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Item 1. Financial Statements

2025-05-08 compared with 2024-11-12 · 458 added, 461 removed, 592 unchanged (61% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, December 31,

March 31, December 31,

(in thousands, except share and per share data) (unaudited)

2 unchanged sentences

Restricted cash 12,000 12,000

Digital assets 17,099 639,660

Accounts receivable, net 2,792 —

Digital assets, current portion

Other receivables

Deposits 22,744 18,778

Derivative instrument, current portion 21,072 1,542

Prepaid expenses and other current assets 28,069 35,610

Total current assets 291,826 470,373

Digital assets

Digital assets, net of current portion

2,745,302 3,223,989

Digital assets - receivable, net

1,164,189 960,057

Property and equipment, net 1,566,069 1,549,491

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Operating lease right-of-use assets 27,335 16,874

Derivative instrument, net of current portion 14,703 7,405

Goodwill 82,751 82,751

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TOTAL ASSETS $ 6,444,446 $ 6,801,317

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES AND EQUITY

Current liabilities:

1 unchanged sentence

Accrued expenses 45,750 76,887

Derivative instrument, current portion 6,276 —

Line of credit, current portion 300,000 —

Operating lease liabilities, current portion 872 239

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Total current liabilities 368,370 95,197

Long-term liabilities:

See accompanying notes to the Condensed Consolidated Financial Statements

Notes payable 2,248,549 2,246,578

Derivative instrument, net of current portion

Line of credit, net of current portion 50,000 200,000

Operating lease liabilities, net of current portion 33,298 22,977

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Total long-term liabilities 2,347,396 2,570,178

See accompanying notes to the Condensed Consolidated Financial Statements

Commitments and Contingencies (Note 16)

Stockholders’ Equity:

Preferred stock, par value $ 0.0001 per share, 50,000,000 shares authorized;

no shares issued and outstanding at September 30, 2024 and December 31, 2023

no shares issued and outstanding at March 31, 2025 and December 31, 2024

Common stock, par value $ 0.0001 per share, 800,000,000 shares authorized;

304,912,746 shares and 242,829,391 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

346,279,403 shares and 340,258,453 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital 4,284,279 4,155,386

Accumulated deficit ( 559,586 ) ( 26,387 )

Total stockholders’ equity 2,855,593 1,615,921

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 3,580,149 $ 1,990,973

Total stockholders’ equity attributable to MARA 3,724,727 4,129,033

Noncontrolling interest 3,953 6,909

3,728,680 4,135,942

TOTAL LIABILITIES AND EQUITY

$ 6,444,446 $ 6,801,317

See accompanying notes to the Condensed Consolidated Financial Statements

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands, except share and per share data) 2025 2024

Total revenues $ 131,647 $ 97,849 $ 441,984 $ 230,740

Costs and expenses

Cost of revenues

Mining and hosting services

Revenues $ 213,884 $ 165,198

Costs and operating expenses (income)

Purchased energy costs 43,481 6,088

Third party hosting and other energy costs

68,183 69,566

Operating and maintenance costs 19,794 15,814

General and administrative 85,865 68,906

Depreciation and amortization 157,897 81,602

Total cost of revenues ( 198,663 ) ( 113,176 ) ( 548,564 ) ( 256,783 )

Operating expenses

General and administrative expenses ( 63,725 ) ( 19,428 ) ( 194,154 ) ( 54,404 )

Change in fair value of digital assets 394,162 ( 488,807 )

Change in fair value of derivative instrument ( 26,828 ) 15,252

( 58,234 ) — ( 35,235 ) —

Research and development

( 2,813 ) ( 713 ) ( 9,124 ) ( 1,573 )

Taxes other than on income 3,095 2,510

Early termination expenses — 22,097

Research and development 9,298 2,466

Total costs and operating expenses (income)

754,947 ( 204,506 )

Amortization of intangible assets ( 219 ) — ( 22,658 ) —

Total operating expenses ( 105,207 ) ( 64,833 ) 71,664 61,891

Operating income (loss)

( 541,063 ) 369,704

Gain (loss) on investments

( 1,000 ) — 4,236 —

Loss on hedge instruments

— — ( 2,292 ) —

Equity in net earnings of unconsolidated affiliate ( 2,133 ) ( 647 ) ( 825 ) ( 647 )

Net gain from extinguishment of debt

Other income (loss)

Change in fair value of digital assets - receivable, net

( 116,067 ) —

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Interest expense ( 9,941 ) ( 1,256 )

Other non-operating income (loss)

Equity in net earnings of unconsolidated affiliate ( 13 ) 1,259

Other 2,474 2,944

Total other income (loss)

( 111,552 ) 5,520

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$ ( 533,443 ) $ 337,173

Series A preferred stock accretion to redemption value

— — — ( 2,121 )

net loss attributable to noncontrolling interest

Net income (loss) attributable to common stockholders

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AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Three Months Ended September 30, 2024

Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders’ Equity

(in thousands, except share data) Number Amount

Balance at June 30, 2024 287,046,579 $ 28 $ 3,072,753 $ ( 430,126 ) $ 2,642,655

Stock-based compensation, net of tax withholding 859,452 — 22,818 — 22,818

Issuance of common stock, net of offering costs 17,313,059 2 320,759 — 320,761

Repurchase of shares in settlement of restricted stock ( 306,344 ) — ( 5,852 ) — ( 5,852 )

Net loss — — — ( 124,789 ) ( 124,789 )

Balance at September 30, 2024 304,912,746 $ 30 $ 3,410,478 $ ( 554,915 ) $ 2,855,593

For the Nine Months Ended September 30, 2024

Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders’ Equity

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

For the Three Months Ended March 31, 2025

Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders’ Equity Noncontrolling Interest

(in thousands, except share data) Number Amount

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Repurchase of shares in settlement of restricted stock ( 1,148,688 ) — ( 20,362 ) — ( 20,362 ) — ( 20,362 )

Net income — — — 12,725 12,725

Balance at September 30, 2024 304,912,746 $ 30 $ 3,410,478 $ ( 554,915 ) $ 2,855,593

See accompanying notes to the Condensed Consolidated Financial Statements

For the Three Months Ended September 30, 2023

Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders’ Equity

(in thousands, except share data) Number Amount

Balance at June 30, 2023 174,209,038 $ 17 $ 1,461,188 $ ( 719,121 ) $ 742,084

Stock-based compensation, net of tax withholding 70,963 — 5,598 — 5,598

Issuance of common stock, net of offering costs 4,182,300 1 36,950 — 36,951

Exchange of convertible notes for common stock 31,722,417 3 318,768 — 318,771

Distribution to noncontrolling interest — — — — — ( 2,712 ) ( 2,712 )

Net loss — — — ( 533,199 ) ( 533,199 ) ( 244 ) ( 533,443 )

Balance at September 30, 2023 210,184,718 $ 21 $ 1,822,504 $ ( 719,511 ) $ 1,103,014

For the Nine Months Ended September 30, 2023

Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders’ Equity

Balance at March 31, 2025 346,279,403 $ 34 $ 4,284,279 $ ( 559,586 ) $ 3,724,727 $ 3,953 $ 3,728,680

For the Three Months Ended March 31, 2024

Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders’ Equity Noncontrolling Interest

(in thousands, except share data) Number Amount

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Issuance of common stock, net of offering costs 24,663,351 3 489,290 — 489,293 — 489,293

Series A Preferred Stock accretion to redemption value — — ( 2,121 ) — ( 2,121 )

Exchange of convertible notes for common stock 31,722,417 3 318,768 — 318,771

Cumulative effect of the adoption of ASU 2023-08

— — — 11,483 11,483

Repurchase of shares in settlement of restricted stock ( 861,338 ) — ( 16,535 ) — ( 16,535 ) — ( 16,535 )

Net income — — — 337,173 337,173 — 337,173

Balance at September 30, 2023 210,184,718 $ 21 $ 1,822,504 $ ( 719,511 ) $ 1,103,014

Balance at March 31, 2024 268,944,172 $ 27 $ 2,707,333 $ ( 230,467 ) $ 2,476,893 $ — $ 2,476,893

See accompanying notes to the Condensed Consolidated Financial Statements

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2025 2024

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)

$ ( 533,443 ) $ 337,173

Adjustments to reconcile net income to net cash used in operating activities:

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Depreciation and amortization 157,897 81,602

1 unchanged sentence

( 112,115 ) 37,556

Change in fair value of digital assets ( 370,896 ) ( 117,868 )

Gain on investments

Loss on hedge instruments

Change in fair value of digital assets and digital assets - receivable, net

510,229 ( 488,807 )

Net gain on investments

( 12,429 ) ( 2,944 )

Stock-based compensation 49,115 51,913

Change in fair value of derivative instrument

( 26,828 ) 15,252

Early termination expenses

Amortization of intangible assets 22,658 —

Amortization of debt issuance costs 1,434 2,780

Equity in net earnings of unconsolidated affiliate 13 ( 1,259 )

Gain on extinguishment of debt, net

Other adjustments from operations, net 2,303 4,098

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Acquisition, net of cash acquired

Loan receivable ( 178 ) —

( 36,344 ) ( 183,815 )

Deposits for acquisitions

Purchase of property and equipment ( 38,856 ) ( 9,088 )

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Proceeds from issuance of common stock, net of issuance costs 100,140 489,293

Proceeds from issuance of Series A preferred stock, net of issuance costs

Proceeds from issuance of convertible debt, net of issuance costs 291,595 —

Redemption of Series A preferred stock

Repurchase of shares in settlement of restricted stock ( 20,362 ) ( 16,535 )

Repayments of finance lease liabilities ( 163 ) —

Repayment of term loan borrowings — ( 50,000 )

Value of shares withheld for taxes ( 2,677 ) ( 100 )

Line of credit

Cash paid for shares withheld for taxes

Net cash provided by financing activities

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MARA Holdings, Inc.

(together with its subsidiaries, the “Company” or “MARA”) is a global leader in 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.

Bitcoin is seeing increasing adoption, and due to its limited supply, the Company believes it offers opportunity for appreciation in value and long-term growth prospects for its business.

(together with its subsidiaries, the “Company” or “MARA”) is a vertically integrated digital energy and infrastructure company that leverages high-intensity compute, such as bitcoin mining, to monetize excess energy and optimize power management.

The Company also offers advanced technology solutions to optimize data center operations, including next-generation liquid immersion cooling systems.

The Company is primarily focused on computing for, acquiring, and holding bitcoin 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 token, bitcoin.

The term “bitcoin” with a lower case “b” is used to denote the digital asset, bitcoin.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its wholly owned and controlled subsidiaries.

Intercompany balances and transactions have been eliminated in consolidation.

All significant intercompany accounts and transactions, including any noncontrolling interest, have been eliminated in consolidation.

The Company has prepared the Condensed Consolidated Financial Statements in accordance with generally accepted accounting principles in the United States (“GAAP”) and regulations of the U.S.

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The results of operations for the interim periods are not necessarily indicative of the results to be expected for any future fiscal periods in 2025 or for the full year ending December 31, 2025.

These financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 28, 2024, as amended by Amendment No.

1 on Form 10-K/A (the “Annual Report”), filed with the SEC on May 24, 2024.

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, valuation of derivative instruments, deferred income taxes, unrealized tax positions, and measurement of digital assets.

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

Effective the first quarter of 2025, the Company made certain changes to the presentation of its Condensed Consolidated Statements of Operations to provide greater transparency and improve the usefulness of its financial reporting.

Specifically, the Company disaggregated cost of revenue and certain operating expenses into the following new line items:

“Purchased energy costs,” “Third party hosting and other energy costs” and “Operating and maintenance costs.” In addition, cost of depreciation and amortization and amortization of intangibles have been aggregated into a single line item titled “Depreciation and amortization.” The Company also began separately

presenting expenses related to “Taxes other than on income,” which were previously included within general and administrative expenses.

These changes are intended to provide more meaningful information regarding the nature of the Company’s operating expenses and to align the presentation with the evolving nature of the Company’s operations.

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 a measure 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 operating costs, general and administrative and research and development expenses.

Cash and Cash Equivalents

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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 September 30, 2024, substantially all of the Company’s cash and cash equivalents were FDIC insured.

As of March 31, 2025, substantially all of the Company’s cash and cash equivalents were FDIC insured.

Restricted Cash

Restricted cash as of September 30, 2024 principally represented those cash balances that support commercial letters of credit and are restricted from withdrawal.

Restricted cash as of March 31, 2025 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.

In 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 Condensed 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 Condensed Consolidated Balance Sheets.

Other digital assets are held with the intent to fund operating expenses are included in current assets on the Condensed Consolidated Balance Sheets.

In addition, digital assets loaned and collateralized were reported as “Digital assets - receivable, net” and classified as long-term assets on the Condensed 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 Condensed 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 Condensed 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.

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 on the Condensed Consolidated Statements of Operations, in accordance with ASC 350-60 - Intangibles - Goodwill and Other - Crypto Assets (“ASC 350-60”).

The Company tracks its cost basis of digital assets in accordance with the first-in-first-out method of accounting.

Refer to Note 5 – Digital Assets, for further information.

Accounts Receivable

The Company acquired accounts receivable as a result of its acquisition of GC Data Center Equity Holdings, LLC on January 12, 2024, which consist of trade receivables.

Digital Assets - Receivable, net

The Company lends digital assets to counterparties under fixed term loans.

In addition, the Company has pledged bitcoin as collateral for a line of credit.

Digital asset receivables that do not have a prespecified maturity date are

repayable at the Company’s option, subject to notice between three and 35 business days.

A borrower may elect to repay at any time, without incurring any 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 are recognized on the Condensed Consolidated Statements of Operations, in accordance with ASC 350-60.

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 .

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” on the Condensed Consolidated Statements of Operations.

Refer to Note 6 – Digital Assets - Receivable, Net for further information.

Other Receivable

The Company acquired accounts receivable as a result of its acquisition of GC Data Center Equity Holdings, LLC on January 12, 2024 (the “GC Data Center Acquisition”), 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 $ 8.3 million as of September 30, 2024.

In addition to owned and operated sites, the Company contracts with other 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 arrangements typically require advance payments to vendors pursuant to the contractual obligations associated with these services.

The Company classifies these payments as “Deposits” or “Long-term deposits” on the Condensed Consolidated Balance Sheets.

The allowance for credit losses was $ 8.6 million as of March 31, 2025.

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 September 30, 2024 and December 31, 2023.

There were no embedded derivatives requiring separation from the host instrument as of March 31, 2025 and December 31, 2024.

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 Condensed 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.

The Company classifies derivative assets or liabilities on the Condensed 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 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 nine months ended September 30, 2024, the Company recorded a $ 2.3 million loss on derivatives as a non-operating charge on the Condensed Consolidated Statements of Operations, all settled through cash payments.

There were no derivative instruments to mitigate bitcoin market pricing volatility risk outstanding as of September 30, 2024 and December 31, 2023.

During the three months ended March 31, 2025, the Company recorded a $ 7.7 million loss on derivatives as a non-operating expense on the Condensed Consolidated Statements of Operations, settled through bitcoin.

There were no derivative instruments outstanding as of March 31, 2025, and various derivative instruments to mitigate bitcoin market pricing volatility risk outstanding as of December 31, 2024.

Energy Derivatives

The Company acquired a commodity swap contract as a result of its acquisition of GC Data Center Equity Holdings, LLC on January 12, 2024, refer to Note 3 - Acquisitions, for further information.

The Company acquired a commodity swap contract as a result of the 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 September 30, 2024, the estimated fair value of the Company’s derivative liability instrument was $ 24.2 million, estimated using observable market-based inputs classified under Level 2 of the fair value hierarchy.

The commodity swap contract meets the definition of a derivative due to terms that provide for net settlement.

As of March 31, 2025, the estimated fair value of the Company’s derivative asset instrument was $ 35.8 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.

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Balance at December 31, 2024

Commodity swap contract 10,989

Change in fair value of derivative instrument

Balance at September 30, 2024

Balance at March 31, 2025

Property and Equipment

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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.

Investments, which may be made from time-to-time for strategic reasons, are included in non-current assets on the Condensed 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 (“ASC 321”).

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.

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 Condensed Consolidated Statements of Operations.

For leases with terms longer than 12 months, a lease liability is recorded on the Company’s Condensed 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 15 – Leases, for further information.

Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination.

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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.

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 Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805 - Business Combinations (“ASC 805”), 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).

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.

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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 contingent consideration period-over-period are recognized in earnings.

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.

Investments, which may be made from time-to-time for strategic reasons, are included in non-current assets on the Condensed Consolidated Balance Sheets.

Refer to Note 8 - Investments, for further information.

Equity Method Investments

Other Investments

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.

The Company recognizes revenue under ASC 606 – Revenue from Contracts with Customers (“ASC 606”).

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.

Purchased Energy Costs

The Company defines purchased energy costs as the amount paid to power providers for power consumed related to the Company’s owned bitcoin mining operations.

Third Party Hosting and Other Energy Costs

The Company considers third party hosting and other energy costs as power expenses paid to power providers for power consumed related to third party hosted bitcoin mining operations, as well as other digital asset mining operation energy costs.

As of March 31, 2025, the Company have third party hosting agreements extending through 2028, refer to Note 16 – Commitments and Contingencies, for further information.

Stock-based Compensation

The Company expenses stock-based compensation to employees and non-employees over the requisite service period based on the grant date fair value of the awards.

Refer to Note 12 – Stockholders' Equity, for further information.

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 grant date fair value of awards with market-based conditions is determined using the Monte Carlo simulation model.

Restricted stock units represent the right to receive a certain number of shares of the Company’s common stock, with vesting subject to a service requirement.

Performance-based stock units represent the right to receive a number of shares of the Company’s common stock based on the achievement of performance-based measures or market-based conditions, with vesting subject to a service requirement.

At each reporting date, the Company reassesses the level of expected achievement of performance-based measures and records any resulting cumulative adjustment in the period of reassessment.

The Company accounts for forfeitures as they occur, rather than estimated expected forfeitures at the grant date, resulting in a true-up of expense to reflect actual vesting outcomes.

Refer to Note 13 – Stock-based Compensation, for further information.

Impairment of Long-lived Assets

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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.

The Company recognizes revenue under ASC 606 – Revenue from Contracts with Customers .

Refer to Note 4 – Revenues, for further information.

Research and Development

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Research and development costs are expensed as incurred in accordance with ASC 730 - Research and Development and are included in operating expenses on the Condensed Consolidated Statements of Operations.

Research and development costs were $ 2.8 million and $ 9.1 million for the three and nine months ended September 30, 2024, respectively, and $ 0.7 million and $ 1.6 million for the three and nine months ended September 30, 2023, respectively.

Research and development costs were $ 9.3 million and $ 2.5 million, for the three months ended March 31, 2025 and 2024 respectively.

Effective Tax Rate

The effective tax rate (“ETR”) from continuing operations was 28.26 % and 142.36 % for the three and nine months ended September 30, 2024, respectively, and 23.03 % and 0.32 % for the three and nine months ended September 30, 2023, respectively.

Our effective tax rate (“ETR”) from continuing operations was 18.26 % and 10.14 % for the three months ended March 31, 2025 and 2024, respectively.

The difference between the U.S.

statutory tax rate of 21% was primarily due to the change in valuation allowance as a result of current year activity.

During the nine months ended September 30, 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 released its valuation allowance associated with deferred tax assets and recognized a corresponding benefit from income taxes on the Condensed Consolidated Statements of Operations.

The Company’s conclusion regarding the realizability of such deferred tax assets was based on the scheduled reversal of deferred tax liabilities.

statutory tax rate of 21% was primarily due to non-deductible officer compensation, which represents a permanent difference that reduces the overall tax benefit.

During the three months ended March 31, 2025, 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 the Company continues to be in a three year cumulative income position.

Income Tax in Interim Periods

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Adjustments to the estimated annual effective income tax rate are recognized in the period when such estimates are revised.

Uncertainties

Uncertain Tax Positions

The Company files federal and state income tax returns.

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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 Condensed Consolidated Financial Statements and assures that there are proper controls in place to ascertain that the Company’s Condensed Consolidated Financial Statements properly reflect the change.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

In March 2025, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2025-02, Liabilities (405):

Amendments to SEC Paragraph Pursuant to SEC Staff Accounting Bulletin No.

ASU 2025-02 amends the Accounting Standard Codification to remove the text of SEC Staff Accounting Bulletin (“SAB”) 121, as rescinded by SAB 122.

The new standard is effective immediately and is not expected to have a material impact on the Company’s Condensed Consolidated Financial Statements.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

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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 is currently evaluating the impact of adopting the standard.

The Company has concluded that it will adopt the standard prospectively on the Consolidated Financial Statements to be included in the Annual Report on Form 10-K for the year ending December 31, 2025.

The Company is currently evaluating the impact of the new requirement for its income tax disclosure.

NOTE 3 – ACQUISITIONS

APLD - Rattlesnake Den I, LLC 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

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 .

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

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

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.

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.

GC Data Center Equity Holdings, LLC 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 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 Wind Farm ( Hansford County, Texas )

On February 14, 2025, the Company acquired a wind farm located in Hansford County, Texas with 240 megawatts of interconnection capacity, with 114 megawatts of nameplate wind capacity from Great Plains Wind Park Holdings, LLC (the “Wind Farm”) for a total consideration of $ 49.2 million, including transaction costs and contingent consideration.

The primary assets acquired were property and equipment of $ 48.2 million and $ 1.0 million related to working capital.

In addition, the Company recorded a $ 10.9 million ROU asset and corresponding lease liability and a $ 3.3 million asset retirement obligation and offsetting liability, recognized in property and equipment and other long-term liabilities, respectively.

The acquisition was accounted for as an asset acquisition that did not meet the definition of a business.

The total consideration was allocated based on the relative fair values of the assets acquired and liabilities assumed, and no goodwill was recognized.

This acquisition is intended to convert underutilized sustainable resources into economic value, achieve low energy cost, and enable broader renewable energy development.

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 in 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.

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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 .

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:

The acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805.

The following table summarizes the 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

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The gross contractual amounts receivable were $ 24.0 million, of which $ 3.6 million is expected to be uncollectible.

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.

During the three months ended March 31, 2024, the Company terminated various customer agreements and recognized an $ 22.1 million charge recorded to “Early termination expenses” on the Condensed Consolidated Statements of Operations.

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.

Changes to the fair value of assets and liabilities are recorded on the Condensed Consolidated Statements of Operations .

The following table presents the changes in the estimated fair value of the GC Data Center Equity Holdings, LLC contingent consideration liability:

(in thousands)

Balance at December 31, 2023

Contingent consideration liability 3,523

Change in fair value of contingent earn-out ( 38 )

Balance at September 30, 2024

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.

Intangible assets were determined to meet the criterion for recognition apart from tangible assets acquired and liabilities assumed.

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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 September 30, 2024, the Company fully amortized customer relationships acquired for $ 22.0 million.

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 Condensed Consolidated Statements of Operations as of the acquisition date.

The following table presents unaudited consolidated pro forma results as if the acquisitions of the acquired facilities of the Garden City Acquisition and GC Data Center Equity Holdings, LLC had occurred as of January 1, 2023 for the indicated periods:

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

The following unaudited pro forma financial information reflects the acquisition of GC Data Center Acquisition 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:

Three Months Ended March 31,

(in thousands) 2024

Revenue $ 168,291

Income (loss) before income taxes

( 173,950 ) ( 3,982 ) ( 21,933 ) 75,829

Income before income taxes

Earnings per common share:

Basic $ ( 0.42 ) $ ( 0.03 ) $ 0.03 $ 0.45

Diluted ( 0.42 ) ( 0.03 ) 0.03 0.09

The unaudited pro forma financial information reflects the acquisition of the acquired facilities by the application of pro forma adjustments to the Company’s historical financial statements as if the acquisition had occurred on January 1, 2023.

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.

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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”).

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.

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 two sites as existing customer agreements expire or are terminated early.

Refer to Note 3 - Acquisitions, for further information.

In 2024, the Company acquired multiple operational bitcoin mining sites for the purpose of improving efficiencies and the scale of the Company’s mining operations.

The Company provided 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.

The following table presents the Company’s revenues disaggregated for those arrangements in which the Company is the Operator and Participant:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2025 2024

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Hosting services (1)

341 — 29,777 —

Total revenues from contracts with customers 14,721 43,201

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Total revenues $ 213,884 $ 165,198

(1) Includes revenue beginning January 12, 2024, the date of the GC Data Center Equity Holdings, LLC acquisition.

The Company made a strategic decision to exit hosting services business upon acquisition.

(1) Includes revenue associated with prior year acquisitions.

The Company made a strategic decision to exit hosting services upon acquisitions.

Intercompany transactions have been eliminated in consolidation.

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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.

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 purchased energy costs.

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.

Expenses associated with providing bitcoin transaction verification services, such as hosting fees, electricity costs, and related fees are recorded as purchased energy costs.

Depreciation on digital asset mining equipment is recorded as depreciation and amortization.

Mining Participant

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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 2023, the Company primarily participated in FPPS mining pools and, to a lesser extent, success-based mining pools.

During 2022 and 2021, the Company primarily participated in success-based mining pools and, to a lesser extent, PPS mining pools.

For the three months ended March 31, 2025 and during 2024, the Company participated in FPPS mining pools.

FPPS Mining Pools

The Company primarily participates in mining pools that use the FPPS payout method for the year ended December 31, 2023.

The Company primarily participates in mining pools that use the FPPS payout method for the three months ended March 31, 2025.

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.

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• 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.

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.

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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 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 two bitcoin mining sites, which were acquired on January 12, 2024, that provide hosting services to institutional-scale crypto mining companies.

The Company operates multiple 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.

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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 to self-mining at these two sites as existing customer agreements expire or are terminated early.

As of March 31, 2025, only one customer remains associated with these hosting 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 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.

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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.

Expenses associated with providing hosting services are recorded as third party hosting and other energy costs and depreciation on hosting equipment is recorded as depreciation and amortization.

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 Condensed 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 September 30, 2024 and December 31, 2023, respectively:

The following table presents the Company’s significant digital asset holdings as of March 31, 2025 and December 31, 2024, respectively:

(in thousands, except for quantity) Quantity Cost Basis Fair Value

Bitcoin 33,263 $ 2,403,662 $ 2,745,302

Kaspa 107,891,919 15,171 17,099

Total digital assets held as of September 30, 2024

Bitcoin - receivable (1)

14,269 651,678 1,177,666

Total bitcoin holdings 47,531 3,055,340 3,922,968

Other digital assets

Total digital assets held as of March 31, 2025

$ 3,056,196 $ 3,926,066

(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

The Company earned 95 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 September 30, 2024 and December 31, 2023, respectively.

During the three months ended September 30, 2024, the Company purchased $ 100.0 million of bitcoin using cash on hand and an additional 4,144 bitcoin, or approximately $ 249.0 million, using the net proceeds from the issuance of the 2031 Notes (as defined below).

Refer to Note 14 - Debt, for additional information.

(1) The Company’s bitcoin - receivable holdings include bitcoin lent out in digital asset loan receivable transactions and bitcoin pledged as collateral.

Refer to Note 6 – Digital Assets - Receivable, Net and Note 14 - Debt, for further information.

The Company earned 4 and 51 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 March 31, 2025 and December 31, 2024, respectively.

NOTE 6 – DIGITAL ASSETS - RECEIVABLE, NET

Lending Arrangements

Throughout 2024 , the Company entered into 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.

As of March 31, 2025 and December 31, 2024, a total of 7,377 bitcoin remained loaned to counterparties under these agreements.

Collateralized Digital Assets

As of March 31, 2025, 3,250 bitcoin were collateralized in connection with an additional line of credit of $ 150.0 million.

As of March 31, 2025 and December 31, 2024, the Company had a total of 6,892 and 2,997 bitcoin collateralized, respectively, in connection with lines of credit.

Refer to Note 14 – Debt, for further information.

Digital assets - receivable, net consists of the following:

(in thousands)

March 31, 2025 December 31, 2024

Digital asset receivable - lending

$ 608,856 $ 688,674

Digital asset receivable - collateralized

568,810 279,762

Total digital asset receivable

1,177,666 968,436

Allowance for credit loss

( 13,477 ) ( 8,379 )

Digital assets - receivable, net

$ 1,164,189 $ 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 Condensed 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 lines of credit for a total of $ 350.0 million.

The credit loss is recorded as a valuation account, directly offsetting the digital asset receivables on the Condensed Consolidated Balance Sheets.

Changes to the allowance for credit losses on loans, based on quarterly analyses, are recorded as provision for credit losses within “Other” on the Condensed Consolidated Statements of Operations.

The Company assesses the creditworthiness of its 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 March 31, 2025, the Company recorded a corresponding allowance for credit loss of $ 13.5 million, based on the PD LGD approach.

As of December 31, 2024, the Company had digital asset receivables outstanding and recorded an allowance for credit loss of $ 8.4 million.

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 specific contract and periodically thereafter with final payments due prior to each shipment date.

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 Condensed Consolidated Balance Sheets.

As of September 30, 2024 and December 31, 2023, such advances totaled approximately $ 240.3 million and $ 95.6 million, respectively.

In addition, the Company contracts with other service providers for the hosting of its equipment and operational support in data centers where the Company’s equipment is deployed.

These arrangements also typically require advance payments to be made to vendors in conjunction with the contractual obligations associated with these services.

As of March 31, 2025 and December 31, 2024, such advances totaled approximately $ 134.0 million and $ 121.3 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 Condensed Consolidated Balance Sheets.

As of September 30, 2024 and December 31, 2023, such deposits totaled approximately $ 82.7 million and $ 67.0 million, respectively.

As of March 31, 2025 and December 31, 2024, such deposits totaled approximately $ 263.5 million and $ 259.4 million, respectively.

NOTE 8 – PROPERTY AND EQUIPMENT

The components of property and equipment as of September 30, 2024 and December 31, 2023 are:

(in thousands, except useful life) Useful life (Years) September 30, 2024 December 31, 2023

The components of property and equipment as of March 31, 2025 and December 31, 2024 are:

(in thousands, except useful life) Useful life (Years) March 31, 2025 December 31, 2024

— $ 3,510 $ 3,510

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Containers 10 - 15

111,794 106,784

Equipment 4 - 15

177,200 124,900

Software and hardware 2 3,316 3,316

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(1) Refer to Note 15 – 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 three and nine months ended September 30, 2024 was $ 0.2 million and $ 0.7 million, respectively.

The Company’s depreciation expense related to property and equipment for the three months ended September 30, 2024 and 2023 was $ 101.1 million and $ 53.5 million, respectively.

The Company’s depreciation expense related to property and equipment for the nine months ended September 30, 2024 and 2023 was $ 266.9 million and $ 108.6 million, respectively.

The Company’s asset retirement obligations represent the estimated costs to return a site to its original state.

As of March 31, 2025, the Company recognized an additional asset retirement obligation of $ 3.3 million related to the Wind Farm land lease.

Asset retirement obligations are accreted over the term of the leases.

The Company’s accretion expense related to the asset retirement obligation for the three months ended March 31, 2025 and 2024 was $ 0.3 million and $ 0.2 million, respectively.

The Company’s depreciation expense related to property and equipment for the three months ended March 31, 2025 and 2024 was $ 154.8 million and $ 78.0 million, respectively.

NOTE 9 – INVESTMENTS

As of September 30, 2024 and December 31, 2023, investments totaled approximately $ 154.0 million and $ 106.3 million, respectively.

The following summarizes the Company’s current investments.

The components of investments as of March 31, 2025 and December 31, 2024 are:

(in thousands)

March 31, 2025 December 31, 2024

Equity method investments

$ 51,267 $ 57,447

Other investments

85,947 54,046

Total investments

$ 137,214 $ 111,493

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.

On January 27, 2023, the Company 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 nine months ended September 30, 2024, the Company received a non-monetary dividend in the amount of $ 4.4 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, accordingly, recognized an impairment of $ 4.1 million that reduced the Company’s investment in the ADGM Entity for the nine months ended September 30, 2024.

The Company’s share of net losses was $ 2.1 million and $ 0.8 million for the three and nine months ended September 30, 2024, respectively, and $ 0.6 million for both the three and nine months ended September 30, 2023.

As of September 30, 2024, the Company’s investment in the ADGM Entity was $ 66.9 million and is reflected in “Investments” on the Condensed Consolidated Balance Sheets.

The Company’s share of net loss was nearly zero for the three months ended March 31, 2025, including approximately $ 3.1 million of depreciation and amortization and net income of $ 1.3 million for three months ended March 31, 2024, including approximately $ 2.6 million of depreciation and amortization.

As of March 31, 2025, the Company’s investment in the ADGM Entity was $ 51.3 million and is reflected in “Investments” on the Condensed Consolidated Balance Sheets.

Other Investments

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Investments in Equity Securities

As of September 30, 2024, the total carrying amount of the Company’s investment in Auradine, Inc.

As of March 31, 2025, the total carrying amount of the Company’s investment in Auradine, Inc.

(“Auradine”) preferred stock was $ 85.4 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 Condensed 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 nine months ended September 30, 2024, the Company entered into two SAFE agreements, for a total carrying value of $ 1.4 million.

During the three months ended September 30, 2024, the Company 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.

NOTE 9 – GOODWILL AND INTANGIBLE ASSETS

The components of goodwill as of September 30, 2024 are as follows:

As of September 30, 2024

GC Data Center Equity Holdings, LLC $ 30,852

Garden City Acquisition 14,510

Total goodwill

The Company acquired goodwill from the GC Data Center Equity Holdings, LLC acquisition on January 12, 2024 and the Garden City Acquisition on April 1, 2024, refer to Note 3 – Acquisitions, for further information.

There was no goodwill as of December 31, 2023.

Intangible assets

The following table presents the Company’s intangible assets as of September 30, 2024:

As of September 30, 2024

(in thousands) Cost Accumulated amortization Net

Customer relationships $ 22,000 $ ( 22,000 ) $ —

Intellectual property

2,633 ( 658 ) 1,975

Total intangible assets $ 24,633 $ ( 22,658 ) $ 1,975

In June 2024, the Company fully amortized customer relationships acquired in the GC Data Center Equity Holdings, LLC due to the Company’s strategic decision to exit hosting services business and termination of customer relationships during the period.

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 September 30, 2024:

(in thousands)

2024 (remaining) $ 220

Total $ 1,975

On February 19, 2025, the Company converted $ 1.2 million from its prior Auradine SAFE investment into preferred stock and purchased additional shares of Auradine preferred stock for a purchase price of $ 20.0 million.

The preferred stock purchased on February 19, 2025 was similar to the Company’s other investments in Auradine preferred stock and, as a result, the Company recorded $ 11.9 million as a gain on investment to adjust the carrying value of its investments to an observable price in accordance with the measurement alternative in ASC 321.

In addition, the Company recorded an additional $ 2.7 million gain on investment to adjust the carrying value of its common stock investment in Auradine to an observable price, in accordance with ASC 321.

The gain on investments was recorded to “Other” on the Condensed Consolidated Statements of Operations.

Other Investments

During the three months ended March 31, 2025, the Company wrote off a previous investment of $ 2.3 million, as the Company believed there were indicators the carrying value may not be recoverable.

The loss on investments was recorded to “Other” on the Condensed Consolidated Statements of Operations.

As of March 31, 2025, the Company had no SAFE investments.

As of December 31, 2024, the Company had two SAFE investments with a carrying value of $ 1.4 million.

NOTE 10 – FAIR VALUE MEASUREMENT

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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 Condensed 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 Condensed 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.

The carrying amounts reported on the Condensed Consolidated Balance Sheets for cash and cash equivalents, restricted cash, other receivables, deposits, prepaid expenses and other current assets, advances to vendors, accounts payable and accrued expenses approximate their estimated fair market value based on the short-term maturity of these instruments.

Additionally, the carrying amounts reported on the Condensed Consolidated Balance Sheets for the Company’s 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.

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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 September 30, 2024 and December 31, 2023, respectively:

(in thousands) Total carrying value at September 30, 2024

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 March 31, 2025 and December 31, 2024, respectively:

(in thousands) Total carrying value at March 31, 2025

Quoted prices in active markets

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Digital assets 2,748,400 2,748,400 — —

Digital assets - receivable, net (1)

1,164,189 — 1,164,189 —

Derivative instrument (2)

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Money market funds $ 292,927 $ 292,927 $ — $ —

Treasury Bills 60,541 60,541 — —

Digital assets 3,228,316 3,228,316 — —

Digital assets - receivable, net (1)

960,057 — 960,057 —

Derivative instrument (2)

8,947 — 8,947 —

Contingent consideration liability (3)

8,138 — — 8,138

(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.

Fluctuations 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.

(2) Represents the estimated amount of acquisition-related consideration expected to be paid in the future as of September 30, 2024 for the GC Center Equity Holdings, LLC acquired on January 12, 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 Condensed 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 nine months ended September 30, 2024.

(3) Represents the estimated amount of acquisition-related consideration expected to be paid in the future as of March 31, 2025 for the GC Data Center Acquisition, the Arkon Acquisition and the Wind Farm.

Increases (decreases) in the probability of achieving the milestones could result in significant changes in the fair value of the contingent consideration.

Refer to Note 3 – Acquisitions and Note 16 - Commitments and Contingencies, for further information.

The Company includes money market funds in cash and cash equivalents on the Condensed Consolidated Balance Sheets.

There were no transfers among Levels 1, 2 or 3 during the three months ended March 31, 2025.

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 Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023, respectively, is as follows:

(in thousands) Total carrying value at September 30, 2024

The following tables present information about the Company’s financial instruments that are not recognized at fair value on the Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024, respectively, is as follows:

(in thousands) Total carrying value at March 31, 2025

Quoted prices in active markets

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$ 2,246,578 $ 1,974,398 $ — $ —

There were no transfers among Levels 1, 2 or 3 during the nine months ended September 30, 2024.

As of September 30, 2024 and December 31, 2023 there were no other assets and liabilities measured at fair value on a non-recurring basis.

There were no transfers among Levels 1, 2 or 3 during the three months ended March 31, 2025.

As of March 31, 2025 and December 31, 2024 there were no other assets and liabilities measured at fair value on a non-recurring basis.

NOTE 11 – 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 three and nine months ended September 30, 2024 and 2023, 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.

Basic income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period.

For the three months ended March 31, 2025 and 2024, 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.

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:

Three Months Ended September 30,

Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Warrants 324,375 324,375

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Performance-based restricted stock units (1)

5,614,236 — — —

Convertible Notes (2)

Series A Preferred Stock — 249,066 — 331,145

Total dilutive shares 104,772,093 324,375

(1) Anti-dilutive performance-based restricted stock units are presented at 200 % as the total potential vested shares.

(1) Anti-dilutive performance-based restricted stock units are presented up to 249 % as the total potential vested shares.

Refer to Note 13 - Stock-based Compensation, for further information.

(2) Refer to Note 14 - Debt, for further information.

The following table sets forth the computation of basic and diluted income (loss) per share:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands, except share and per share data) 2025 2024

Basic earnings per share of common stock:

Net income (loss) per share of common stock - basic

Net income (loss) attributable to common stockholders - basic

$ ( 533,199 ) $ 337,173

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Diluted earnings per share of common stock:

Net income (loss) per share of common stock - basic

Net income (loss) attributable to common stockholders - basic

$ ( 533,199 ) $ 337,173

Notes interest expense, net of tax — 985

Gain from extinguishment of debt, net of tax

— ( 62,910 ) — ( 62,910 )

Net income (loss) per share of common stock - diluted

Net income (loss) attributable to common stockholders - diluted

$ ( 533,199 ) $ 338,158

2 unchanged sentences

Restricted stock units — 4,472,357

Performance-based restricted stock units — — 581,258 —

Convertible Notes

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NOTE 12 – STOCKHOLDERS’ EQUITY

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 $ 1,500.0 million.

During the nine months ended September 30, 2024, the Company sold 34,785,661 shares of common stock for an aggregate purchase price of $ 665.7 million, net of offering expenses of $ 7.5 million and $ 17.0 million for the three and nine months ended September 30, 2024, respectively, pursuant to the 2024 ATM.

As a result, the Company had $ 817.2 million aggregate offering price remaining under the 2024 ATM.

On February 19, 2025, 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 800,000,000 with a par value of $ 0.0001 per share.

At-the-Market Offering Agreements

On March 28, 2025, the Company commenced a new at-the-market (“ATM”) offering program, which replaced the 2024 ATM (as defined below), with Barclays Capital Inc., BMO Capital Markets Corp., BTIG, LLC, Cantor Fitzgerald & Co., Guggenheim Securities, LLC, H.C.

Wainwright & Co., LLC and Mizuho Securities USA LLC acting as the sales agents (collectively, the “Agents”) pursuant to an ATM agreement (the “2025 ATM”), under which the Company may offer and sell shares of its common stock from time to time through the Agents having an aggregate offering price of up to $ 2.0 billion.

As of March 31, 2025, the Company has not sold any shares of common stock pursuant to the 2025 ATM.

In February 2024, the Company commenced an ATM offering program pursuant to an ATM agreement (the “2024 ATM”), under which the Company had the right to offer and sell shares of its common stock from time to time having an aggregate offering price of up to $ 1.5 billion.

During the three months ended March 31, 2025, the Company sold 5,428,548 shares of common stock for an aggregate purchase price of $ 100.1 million, net of offering expenses of $ 2.6 million, and concluded the 2024 ATM.

NOTE 13 – 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 September 30, 2024, the Company had an aggregate of 16,525,736 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:

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands) 2024 2023 2024 2023

Performance-based stock awards $ 6,437 $ — $ 11,606 $ —

Service-based stock awards 16,903 5,511 91,979 13,907

Total stock-based compensation $ 23,340 $ 5,511 $ 103,585 $ 13,907

The Company’s Amended and Restated 2018 Equity Incentive Plan (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.

As of March 31, 2025, the Company had an aggregate of 5,585,251 shares of common stock reserved for future issuance under the 2018 Plan.

The Company grants awards to employees under annual long-term incentive plans (“LTIP”) to align the incentive structure to the long-term goals of the Company, promote retention, and promote the achievement of targeted results.

LTIP awards have included service-based RSUs and performance-based restricted stock units (“PSUs”).

PSUs vest subject to the Company’s achievement of defined performance measures and continued employment.

Restricted Stock Units

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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 nine months ended September 30, 2024, is as follows:

A summary of the Company’s service-based RSU activity for the three months ended March 31, 2025, is as follows:

Number of RSUs Weighted Average Grant Date Fair Value

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Vested ( 1,399,765 ) 14.67

Nonvested at September 30, 2024

Nonvested at March 31, 2025

8,869,905 $ 15.33

As of September 30, 2024, there was approximately $ 67.2 million of aggregate unrecognized stock-based compensation related to unvested service-based RSUs that is expected to be recognized over the next 2.7 years.

As of March 31, 2025, there was approximately $ 73.1 million of aggregate unrecognized stock-based compensation related to unvested service-based RSUs that is expected to be recognized over the next 2.6 years.

Performance-based Restricted Stock Units

The Company granted performance-based restricted stock units (“PSUs”) on May 1, 2024 to employees which 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 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.

A summary of the Company’s PSU activity for the nine months ended September 30, 2024, is as follows:

The Company granted PSUs on February 28, 2025 to its employees, and subsequently to new hires, pursuant to the 2025 LTIP.

The PSUs vest based on the achievement of certain performance-based conditions and a market-based

condition, and are further subject to a service condition.

The service periods for these PSUs range from approximately two to four years and will vest as a percentage of the target number of shares between 0 % and 249 %, based on the individual level of achievement of each of the performance-based conditions and the market-based condition.

A summary of the Company’s PSU activity for the three months ended March 31, 2025, is as follows:

Number of PSUs Weighted Average Grant Date Fair Value

Nonvested at December 31, 2024

2,260,612 $ 49.05

Granted 3,607,080 16.17

Nonvested at September 30, 2024

Forfeited ( 9,375 ) 51.06

Nonvested at March 31, 2025

5,858,317 $ 28.80

As of September 30, 2024, there was approximately $ 28.6 million of aggregate unrecognized stock-based compensation related to unvested PSUs that is expected to be recognized over the next 3.3 years.

As of March 31, 2025, there was approximately $ 133.9 million of aggregate unrecognized stock-based compensation related to unvested PSUs that is expected to be recognized over the next 3.0 years.

Common Stock Warrants

As of September 30, 2024, the Company’s issued and outstanding common stock warrants had no change from December 31, 2023.

As of March 31, 2025, the Company’s issued and outstanding common stock warrants had no change from December 31, 2024.

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 0.8 years.

Stock-based Compensation Expense

The following table presents a summary of the Company’s stock-based compensation expense, by award type:

Three Months Ended March 31,

(in thousands) 2025 2024

Performance-based restricted stock units

Restricted stock units

24,792 51,913

Total stock-based compensation expense $ 49,115 $ 51,913

For the three months ended March 31, 2025, stock-based compensation expense was recorded in “General and administrative,” “Operating and maintenance costs” and “Research and development” for $ 48.9 million, $ 0.1 million and $ 0.1 million, respectively, on the Condensed Consolidated Statements of Operations.

For the three months ended March 31, 2024, stock-based compensation expense was recorded to “General and administrative” on the Condensed Consolidated Statements of Operations.

NOTE 14 – DEBT

The net carrying value of the Company’s outstanding debt as of September 30, 2024 and December 31, 2023, consisted of the following:

(in thousands) September 30, 2024 December 31, 2023

2026 Notes $ 330,707 $ 330,707

2031 Notes 300,000 —

unamortized debt discount ( 12,024 ) ( 5,053 )

Total convertible notes, net of discount $ 618,683 $ 325,654

The Company issued the following convertible notes (collectively, the “Notes”) in private offerings:

• $ 300.0 million aggregate principal amount of 2.125 % Convertible Senior Notes due 2031 (the “2031 Notes”)

• $ 330.7 million aggregate principal amount of 1.0 % Convertible Senior Notes due 2026 (the “2026 Notes”)

The following table summarizes the key terms of each of the Notes:

2026 Notes 2031 Notes

Issuance Date November 2021 August 2024

Maturity Date December 1, 2026 September 1, 2031

The net carrying value of the Company’s outstanding debt as of March 31, 2025 and December 31, 2024, consisted of the following:

(in thousands) March 31, 2025 December 31, 2024

December 2026 Notes $ 66,900 $ 66,811

September 2031 Notes 292,287 292,014

March 2030 Notes 980,617 979,642

June 2031 Notes 908,745 908,111

Line of credit 350,000 200,000

Total debt 2,598,549 2,446,578

Current portion of long-term debt ( 300,000 ) —

Total long-term debt $ 2,298,549 $ 2,446,578

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

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)

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Stated Interest Rate 1.0 % 2.125 % — % — %

Interest Payment Dates June 1 & December 1 March 1 & September 1

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

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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 Notes (the “issuance costs”).

(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 Condensed Consolidated Statements of Operations.

Issuance of 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 2031 Notes purchased an additional $ 50.0 million principal of 2031 Notes for an aggregate principal amount of $ 300.0 million.

The 2031 Notes were issued pursuant to, and are governed by, an indenture (the “Indenture”) with respect to the 2031 Notes between the Company and the U.S.

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

The 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 2031 Notes will mature on September 1, 2031, unless earlier repurchased, redeemed or converted in accordance with their terms.

The 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 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 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 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 2031 Notes, holders may convert the 2031 Notes at any time.

Upon conversion of the 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 2031 Notes.

The Company may redeem for cash all or any portion of the 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 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 2031 Notes on March 1, 2029 at a repurchase price equal to 100 % of the principal amount of the 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 2031 Notes at a fundamental change repurchase price equal to 100 % of the principal amount of the 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 2031 Notes may declare 100 % of the principal of, and accrued and unpaid special interest, if any, on, all the 2031 Notes to be due and payable.

2026 Notes Partial Extinguishment of Debt

In September 2023, the Company entered into privately negotiated exchange agreements with certain holders of its 2026 Notes.

In total, the Company exchanged $ 416.8 million principal amount of 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 2026 Notes, the fair value of the Company’s common stock issued in the exchange and related transaction costs on the Condensed 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.

Line of Credit

In October 2024, the Company secured lines of credit (collectively, the “Original Line of Credit”) with two counterparties for a total of $ 200.0 million, collateralized by 4,499 bitcoin.

The Original Line of Credit, as amended in February 2025, bears interest at a rate of 10.5 % per annum, with maturity dates beginning in 2026.

The Original Line of Credit automatically renews annually unless otherwise terminated by the Company.

The Company drew $ 200.0 million from the Original Line of Credit in October 2024 and concurrently transferred bitcoin to the counterparties as collateral at a fair value, at the time of transfer, of $ 284.8 million.

In March 2025, the Company secured a second line of credit (the “New Line of Credit” and together with the Original Line of Credit, the “Line of Credit”) with a new counterparty for a total of $ 150.0 million, collateralized by 3,250 bitcoin.

The New Line of Credit bears interest at a rate of 8.85 % per annum and has a maturity date of March 2026.

The Company drew $ 150.0 million from the New Line of Credit in March 2025 and concurrently transferred bitcoin to the counterparty as collateral for a fair value, at the time of transfer, of $ 269.5 million.

As of March 31, 2025, the aggregate outstanding balance on the Line of Credit was $ 350.0 million, and 6,892 bitcoin remained collateralized.

The Line of Credit includes provisions requiring the collateral to be balanced against the outstanding borrowings.

If the value of the collateral securing our borrowings fluctuates below or above a set threshold, the Company will be required to contribute additional collateral, or may withdraw excess collateral, as applicable, to maintain the agreed-upon level.

NOTE 15 – LEASES

The Company has operating and finance leases primarily for office space, mining facilities and land in the United States.

The Company also entered into 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.

As of March 31, 2025, the Company had operating and finance leases primarily for office space, mining facilities and land in the United States.

The Company is party to an arrangement 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 the Company therefore does not record a right-of-use (“ROU”) asset or lease liability associated with the leases.

The Company has amortized the ROU assets totaling $ 0.4 million and $ 0.1 million for the three months ended September 30, 2024 and 2023, respectively, and $ 1.1 million and $ 0.2 million for the nine months ended September 30, 2024 and 2023, respectively.

The following table presents the assets and liabilities related to the Company’s operating and finance leases as of September 30, 2024 and December 31, 2023:

Payment for these two operating leases is entirely variable and based on usage of electricity and expensed as incurred.

The Company has amortized the ROU assets totaling $ 0.4 million and $ 0.3 million for the three months ended March 31, 2025 and 2024, respectively.

The following table presents the assets and liabilities related to the Company’s operating and finance leases as of March 31, 2025 and December 31, 2024:

(in thousands)

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Balance Sheet Classification

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The Company’s total lease expenses are comprised of the following:

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2025 2024

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Total rent expense $ 23,446 $ 23,406

(1) Amortization of finance lease ROU asset is included in “Cost of revenues - depreciation and amortization” on the Condensed Consolidated Statements of Operations.

(1) Amortization of finance lease ROU asset is included in “Depreciation and amortization” on the Condensed Consolidated Statements of Operations.

Additional information regarding the Company’s leasing activities is as follows:

For the Nine Months Ended September 30,

Three Months Ended March 31,

Operating cash flows from operating leases $ 492 $ 438

Financing cash flows from finance lease $ 163 $ —

Weighted-average remaining lease term (in years):

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Finance lease 7.2 % — %

The following table presents the Company’s future minimum lease payments as of September 30, 2024:

The following table presents the Company’s future minimum lease payments as of March 31, 2025:

(in thousands)

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2028 4,927 183

2029 4,759 189

Thereafter 47,707 88,907

3 unchanged sentences

$ 34,170 $ 3,877

(1) Present value of lease liability exclude unfavorable lease liabilities associated with the GC Data Center Equity Holdings, LLC operating lease and the Garden City acquisition finance lease for a net value of $ 4.7 million and $ 1.1 million, respectively.

NOTE 16 - COMMITMENTS AND CONTINGENCIES

Miners and Other Mining Equipment

The Company entered into purchase agreements to purchase miners and other mining equipment for a total purchase price of $ 485.7 million.

The remaining commitment of $ 23.5 million is due in periodic installments throughout 2025.

The Company contracts with service providers for hosting our equipment and operational support in data centers where our equipment is deployed.

Under these arrangements, the Company expects to pay at minimum approximately $ 468.1 million in total payments over the next three years .

Contingent Consideration Liabilities

In connection with certain acquisitions, the Company may be required to make additional payments to the sellers that are contingent upon the occurrence of future events.

The estimated total contingent consideration as of March

31, 2025 was approximately $ 15.3 million related to the GC Data Center Acquisition, the Arkon Acquisition and the Wind Farm.

Refer to Note 3 – Acquisitions, for further information.

NOTE 16 - LEGAL PROCEEDINGS

The following table presents the change in the estimated fair value of the Company’s contingent consideration liabilities:

(in thousands)

Balance at December 31, 2024

The Wind Farm acquisition

Change in fair value of contingent consideration ( 2,883 )

Balance at March 31, 2025

Contingencies

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 Condensed Consolidated Balance Sheets.

As of September 30, 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.

As of March 31, 2025, 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.

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 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 Securities Exchange Act of 1934, as amended (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.

3 unchanged sentences

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 heard the Company’s motion to dismiss the amended complaint and, while granting the Company’s motion to dismiss, the court also granted the plaintiffs thirty days to amend their complaint to avoid a permanent dismissal.

On April 2, 2025, lead plaintiffs filed a second amended class action complaint.

The Company’s motion to dismiss the second amended complaint is currently due to be filed on June 2, 2025.

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 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 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 .

2 unchanged sentences

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 June 25, 2024, plaintiffs filed an amended consolidated complaint in the Nevada Derivative Action 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 in the Nevada Derivative Action.

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 in the Nevada Derivative Action 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’s motion to dismiss, the court also granted the plaintiff thirty days to amend its complaint to avoid a permanent dismissal.

On March 21, 2025, plaintiffs filed a second amended consolidated complaint.

The Company’s motion to dismiss the second amended consolidated complaint is currently due to be filed on May 20, 2025.

Information Subpoena

3 unchanged sentences

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.

On April 21, 2025, the SEC’s Division of Enforcement notified the Company that it had concluded its investigation and did not intend to recommend an enforcement action against the Company.

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 including:

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.

1 unchanged sentence

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 filed a motion for summary judgment with respect to each of the causes of action, and the Court dismissed all of the causes of action other than breach of written contract.

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 certain provisions of the non-disclosure agreement and returned a verdict in the amount of $ 138.8 million.

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, based on applicable law, 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 judgment’s interest rate, and Ho filed a motion requesting an award of pre-judgment interest.

Subsequent to September 30, 2024, the Company acquired a surety bond for the amount owing.

The Company intends to defend its positions vigorously and assert its various well-founded legal claims to challenge both the verdict and the amount 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.

On May 7, 2025, the Court entered an order denying the Company’s motions for judgment as a matter of law and for a new trial but granted a 20 percent reduction of the jury’s verdict.

The Court also denied Ho’s motion for pre-verdict prejudgment interest but awarded post-verdict prejudgment interest.

The Company intends to continue to defend its positions vigorously and assert its various legal arguments to challenge both the verdict and the amount of the award.

NOTE 17 - 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.

On September 26, 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 three and nine months ended September 30, 2024, the Company made advances of $ 11.6 million and $ 16.7 million, respectively, for future purchases resulting in total advances to Auradine of $ 31.5 million as of September 30, 2024.

During the three months ended March 31, 2025, the Company converted $ 1.2 million from its previously outstanding Auradine SAFE investment into preferred stock and purchased additional shares of Auradine preferred stock for a purchase price of $ 20.0 million.

As of March 31, 2025, the Company’s total investment holdings in Auradine was $ 85.4 million, reflecting prior purchases of preferred stock, the exercise of a warrant to acquire common stock and adjustments to the carrying value of the investment in accordance with ASC 321.

In addition, during the three months ended March 31, 2025, the Company advanced $ 22.3 million to Auradine for future purchases.

As of March 31, 2025 total advances to Auradine, net of property and equipment placed into service, was $ 57.2 million.

The Company holds one seat on Auradine’s Board of Directors.

NOTE 18 – SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL INFORMATION

The following table provides supplemental disclosure of Condensed Consolidated Statements of Cash Flows information:

Nine Months Ended September 30,

Three Months Ended March 31,

Cash and cash equivalents

4 unchanged sentences

Supplemental information:

Cash paid during the year for:

Cash paid for income taxes

$ 1,256 $ 785

Cash paid for interest

Supplemental schedule of non-cash investing and financing activities:

Series A Preferred Stock accretion to redemption value $ — $ 2,121

Digital assets transferred to digital assets - receivable, net

$ 325,296 $ —

Reclassifications from advances to vendor to property and equipment upon receipt of equipment 84,685 59,615

Reclassifications from advances to vendor to investments

Reclassifications from advances to vendor to other assets 3,421 —

Reclassifications from long-term prepaid to property and equipment

Reclassifications from long-term prepaid to intangible assets 2,633 —

Exchange of convertible notes for common stock — 318,771

Reclassifications from deposits to property and equipment

Contingent consideration from acquisition

Asset retirement obligation acquired

Dividends received from equity method investment

Distribution to noncontrolling interest

NOTE 19 – SUBSEQUENT EVENTS

On October 15, 2024, the Company announced it had secured a $ 200.0 million line of credit, collateralized by a portion of the Company’s bitcoin holdings.

The Company may use the funds to capitalize on strategic opportunities and for other general corporate purposes.

As of October 17, 2024, the facility was fully utilized.

On November 5, 2024, the Company acquired two operational data centers located in Hannibal and Hopedale, Ohio, with 222 megawatts of interconnect-approved capacity.

These sites have 122 megawatts of capacity and interconnection approval to expand by another 100 megawatts.

Simultaneously, the Company has begun developing a 150 -megawatt operation in Findlay, Ohio, which already has 30 megawatts of capacity.

These three facilities have a combined interconnect-approved capacity of 372 megawatts.

Subsequent to September 30, 2024, the Company issued an aggregate 16,860,005 shares of common stock under the 2024 ATM.

As a result, the Company had $ 520.2 million aggregate offering price remaining under the 2024 ATM.

Subsequent to March 31, 2025, the Company issued an aggregate 5,220,713 shares of common stock under the 2025 ATM.

As a result, the Company had approximately $ 1.9 billion aggregate offering price remaining under the 2025 ATM.

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

What changed 10-Q

Item 1. Financial Statements