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Item 1. Financial Statements

2024-11-12 compared with 2024-08-01 · 299 added, 253 removed, 754 unchanged (42% of the section changed)

FINANCIAL STATEMENTS

MARATHON DIGITAL HOLDINGS, INC.

MARA HOLDINGS, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, December 31,

September 30, December 31,

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

5 unchanged sentences

Deposits 26,497 7,240

Derivative instrument, current portion 13,710 —

Prepaid expenses and other current assets 16,728 25,590

7 unchanged sentences

Operating lease right-of-use assets 9,363 443

Derivative instrument, net of current portion 20,278 —

Goodwill 45,362 —

Intangible assets, net 1,975 —

Deferred tax assets 28,646 —

Total long-term assets 3,340,777 961,170

4 unchanged sentences

Accrued expenses 36,861 22,291

Derivative instrument, current portion 6,276 —

Operating lease liabilities, current portion 367 124

4 unchanged sentences

Notes payable 618,683 325,654

Derivative instrument, net of current portion

Operating lease liabilities, net of current portion 15,014 354

3 unchanged sentences

Total long-term liabilities 664,767 341,294

Commitments and Contingencies (Note 15)

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 June 30, 2024 and December 31, 2023

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

Common stock, par value $ 0.0001 per share, 500,000,000 shares authorized;

287,046,579 shares and 242,829,391 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

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

Additional paid-in capital 3,410,478 2,183,537

3 unchanged sentences

See accompanying notes to the Condensed Consolidated Financial Statements

MARATHON DIGITAL HOLDINGS, INC.

MARA HOLDINGS, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands, except share and per share data) 2024 2023 2024 2023

9 unchanged sentences

Change in fair value of digital assets 30,088 ( 44,692 ) 370,896 117,868

Change in fair value of derivative

Change in fair value of derivative instrument

( 58,234 ) — ( 35,235 ) —

7 unchanged sentences

( 172,223 ) ( 80,160 ) ( 34,916 ) 35,848

Gain on investments

Gain (loss) on investments

( 1,000 ) — 4,236 —

Loss on hedge instruments

1 unchanged sentence

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

Net loss from extinguishment of debt

Net gain from extinguishment of debt

— 82,600 — 82,267

1 unchanged sentence

Interest expense ( 2,342 ) ( 2,536 ) ( 4,967 ) ( 9,136 )

Other non-operating income

Other non-operating income (loss)

( 146 ) — 67 —

18 unchanged sentences

See accompanying notes to the Condensed Consolidated Financial Statements

MARATHON DIGITAL HOLDINGS, INC.

MARA HOLDINGS, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Three Months Ended June 30, 2024

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

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

2 unchanged sentences

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

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

For the Six Months Ended June 30, 2024

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

5 unchanged sentences

Net income — — — 12,725 12,725

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

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 June 30, 2023

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 March 31, 2023 167,259,602 $ 17 $ 1,393,428 $ ( 710,159 ) $ 683,286

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

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

Net loss — — — ( 390 ) ( 390 )

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

For the Six Months Ended June 30, 2023

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

4 unchanged sentences

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

1 unchanged sentence

Net income — — — 109,347 109,347

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

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

See accompanying notes to the Condensed Consolidated Financial Statements

MARATHON DIGITAL HOLDINGS, INC.

MARA HOLDINGS, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands) 2024 2023

3 unchanged sentences

Depreciation and amortization 266,939 108,556

Deferred tax expense

Deferred tax (benefit) expense

( 43,932 ) 351

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

2 unchanged sentences

Stock-based compensation 103,585 13,907

Change in fair value of derivative

Change in fair value of derivative instrument

Early termination expenses

2 unchanged sentences

Equity in net earnings of unconsolidated affiliate 825 647

Loss on extinguishment of debt, net

Gain on extinguishment of debt, net

Other adjustments from operations, net ( 2,341 ) 609

Changes in operating assets and liabilities ( 425,945 ) ( 260,549 )

Revenues from digital assets production ( 280,732 ) ( 132,891 )

Accounts receivable ( 2,163 ) —

Deposits ( 16,504 ) ( 19,325 )

Prepaid expenses and other assets 1,360 ( 6,963 )

Accounts payable and accrued expenses 23,807 2,434

Accrued interest — ( 388 )

Net cash used in operating activities

3 unchanged sentences

Acquisition, net of cash acquired ( 275,839 ) —

Loan receivable ( 178 ) —

Purchase of property and equipment ( 64,303 ) ( 25,813 )

Proceeds from sale of property and equipment

Proceeds from sale of digital assets 118,358 179,509

8 unchanged sentences

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 ( 28,965 ) —

Repayments of finance lease liabilities ( 163 ) —

Repayments of revolving credit agreement

Repayment of term loan borrowings — ( 50,000 )

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

1 unchanged sentence

1,414,794 213,565

Net increase (decrease) in cash, cash equivalents and restricted cash

Net decrease in cash, cash equivalents and restricted cash

( 181,057 ) ( 11,295 )

4 unchanged sentences

See accompanying notes to the Condensed Consolidated Financial Statements

MARATHON DIGITAL HOLDINGS, INC.

MARA HOLDINGS, INC.

AND SUBSIDIARIES

1 unchanged sentence

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Marathon Digital 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 and inclusive future.

MARA secures the world’s preeminent blockchain ledger (i.e., Bitcoin) and supports the energy transformation by converting stranded, or otherwise underutilized energy into economic value.

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 and holding digital assets as a long-term investment.

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.

19 unchanged sentences

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

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

Restricted Cash

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

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

Digital Assets

On July 25, 2024, the Company adopted a full holding onto bitcoin (“HODL”) approach towards its bitcoin treasury policy, retaining all bitcoin mined in its operations, and may periodically make strategic open market purchases.

As a result, bitcoin digital assets are included in non-current assets in the Condensed Consolidated Balance Sheets due to the Company’s recent intent to retain and hold 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.

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 in the Condensed Consolidated Statements of Operations.

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.

3 unchanged sentences

Refer to Note 3 - Acquisitions, for further information.

The Company provides an allowance for doubtful accounts equal to the estimated uncollectible amounts, based on historical and customer specific experience and current economic and market conditions.

The allowance for doubtful accounts was $ 12.1 million as of June 30, 2024.

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

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” in the Condensed Consolidated Balance Sheets.

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

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.

1 unchanged sentence

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 June 30, 2024 and December 31, 2023.

There were no embedded derivatives requiring separation from the host instrument as of September 30, 2024 and December 31, 2023.

The Company does not elect to designate derivatives as hedges for accounting purposes and as such, records derivatives at fair value with subsequent changes in fair value and settlements recognized in earnings.

The Company classifies derivative assets or liabilities in 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 of the Balance Sheets and for derivatives with multiple settlements, based on the term of the contract.

Bitcoin Derivatives

From time to time the Company enters into derivative contracts to mitigate bitcoin market pricing volatility risk.

During the six months ended June 30, 2024, the Company recorded a $ 2.3 million loss on derivatives as a non-operating charge in the Condensed Consolidated Statements of Operations, all settled through cash payments.

There were no derivative instruments outstanding as of June 30, 2024 and December 31, 2023.

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.

Energy Derivatives

1 unchanged sentence

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 June 30, 2024, the estimated

fair value of the Company’s derivative instrument was $ 34.0 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 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 significant assumptions used in the discounted cash flow model to estimate fair value include the discount rate and electricity forward curves.

Accordingly, the Company records the change in fair value of derivative on the Condensed Consolidated Statements of Operations.

Accordingly, the Company records the change in fair value of derivative instrument on the Condensed Consolidated Statements of Operations.

The following table presents the changes in fair value of the derivative instrument:

2 unchanged sentences

Commodity swap contract 10,989

Change in fair value of derivative 22,999

Balance at June 30, 2024

Change in fair value of derivative instrument

Balance at September 30, 2024

Property and Equipment

21 unchanged sentences

The determination of fair value involves assumptions, estimates and judgments.

The initial allocation of the purchase price is considered preliminary and therefore subject to change until the end of the measurement period (up to one year from the acquisition date).

Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net assets

The initial allocation of the purchase price is considered preliminary and

therefore subject to change until the end of the measurement period (up to one year from the acquisition date).

Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net assets acquired.

Contingent consideration is included within the purchase price and is initially recognized at fair value as of the acquisition date.

2 unchanged sentences

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 in the Condensed Consolidated Balance Sheets.

Investments without a readily determinable fair value 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 .

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

The Company accounts for investments in which it owns between 20% and 50% of the common stock and has the ability to exercise significant influence, but not control, over the investee using the equity method of accounting in accordance with ASC 323 - Equity Method Investments and Joint Ventures .

Under the equity method, an investor initially records its investment in the investee at cost and adjusts the carrying amount of its investment to recognize its proportionate share of the earnings or losses of the investee after the date of investment.

Other Investments

Investments in which the Company does not have the ability to exercise significant influence and does not have readily determinable fair values, are recorded at cost minus impairment, plus or minus changes from observable price changes in orderly transactions for identical or similar investments of the same issuer, in accordance with the measurement alternative described in ASC 321 - Investments – Equity Securities .

As part of the Company’s policy to maximize return on strategic investment opportunities, while preserving capital and limiting downside risk, the Company may at times enter into equity investments or Simple Agreements for Future Equity (“SAFE”).

1 unchanged sentence

However, the Company generally does not make investments for speculative purposes and does not intend to engage in the business of making investments.

During the three months ended June 30, 2024, the Company entered into a second SAFE agreement.

As of June 30, 2024, the Company had two SAFE investments with a carrying value of $ 1.3 million, with no noted impairments or other adjustments.

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.

On January 10, 2024, the Company purchased additional shares of Auradine, Inc.

(“Auradine”) preferred stock with a purchase price of $ 8.0 million, bringing the total carrying amount of its investment in Auradine preferred stock to $ 48.7 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” in 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.

Equity Method Investments

The Company accounts for investments in which it owns between 20% and 50% of the common stock or 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 an investment in the stock of an investee at cost and adjusts the carrying amount of the investment to recognize the investor’s share of the earnings or losses of the investee after the date of acquisition.

On January 27, 2023, the Company and Zero Two (formerly known as FS Innovation, LLC) entered into a Shareholders’ Agreement regarding the formation of 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 started mining operations during September 2023.

During the six months ended June 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 six months ended June 30, 2024.

The Company’s share of net gain was nearly zero and $ 1.3 million for the three and six months ended June 30, 2024, respectively.

As of June 30, 2024, the Company’s investment in the ADGM Entity was $ 65.4 million and is reflected in “Investments” in the Condensed Consolidated Balance Sheets.

Stock-based Compensation

10 unchanged sentences

Research and development costs consist primarily of contractor costs, equipment, supplies, personnel, and related expenses for research and development activities.

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

Research and development costs were $ 3.8 million and $ 6.3 million for the three and six months ended June 30, 2024, respectively, and $ 0.7 million and $ 0.9 million for the three and six months ended June 30, 2023, respectively.

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.

Effective Tax Rate

The effective tax rate (“ETR”) from continuing operations was 13.69 % and 4.44 % for the three and six months ended June 30, 2024, respectively, and 2.32 % and 0.25 % for the three and six months ended June 30, 2023, respectively.

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.

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 six months ended June 30, 2024, the Company concluded, based upon all available evidence, that 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 in the Condensed Consolidated Statements of Operations.

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.

The foregoing items cause the ETR to be significantly different compared to the Company’s historical annual ETR.

Income Tax in Interim Periods

9 unchanged sentences

The Company continually assesses any new accounting pronouncements to determine their applicability.

When it is determined that a new accounting pronouncement may affect the Company’s financial reporting, the Company

undertakes an analysis to determine any required changes to its 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.

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.

2 unchanged sentences

ASU 2023-09 requires entities to disclose specific rate reconciliations, amount of income taxes separated by federal and individual jurisdiction, and the amount of income (loss) from continuing operations before income tax expense (benefit) disaggregated between federal, state, and foreign.

The new standard is effective for the Company for its fiscal year beginning January 1, 2025, with early adoption permitted.

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.

2 unchanged sentences

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 CODM.

The new standard is effective for the Company for its fiscal year beginning January 1, 2025, with early adoption permitted.

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.

1 unchanged sentence

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 Applied Digital Corporation (“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.

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.

21 unchanged sentences

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 operational 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.

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 acquisition is intended to improve efficiencies and the scale of operations through the integration of the Company’s technology stack and realization of synergies.

The Company will not be taking on any new hosting services customers and will transition to self-mining at these two sites as existing customer agreements expire or are terminated early.

The Company will not be taking on any new hosting services customers at these locations and will transition to self-mining at these two sites as existing customer agreements expire or are terminated early.

The following table summarizes the components of total purchase consideration:

28 unchanged sentences

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 in the Condensed Consolidated Statements of Operations .

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

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)

2 unchanged sentences

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

Balance at June 30, 2024

Balance at September 30, 2024

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

The fair values of intangible assets were estimated based on various valuation techniques including the use of discounted cash flow analyses, and multi-period excess earnings valuation approaches, which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy.

These valuation inputs

included estimates and assumptions about forecasted future cash flows, long-term revenue growth rates, and discount rates.

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.

The Company recognized $ 2.8 million in expense during the three months ended March 31, 2024 for the amortization of these acquired customer relationships.

The results of acquired facilities have been included from the acquisition date.

Included in the Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 was revenues of $ 20.8 million and net loss before tax of $ 42.5 million, which includes depreciation in the amount of $ 5.3 million.

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 had occurred as of January 1, 2023 for the indicated periods:

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

As of September 30, 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,

(in thousands) 2024 2023 2024 2023

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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 to provide hosting services to institutional-scale crypto mining companies for the purpose of improving efficiencies and the scale of the Company’s mining operations.

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.

Refer to Note 3 - Acquisitions, for further information.

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

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands) 2024 2023 2024 2023

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

The following table presents the Company’s significant digital asset holdings as of September 30, 2024 and December 31, 2023, respectively:

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

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

Total digital assets held as of June 30, 2024

Total digital assets held as of September 30, 2024

$ 1,271,657 $ 1,710,221

3 unchanged sentences

$ 515,315 $ 639,660

The Company earned 50 and 48 bitcoin that were pending distribution from the Company’s equity method investee, the ADGM Entity, which are excluded from the Company’s holdings as of June 30, 2024 and December 31, 2023, respectively.

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.

NOTE 6 – ADVANCES TO VENDORS AND DEPOSITS

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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.

The Company accounts for these payments as “Advances to vendors” in the Condensed Consolidated Balance Sheets.

As of June 30, 2024 and December 31, 2023, such advances totaled approximately $ 385.4 million and $ 95.6 million, respectively.

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.

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

As of June 30, 2024 and December 31, 2023, such deposits totaled approximately $ 82.8 million and $ 67.0 million, respectively.

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.

NOTE 7 – PROPERTY AND EQUIPMENT

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

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

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

— $ 4,649 $ —

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Asset retirement obligation 8 7,879 —

Construction in progress — 145,311 —

Other 7 839 242

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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 six months ended June 30, 2024 was $ 0.2 million and $ 0.4 million, respectively.

The Company’s depreciation expense related to property and equipment for the three months ended June 30, 2024 and 2023 was $ 87.8 million and $ 37.3 million, respectively.

The Company’s depreciation expense related to property and equipment for the six months ended June 30, 2024 and 2023 was $ 165.8 million and $ 55.0 million, respectively.

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.

NOTE 8 – 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.

Equity Method Investments

The ADGM Entity

On January 27, 2023, the Company and Zero Two (formerly known as FS Innovation, LLC) entered into a Shareholders’ Agreement to form an Abu Dhabi Global Markets company (the “ADGM Entity”) in which the Company has a 20 % ownership interest, which is accounted for as an equity method investment.

The ADGM Entity commenced mining operations in September 2023.

During the 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’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.

Other Investments

Other investments consist of strategic investments made from time to time in equity securities and SAFE investments.

Investments in Equity Securities

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

(“Auradine”) preferred stock was $ 50.7 million.

On September 26, 2024, the Company purchased additional shares of Auradine preferred stock with a purchase price of $ 0.8 million.

On January 10, 2024, the Company purchased additional shares of Auradine preferred stock with a purchase price of $ 8.0 million.

The preferred stock purchased on January 10, 2024 was similar to the Company’s other investments in Auradine preferred stock and, as a result, the Company recorded $ 5.2 million to “Gain on investments” on the 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 June 30, 2024 are as follows:

As of June 30, 2024

(in thousands) Cost Accumulated impairment charges Net

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

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Total goodwill

$ 45,362 $ — $ 45,362

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.

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Intangible assets

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

As of June 30, 2024

(in thousands) Cost Accumulated amortization Accumulated impairment charges Net

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 ) $ —

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

During the three months ended June 30, 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.

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 June 30, 2024:

The following table presents the Company’s estimated future amortization of finite-lived intangible assets as of September 30, 2024:

(in thousands)

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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 in 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 in 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, 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.

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

Recurring fair value measured at June 30, 2024

(in thousands) Total carrying value Quoted prices in active markets

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

Quoted prices in active markets

(Level 1) Significant other observable inputs

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Money market funds $ 105,130 $ 105,130 $ — $ —

Treasury Bills 65,319 65,319

Digital assets 1,710,221 1,710,221 — —

3 unchanged sentences

3,485 — — 3,485

Recurring fair value measured at December 31, 2023

(in thousands) Total carrying value Quoted prices in active markets

(in thousands) Total carrying value at December 31, 2023

Quoted prices in active markets

(Level 1) Significant other observable inputs

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Digital assets 639,660 639,660 — —

(1) 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, 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 derivatives.

(1) The fair value of the derivative instrument was estimated using a discounted cash flow approach that considers various assumptions including current market prices and electricity forward curves, which are considered Level 2 inputs.

Increases (decreases) in market prices and electricity forward curves could result in significant increases (decreases) in the fair value of derivative instruments.

Refer to Note 2 - Summary of Significant Accounting Policies - Derivatives, for further information.

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

(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.

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The Company includes the above money market funds and U.S.

treasury bills in cash and cash equivalents in the Condensed Consolidated Balance Sheets.

treasury bills in cash and cash equivalents on the Condensed Consolidated Balance Sheets.

The Company’s U.S.

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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 six months ended June 30, 2024.

Non-recurring measurement of fair value

The following tables present information about the Company’s liabilities measured at fair value on a non-recurring basis and are, therefore, not included in the tables above.

These liabilities include outstanding convertible notes measured at fair value based on quoted prices in active markets.

These liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (e.g., impairment).

The Company’s estimated level within the fair value hierarchy for each of these liabilities as of June 30, 2024 and December 31, 2023, respectively, is as follows:

Non-recurring fair value measured at June 30, 2024

(in thousands) Total carrying value Quoted prices in active markets

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

Fair value of financial instruments not recognized at fair value

The following tables present information about the Company’s financial instruments that are not recognized at fair value on the 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

Quoted prices in active markets

(Level 1) Significant other observable inputs

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$ 618,683 $ 561,291 $ — $ —

Non-recurring fair value measured at December 31, 2023

(in thousands) Total carrying value Quoted prices in active markets

(in thousands) Total carrying value at December 31, 2023

Quoted prices in active markets

(Level 1) Significant other observable inputs

2 unchanged sentences

$ 325,654 $ 269,725 $ — $ —

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

As of June 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 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.

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 by the weighted average number of shares of common stock outstanding during the period.

For the three and six months ended June 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.

The following table presents the 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 June 30,

Six Months Ended June 30,

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.

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

2 unchanged sentences

Performance-based restricted stock units (1)

5,614,236 — — —

Convertible notes 20,224,952 4,341,422 20,224,952 4,341,422

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Total dilutive shares 34,228,419 8,668,294 20,549,327 4,996,942

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

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

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

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands, except share and per share data) 2024 2023 2024 2023

Basic earnings per share of common stock:

Net income per share of common stock - basic

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

$ ( 124,789 ) $ ( 390 ) $ 12,725 $ 107,226

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294,942,685 179,602,722 277,643,666 169,162,821

Net income per share of common stock - basic

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

$ ( 0.42 ) $ — $ 0.05 $ 0.63

Diluted earnings per share of common stock:

Net income per share of common stock - basic

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

$ ( 124,789 ) $ ( 390 ) $ 12,725 $ 107,226

Notes interest expense, net of tax — 938 — 3,416

Series A preferred stock accretion to redemption value — — — 2,121

Net income per share of common stock - diluted

Gain from extinguishment of debt, net of tax

— ( 62,910 ) — ( 62,910 )

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

$ ( 124,789 ) $ ( 62,362 ) $ 12,725 $ 47,732

Weighted average shares of common stock - basic

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Convertible notes — 4,134,048 — 5,020,474

Preferred stock — — — 70,757

Weighted average shares of common stock - diluted

294,942,685 183,736,770 282,651,034 174,393,108

Net income per share of common stock - diluted

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

$ ( 0.42 ) $ ( 0.34 ) $ 0.05 $ 0.27

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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 six months ended June 30, 2024, the Company sold 17,472,602 shares of common stock for an aggregate purchase price of $ 344.9 million, net of offering expenses, pursuant to the 2024 ATM.

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.

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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.

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 June 30, 2024, the Company had an aggregate of 15,536,354 shares of common stock reserved for future issuance under the 2018 Plan.

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 June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands) 2024 2023 2024 2023

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however, in certain instances, all or a portion of a grant may vest immediately.

RSUs granted to directors generally vest over a one-year period or, in certain instances, immediately.

RSUs granted to directors generally vest over a one-year period.

The Company measures the fair value of RSUs at the grant date and recognizes expenses on a straight-line basis over the requisite service period from the date of grant for each separately-vesting tranche under the graded-vesting attribution method.

A summary of the Company’s service-based RSU activity for the six months ended June 30, 2024, is as follows:

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

Number of RSUs Weighted Average Grant Date Fair Value

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Vested ( 4,003,552 ) 15.29

Nonvested at June 30, 2024

Nonvested at September 30, 2024

8,064,856 $ 13.54

As of June 30, 2024, there was approximately $ 89.0 million of aggregate unrecognized stock-based compensation related to unvested service-based RSUs that is expected to be recognized over the next 2.8 years.

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.

Performance-based Restricted Stock Units

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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 six months ended June 30, 2024, is as follows:

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

Number of PSUs Weighted Average Grant Date Fair Value

1 unchanged sentence

Granted 2,807,118 14.33

Nonvested at June 30, 2024

Nonvested at September 30, 2024

2,807,118 $ 14.33

As of June 30, 2024, there was approximately $ 38.7 million of aggregate unrecognized stock-based compensation related to unvested PSUs that is expected to be recognized over the next 3.6 years.

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.

Common Stock Warrants

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

The Company continues to have 324,375 outstanding warrants, at a weighted average exercise price of $ 25.00 , that are expected to expire in approximately one year .

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

The Company continues to have 324,375 outstanding warrants, at a weighted average exercise price of $ 25.00 , that are expected to expire in approximately 1.3 years.

NOTE 14 – DEBT

Convertible Note

On November 18, 2021, the Company issued $ 650.0 million principal of 1 % Convertible Senior Notes due 2026 (the “Notes”).

On November 23, 2021, the initial purchasers of the Notes purchased an additional $ 97.5 million principal of Notes for an aggregate principal amount of $ 747.5 million.

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

Remaining Principal (in thousands)

$ 330,707 $ 300,000

Stated Interest Rate 1.0 % 2.125 %

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

Net Proceeds (1) (in thousands)

$ 728,082 $ 291,595

Initial Conversion Rate 13.1277 52.9451

Initial Conversion Price $ 76.17 $ 18.89

Share Principal Price $ 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”).

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.

The Notes accrue interest at a rate of 1 % per annum, payable semi-annually in arrears on June 1 and December 1 of each year, beginning on June 1, 2022.

As of June 30, 2024 and December 31, 2023, the Notes outstanding, net of unamortized discounts of approximately $ 4.2 million and $ 5.1 million, respectively, were $ 326.5 million and $ 325.7 million, respectively.

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.

NOTE 15 – LEASES

The Company leases office space in the United States under operating lease agreements.

The Company also entered into an arrangement with APLD for the use of energized cryptocurrency mining facilities under which the Company pays for electricity per megawatt based on usage.

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.

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.

Payments made 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.

Variable lease cost during the three and six months ended June 30,

2024 and June 30, 2023 are disclosed in the table below.

Office space and mining facilities comprise the Company’s material underlying asset class under operating lease agreements.

The Company assumed an operating lease in the GC Data Center Equity Holdings, LLC acquisition related to the data center land lease in Granbury, Texas on January 12, 2024.

The ROU asset and total lease liability recorded for the assumption of the lease was $ 8.9 million and $ 8.9 million, respectively.

An unfavorable lease liability adjustment of $ 5.1 million related to the GC Data Center Equity Holdings, LLC acquisition is reflected in the total operating lease liabilities.

Additionally, the Company assumed a finance lease in the Garden City Acquisition related to the land lease in Garden City, Texas on April 1, 2024.

The ROU asset and total lease liability recorded for the assumption of the lease was $ 4.0 million and $ 4.0 million, respectively.

An unfavorable lease liability adjustment of $ 1.1 million related to the Garden City Acquisition is reflected in the total finance lease liabilities.

The ROU assets and lease liabilities for the leases assumed each were measured based on the net present value of remaining future lease payments on the date of the acquisition, with consideration given for options to extend or renew the lease.

As of June 30, 2024, the Company’s ROU assets and total lease liabilities were $ 9.7 million and $ 10.6 million, respectively.

As of December 31, 2023, the Company’s ROU assets and total lease liabilities were $ 0.4 million and $ 0.5 million, respectively.

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

The Company has amortized the ROU assets totaling $ 0.7 million and $ 0.2 million for the six months ended June 30, 2024 and 2023, respectively.

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

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:

(in thousands)

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Balance Sheet Classification

Operating lease right-of-use assets

Operating lease ROU assets

Operating lease right-of-use assets $ 9,363 $ 443

Finance lease right-of-use assets

Finance lease ROU assets

Property and equipment, net 4,019 —

Total right-of-use assets $ 13,757 $ 443

Total ROU assets

$ 13,382 $ 443

Current portion:

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

For the Three Months Ended June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

(in thousands) 2024 2023 2024 2023

5 unchanged sentences

Total rent expense $ 31,621 $ 26,336 $ 75,862 $ 46,479

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

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

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Operating cash flows from operating leases $ 1,250 $ 319

6 unchanged sentences

Finance lease 7.2 % — %

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

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

(in thousands)

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Present value of lease liability (1)

$ 10,723 $ 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.

Refer to Note 3 - Acquisitions, for further information.

NOTE 16 - 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 June 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 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.

The Company will continue to monitor each related legal issue and adjust accruals as new information and developments occur.

Compute North Bankruptcy

On September 22, 2022, Compute North Holdings, Inc.

(currently d/b/a Mining Project Wind Down Holdings, Inc.) and certain of its affiliates (collectively, “Compute North”) filed for chapter 11 bankruptcy protection.

Compute North provided operating services to the Company and hosted its mining rigs at multiple facilities.

The Company delivered miners to Compute North, which then installed the mining rigs at those facilities, operated and maintained the mining rigs, and provided energy to keep the miners operating.

During the course of the chapter 11 cases, Compute North sold substantially all of their assets in a series of 363 sale transactions, including Compute North’s ownership interests in non-debtor entities that own or partially own facilities that house the Company’s miners.

On November 23, 2022, the Company and certain of its affiliates timely filed proofs of claim asserting various claims against Compute North, including:

(i) claims arising under hosting agreements between the Company and Compute North LLC;

(ii) claims arising under that certain Senior Promissory Note, dated as of July 1, 2022, by and between the Company, as Lender, and Compute North LLC, as Borrower;

(iii) claims arising from the breach of a letter of intent between us and Compute North LLC;

and (iv) claims for daily lost revenue, profits and other damages against Compute North.

On February 9, 2023, the Bankruptcy Court approved a settlement stipulation between the Company and Compute North, pursuant to which the proofs of claim filed by the Company and certain of its affiliates were resolved, and the Company received a single allowed unsecured claim against Compute North LLC in the amount of $ 40.0 million and its Preferred Equity Interests in Compute North Holdings, Inc.

in the amount of 39,597 shares of Series C Preferred Stock was confirmed.

In exchange, the Company agreed to vote in favor of Compute North’s chapter 11 plan.

On February 16, 2023, the Bankruptcy Court confirmed Compute North’s chapter 11 plan (the “Plan”), pursuant to which Compute North will liquidate its remaining assets and distribute proceeds arising therefrom in accordance with the waterfall set forth in the Plan.

In its disclosure statement filed on December 19, 2022, the Compute North Debtors projected that holders of allowed general unsecured claims could recover anywhere between 8 % to 65 % on their claims, while holders of preferred equity interests are expected to recover nothing on their interests.

The Plan became effective on March 31, 2023.

At this time, the Company cannot predict the quantum of its potential recovery on account of its allowed general unsecured claim and preferred equity interests or the timing of when it would receive any distributions under the Plan on account of its claims and interests.

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.

3 unchanged sentences

The allegations in the amended class action complaint are substantially similar to those in the March 30, 2023 putative class action complaint.

The defendants have until August 5, 2024 to respond to the amended class action complaint.

On August 5, 2024, the defendants moved to dismiss the amended class action complaint.

Derivative Complaints

1 unchanged sentence

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 .

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 .

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 .

On July 13, 2023, a fourth shareholder derivative complaint was filed in the Circuit Court of the 17th Judicial Circuit for Broward County, Florida (together with the complaint filed on June 22, 2023, the “Florida Derivative Actions”), against current members of the Company’s Board and senior management, alleging claims for breach of fiduciary duty, unjust enrichment, and waste of corporate assets, based on allegations substantially similar to the allegations in the March 30, 2023 putative class action complaint in Moreno .

2 unchanged sentences

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.

The allegations remain substantially similar to those in the March 30, 2023 putative class action complaint in Moreno .

The defendants have until August 9, 2024 to respond to the amended complaint.

On August 9, 2024, the defendants moved to dismiss the amended complaint.

On October 16, 2023, the parties to the derivative actions pending in the Circuit Court of the 17th Judicial Circuit for Broward County, Florida filed an agreed order to stay both actions pending completion of the Nevada Derivative Action.

15 unchanged sentences

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.

The judgment has not yet been entered and the Company has not paid any portion of the award.

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.

In particular, even if the jury verdict is not reversed, the Company believes applicable law supports a significant reduction in 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.

In addition, during the six months ended June 30, 2024, the Company made advances of $ 29.1 million, for future purchases resulting in a total advances to Auradine of $ 43.6 million as of June 30, 2024.

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.

NOTE 18 – SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL INFORMATION

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

Six Months Ended June 30,

Nine Months Ended September 30,

Cash and cash equivalents

$ 164,256 $ 357,313

Restricted cash

Total cash, cash equivalents and restricted cash

$ 176,256 $ 357,313

Supplemental information:

Cash paid during the year for:

Income taxes $ 1,256 $ 782

Interest 4 4,524

Cash paid for income taxes

$ 1,256 $ 785

Cash paid for interest

Supplemental schedule of non-cash investing and financing activities:

1 unchanged sentence

Reclassifications from advances to vendor to property and equipment upon receipt of equipment 404,133 551,650

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 investments to property and equipment 4,416 —

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

Effective settlement of pre-existing relationships — —

Exchange of convertible notes for common stock — 318,771

Dividends received from equity method investment

NOTE 19 – SUBSEQUENT EVENTS

On July 25, 2024, the Company announced acquiring $ 100.0 million bitcoin as part of the Company’s strategy to hold bitcoin and not sell for the foreseeable future.

Subsequent to June 30, 2024, the Company issued an aggregate 7,276,739 shares of common stock under the 2024 ATM.

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.

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