewards remitted to MaraPool participants as cost of revenues. In accordance with ASC 606-10-32-21, the Company measures the estimated fair value of the non-cash consideration (block reward and transaction fees) at contract inception, which is at the time the performance obligation to the requester and the network is fulfilled by successfully validating a block. The Company measures the non-cash consideration which is fixed as of the inception of each individual contract using the quoted spot rate for bitcoin determined using the Company’s primary trading platform for bitcoin at the time the Company successfully validates a block. Expenses associated with providing bitcoin transaction verification services, such as hosting fees, electricity costs, and related fees are recorded as cost of revenues. Depreciation on digital asset mining equipment is also recorded as a component of cost of revenues. Mining Participant The Company participates in third-party operated mining pools. When the Company is a Participant in a third-party operated mining pool, the Company provides a service to perform hash calculations to the third-party pool operators. The Company considers the third-party mining pool operators to be its customers under Topic 606. Contract inception and the Company’s enforceable right to consideration begins 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. The Company is entitled to non-cash compensation based on the pool operator’s payout model. The payout methodologies differ depending on the type of third-party operated mining pool. Full-Pay-Per-Share (“FPPS”) pools pay block rewards and transaction fees, less mining pool fees and Pay-Per-Share (“PPS”) pools pay block rewards less mining pool fees but no transaction fees. For FPPS and PPS pools, the Company is entitled to non-cash consideration even if a block is not successfully validated by the mining pool operators. Success-based mining pools pay a fractional share of the successfully mined block and transaction fees, reduced by pool operator expenses only if a block is successfully validated. During 2024, the Company participated in FPPS mining pools. During 2023, the Company primarily participated in FPPS mining pools and, to a lesser extent, success-based mining pools. During 2022, the Company primarily participated in success-based mining pools and, to a lesser extent, PPS mining pools. FPPS Mining Pools The Company primarily participates in mining pools that use the FPPS payout method for the year ended December 31, 2024. 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 24-hour period beginning midnight UTC and ending 23:59:59 UTC on a daily basis. The non-cash consideration that the Company is entitled to for providing hash calculations to the pool operator under the FPPS payout method is made up of block rewards and transaction fees less pool operator expenses determined as follows: F-24 Table of Contents • 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 midnight 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 midnight 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 is 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 generates revenue in accordance with the pool operator’s payout formula during the same 24-hour period beginning midnight UTC daily. The above non-cash consideration is variable in accordance with paragraphs ASC 606-10-32-5 to 606-10-32-7, 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. While the non-cash consideration is variable, the Company has the ability to estimate the variable consideration at contract inception with reasonable certainty without the risk of significant revenue reversal. The Company does not constrain this variable consideration because it is probable that a significant reversal in the amount of revenue recognized from the contract will not occur when the uncertainty is subsequently resolved and recognizes the non-cash consideration on the same day that control is transferred, which is the same day as contract inception. The Company measures the non-cash consideration based on the simple average daily spot rate of bitcoin determined using the Company’s primary trading platform for bitcoin over a 24-hour period beginning midnight UTC and ending 23:59:59 UTC on the day of contract inception. 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. PPS Mining Pools The Company participates in PPS pools that provide non-cash consideration similar to the FPPS pools except PPS pools do not include transaction fees, therefore, the non-cash consideration received by the Company is made up of block rewards less mining pool fees. While the non-cash consideration is variable, the Company has the ability to estimate the variable consideration at contract inception with reasonable certainty. The Company does not constrain this variable consideration because it is probable that a significant reversal in the amount of revenue recognized from the contract will not occur when the uncertainty is subsequently resolved and recognizes the non-cash consideration on the same day that control is transferred, which is the same day as contract inception. The Company measures the non-cash consideration based on the simple average daily spot rate of bitcoin determined using the Company’s primary trading platform for bitcoin over a 24-hour period beginning midnight UTC and ending 23:59:59 UTC on the day of contract inception. 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. Success-based Mining Pools The Company also participates, to a lesser extent, in third-party mining pools that pay rewards only when the pool successfully validates a block. For these pools, the Company only earns a reward when the third-party pool F-25 Table of Contents successfully mines a block and its reward is the fractional share of the successfully mined block and transaction fees, reduced by pool operator expenses, based on the proportion of hash calculations the Company performed for the mining pool operator to the total hash calculations performed by all mining pool participants in validating the block during the 24-hour period beginning at midnight UTC and ending 23:59:59 UTC daily. Contract inception and the Company’s enforceable right to consideration begins when the Company commences the performance of hash calculations for the mining pool operator. The non-cash consideration is variable in accordance with paragraphs ASC 606-10-32-5 to 606-10-32-7 as it depends on whether the third-party mining pool successfully validates a block during each 24-hour period. In addition, other inputs such as the amount of hash calculations and the Company’s fractional share of consideration earned by the pool operator also cause variability. The Company does not have the ability to estimate whether a block will be successfully validated with reasonable certainty at contract inception. The Company constrains the variable consideration at contract inception because it is not probable that a significant reversal in the amount of revenue recognized from the contract will not occur when the uncertainty is subsequently resolved. Once a block is successfully validated, the constraint is lifted. The Company recognizes the non-cash consideration on the same day that control is transferred, which is the same day as contract inception. The Company’s policy was to measure non-cash consideration based on the spot rate of bitcoin at the time the pool successfully validates a block, which was not in accordance with ASC 606-10-32-21 which requires measurement to coincide with contract inception. Additionally, this measurement was not consistent with the measurement of non-cash consideration for FPPS and PPS pools. During the three months ended December 31, 2023, the Company corrected this error and changed its measurement of non-cash consideration to the simple average daily spot rate of bitcoin determined using the Company’s primary trading platform for bitcoin on the date of contract inception, which is the same day that control of the contracted service (hash calculations) is transferred to the pool operator. The change in measurement did not have a material impact to the results of operations for any of the periods presented. Expenses associated with providing hash calculation services to third-party operated mining pools, such as hosting fees, electricity costs, and related fees, are recorded as cost of revenues. Depreciation on digital asset mining equipment is also recorded as a component of cost of revenues. Hosting Services The Company operates three bitcoin mining sites, which were acquired during the year ended December 31, 2024, that provide hosting services to institutional-scale crypto mining companies. Hosting services include colocation and managed services. Colocation services include providing mining companies with sheltered data center space, electrical power, cooling, and internet connectivity. Managed services generally include providing customers with technical support and maintenance services, in addition to colocation services. The Company will not be taking on any new hosting services customers and will transition acquired sites to self-mining as existing customer agreements expire or are terminated early. Colocation services revenue is recognized over time as the customer simultaneously receives and consumes the benefits of the Company’s performance. Managed services revenue is recognized at a point-in-time as the control transfers to the customer, satisfying the performance obligation. The transaction price for colocation services is variable based on the consumption of energy and the managed services price is a fixed rate per miner basis. The Company recognizes hosting services revenue to the extent that a significant reversal of such revenue will not occur. Hosting services customers are generally invoiced in advance of the month in which the Company satisfies its performance obligation, and deferred revenue is recorded for any upfront payments received in advance of the Company’s performance. The monthly transaction price is generally variable based on the amount of megawatt hours (“MWh”) consumed by the customers equipment and when other monthly contracted services are performed. At the end of each month, the customer is billed for the actual amount owed for services performed. The Company recognizes revenue for hosting services under the right-to-invoice practical expedient in ASC 606-10-55-18, which allows for the recognition of revenue over time as the Company’s right-to-invoice for final payment corresponds directly with the value of services transferred to the customer to-date. Expenses associated with providing hosting services are recorded as cost of revenues and depreciation on hosting equipment is recorded as a separate component of cost of revenues. F-26 Table of Contents NOTE 5 – DIGITAL ASSETS Effective January 1, 2023, the Company early adopted ASU 2023-08, which requires entities to measure crypto assets at fair value with changes recognized in the Consolidated Statements of Operations each reporting period. The Company’s digital assets were within the scope of ASU 2023-08 and a cumulative-effect adjustment of $ 11.5 million as of the beginning of the fiscal year ended December 31, 2023 was recorded for the difference between the carrying amount of the Company’s digital assets and fair value. The following table presents the Company’s significant digital asset holdings as of December 31, 2024 and 2023, respectively: (in thousands, except for quantity) Quantity Cost Basis Fair Value Bitcoin 34,519 $ 2,415,963 $ 3,223,989 Bitcoin - receivable (1) 10,374 401,334 968,436 Total bitcoin holdings 44,893 2,817,297 4,192,425 Kaspa 34,817,098 5,624 4,327 Total digital assets held as of December 31, 2024 $ 2,822,921 $ 4,196,752 (in thousands, except for quantity) Quantity Cost Basis Fair Value Bitcoin 15,126 $ 515,315 $ 639,660 Total digital assets held as of December 31, 2023 $ 515,315 $ 639,660 (1) The Company’s bitcoin - receivable holdings include 7,377 bitcoin lent out in digital asset loan receivable transactions and 2,997 bitcoin pledged as collateral. Refer to Note 6 - Digital Assets - Receivable, Net and Note 17 - Debt, for further information. The Company earned 51 and 48 bitcoin that were pending distribution from the Company’s equity method investee, the ADGM Entity (as defined below), which are excluded from the Company’s holdings as of December 31, 2024 and 2023, respectively. F-27 Table of Contents The following table presents a roll-forward of the Company’s digital asset holdings during the years ended December 31, 2024 and 2023: (in thousands) Bitcoin Fair Value KASPA Fair Value Digital assets and digital assets, restricted at December 31, 2022 $ 190,717 $ — Cumulative effect of the adoption of ASU 2023-08 11,483 — Additions of digital assets: Mining 385,959 — Disposition of digital assets ( 264,945 ) — Realized gain on digital assets 28,738 — Unrealized gain on digital assets 287,708 — Digital assets at December 31, 2023 639,660 — Additions of digital assets: Mining 599,436 23,026 Purchases 1,943,882 2,978 Dividends from equity method investee 25,299 — Disposition of digital assets ( 133,165 ) ( 19,125 ) Realized gain (loss) on digital assets (1) 616,042 ( 1,255 ) Unrealized gain on (loss) digital assets 200,324 ( 1,297 ) Other 1,151 — Transferred to Digital assets - receivable, net ( 668,640 ) — Digital assets at December 31, 2024 $ 3,223,989 $ 4,327 (1) Realized gains (losses) result from digital asset dispositions and upon the lending or pledging of bitcoin as collateral. The following tables summarizes the source of funds for the Company’s bitcoin purchases during the year ended December 31, 2024: (in thousands, except for quantity) Quantity Approximate Value Cash on hand 2,347 $ 160,356 Net proceeds from the issuance of the September 2031 Notes (1) 4,144 249,000 Net proceeds from the issuance of the March 2030 Notes (1) 9,074 872,353 Net proceeds from the issuance of the June 2031 Notes (1) 6,500 662,173 Total purchases 22,065 $ 1,943,882 (1) Defined below. Refer to Note 17 - Debt, for further information. F-28 Table of Contents NOTE 6 – DIGITAL ASSETS - RECEIVABLE, NET Lending Arrangements During the year ended December 31, 2024, the Company entered into four separate master securities loan agreements with various counterparties that represent digital asset loan receivables to generate yield from our loaned bitcoin holdings for the Company’s stakeholders. A total of 7,377 bitcoin were loaned to the counterparties as of December 31, 2024. Collateralized Digital Assets During the year ended December 31, 2024, 2,997 bitcoin were collateralized in connection with the lines of credit of $ 200.0 million. Refer to Note 17 - Debt, for further information on the line of credit. Digital assets - receivable, net consists of the following: (in thousands) December 31, 2024 Digital asset receivable - lending $ 688,674 Digital asset receivable - collateralized 279,762 Total digital asset receivable 968,436 Less: Allowance for credit loss ( 8,379 ) Digital assets - receivable, net $ 960,057 The digital asset receivables forementioned are initially recognized at fair value upon transfer and subsequently remeasured at fair value each reporting period. The changes in fair value are recognized as “Changes to digital assets - receivable, net” on the Consolidated Statements of Operations. The allowance for credit losses reflects the Company’s current estimate of the potential credit losses associated with the digital asset loan receivable and bitcoin provided as collateral to secure the $ 200.0 million line of credit. The credit loss is recorded as a valuation account, directly offsetting the Digital asset receivables on the Consolidated Balance Sheets. Changes to the allowance for credit losses on loans, based on quarterly analysis’, are recorded as provision for credit losses within “Other non-operating income (loss)” on the Consolidated Statements of Operations. The Company assesses the creditworthiness of our borrowers on a quarterly basis. For the purpose of determining the allowance for credit loss, financial assets with similar risk characteristics are pooled together. Our financial assets are aggregated by exposure term and assigned risk ratings. The Company considers credit ratings and several factors including the collateral and/or security of the Digital asset receivable, and are aligned with the ratings used by major credit ratings agencies. Given the limited historical data related to digital asset receivables and incurred losses related to digital asset receivables, the Company chose to rely on external data to perform the calculation of expected credit losses. The Company utilized the profitability of default (“PD”) and loss given default (“LGD”) approach to estimate the allowance for credit loss. In order to apply the PD LGD approach, management considered the lifetime of the digital asset receivables, the reasonable and supportable forecast, and the PD LGD. As of December 31, 2024, the Company recorded a corresponding allowance for credit loss of $ 8.4 million, based on the PD LGD approach. There were no digital asset receivables outstanding or allowance for credit losses recorded as of December 31, 2023, F-29 Table of Contents NOTE 7 – ADVANCES TO VENDORS AND DEPOSITS The Company contracts with bitcoin mining equipment manufacturers to procure equipment necessary for the operation of its bitcoin mining operations. These agreements typically require a certain percentage of the value of the total order to be paid in advance at specific intervals, usually within several days of execution of a contract and periodically thereafter with final payments due prior to each shipment date. The Company accounts for these payments as “Advances to vendors” on the Consolidated Balance Sheets. As of December 31, 2024 and 2023, such advances totaled approximately $ 121.3 million and $ 95.6 million, respectively. In addition, the Company contracts with various service providers for hosting of its equipment, operational support in data centers where the Company’s equipment is deployed and construction of data centers on leased sites. These contracts typically require advance payments to service providers in conjunction with the contractual obligations associated with these services. Additionally, when applicable, funds related to a surety bond are included. The Company classifies these payments as “Deposits” and “Long-term deposits” on the Consolidated Balance Sheets. As of December 31, 2024 and 2023, such deposits totaled approximately $ 259.4 million and $ 67.0 million, respectively. NOTE 8 – PROPERTY AND EQUIPMENT The components of property and equipment as of December 31, 2024 and 2023 are: (in thousands, except useful life) Useful life (Years) December 31, 2024 December 31, 2023 Land (1) — $ 3,510 $ — Land improvements 9 26,530 — Building and improvements 25 86,877 — Mining rigs 3 1,705,648 862,055 Containers 10 - 15 106,784 5,676 Equipment 4 - 15 124,900 — Software and hardware 2 3,316 — Asset retirement obligation 8 7,879 — Construction in progress — 71,396 — Other 7 6,335 242 Total gross property, equipment 2,143,175 867,973 Less: Accumulated depreciation and amortization ( 593,684 ) ( 196,201 ) Property and equipment, net $ 1,549,491 $ 671,772 (1) Refer to Note 18 - Leases, for further information regarding the Company’s finance land lease. The Company recorded an asset retirement obligation of $ 7.9 million for the Granbury data center land lease. The asset retirement obligation represents the estimated cost to return the site to its original state. The asset retirement obligation is being depreciated over the term of the lease which is approximately 8 years. The Company’s accretion expense related to the asset retirement obligation for the year ended December 31, 2024 was $ 0.9 million, respectively. The Company’s depreciation expense related to property and equipment for the year ended December 31, 2024 and 2023 was $ 403.7 million and $ 179.5 million, respectively. F-30 Table of Contents NOTE 9 – INVESTMENTS The components of investments as of December 31, 2024 and 2023 are: (in thousands) December 31, 2024 December 31, 2023 Equity method investments $ 57,447 $ 69,292 Other investments 54,046 37,000 Total investments $ 111,493 $ 106,292 Equity Method Investment The ADGM Entity On January 27, 2023, the Company and Zero Two (formerly known as FS Innovation, LLC) entered into a Shareholders’ Agreement to form an Abu Dhabi Global Markets company (the “ADGM Entity”) in which the Company has a 20 % ownership interest, which is accounted for as an equity method investment. The ADGM Entity commenced mining operations in September 2023. During the year ended December 31, 2024, the Company received a non-monetary dividend in the amount of $ 8.5 million associated with approximately 1,950 mining rigs distributed by Zero Two. The Company recorded the mining rigs to property and equipment at fair value and recognized a loss of $ 4.1 million that reduced the Company’s investment in the ADGM Entity for the year ended December 31, 2024. The Company’s share of net losses was $ 1.5 million for the year ended December 31, 2024, including approximately $ 12.4 million of depreciation and amortization and $ 0.6 million for year ended December 31, 2023, including approximately $ 2.1 million of depreciation and amortization. As of December 31, 2024, the Company’s investment in the ADGM Entity was $ 57.4 million and is reflected in “Investments” on the Consolidated Balance Sheets. Other Investments Other investments consist of strategic investments made from time to time in equity securities and SAFE investments. Investments in Equity Securities Auradine As of December 31, 2024, the total carrying amount of the Company’s investment in Auradine, Inc. (“Auradine”) preferred stock was $ 50.7 million. On September 26, 2024, the Company purchased additional shares of Auradine preferred stock with a purchase price of $ 0.8 million. On January 10, 2024, the Company purchased additional shares of Auradine preferred stock with a purchase price of $ 8.0 million. The preferred stock purchased on January 10, 2024 was similar to the Company’s other investments in Auradine preferred stock and, as a result, the Company recorded $ 5.2 million to “Gain on investments” on the Consolidated Statements of Operations to adjust the carrying amount of its investments to an observable price in accordance with the measurement alternative in ASC 321. SAFE Investments During the year ended December 31, 2024, the Company entered into two SAFE agreements, for a total carrying value of $ 1.4 million and wrote-down a previous SAFE investment of $ 1.0 million. As of December 31, 2023, the Company had one SAFE investment with a carrying value of $ 1.0 million, with no impairments or other adjustments. F-31 Table of Contents NOTE 10 – GOODWILL AND INTANGIBLE ASSETS Goodwill The components of goodwill as of December 31, 2024 are: (in thousands) As of December 31, 2024 GC Data Center Acquisition $ 30,852 Garden City Acquisition 14,510 Arkon Acquisition 37,389 Total goodwill $ 82,751 The Company acquired goodwill from completed acquisitions throughout the year ended December 31, 2024. Refer to Note 3 – Acquisitions, for further information. There was no goodwill as of December 31, 2023. The Company completed its annual goodwill impairment analysis as of December 31, 2024 and concluded that its fair value substantially exceeded its carrying value, therefore no goodwill impairment was recorded as of December 31, 2024 Intangible assets The following table presents the Company’s intangible assets as of December 31, 2024: As of December 31, 2024 (in thousands) Cost Accumulated amortization Net Customer relationships $ 23,000 $ ( 22,041 ) $ 959 Intellectual property 2,633 ( 878 ) 1,755 Total intangible assets $ 25,633 $ ( 22,919 ) $ 2,714 In June 2024, the Company fully amortized the customer relationship intangible assets acquired in the GC Data Center Acquisition due to the Company’s strategic decision to exit hosting services business and termination of customer relationships during the period. In connection with the Arkon Acquisition in November 2024, the Company acquired an additional customer relationship intangible asset. Refer to Note 3 - Acquisitions, for further information. There were no intangible assets as of December 31, 2023. The following table presents the Company’s estimated future amortization of finite-lived intangible assets as of December 31, 2024: Year Amount (in thousands) 2025 $ 1,128 2026 1,128 2027 250 2028 208 Total $ 2,714 F-32 Table of Contents NOTE 11 – FAIR VALUE MEASUREMENT The Company measures certain financial and non-financial assets and liabilities at fair value on a recurring or non-recurring basis. The Company uses a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is 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, essentially an exit price, based on the highest and best use of the asset or liability. The levels of the fair value hierarchy are: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions The carrying amounts reported on the Consolidated Balance Sheets for cash and cash equivalents, restricted cash, other receivables, deposits, prepaid expenses and other current assets, property and equipment, advances to vendors, accounts payable, accrued expenses, and legal reserve payable approximate their estimated fair market value based on the short-term maturity of these instruments. Additionally, the carrying amounts reported on the Consolidated Balance Sheets for the Company’s term loan, operating lease liabilities and other long-term liabilities approximate fair value as the related interest rates approximate rates currently available to the Company. Financial assets and liabilities are classified in their entirety within the fair value hierarchy based on the lowest level of input that is significant to their fair value measurement. The Company measures the fair value of its marketable securities and investments by taking into consideration valuations obtained from third-party pricing sources. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs included reported trades of and broker-dealer quotes on the same or similar securities, issuer credit spreads, benchmark securities and other observable inputs. Recurring measurement of fair value The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value hierarchy for each of those assets and liabilities as of December 31, 2024 and 2023, respectively: (in thousands) Total carrying value at December 31, 2024 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Money market funds $ 292,927 $ 292,927 $ — $ — Digital assets 3,228,316 3,228,316 — — Digital assets - receivable, net (1) 960,057 — 960,057 — Derivative instrument (2) 8,947 — 8,947 — Liabilities: Contingent consideration liability (3) 8,138 — — 8,138 F-33 Table of Contents (in thousands) Total carrying value at December 31, 2023 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Money market funds $ 141,147 $ 141,147 $ — $ — U.S. Treasury Bills 60,541 60,541 — — Digital assets 639,660 639,660 — — (1) The fair value of digital assets - receivable, net was estimated using the market approach, utilizing observable market prices and other relevant market data, which are considered Level 2 inputs. Refer to Note 6 - Digital Assets - Receivable, Net, for further information. (2) The fair value of the derivative instrument was estimated using a discounted cash flow approach that considers various assumptions including current market prices and electricity forward curves, which are considered Level 2 inputs. Increases (decreases) in market prices and electricity forward curves could result in significant increases (decreases) in the fair value of derivative instruments. Refer to Note 2 - Summary of Significant Accounting Policies - Derivatives, for further information. (3) Represents the estimated amount of acquisition-related consideration expected to be paid in the future as of December 31, 2024 for the GC Center Equity Holdings, LLC acquired on January 12, 2024 and the Arkon Acquisition as of November 5, 2024. Increases (decreases) in the probability of achieving the milestones could result in significant increases (decreases) in the fair value of the contingent consideration. Refer to Note 3 - Acquisitions, for further information. The Company includes the above money market funds and U.S. treasury bills in cash and cash equivalents on the Consolidated Balance Sheets. The Company’s U.S. treasury bills have original remaining maturities of three months or less when purchased. Effective January 1, 2023, the Company early adopted ASU 2023-08, measuring digital assets at fair value on a recurring basis. There were no transfers among Levels 1, 2 or 3 during the years ended December 31, 2024. Fair value of financial instruments not recognized at fair value The following tables present information about the Company’s financial instruments that are not recognized at fair value on the Consolidated Balance Sheets as of December 31, 2024 and 2023, respectively, is as follows: (in thousands) Total carrying value at December 31, 2024 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Liabilities: Notes payable $ 2,246,578 $ 1,974,398 $ — $ — December 31, 2023 (in thousands) Total carrying value at December 31, 2023 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Liabilities: Notes payable $ 325,654 $ 269,725 $ — $ — There were no transfers among Levels 1, 2 or 3 during the years ended December 31, 2024. As of December 31, 2024 and 2023 there were no other assets and liabilities measured at fair value on a non-recurring basis. F-34 Table of Contents NOTE 12 – INCOME TAXES The Company accounts for income taxes under ASC 740 - Income Taxes , which requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carry-forwards. ASC 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. Income tax expense (benefit) attributable to income from continuing operations was $ 75.5 million, $ 16.4 million and $( 24.2 ) million for the years ended December 31, 2024, 2023 and 2022, respectively, and differed from the amounts computed by applying the U.S. federal income tax rate of 21% to pretax income from continuing operations as a result of the following: (in thousands, except percentage data) 2024 2023 2022 Federal income tax expense (benefit) at the statutory rate 21.0 % $ 129,517 21.0 % $ 58,296 ( 21.0 ) % $ ( 150,785 ) State income taxes, net of federal tax expense 1.8 % 10,872 0.9 % 2,559 ( 1.6 ) % ( 11,495 ) Executive compensation deduction limitation 3.4 % 21,241 0.9 % 2,587 1.0 % 7,358 Excess tax benefit related to share-based compensation ( 0.4 ) % ( 2,696 ) 0.2 % 470 — % 285 Nondeductible other expenses 0.2 % 1,349 0.6 % 1,798 — % 14 Change in valuation allowance ( 12.6 ) % ( 77,960 ) ( 18.9 ) % ( 52,502 ) 18.2 % 130,462 Prior year true-ups — % — 1.2 % 3,346 — % 127 Other, net ( 1.1 ) % ( 6,828 ) — % ( 128 ) — % ( 198 ) Income tax expense (benefit) from continuing operations 12.3 % $ 75,495 5.9 % $ 16,426 ( 3.4 ) % $ ( 24,232 ) The components of the provision for income taxes are as follows: For the Year Ended December 31, (in thousands) 2024 2023 2022 Current income tax expense Federal $ — $ — $ — State 2,278 1,140 733 Total current income tax expense 2,278 1,140 733 Deferred tax expense (benefit) Federal 142,087 66,129 ( 143,598 ) State 9,090 1,659 ( 11,829 ) Total deferred tax expense (benefit) 151,177 67,788 ( 155,427 ) Change in valuation allowance ( 77,960 ) ( 52,502 ) 130,462 Net deferred tax expense after valuation allowance (benefit) 73,217 15,286 ( 24,965 ) Income tax provision (benefit) $ 75,495 $ 16,426 $ ( 24,232 ) F-35 Table of Contents The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2024 and 2023 are presented below: (in thousands) December 31, 2024 December 31, 2023 Deferred tax assets: Tax credit carryforwards $ 2,201 $ 517 Net operating loss carryforwards 120,224 144,081 Intangible assets 5,836 1,602 Property and equipment 10,463 — Stock compensation 10,435 3,898 Disallowed interest 2,254 3,093 Bad debt reserve 9,830 9,957 Research and development costs 7,867 1,619 Accruals, reserves and other 3,589 286 Impairment loss — 36,100 Capital losses 283 11,950 Gain on hedge instruments 4,243 3,798 Total gross deferred tax assets 177,225 216,901 Less valuation allowance — ( 77,960 ) Net deferred tax assets 177,225 138,941 Deferred tax liabilities: Gain on investment ( 912 ) — Property and equipment, net — ( 117,094 ) Digital assets ( 264,816 ) ( 37,133 ) Total gross deferred liabilities ( 265,728 ) ( 154,227 ) Net deferred tax liability $ ( 88,503 ) $ ( 15,286 ) The valuation allowance for deferred tax assets as of December 31, 2023 was $ 78.0 million. There was a zero valuation allowance for deferred tax assets as of December 31, 2024, resulting in a decrease of the total valuation allowance of $ 78.0 million for the year ended December 31, 2024. For the year ended December 31, 2024 , the Company concluded, based upon all available evidence, it was more likely than not that it would have sufficient future taxable income to realize the Company’s federal and state deferred tax assets. As a result, the Company is releasing the valuation allowance against deferred tax assets that are supported by reversing deferred tax liabilities. At December 31, 2024 , the Company has federal and state net operating loss carryforwards of $ 612.8 million, which are available to offset future taxable income. In addition, the Company has interest carryforwards of $ 10.5 million. The Company has the following attributes and credit carryforwards: (in thousands) Gross Amount Expiring Federal net operating loss carryforwards $ 3,314 2034-2035 Federal net operating loss carryforwards 563,555 Indefinite State net operating loss carryforwards 45,926 Various Interest expense carryforwards 10,474 Indefinite Federal tax credit carryforwards 2,160 2040-2044 State tax credit carryforwards 40 Indefinite F-36 Table of Contents Section 382 and Section 383 of the Internal Revenue Code limit the utilization of U.S. tax attribute carryforwards following a change of control. Based on the Company’s analysis under Section 382, approximately $ 84.5 million of tax attributes are limited by Section 382/383 as of December 31, 2024. The Section 382/383 limitation in conjunction with the twenty-year carryforward limitation caused $ 33.7 million of attributes to be deemed worthless, which resulted in a write-off of the related deferred tax assets in 2021. A reconciliation of the beginning and ending amount of total unrecognized tax benefits for the tax years ended December 31, 2024, 2023 and 2022 is as follows: For the Year Ended December 31, (in thousands) 2024 2023 2022 Balance, beginning of year $ 5,296 $ 5,252 $ 44.00 Increase (decrease) related to prior year tax positions 1 ( 31 ) 21 Increase related to current year tax positions 560 75 5,187 Balance, end of year $ 5,857 $ 5,296 $ 5,252 The Company has established a reserve against its federal research and development tax credits generated in 2024 and previous years. The Company has also established a reserve related to its executive compensation deduction limitation in 2022. As of December 31, 2024, the total amount of unrecognized tax benefits was $ 5.9 million, all of which was offset against deferred tax assets. If the unrecognized tax benefits were recognized as of December 31, 2024, there would be a $ 5.9 million favorable impact that would affect the effective rate on income from continuing operations. The Company did no t accrue either interest or penalties for the years ended December 31, 2024 and 2023. The Company does not currently expect any of its remaining unrecognized tax benefits to be recognized in the next twelve months. The Company files federal and state income tax returns. The 2020-2023 tax years generally remain subject to examination by the IRS and various state taxing authorities, although the Company is not currently under examination in any jurisdiction. NOTE 13 – NET INCOME (LOSS) PER SHARE Net income (loss) per share is calculated in accordance with ASC 260 - Earnings Per Share . Basic income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. For the year ended December 31, 2024, 2023 and 2022, the Company recorded net income (loss) and as such, the Company calculated the impact of dilutive common stock equivalents in determining diluted earnings per share. F-37 Table of Contents The following table presents the total potential securities that were not included in the computation of diluted income (loss) per share, as their inclusion would have been anti-dilutive: For the Year Ended December 31, 2024 2023 2022 Warrants 324,375 324,375 324,375 Restricted stock units — — 1,255,648 The Convertible Notes (as defined below) — — 9,812,955 Series A Preferred Stock — 322,654 — Total dilutive shares 324,375 647,029 11,392,978 The following table sets forth the computation of basic and diluted income (loss) per share: For the Year Ended December 31, (in thousands, except share and per share data) 2024 2023 2022 Basic earnings per share of common stock: Net income (loss) per share of common stock - basic $ 541,253 $ 259,052 $ ( 694,022 ) Weighted average shares of common stock - basic 289,961,989 183,855,570 113,467,837 Net income (loss) per share of common stock - basic $ 1.87 $ 1.41 $ ( 6.12 ) Diluted earnings per share of common stock: Net income (loss) per share of common stock - basic $ 541,253 $ 259,052 $ ( 694,022 ) Add: Notes interest expense, net of tax 6,364 7,421 — Less: Gain from extinguishment of debt, net of tax ( 10,278 ) ( 62,909 ) — Net income (loss) per share of common stock - diluted $ 537,339 $ 203,564 $ ( 694,022 ) Weighted average shares of common stock - basic 289,961,989 183,855,570 113,467,837 Restricted stock units 4,492,213 330,928 — Performance-based restricted stock units 849,739 — — The Convertible Notes 16,537,406 8,106,779 — Weighted average shares of common stock - diluted 311,841,347 192,293,277 113,467,837 Net income (loss) per share of common stock - diluted $ 1.72 $ 1.06 $ ( 6.12 ) NOTE 14 – STOCKHOLDERS' EQUITY Common Stock On July 27, 2023, the Company’s shareholders approved an amendment to the Company’s articles of incorporation that increased the amount of common stock authorized for issuance to 500,000,000 with a par value of $ 0.0001 per share. Shelf Registration Statements on Form S-3 and At-the-Market Offering Agreements In February 2024, the Company commenced a new at-the-market (“ATM”) offering program with H.C. Wainwright & Co., LLC (“Wainwright”) acting as sales agent (the “2024 ATM”) pursuant to an ATM agreement, under which the Company may offer and sell shares of its common stock from time to time through Wainwright having an aggregate offering price of up to $ 1.5 billion. During the year ended December 31, 2024, the Company sold 68,747,807 shares of common stock for an aggregate purchase price of $ 1.4 billion, net of offering expenses of $ 34.9 million for the year ended December 31, 2024, respectively, pursuant to the 2024 ATM. As a result, the Company had $ 102.7 million aggregate offering price remaining under the 2024 ATM at December 31, 2024. F-38 Table of Contents NOTE 15 – STOCK-BASED COMPENSATION 2018 Equity Incentive Plan On January 1, 2018, the Board adopted the 2018 Equity Incentive Plan (as amended, the “2018 Plan”), which was subsequently approved by the Company’s shareholders on March 7, 2018. The 2018 Plan provides for the issuance of stock options, restricted stock, restricted stock units (“RSUs”), preferred stock and other awards to employees, directors, consultants and other service providers. In June 2024, the Company’s shareholders approved an amendment to the 2018 Plan that increased the number of shares authorized for issuance thereunder by 15,000,000 shares. As of December 31, 2024, the Company had an aggregate of 15,680,345 shares of common stock reserved for future issuance under the 2018 Plan. A summary of the Company’s stock-based compensation, by category, is as follows: For the Year Ended December 31, (in thousands) 2024 2023 2022 Performance-based stock awards $ 47,301 $ — $ — Service-based stock awards 110,341 32,644 24,595 Total stock-based compensation $ 157,642 $ 32,644 $ 24,595 Restricted Stock Units The Company grants service-based RSUs to employees, directors, and consultants. RSUs granted to employees generally vest over a four-year period from the date of grant; however, in certain instances, all or a portion of a grant may vest immediately. RSUs granted to directors generally vest over a one-year period. The Company measures the fair value of RSUs at the grant date and recognizes expenses on a straight-line basis over the requisite service period from the date of grant for each separately-vesting tranche under the graded-vesting attribution method. A summary of the Company’s service-based RSU activity for the year ended December 31, 2024, is as follows: Number of RSUs Weighted Average Grant Date Fair Value Nonvested at December 31, 2023 5,765,529 $ 9.40 Granted 7,793,855 18.29 Forfeited ( 728,632 ) 14.46 Vested ( 4,841,985 ) 12.99 Nonvested at December 31, 2024 7,988,767 $ 15.44 As of December 31, 2024, there was approximately $ 64.7 million of aggregate unrecognized stock-based compensation related to unvested service-based RSUs that is expected to be recognized over the next 2.8 years. Performance-based Restricted Stock Units The Company granted performance-based restricted stock units (“PSUs”) on May 1, 2024, and subsequently to new hires and for promotions. These awards generally vest over a four-year period from the date of grant. Awards are issued in the form of RSUs and are granted pursuant to the 2018 Plan. The number of PSUs that are subject to vest is directly correlated with the Company’s achievements of a pre-determined metric relating to total stockholder return (“TSR”) for the period from January 1, 2024 through December 31, 2024 (the “Performance Period”). Based on the Company’s TSR performance relative to the peer group for the Performance Period, the PSU awards will vest between 0 % to 200 % of the target amount over an approximate four-year period. Determination regarding the Company’s performance relative to the TSR metric will establish the maximum number of shares that are subject F-39 Table of Contents to vesting pursuant to the PSU awards. Once determined, (i) 25 % of the PSU awards will vest on January 31, 2025, and (ii) the balance of the awards will vest in 12 equal calendar quarters (with 6.25 % of the shares vesting each quarter). The Company measures the fair value of the PSUs at the grant date using the Monte Carlo simulation model. The Monte Carlo simulation model requires the input of subjective assumptions, including risk-free interest rate, expected term, expected stock price volatility, market capitalization of peer group, and dividend yield. The risk-free interest rate assumption is based upon observed interest rates for constant maturity U.S. Treasury securities as of the grant date. Expected term is consistent with the Performance Period of the awards. Expected volatility is based on the historical volatility of the Company’s common stock over the estimated expected life. The Company does not pay a dividend, therefore, the dividend yield is assumed to be zero. During the fourth quarter of 2024, the Company revised the peer group for its PSUs to ensure a relevant benchmark for performance evaluation and modified the vesting date of the first tranche to December 31, 2024. This modification resulted in the recognition of $ 26.1 million of incremental expense in the quarter ended December 31, 2024. The remaining $ 78.2 million of incremental expense will be recognized over the requisite service period. A summary of the Company’s PSU activity for the year ended December 31, 2024, is as follows: Number of PSUs Weighted Average Grant Date Fair Value Nonvested at December 31, 2023 — $ — Granted 3,016,773 49.05 Forfeited ( 2,696 ) 14.12 Vested ( 753,465 ) 49.05 Nonvested at December 31, 2024 (1) 2,260,612 $ 49.05 (1) The actual performance resulted in a payout of 200 % of the target level. As of December 31, 2024, there was approximately $ 100.5 million of aggregate unrecognized stock-based compensation related to unvested PSUs that is expected to be recognized over the next 3.1 years. Common Stock Warrants As of December 31, 2024, the Company’s issued and outstanding common stock warrants had no change from December 31, 2023. The Company continues to have 324,375 outstanding warrants, at a weighted average exercise price of $ 25.00 , that are expected to expire in approximately 1.0 years. NOTE 16 – ACCRUED EXPENSES As of December 31, 2024 and 2023, the Company’s accrued expenses consisted of the following: (in thousands) December 31, 2024 December 31, 2023 Interest $ 2,500 $ 276 Non-income taxes 10,237 6,926 Compensation and related expenses 13,578 6,073 Termination and legal fees 11,975 1,156 Utility expenses 17,931 4,113 Professional fees 15,186 — Other 5,480 3,747 Total accrued expenses $ 76,887 $ 22,291 F-40 Table of Contents NOTE 17 – DEBT The net carrying value of the Company’s outstanding debt as of December 31, 2024 and December 31, 2023, consisted of the following: (in thousands) December 31, 2024 December 31, 2023 December 2026 Notes $ 67,492 $ 330,707 September 2031 Notes 300,000 — March 2030 Notes 1,000,000 — June 2031 Notes 925,000 — Line of credit 200,000 — Total debt 2,492,492 330,707 Less: unamortized original issue discount and debt issuance costs ( 45,914 ) ( 5,053 ) Total long-term portion $ 2,446,578 $ 325,654 Convertible Senior Notes The Company issued the following convertible notes (collectively, the “Convertible Notes”) in private offerings: • $ 925.0 million aggregate principal amount of 0.0 % Convertible Senior Notes due 2031 (the “June 2031 Notes”) • $ 1.0 billion aggregate principal amount of 0.0 % Convertible Senior Notes due 2030 (the “March 2030 Notes”) • $ 300.0 million aggregate principal amount of 2.125 % Convertible Senior Notes due 2031 (the “September 2031 Notes”) • $ 747.5 million aggregate principal amount of 1.0 % Convertible Senior Notes due 2026 (the “December 2026 Notes”) The following table summarizes the key terms of each of the Convertible Notes: December 2026 September 2031 March 2030 June 2031 Issuance Date November 2021 August 2024 November 2024 December 2024 Maturity Date December 1, 2026 September 1, 2031 March 1, 2030 June 1, 2031 Remaining Principal (in thousands) $ 67,492 $ 300,000 $ 1,000,000 $ 925,000 Stated Interest Rate 1.0 % 2.125 % — % — % Interest Payment Dates June 1 & December 1 March 1 & September 1 March 1 & September 1 June 1 & December 1 Net Proceeds (1) (in thousands) $ 728,082 $ 291,595 $ 979,176 $ 907,908 Effective Interest Rate 1.0 % 2.6 % 0.4 % 0.3 % Initial Conversion Rate 13.1277 52.9451 38.5902 28.9159 Initial Conversion Price $ 76.17 $ 18.89 $ 25.91 $ 34.58 Share Principal Price $ 1,000 $ 1,000 $ 1,000 $ 1,000 (1) Net proceeds are net of customary offering expenses associated with the issuance of each of the Convertible Notes (the “issuance costs”) at the time of issuance. The Company accounts for these issuance costs as a reduction to the principal amount and amortizes the issuance costs to interest expense from the respective debt issuance date through the Maturity Date, on the Consolidated Statements of Operations. F-41 Table of Contents Issuance of the June 2031 Notes On December 4, 2024, the Company issued $ 850.0 million principal of 0.0 % Convertible Senior Notes due 2031. In addition, on December 10, 2024, the initial purchasers of the June 2031 Notes purchased an additional $ 75.0 million principal of June 2031 Notes for an aggregate principal amount of $ 925.0 million. The June 2031 Notes were issued pursuant to, and governed by, an indenture (the “Indenture”) with respect to the June 2031 Notes between the Company and the U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The June 2031 Notes are senior unsecured obligations of the Company and do not bear regular interest. The June 2031 Notes will mature on June 1, 2031, unless earlier converted, redeemed or repurchased in accordance with their terms. The June 2031 Notes are convertible into shares of the Company’s common stock at an initial conversion rate of 28.9159 shares per one thousand dollar principal amount of June 2031 Notes, which represents an initial conversion rate price of approximately $ 34.58 per share of common stock. The conversion rate is subject to customary anti-dilution adjustments. In addition, following certain events that occur prior to the maturity date or if the Company delivers a notice of redemption, the Company will increase the conversion rate for a holder who elects to convert its June 2031 Notes in connection with such corporate event or notice of redemption, as the case may be, in certain circumstances as provided by the Indenture. Prior to March 1, 2031, the June 2031 Notes are convertible only upon the occurrence of certain events. On or after March 1, 2031 until the close of business on the second scheduled trading day immediately preceding the maturity date of the June 2031 Notes, holders may convert the June 2031 Notes at any time. Upon conversion of the June 2031 Notes, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of common stock, at the Company’s election. Prior to June 5, 2029, the Company may not redeem the June 2031 Notes. The Company may redeem for cash all or any portion of the June 2031 Notes, at its option, on or after June 5, 2029, if the last reported sale price of the Company’s common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days, whether or not consecutive, including the trading day immediately preceding the date on which the Company provides a notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption. The redemption price will be equal to 100 % of the principal amount of the June 2031 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. Holders have the right to require the Company to repurchase for cash all or any portion of their June 2031 Notes on June 4, 2027 and on June 4, 2029 at a repurchase price equal to 100 % of the principal amount of the June 2031 Notes to be repurchased, plus any accrued and unpaid interest to, but excluding the repurchase date. In addition, if the Company undergoes a “fundamental change,” as defined in the Indenture, prior to maturity, subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of their June 2031 Notes at a fundamental change repurchase price equal to 100 % of the principal amount of the June 2031 Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of at least 25 % in principal amount of the outstanding June 2031 Notes may declare 100 % of the principal of, and accrued and unpaid special interest, if any, on, all the June 2031 Notes to be due and payable. Issuance of the March 2030 Notes On November 20, 2024, the Company issued $ 850.0 million principal of 0.0 % Convertible Senior Notes due 2030. In addition, on November 20, 2024, the initial purchasers of the March 2030 Notes purchased an additional $ 150.0 million principal of March 2030 Notes for an aggregate principal amount of $ 1.0 billion. The March 2030 Notes were issued pursuant to, and governed by, an indenture (the “Indenture”) with respect to the March 2030 Notes between the Company and the U.S. Bank Trust Company, Nation Association, as trustee (the “Trustee”). The March 2030 Notes are senior unsecured obligations of the Company and do not bear regular interest. The March 2030 Notes will mature on March 1, 2030, unless earlier repurchased, redeemed or converted in accordance with F-42 Table of Contents their terms. The March 2030 Notes are convertible into shares of the Company’s common stock at an initial conversion rate of 38.5902 shares per one thousand dollar principal amount of March 2030 Notes, which represents an initial conversion price of approximately $ 25.91 per share of common stock. The conversion rate is subject to customary anti-dilution adjustments. In addition, following certain events that occur prior to the maturity date or if the Company delivers a notice of redemption, the Company will increase the conversion rate for a holder who elects to convert its March 2030 Notes in connection with such corporate event or notice of redemption, as the case may be, in certain circumstances as provided by the Indenture. Prior to December 1, 2029, the March 2030 Notes are convertible only upon the occurrence of certain events. On or after December 1, 2029 until the close of business on the second scheduled trading day immediately preceding the maturity date of the March 2030 Notes, holders may convert the March 2030 Notes at any time. Upon conversion of the March 2030 Notes, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of common stock, at the Company’s election. Prior to March 5, 2028, the Company may not redeem the March 2030 Notes. The Company may redeem for cash all or any portion of the March 2030 Notes, at its option, on or after March 5, 2028, if the last reported sale price of the Company’s common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days, whether or not consecutive, including the trading day immediately preceding the date on which the Company provides a notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption. The redemption price will be equal to 100 % of the principal amount of the March 2030 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. Holders have the right to require the Company to repurchase for cash all or any portion of their March 2030 Notes on December 1, 2027 at a repurchase price equal to 100 % of the principal amount of the March 2030 Notes to be repurchased, plus any accrued and unpaid interest to, but excluding the repurchase date. In addition, if the Company undergoes a “fundamental change,” as defined in the Indenture, prior to maturity, subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of their March 2030 Notes at a fundamental change repurchase price equal to 100 % of the principal amount of the March 2030 Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of at least 25 % in principal amount of the outstanding March 2030 Notes may declare 100 % of the principal of, and accrued and unpaid special interest, if any, on, all the March 2030 Notes to be due and payable. Issuance of the September 2031 Notes On August 14, 2024, the Company issued $ 250.0 million principal of 2.125 % Convertible Senior Notes due 2031. In addition, on August 14, 2024, the initial purchasers of the September 2031 Notes purchased an additional $ 50.0 million principal of September 2031 Notes for an aggregate principal amount of $ 300.0 million. The September 2031 Notes were issued pursuant to, and are governed by, an indenture (the “Indenture”) with respect to the September 2031 Notes between the Company and the U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The September 2031 Notes are senior unsecured obligations of the Company and bear interest at a rate of 2.125 % per annum, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1 , 2025. The September 2031 Notes will mature on September 1, 2031, unless earlier repurchased, redeemed or converted in accordance with their terms. The September 2031 Notes are convertible into shares of the Company’s common stock at an initial conversion rate of 52.9451 shares per one thousand dollar principal amount of September 2031 Notes, which represents an initial conversion price of approximately $ 18.89 per share of common stock. The conversion rate is subject to customary anti-dilution adjustments. In addition, following certain events that occur prior to the maturity date or if the Company delivers a notice of redemption, the Company will increase the conversion rate for a holder who elects to convert its September 2031 Notes in connection with such corporate event or notice of redemption, as the case may be, in certain circumstances as provided by the Indenture. F-43 Table of Contents Prior to March 1, 2031, the September 2031 Notes are convertible only upon the occurrence of certain events. On or after March 1, 2031 until the close of business on the second scheduled trading day immediately preceding the maturity date of the September 2031 Notes, holders may convert the September 2031 Notes at any time. Upon conversion of the September 2031 Notes, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of common stock, at the Company’s election. Prior to September 6, 2028, the Company may not redeem the September 2031 Notes. The Company may redeem for cash all or any portion of the September 2031 Notes, at its option, on or after September 6, 2028, if the last reported sale price of the Company’s common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days, whether or not consecutive, including the trading day immediately preceding the date on which the Company provides a notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption. The redemption price will be equal to 100 % of the principal amount of the September 2031 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. Holders have the right to require the Company to repurchase for cash all or any portion of their September 2031 Notes on March 1, 2029 at a repurchase price equal to 100 % of the principal amount of the September 2031 Notes to be repurchased, plus accrued and unpaid interest to, but excluding the repurchase date. In addition, if the Company undergoes a “fundamental change,” as defined in the Indenture, prior to the maturity, subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of their September 2031 Notes at a fundamental change repurchase price equal to 100 % of the principal amount of the September 2031 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of at least 25 % in principal amount of the outstanding September 2031 Notes may declare 100 % of the principal of, and accrued and unpaid special interest, if any, on, all the September 2031 Notes to be due and payable. December 2026 Notes Partial Extinguishment of Debt On December 4, 2024, in connection with the issuance of the June 2031 Notes, the Company entered into a privately negotiated exchange agreement with certain holders of its December 2026 Notes to repurchase approximately $ 51.2 million principal amount of a portion of the December 2026 Notes. Due to the additional of a substantive conversion feature, the Company determined that the exchange was an extinguishment of debt. The Company measured a $ 2.4 million gain on extinguishment of debt based on the carrying value of the December 2026 Notes, cash paid and related transactions costs on the Consolidated Statements of Operations. On November 20, 2024, in connection with the issuance of the March 2030 Notes, the Company entered into a privately negotiated exchange agreement with certain holders of its December 2026 Notes to repurchase approximately $ 212.0 million principal amount of a portion of the December 2026 Notes. Due to the addition of a substantive conversion feature, the Company determined that the exchange was an extinguishment of debt. The Company measured a $ 10.8 million gain on extinguishment of debt based on the carrying value of the December 2026 Notes, cash paid and related transaction costs on the Consolidated Statements of Operations. In September 2023, the Company entered into privately negotiated exchange agreements with certain holders of its December 2026 Notes. In total, the Company exchanged $ 416.8 million principal amount of December 2026 Notes for an aggregate 31,722,417 shares of Company common stock. Due to the addition of a substantive conversion feature, the Company determined that the exchange was an extinguishment of debt. The Company measured an $ 82.6 million gain on extinguishment of debt based on the carrying value of the December 2026 Notes, the fair value of the Company’s common stock issued in the exchange and related transaction costs on the Consolidated Statements of Operations. The Company is permitted and may seek to repurchase additional notes prior to the maturity date, whether through privately negotiated purchases, open market purchases, or otherwise. F-44 Table of Contents Line of Credit In October of 2024, the Company secured line of credits (collectively, the “Line of credit”), with two counterparties for a total of $ 200.0 million, collateralized by 4,499 bitcoin. The Line of credit, as amended in February 2025, bears interest rates ranging from 10.5 % to 11.5 % per annum and have maturity dates beginning in 2026. The Line of credit automatically renews annually unless otherwise terminated by the Company. As of December 31, 2024, it is the Company’s intent to maintain the amounts outstanding during the next year. The Company drew $ 200.0 million from the Line of credit in October 2024 and concurrently transferred bitcoin to the counterparties as collateral at a fair value of $ 284.8 million. As of December 31, 2024, the outstanding balance on the Line of credit was $ 200.0 million, and 2,997 bitcoin remained collateralized. The following table summarizes the Company’s repayments due on the Convertible Notes and the Line of credit: (in thousands) Year Remaining Payments 2025 $ — 2026 267,492 2027 — 2028 — 2029 — Thereafter 2,225,000 Total $ 2,492,492 NOTE 18 – LEASES As of December 31, 2024 the Company had operating and finance leases primarily for office space, mining facilities and land in the United States. The Company had an arrangement with Applied Digital Corporation for the use of energized cryptocurrency mining facilities under which the Company pays for electricity per megawatt based on usage. The Company has determined that it has embedded operating leases at two of the facilities governed by this arrangement that commenced in January and March 2023, and has elected not to separate lease and non-lease components. Payment for these two operating leases are entirely variable and are based on usage of electricity, and expensed as incurred. The Company has amortized the ROU assets totaling $ 0.8 million and $ 0.3 million for the year ended December 31, 2024 and 2023, respectively. F-45 Table of Contents The following table presents the assets and liabilities related to the Company’s operating and finance leases as of December 31, 2024 and 2023: (in thousands) December 31, 2024 December 31, 2023 Assets Balance Sheet Classification Operating lease ROU assets Operating lease right-of-use assets $ 16,874 $ 443 Finance lease ROU assets Property and equipment, net 2,877 — Total ROU assets $ 19,751 $ 443 Liabilities Current portion: Operating lease liabilities Operating lease liabilities, current portion $ 239 $ 124 Finance lease liability Finance lease liability, current portion 168 — Long-term portion: Operating lease liabilities Operating lease liabilities, net of current portion 22,977 354 Finance lease liability Finance lease liability, net of current portion 3,709 — Total lease liabilities $ 27,093 $ 478 Lease costs are recorded on a straight-line basis within operating expenses. The Company’s total lease expenses are comprised of the following: For the Year Ended December 31, (in thousands) 2024 2023 2022 Lease costs: Operating lease cost $ 838 $ 315 $ 327 Finance lease cost: Amortization of ROU asset (1) 22 — — Short-term lease rent expense 59 36 29 Variable lease cost 107,420 80,108 — Total rent expense $ 108,339 $ 80,459 $ 356 (1) Amortization of finance lease ROU asset is included in “Cost of revenues - depreciation and amortization” on the Consolidated Statements of Operations. F-46 Table of Contents Additional information regarding the Company’s leasing activities is as follows: For the Year Ended December 31, 2024 2023 2022 Operating cash flows from operating leases $ 629 $ ( 32 ) $ 67 Financing cash flows from finance lease $ 163 $ — $ — Weighted-average remaining lease term (in years): Operating leases 9.1 3.2 3.9 Finance lease 96.3 — — Weighted-average discount rate: Operating leases 7.0 % 5.0 % 5.0 % Finance lease 7.2 % — % — % The following table presents the Company’s future minimum lease payments as of December 31, 2024: (in thousands) Year Operating Leases Finance Lease 2025 $ 1,855 $ 168 2026 2,478 173 2027 4,233 178 2028 4,180 183 2029 3,993 189 Thereafter 17,433 88,907 Total 34,172 89,798 Less: Imputed interest ( 10,956 ) ( 85,921 ) Present value of lease liability $ 23,216 $ 3,877 NOTE 19 - LEGAL PROCEEDINGS The Company, and its subsidiaries, from time to time may be subject to various claims, lawsuits and legal proceedings that arise from the ordinary course of business. In accordance with ASC 450 - Contingencies , if a loss contingency associated with the following legal matters are probable to be incurred and the amount of loss can be reasonably estimated, an accrual is recorded on the Consolidated Balance Sheets. As of December 31, 2024, the Company has determined that the liabilities associated with certain litigation matters are not expected to have a material impact on the Company’s Financial Statements. The Company will continue to monitor each related legal issue and adjust accruals as new information and developments occur. Compute North Bankruptcy On September 22, 2022, Compute North Holdings, Inc. (currently d/b/a Mining Project Wind Down Holdings, Inc.) and certain of its affiliates (collectively, “Compute North”) filed for chapter 11 bankruptcy protection. Compute North provided operating services to the Company and hosted its mining rigs at multiple facilities. The Company delivered miners to Compute North, which then installed the mining rigs at those facilities, operated and maintained the mining rigs, and provided energy to keep the miners operating. During the course of the chapter 11 cases, F-47 Table of Contents Compute North sold substantially all of their assets in a series of 363 sale transactions, including Compute North’s ownership interests in non-debtor entities that own or partially own facilities that house the Company’s miners. On November 23, 2022, the Company and certain of its affiliates timely filed proofs of claim asserting various claims against Compute North, including: (i) claims arising under hosting agreements between the Company and Compute North LLC; (ii) claims arising under that certain Senior Promissory Note, dated as of July 1, 2022, by and between the Company, as Lender, and Compute North LLC, as Borrower; (iii) claims arising from the breach of a letter of intent between us and Compute North LLC; and (iv) claims for daily lost revenue, profits and other damages against Compute North. On February 9, 2023, the Bankruptcy Court approved a settlement stipulation between the Company and Compute North, pursuant to which the proofs of claim filed by the Company and certain of its affiliates were resolved, and the Company received a single allowed unsecured claim against Compute North LLC in the amount of $ 40.0 million and its Preferred Equity Interests in Compute North Holdings, Inc. in the amount of 39,597 shares of Series C Preferred Stock was confirmed. In exchange, the Company agreed to vote in favor of Compute North’s chapter 11 plan. On February 16, 2023, the Bankruptcy Court confirmed Compute North’s chapter 11 plan (the “Plan”), pursuant to which Compute North will liquidate its remaining assets and distribute proceeds arising therefrom in accordance with the waterfall set forth in the Plan. In its disclosure statement filed on December 19, 2022, the Compute North Debtors projected that holders of allowed general unsecured claims could recover anywhere between 8 % to 65 % on their claims, while holders of preferred equity interests are expected to recover nothing on their interests. The Plan became effective on March 31, 2023. At this time, the Company cannot predict the quantum of its potential recovery on account of its allowed general unsecured claim and preferred equity interests or the timing of when it would receive any distributions under the Plan on account of its claims and interests. Moreno v. Marathon On March 30, 2023, a putative class action complaint was filed in the United States District Court for the District of Nevada, against the Company and present and former senior management, alleging claims under Section 10(b) and 20(a) of the Exchange Act arising out of the Company’s announcement of accounting restatements on February 28, 2023. On March 29, 2024, the court appointed lead plaintiffs and counsel. On June 4, 2024, lead plaintiffs filed an amended class action complaint, styled as Langer et al. v. Marathon et al . The allegations in the amended class action complaint are substantially similar to those in the March 30, 2023 putative class action complaint. On August 5, 2024, the defendants moved to dismiss the amended class action complaint. On December 6, 2024, the motion to dismiss the amended class action complaint was fully briefed. On March 3, 2025, the United States District Court for the District of Nevada will hear the Company’s motion to dismiss the second amended class action complaint. Derivative Complaints On June 22, 2023, a shareholder derivative complaint was filed in the Circuit Court of the 17th Judicial Circuit for Broward County, Florida, against current members of the Company’s Board and senior management, alleging claims for breach of fiduciary duty and unjust enrichment based on allegations substantially similar to the allegations in the March 30, 2023 putative class action complaint in Moreno . On July 8, 2023, a second shareholder derivative complaint was filed in the United States District Court for the District of Nevada, against current and former members of the Company’s Board and senior management, alleging claims under Sections 14(a), 10(b), and 21D of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and for breach of fiduciary duty, unjust enrichment, and waste of corporate assets, based on allegations substantially similar to the allegations in the March 30, 2023 putative class action complaint in Moreno . On July 12, 2023, a third shareholder derivative complaint was filed in the United States District Court for the District of Nevada, against current and former members of the Company’s Board and senior management, alleging claims under Section 14(a) of the Exchange Act and for breach of fiduciary duty, based on allegations substantially similar to the allegations in the March 30, 2023 putative class action complaint in Moreno . F-48 Table of Contents On July 13, 2023, a fourth shareholder derivative complaint was filed in the Circuit Court of the 17th Judicial Circuit for Broward County, Florida (together with the complaint filed on June 22, 2023, the “Florida Derivative Actions”), against current members of the Company’s Board and senior management, alleging claims for breach of fiduciary duty, unjust enrichment, and waste of corporate assets, based on allegations substantially similar to the allegations in the March 30, 2023 putative class action complaint in Moreno . On August 14, 2023, the two derivative actions pending in the United States District Court for the District of Nevada were consolidated (the “Nevada Derivative Action”). On April 1, 2024, the United States District Court for the District of Nevada appointed co-lead counsel for plaintiffs in the Nevada Derivative Action. On June 25, 2024, plaintiffs filed an amended consolidated complaint alleging breaches of fiduciary duties, unjust enrichment, waste of corporate assets, claims under Section 14(a) of the Exchange Act, and for contribution under Sections 10(b) and 21D of the Exchange Act. On August 9, 2024, the defendants moved to dismiss the amended complaint. On October 16, 2023, the parties to the derivative actions pending in the Circuit Court of the 17th Judicial Circuit for Broward County, Florida filed an agreed order to stay both actions pending completion of the Nevada Derivative Action. On July 25, 2024, the Florida Derivative Actions were administratively closed. On November 7, 2024, the motion to dismiss the amended complaint was fully briefed. On February 20, 2025, the United States District Court for the District of Nevada heard the Company’s motion to dismiss the amended complaint and, while granting the Company motion to dismiss, the court also granted the plaintiff thirty days to amend its complaint to avoid a permanent dismissal. Information Subpoena On October 6, 2020, the Company entered into a series of agreements with multiple parties to design and build a data center for up to 100 -megawatts in Hardin, Montana. In conjunction therewith, the Company filed a Current Report on Form 8-K on October 13, 2020 disclosing that, pursuant to a Data Facility Services Agreement, the Company issued 6,000,000 shares of restricted common stock, in transactions exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended. During the quarter ended September 30, 2021, the Company and certain of its executives received a subpoena to produce documents and communications concerning the Hardin, Montana data center facility. The Company received an additional subpoena from the SEC on April 10, 2023, relating to, among other things, transactions with related parties. The Company understands that the SEC may be investigating whether or not there may have been any violations of the federal securities law. The Company is cooperating with the SEC. Ho v. Marathon On January 14, 2021, plaintiff Michael Ho (“Ho”) filed a civil complaint (the “Complaint”) in which he alleged, among other things, that the Company breached the terms of a non-disclosure agreement, profited from commercially sensitive information he shared with the Company, and refused to compensate him for his role in securing the Company’s acquisition of an energy supplier. The Complaint initially alleged six causes of action: (1) breach of written contract, (2) breach of implied contract, (3) quasi-contract, (4) services rendered, (5) intentional interference with prospective economic relations, and (6) negligent interference with prospective economic relations. On February 22, 2021, the Company responded to the Complaint with a general denial of the claims and asserted certain affirmative defenses. On February 25, 2021, the Company removed the action to the United States District Court in the Central District of California (the “Court”). The Company subsequently filed a motion for summary judgment with respect to each of the causes of action. As a result of the Court’s summary judgment ruling and Ho’s voluntary dismissal of certain claims, the only remaining cause of action at the time of verdict was breach of written contract. On July 8, 2024, the Court commenced a jury trial with respect to the sole remaining claim. On July 18, 2024, the jury determined that the Company had breached the non-disclosure agreement and returned a verdict in the amount of $ 138.8 million. On September 18, 2024, the Court entered a judgment of the same amount, plus post-judgment interest. The Company has not paid any portion of the award. On October 16, 2024, the Company filed a renewed motion for judgment as a matter of law (or in the alternative for a new trial and remittitur), which seeks to overturn, or at a minimum significantly reduce, the damage award. Also on October 16, 2024, the Company filed a motion to correct the post-judgment interest rate set forth in the judgment, and Ho filed a motion requesting an award of pre-judgment interest. In the fourth quarter of 2024, the Company acquired a surety bond for the amount owing. The F-49 Table of Contents Company intends to defend its positions vigorously and assert its various legal arguments to challenge both the verdict and the amount of the award. The Court has scheduled a hearing on March 28, 2025 related to the aforementioned motions filed by the Company and Ho. NOTE 20 - RELATED PARTY TRANSACTIONS Parties are considered related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. During September 2023, the Company entered into an agreement with Auradine to secure certain rights to future purchases by the Company from Auradine for which the Company paid $ 15.0 million. During the third quarter of 2024, the Company purchased additional shares of Auradine preferred stock with a purchase price of $ 0.8 million, bringing the Company’s total investment holdings in Auradine to $ 50.7 million based upon previous purchases of additional preferred stock and a SAFE instrument. In addition, during the year ended December 31, 2024, the Company made advances of $ 84.5 million for future purchases. As of December 31, 2024 total advances to Auradine, net of property and equipment placed into service, was $ 40.7 million. The Company holds one seat on Auradine’s Board of Directors. F-50 Table of Contents NOTE 21 – SUPPLEMENTAL CONSOLIDATED FINANCIAL INFORMATION The following table provides supplemental disclosure of Consolidated Statements of Cash Flows information: Year Ended December 31, 2024 2023 2022 Cash and cash equivalents $ 391,771 $ 357,313 $ 103,705 Restricted cash 12,000 — 8,800 Total cash, cash equivalents and restricted cash $ 403,771 $ 357,313 $ 112,505 Supplemental information: Cash paid during the year for: Cash paid for income taxes $ 1,148 $ 723 $ 7 Cash paid for interest 678 7,392 11,432 Supplemental schedule of non-cash investing and financing activities: Series A Preferred Stock accretion to redemption value $ — $ 2,121 $ — Operating lease assets obtained in exchange for new operating lease liabilities — — 1,539 Collection of loan denominated in Bitcoin — — 27,784 Digital assets transferred to digital assets - receivable, net 668,640 — 137,844 Reclassifications from advances to vendor to property and equipment upon receipt of equipment 784,155 551,418 337,485 Reclassifications from advances to vendor to other assets 4,016 — — Common stock issued for service and license agreements — — 4,577 Exchange of convertible notes for common stock — 318,771 — Dividends received from equity method investment 29,715 2,161 — NOTE 22 – SUBSEQUENT EVENTS On January 8, 2025, the Company designated 13 million shares of its undesignated preferred stock as Series X Preferred Stock, par value $ 0.0001 per share (the “Series X Preferred Stock”), and issued all 13 million shares of the Series X Preferred Stock to the Company’s lead independent director, in a private placement, for an aggregate purchase price of $ 1,300 , and cancelled on February 21, 2025. On February 19, 2025, the Company held a special meeting of stockholders that approved an amendment to our Restated Article of Incorporation to increase the number of shares of common stock authorized from 500,000,000 shares to 800,000,000 shares. On February 14, 2025, the Company completed an acquisition with Great Plains Wind Park Holdings, LLC, pursuant to which the Company acquired a wind farm located in Hansford County, Texas with 114 megawatts of nameplate wind capacity for a $ 50.0 million cash consideration, subject to customary working capital adjustments. Subsequent to December 31, 2024, the Company issued an aggregate 5,428,548 shares of common stock under the 2024 ATM, concluding the offering. F-51 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.