What changed in this filing

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Item 1. Business

2025-02-28 compared with 2024-02-23 · 283 added, 189 removed, 149 unchanged (76% of the section changed)

We are a vertically integrated Bitcoin mining company principally engaged in enhancing our capabilities to mine Bitcoin in support of the Bitcoin blockchain.

We also provide comprehensive and critical infrastructure for institutional-scale Bitcoin mining at our large-scale Bitcoin mining facilities in Rockdale, Texas (the “Rockdale Facility”) and Navarro County, Texas (the “Corsicana Facility”).

Our Rockdale Facility is believed to be the largest single Bitcoin mining facility in North America, as measured by developed capacity, and we are currently evaluating further growing its capacity.

Additionally, we are developing the Corsicana Facility, our second large-scale Bitcoin mining facility, which, upon completion, is expected to have approximately one gigawatt of Bitcoin mining capacity.

We operate in an environment and industry which frequently evolves based on the proliferation and uptake of Bitcoin.

A significant component of our strategy is to effectively and efficiently allocate capital among opportunities that we believe will generate the highest return on our investment.

We operate in three reportable business segments:

Bitcoin Mining, Data Center Hosting, and Engineering, which are organized based on purpose and services performed.

We are a vertically-integrated Bitcoin mining company principally engaged in enhancing our power infrastructure to mine Bitcoin in support of the Bitcoin blockchain.

We are also exploring the feasibility of developing a portion of our power capacity for AI/HPC uses.

We provide comprehensive and critical infrastructure for institutional-scale Bitcoin mining at our large-scale Bitcoin Mining facilities in Rockdale, Texas (the “Rockdale Facility”), Navarro County, Texas (the “Corsicana Facility”), and two Bitcoin mining sites in Paducah, Kentucky (the “Kentucky Facility” and, together with the Rockdale Facility and the Corsicana Facility, our “Facilities”).

The Rockdale Facility is believed to be the largest Bitcoin mining facility in North America, as measured by developed capacity.

During 2024, we completed Phase I of development of the Corsicana Facility, a second large-scale Bitcoin mining facility, currently equipped to provide up to 400 megawatts (“MW”) of capacity for our Bitcoin Mining.

Upon completion, the Corsicana Facility is expected to have approximately one gigawatt (“GW”) of operational capacity available for our business purposes.

Additionally, in 2024, we completed a transaction to acquire Block Mining, Inc.

(“Block Mining”), a Kentucky-based vertically-integrated Bitcoin miner expanding our Facilities to include two operational sites, in Kentucky, totaling 60 MW of operational capacity with potential to expand up to 155 MW.

We intend to expand the two Block Mining sites, targeting 110 MW for self-mining operations in 2025.

Through our acquisition of Block Mining (the “Block Mining Acquisition”), we also own a greenfield expansion opportunity, adjacent to an existing substation, presenting us with the ability to develop 60 MW of additional capacity, and the potential to expand up to 150 MW.

In 2024, we adopted and implemented our “Bitcoin Treasury Strategy” strategy, a corporate strategy of acquiring and holding Bitcoin on our balance sheet, and, from time to time, subject to market conditions, issuing debt or equity securities or engaging in other capital raising transactions to fund operations and/or purchase Bitcoin.

For more information see “Bitcoin Treasury Strategy” in Part II, Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report.

We operate in an environment which is frequently evolving based on the proliferation of Bitcoin and cryptocurrencies in general.

We have determined that it is in the best interest of our business to undertake a formal process to evaluate the feasibility of developing the approximately 600 MW of remaining power capacity at the Corsicana Facility for AI/HPC uses with the goal of maximizing the potential of our assets.

We have engaged a leading consultant in the data center industry to conduct a feasibility assessment of the Corsicana Facility.

A significant component of our overall business strategy is to effectively and efficiently allocate capital between opportunities that generate the highest return on investment.

We operate in two reportable business segments:

Bitcoin Mining and Engineering, which are organized based on purpose and services performed.

Each of our business segments is further discussed herein.

Amounts in this Annual Report are stated in thousands of U.S.

Dollars except for share and per share amounts, numbers of miners, hash rate, and Bitcoin quantities and prices, or as otherwise noted.

Unless otherwise indicated, amounts in this Annual Report are stated in thousands of U.S.

Dollars except for:

share, per share, and miner amounts;

Bitcoin quantities, prices, and hash rate;

cost to mine one Bitcoin;

and production value of one Bitcoin mined.

Business Segments

Bitcoin Mining

As of December 31, 2023, our Bitcoin Mining business segment operated 112,944 miners with a total hash rate capacity of 12.4 exahash per second (“EH/s”).

In 2023, we mined 6,626 Bitcoin, which represented an increase of 19.3% over the 5,554 Bitcoin we mined in 2022.

As of December 31, 2024, our Bitcoin Mining business segment had a total deployed hash rate of 31.5 exahash per second (“EH/s”), as compared to a total deployed hash rate of 12.4 EH/s as of December 31, 2023.

In 2024, we mined 4,828 Bitcoin, which represented a decrease of 27.1% compared to the 6,626 Bitcoin we mined in 2023.

Based on our existing operations and expected deliveries and deployment of miners we have purchased, we anticipate having approximately 38.4 EH/s of total hash rate in operation by the end of 2025.

All amounts are inclusive of the effects of the Block Mining Acquisition.

Our Bitcoin Mining operations are focused on maximizing our ability to successfully mine Bitcoin by growing our hash rate (the amount of computer power we devote to supporting the Bitcoin blockchain), to increase our chances of successfully creating new blocks on the Bitcoin blockchain (a process known as “solving a block”).

Generally, the greater share of the Bitcoin blockchain’s total network hash rate (the aggregate hash rate deployed to solving a block on the Bitcoin blockchain) a miner’s hash rate represents, the greater that miner’s chances of solving a block and, therefore, earning the block reward, which is currently 6.25 Bitcoin plus transaction fees per block (subject to periodic halving, as discussed below).

As the proliferation of Bitcoin continues and the market price for Bitcoin increases, we expect additional miner operators to enter the market in response to an increased demand for Bitcoin which we anticipate to follow increased Bitcoin prices.

As these new miner operators enter the market and as increasingly powerful miners are deployed in an attempt to solve a block, the Bitcoin blockchain’s network hash rate grows, meaning an existing miner must increase its hash rate at pace commensurate with the growth of network hash rate to maintain its relative chance of solving a block and earning a block reward.

The current block reward is 3.125 Bitcoin plus transaction fees per block (subject to periodic halving, as discussed below).

As the proliferation of Bitcoin continues and the market price for Bitcoin increases, we expect additional miner operators to enter the market in response to an increased demand for Bitcoin.

As these new miner operators enter the market and as increasingly powerful miners are deployed in an attempt

to solve a block, the Bitcoin blockchain’s network hash rate grows, meaning existing miners must increase their hash rate at pace commensurate with the growth of network hash rate to maintain its relative chance of solving a block and earning a block reward.

As we expect this trend to continue, we will need to continue growing our hash rate to compete in our dynamic and highly competitive industry.

A key component of the Bitcoin Mining business segment is to acquire highly specialized computer servers (known in the industry as “miners”), which operate application-specific integrated circuit (“ASIC”) chips designed specifically to mine Bitcoin, and deploy such miners at-scale in our Rockdale Facility and Corsicana Facility, that utilize innovative and efficient immersion-cooled environments.

The Rockdale Facility and the Corsicana Facility, which are supported by our dedicated best-in-class team, enable our large-scale Bitcoin Mining operations and provide the necessary infrastructure and available power capacity for us to continue scaling our Bitcoin Mining business.

We believe ASIC miners are the most effective and energy-efficient miners available today, and we believe deploying them at-scale, including in quiet immersion-cooled environments, with their more efficient heat dissipation and reduced wear-and-tear compared to traditional air-cooled hardware, will enable us to continue growing our hash rate and optimize the output and longevity of our miners once they are deployed.

During the year ended December 31, 2023, we entered into a long-term master purchase and sales agreement, dated as of June 23, 2023, as amended (the “Master Agreement”) with MicroBT Electronics Technology Co., LTD, through its manufacturing affiliate,

SuperAcme Technology (Hong Kong) Limited (collectively, “MicroBT”) to secure the long-term supply of state-of-the-art immersion miners from MicroBT, all of which are being manufactured in the United States.

We deploy such miners at-scale in our Facilities and utilize a combination of air cooled and immersion-cooled environments to maximize miner efficiency.

Our Facilities, which are supported by our dedicated best-in-class team, enable our large-scale Bitcoin Mining operations and provide the necessary infrastructure and available power capacity for us to continue scaling our vertically-integrated Bitcoin Mining business.

Our miners are some of the most effective and energy-efficient miners available today, and our efficiency is constantly improving as we replace aging miners with new state-of-the-art models.

Our miners are deployed in air-cooled environments and in quiet, immersion-cooled environments.

By utilizing both methods of cooling we are able to continue growing our hash rate and optimizing our miners’ capabilities.

Immersion-cooling provides more efficient heat dissipation and reduced wear-and-tear compared to traditional air-cooled hardware, and with a smaller footprint and lower noise pollution.

Air-cooling provides us with greater power benefits as we do not have to divert energy to power the tanks and immersion systems required by immersion-cooling.

During the year ended December 31, 2023, we entered into a long-term master purchase and sales agreement, dated as of June 23, 2023, as amended (the “Master Agreement”), with MicroBT Electronics Technology Co., LTD, through its manufacturing affiliate, SuperAcme Technology (Hong Kong) Limited (collectively, “MicroBT”) to secure the long-term supply of state-of-the-art immersion miners from MicroBT, all of which are being manufactured in the United States.

Pursuant to the Master Agreement, MicroBT agreed to provide us with ready access to its newest and most powerful miners, at their most competitive prices.

In 2023, we executed two purchase orders under the Master Agreement to acquire a total of 99,840 new MicroBT miners (consisting of 8,320 M56S+ model miners, 22,684 M56S++ model miners, 20,778 M66 model miners, and 48,058 M66S model miners), primarily for use at our Corsicana Facility, for a total purchase price of approximately $453.4 million.

Delivery of these miners began in the fourth quarter of 2023 and will be completed in monthly batches according to the delivery schedules specified under the applicable purchase order.

Through December 31, 2024, we executed three purchase orders under the Master Agreement to acquire miners with a total hash rate of 31.4 EH/s, for a total purchase price of approximately $550.1 million.

Delivery of the MicroBT miners initially began in the fourth quarter of 2023 and will be completed in monthly batches according to the delivery schedules specified under the applicable purchase order.

All miners are expected to be received and deployed by mid-2025.

Upon full deployment of these new, state-of-the-art MicroBT immersion miners, we anticipate a total self-mining hash rate capacity of 38 EH/s.

The Master Agreement also provides us with options to purchase up to 66,560 additional miners per year through December 31, 2027, on the same terms as the initial order, for an aggregate of 265,000 additional miners.

For additional discussion of our purchase orders with MicroBT, see the purchase orders incorporated by reference as exhibits to this Annual Report.

A “mining pool” is a service operated by a mining pool operator that pools the resources of individual miners to share their processing power over a network.

Mining pools emerged in response to the growing difficulty and network hash rate competing for Bitcoin rewards on the Bitcoin blockchain as a way of lowering costs and reducing the risk of an individual miner’s mining activities.

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

Upon full deployment of these state-of-the-art MicroBT miners, we anticipate a total self-mining hash rate capacity of 38.4 EH/s.

We have four additional annual options to purchase miners, on the same or more favorable terms as the second purchase order executed under the Master Agreement, through December 31, 2027 which may be further extended by the production and delivery schedule of any additional purchase orders executed under the Master Agreement.

These additional miners represent a total hash rate of approximately 75.0 EH/s, assuming we exercise of all four annual purchase options.

A “mining pool” is a service operated by a mining pool operator that combines the resources of individual miners to share their processing power across a network.

Mining pools were created to address the growing difficulty and network hash rate competing for Bitcoin rewards on the Bitcoin blockchain, providing a way to lower costs and reduce the risk of an individual miner’s mining activities.

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

Mining pools are subject to various risks such as disruption and down time.

In the event that a pool we utilize experiences down time or is not yielding returns, our results may be impacted.

We have utilized two types of mining pools:

● The first type of mining pool uses software that coordinates the pool members’ hash rate, identifies new block rewards, records how much work all the participants are doing, and assigns Bitcoin rewards to its participants in proportion to the hash rate each participant contributed to the successful mining transaction.

Fees are paid to the mining pool operator to cover the costs of maintaining the pool and are deducted from amounts we may otherwise earn.

Fees and payouts fluctuate and historically have been no more than approximately 2% per reward earned, on average.

We utilized this type of mining pool during the years ended December 31, 2021 and throughout 2022, until mid-December 2022.

● The second type of mining pool pays Bitcoin rewards utilizing a “Full-Pay-Per-Share” payout of Bitcoin based on a contractual formula, which calculates payout primarily based on the hash rate provided by us to the mining pool as a percentage of total network hash rate, along with other inputs.

We are entitled to consideration even if a block is not successfully placed by the mining pool operator.

We transitioned completely to this type of mining pool in December 2022, and utilized it for the year ended December 31, 2023.

We utilize a type of mining pool that pays Bitcoin rewards utilizing a “Full-Pay-Per-Share” payout of Bitcoin based on a contractual formula.

The formula calculates payouts primarily based on the hash rate we contribute to the mining pool, as a percentage of total network hash rate, along with other inputs.

Under this system, we are entitled to receive consideration even if the mining pool operator does not successfully solve a block.

Immersion-cooling

The initial phase of the development of the Corsicana Facility involves the construction of 400 megawatts (“MW”) of immersion-cooled Bitcoin Mining and Data Center Hosting infrastructure.

Phase I of the development of the Corsicana Facility involved the construction of 400 MW of immersion-cooled Bitcoin Mining infrastructure.

We anticipate that immersion-cooling technology will present many unique opportunities to increase efficiencies in Bitcoin mining and are constantly evaluating new and emerging technologies in the Bitcoin ecosystem to make our mining operations more efficient.

When miners are immersion-cooled, they operate in a more stable environment that is better able to dissipate the heat generated by the miners’ operation, allowing the equipment to run at sustained higher productivity rates for longer periods of time.

We are continuing to test our immersion-cooling mining operations and, if our desired performance metrics are achieved, we plan to leverage our infrastructure development capabilities to expand the implementation of our immersion-cooled Bitcoin mining hardware to increase our Bitcoin mining hash rate without relying solely on purchasing additional new miners and mining equipment, which we believe will result in increased operating efficiencies, and, thus, improved capital efficiencies.

Data Center Hosting

Our Data Center Hosting business segment is operated at our Rockdale Facility and focuses on providing co-location services for institutional-scale Bitcoin mining companies.

The Rockdale Facility provides the critical infrastructure and workforce necessary for institutional-scale miners to deploy and operate their miners in buildings specifically designed to operate Bitcoin miners at scale.

In pursuit of achieving the most efficient power strategy, we combine fixed low-cost power agreements, real-time spot power procurement, and credit from our participation in ancillary power services programs established by the Electric Reliability Council of Texas (“ERCOT”).

We benefit from this low-cost energy by maximizing production margins.

During the year ended December 31, 2023, we completed our expansion of the Rockdale Facility, more than doubling its developed capacity from the time of its acquisition in May 2021.

The expansion of our Rockdale Facility has provided us with the capacity to deploy our current fleet of miners and bring our Bitcoin Mining business segment entirely in-house, while still allowing us to continue offering Data Center Hosting services.

We believe deploying our miners at the expanded Rockdale Facility offers many advantages for our Bitcoin Mining operations, such as operating without incurring third-party colocation services fees and doing so at the low fixed energy costs available to the Rockdale Facility under its long-term Power Purchase Agreement (“PPA”).

Our Engineering business segment designs and manufacturers power distribution equipment and custom engineered electrical products that provide us with the ability to vertically integrate many of the critical electrical components and engineering services necessary for our Corsicana Facility development and Rockdale Facility expansion and to reduce our execution and counter-party risk in ongoing and future expansion projects.

Engineering and other specialized talent employed in our Engineering business segment also allows us to continue to explore new methods to optimize and develop a best-in-class Bitcoin mining operation and has been instrumental in the development of our industrial-scale immersion-cooled Bitcoin mining hardware.

increase our Bitcoin mining hash rate without relying solely on purchasing additional new miners and mining equipment, which we believe will result in increased operating efficiencies, and, thus, improved capital efficiencies.

Our Engineering business segment designs and manufactures power distribution equipment and custom engineered electrical products that provide us with the ability to vertically integrate many of the critical electrical components and engineering services necessary for the Corsicana Facility development and Rockdale Facility expansion.

This integration helps reduce our execution and counter-party risk in our ongoing and future expansion projects.

The specialized talent employed in our Engineering business segment also allows us the opportunity to explore new methods to optimize and develop best-in-class Bitcoin mining operations and has been instrumental in the development of our industrial-scale immersion-cooled Bitcoin mining hardware.

Our Engineering business segment also provides electricity distribution product design, manufacturing, and installation services primarily focused on large-scale commercial and governmental customers and serves a broad scope of clients across a wide range of markets including data center, power generation, utility, water, industrial, and alternative energy.

Products are custom built to client and industry specifications.

In December 2024, we acquired E4A Solutions, LLC (“E4A Solutions”), a leading provider of electrical engineering services to a diverse customer base of energy developers and data center operators.

This acquisition adds to our vertically integrated strategy by adding engineering expertise to service our own existing and future electrical infrastructure as well as provide solutions and services to the rapidly growing market for electrical infrastructure.

Our business is highly competitive and operates 24 hours a day, 7 days a week, on a global basis.

2 unchanged sentences

See more details below under “Industry Trends”.

Our main competitors generally include other large Bitcoin mining companies, both publicly listed and private, as well as other Bitcoin miners who participate in mining pools.

Data center hosting, particularly in relation to Bitcoin mining, is also highly competitive.

Institutional Bitcoin mining customers demand access to mining infrastructure that can supply large amounts of reliable, low-cost electricity, with best-in-class teams that can execute on deploying miners on compressed timelines.

In order to ensure this supply of large amounts of low-cost electricity, we have entered into long-term power purchase agreements with our energy supplier at the Rockdale Facility, which allows us to control our power costs and project them over a long-term, enabling us to focus on developing best-in-class mining infrastructure and delivering best-in-class services.

Our main competitors generally include other large, public Bitcoin mining companies.

Additionally, we compete with other Bitcoin miners who participate in mining pools.

Industry Trends

During 2022 and 2023, we observed several companies in the Bitcoin ecosystem experience significant challenges and initiate bankruptcy proceedings due to the significant volatility in the price of Bitcoin, the increase in interest rates, the volatility in spot prices of power, and other national and global macroeconomic factors.

We anticipate this trend will likely continue as companies attempt to shift their business models to operate on significantly compressed margins.

Further affecting the margins of the companies within the Bitcoin ecosystem, the Bitcoin reward for solving a block is subject to periodic incremental halving, as described below under the heading “Factors Affecting Profitability - Halving.”

The dramatic increase in the price of Bitcoin observed in the market during prior years caused many companies to over-leverage themselves, thus operating in potentially unsustainable ways given the recent variability in the price of Bitcoin.

We chose to refrain from engaging in any significant debt-financing activities during this period and, as a result, has not been subject to the significant

debt-service shortfalls some of our competitors are experiencing.

Despite such challenges in the ecosystem, we continue to focus on building long-term stockholder value by taking strategic action to vertically integrate our business, expanding the Rockdale Facility and developing the Corsicana Facility.

Management believes this focus will positively affect each of our three business segments by providing more capacity for our Bitcoin Mining and Data Center Hosting operations, and by capitalizing on supply chain efficiencies garnered through our Engineering segment.

As we grow our business, we continue to focus on deploying our efficient Bitcoin mining fleet, at scale, while realizing the benefits of being an owner and operator of our Bitcoin Mining and Data Center Hosting facilities.

We anticipate companies in our industry will continue to experience challenges, and that 2024 may continue to be a period of consolidation in the Bitcoin mining industry.

Further, given our relative position, liquidity, and absence of any significant long-term debt, we believe we are well positioned to benefit from such consolidation.

We are continuously evaluating strategic opportunities which we may decide to undertake as part of our strategic growth initiatives;

however, we can offer no assurances that any strategic opportunities which we decide to undertake will be achieved on the schedule or within the budget we anticipate, if at all, in our competitive and evolving industry, and our business and financial results may change significantly as a result of such strategic growth.

The recent shutdowns of certain digital asset exchanges and trading platforms due to fraud or business failure has negatively impacted confidence in the digital asset industry as a whole and led to increased oversight and scrutiny of the industry.

Industry Expansion

The price of Bitcoin increased during the first quarter of 2024 due to a new source of demand, the eleven Bitcoin spot Exchange Traded Funds (“ETFs”), which were approved to begin trading by the SEC on January 11, 2024.

Significant interest in the ETFs followed their introduction.

One such ETF earned recognition as the fastest ETF ever to surpass $10 billion in assets under management since its launch.

The ETFs, as investment vehicles, provide a new access point for investors to gain exposure to Bitcoin through more traditional methods.

The price of Bitcoin increased again in the fourth quarter of 2024 to all-time highs based on the results of the United States presidential election.

During 2023 and 2024, the Bitcoin mining industry experienced record growth as the price of Bitcoin increased from the lows seen in early 2023.

The rising Bitcoin price created renewed opportunities for public companies to access capital markets to fund growth, leading to unprecedent expansion in mining operations.

As a result, the size of provisioned hash calculation services on the network increased, as measured by total hash rate.

We expect competition within the mining industry to persist as long as Bitcoin prices remain elevated or continue to rise.

Bitcoin Network Changes and Competition

The Bitcoin mining industry recently experienced an increase in transaction fees on the Bitcoin network, as well as an increase in overall demand for Bitcoin.

Various protocols on the Bitcoin network gained popularity during 2023, and at various times temporarily resulted in a significant increase in the transaction fees paid to add a certain Bitcoin transaction to the blockchain.

These transaction fees are volatile in nature but are paid directly to miners and are representative of public interest in transacting in Bitcoin.

Transaction fees are packaged with the block subsidy issued by the Bitcoin network to combine for the total reward paid to miners upon solving a block.

The Bitcoin reward issued by the Bitcoin network for solving a block is subject to periodic incremental halving.

The network halving is a preprogrammed, fixed process of the Bitcoin network where the Bitcoin reward for solving a block received by miners is reduced by half approximately every four years, resulting in a predictable and controlled inflationary rate.

The network halving will continue to occur on this schedule until the amount of Bitcoin in existence reaches the cap of 21 million.

Historically, many Bitcoin miners have been a source of selling pressure on Bitcoin as miners have sold their production to fund operations.

After each halving, the decrease in the reward provided to miners from the Bitcoin network may result in a decrease in the supply of Bitcoin sold by miners into the market.

The network halving occurred in April 2024, cutting the subsidy from 6.25 to 3.125 Bitcoin per block.

Network difficulty, which is a measure of how hard it is for miners to solve a block on the Bitcoin blockchain (and, thus, earn a mining reward), is determined by the network’s total hash rate ( i.e.

, the total computational power devoted to solving a block), which is adjusted every 2,016 blocks (with a new block being added approximately every ten minutes).

Therefore, as more miners join the network and the network’s global hash rate increases, its difficulty will increase.

Conversely, if miners leave the network and its hash rate decreases, its difficulty will decrease.

We have observed that when the market price for Bitcoin experiences a sustained increase (as it did throughout 2024), new miners are introduced onto the Bitcoin network, increasing its network hash rate, and network difficulty increases as a result.

Thus, despite increasing our hash rate by approximately 154.0% from December 31, 2023, to December 31, 2024, the halving in April 2024 and increased network difficulty following increased network hash rate across the periods resulted in an approximately 27.1% decrease in the number of Bitcoin we mined for the year ended December 31, 2024, as compared to the same period in 2023.

Accordingly, as market prices for Bitcoin increase and more miners and hash rate are drawn onto the Bitcoin network, network difficulty and competition will continue to increase, meaning existing miners like us will need to increase their hash rate to maintain and improve their chances of earning a Bitcoin mining reward.

To do this, we continually seek out new Bitcoin Mining capacity, including through our acquisition and development of new Bitcoin Mining facilities (such as the Corsicana Facility and the Block Mining Acquisition) and the electricity supply and distribution facilities to service them, as well as other strategic growth opportunities.

Further, we have adopted new and improved technology to increase both our mining power and efficiency, including our industrial-scale adoption of immersion cooling and our strategic acquisitions of large quantities of the newest and most powerful and efficient miners available.

Vertical Integration

Prior to the halving event, shifts in strategy by prominent Bitcoin miners focused on implementing vertically-integrated business models by investing in infrastructure, and upgrading and expanding fleets at their own facilities rather than renting out space from a third-party’s data center.

Vertical integration provides additional control over operational outcomes as well as better management of any input costs such as power and overhead fees.

Flexibility, and the ability to manage expenses, becomes increasingly important as the amount of competition on the Bitcoin network expands and the subsidy in Bitcoin provided by the network contracts decreases.

The Company has led the industry by focusing on a vertically-integrated business model since 2021.

We continue to focus on building long-term stockholder value by taking strategic actions to further vertically-integrate our business at the current Rockdale Facility, developing the Corsicana Facility, and having acquired the Kentucky Facility and E4A Solutions.

Management believes a focus on vertical integration will positively affect each of our business segments by providing increased capacity for our Bitcoin Mining operations, more opportunities for implementing our proprietary power strategy, and by positioning us to capitalize on supply chain efficiencies and electrical engineering services garnered through our Engineering segment.

We continue to focus on deploying our efficient Bitcoin Mining fleet, at scale, while realizing the benefits of being an owner and operator of our Facilities.

We anticipate the Bitcoin network will continue to see increased competition and consolidation in the Bitcoin mining industry.

Further, given our relative position and liquidity, we believe we are well positioned to benefit from such consolidation.

We are continuously evaluating opportunities which we may decide to undertake as part of our strategic growth initiatives;

however, we can offer no assurances that any strategic opportunities which we decide to undertake will be achieved on the schedule or within the budget we anticipate, if at all, and our business and financial results may change significantly as a result of such strategic growth.

Digital Asset Exchanges

Digital asset exchanges provide trading venues for purchases and sales of Bitcoin.

Bitcoin can be exchanged for fiat currencies, such as the U.S.

dollar, at rates of exchange determined by market forces on Bitcoin trading platforms, which are not regulated in the same manner as traditional securities exchanges.

In addition to these platforms, over-the-counter markets and derivatives markets for Bitcoin also exist.

The value of Bitcoin within the market is determined, in part, by the supply of and demand for Bitcoin in the

global Bitcoin market, market expectations for the adoption of Bitcoin, and the volume of peer-to-peer transactions, among other factors.

The shutdowns of certain digital asset exchanges and trading platforms due to fraud or business failure negatively impacted confidence in the digital asset industry as a whole and led to increased oversight and scrutiny of the industry.

We did not have any exposure to any digital asset lenders or exchanges who have declared bankruptcy or have suspended operations.

We only hold and sell Bitcoin that we have mined and do not sell, hold, or redeem any Bitcoin for any other parties.

Our Bitcoin is held in cold storage wallets by a well-known U.S.-based third-party digital asset-focused custodian.

We also sell our Bitcoin using our custodian’s U.S.

We only hold and sell Bitcoin that we have mined or purchased and do not sell, hold, or redeem any Bitcoin for any other parties.

Our Bitcoin is held in cold storage wallets by well-known U.S.-based third-party digital asset-focused custodians.

Custody of our Bitcoin

Our Bitcoin is held in cold storage wallets by well-known U.S.-based third-party digital asset-focused custodians, NYDIG Trust Company LLC (“NYDIG”) and Coinbase, Inc., on behalf of itself and Coinbase Custody Trust Company, LLC, and, if applicable, Coinbase Credit, Inc.

or Coinbase Custody International Ltd.

(collectively, “Coinbase” and, together with NYDIG, our “Custodians”).

We may also sell our Bitcoin using our Custodians’ U.S.

brokerage services.

In 2023, the banking industry and financial services sector experienced disruptions and instability.

In March 2023, Silvergate Capital Corporation, the holding company for Silvergate Bank, which was primarily focused on the digital asset industry, announced its intent to wind down operations and voluntarily liquidate its holdings.

Also in March, Silicon Valley Bank and Signature Bank both closed.

The Federal Deposit Insurance Corporation (“FDIC”) was appointed receiver following their closures and transferred substantially all assets of the former banks to newly created, FDIC-operated bridge banks in an action to protect all depositors of the banks.

In May 2023, First Republic Bank was closed, and the FDIC sold substantially all of First Republic Bank’s assets to JP Morgan Chase & Co.

Although we maintained certain operating accounts with Signature Bank prior to its closure, we have since transferred all our deposits previously held with the bank to other banking institutions.

We did not lose access to our accounts or experience interruptions in banking services, and we suffered no losses with respect to our deposits at Signature Bank as a result of the bank’s closure.

We did not have any banking relationships with Silicon Valley Bank, Silvergate Bank, or First Republic Bank, and currently hold our cash and cash equivalents at multiple banking institutions.

Although we did not suffer any losses, we continue to monitor for updates to mitigate any future impacts we may be subject to as a result of instability of the banking industry and financial services sector.

The cold storage wallets in which our Bitcoin are held are located in the United States.

NYDIG is a standalone trust company organized by an institutional-grade New York City bank, which holds our Bitcoin in trust accounts solely for our benefit.

Coinbase is established as a New York Trust Company, a fiduciary under New York state law, and is regulated by the New York Department of Financial Services (“NYDFS”).

Any Company funds that may be held by Coinbase are legally segregated at the account, sub-account, and on-chain wallet address level.

While we believe that our custodial agreements provide our business with reasonable protections for our operations and the safe storage of our digital assets, we make no assurances that storing our digital assets with either NYDIG or Coinbase is free from risk.

To the best of our knowledge, NYDIG and Coinbase safely store our digital assets in segregated accounts as represented in the NYDIG Custodial Agreement and the Coinbase Prime Broker Agreement;

however, if either, or both, of our Custodians were to be in breach of its agreement, our digital assets could be compromised.

Similarly, if NYDIG or Coinbase were to cease operations, declare insolvency or file for bankruptcy, there is a reasonable risk that recovery of our assets, though kept in segregated accounts, would be delayed or unrecoverable.

For further discussion of our custodial agreements, see Part II, Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report.

Applicable insolvency law is not fully developed with respect to the holding of digital assets in custodial accounts.

If our custodied Bitcoin were considered to be the property of our Custodians’ estates in the event that such Custodian were to enter bankruptcy, receivership or similar insolvency proceedings, there is a risk that we could be treated as a general unsecured creditor of such Custodian, inhibiting our ability to access our Bitcoin.

Even if we are able to prevent our Bitcoin from being considered the property of a Custodian’s bankruptcy estate as part of an insolvency proceeding, it is possible that we would still be delayed or may otherwise experience difficulty in accessing our Bitcoin held by the affected Custodian during the pendency of the insolvency proceedings.

To our knowledge, our Custodians have not petitioned for bankruptcy protection, been declared insolvent or bankrupt, made any assignment for the benefit of creditors, or had a receiver appointed for its assets, at any point while we have been a customer.

Further, none of our Bitcoin was, as of the time of filing this Annual Report, custodied with any entity that has petitioned for bankruptcy protection, been declared bankrupt or insolvent, made any assignment for the benefit of creditors, or had a receiver appointed for its assets.

The recent bankruptcies in the crypto industry and failures of certain financial institutions have not resulted in any loss or misappropriation of any of our Bitcoin nor have such events impacted our access to any of our Bitcoin.

We are not aware of any of our Custodians experiencing excessive redemptions or withdrawals, or having suspended redemptions or withdrawals, of any customer assets (Bitcoin, crypto, or otherwise).

Further, we have not experienced any loss of, or access to, our Bitcoin custodied with our Custodians, we have never been unable to account for such Bitcoin assets, and we are not aware of our Custodians having ever been unable to account for our Bitcoin assets or the crypto assets of its other customers.

To the extent we sell any of our Bitcoin custodied with either NYDIG or Coinbase, these transactions are done through the Custodian’s U.S.

brokerage services, which are registered with the Financial Crimes Enforcement Network (“FINCEN”) and hold NYDFS Bitlicenses.

Such brokered sales are made primarily through market-making transactions with institutional grade investors.

While we do not know the identity of the purchasers in such brokered sales of our Bitcoin, each of our Custodians have made all customary representations to us regarding its compliance with all Know Your Customer and Anti-Money Laundering (“KYC/AML”) regulations applicable to such brokered sales of our Bitcoin.

Our agreements with such brokerage services require them to comply with all applicable FINCEN and NYDFS rules and regulations, and with respect to the NYDIG Custodial Agreement, the Office of Foreign Assets Control’s rules and regulations, including with respect to KYC/AML.

We maintain property insurance coverage for our mining hardware, buildings, and infrastructure.

This includes coverage for business interruption, earthquakes, flood and tornadoes.

We also maintain cybersecurity coverage, casualty, general liability, pollution and builders’ risk insurance policies.

We believe each Custodian maintains limited insurance policies covering the pool of digital assets it custodies against certain events of loss, such as theft.

We do not carry additional insurance coverage on our Bitcoin holdings.

We engage our insurance broker annually to solicit underwriters to provide proposals to renew our current coverage or update our policies to meet our needs, prior to the policies’ expiration.

Research and Development

In 2022, we initiated development of the Corsicana Facility to expand our Bitcoin Mining and Data Center Hosting capabilities on a 265-acre site in Navarro County, Texas, located next to the Navarro Switch.

Once complete, we expect the Corsicana Facility to have one gigawatt of developed capacity for Bitcoin Mining and Data Center Hosting operations.

The initial phase of the development of the Corsicana Facility involves the construction of 400 MW of immersion-cooled Bitcoin Mining and Data Center Hosting infrastructure, as well as a high-voltage power substation and transmission facilities to supply power and water to the facility.

Construction of the substation and the data centers is ongoing and operations are expected to commence by the end of the first quarter of 2024, following commissioning of the substation.

In 2022, we initiated development of the Corsicana Facility to expand our Bitcoin Mining capabilities on a 265-acre site in Navarro County, Texas, located next to the Navarro Switch.

Once complete, we expect the Corsicana Facility to have one GW of developed capacity for Bitcoin Mining or for other business purposes.

Phase I of the development of the Corsicana Facility involved the construction of 400 MW of immersion-cooled Bitcoin Mining infrastructure, as well as a high-voltage power substation and transmission facilities to supply power and water to the facility.

Construction of Phase I was completed during the year ended December 31, 2024.

We are currently evaluating the feasibility of developing the approximately 600 MW of remaining power capacity at the Corsicana Facility for AI/HPC operations.

Materials and Suppliers

We maintain several key supplier relationships that are important to our business to secure mining hardware and infrastructure components and other materials.

Given the complexity of developing mining hardware, there are few suppliers that can produce miners at scale.

For example, our purchase orders with MicroBT have future delivery schedules that extend out many months before those miners are delivered to our Rockdale Facility.

These fluctuations in delivery timelines require us to plan to purchase miners well in advance of when we anticipate deploying those miners.

Our development of the Corsicana Facility requires large quantities of electrical infrastructure components and construction materials.

We seek to procure these materials from our suppliers in sufficient quantities so that we can deploy miners at scale on

accelerated timelines.

Further, our immersion-cooled Bitcoin Mining activities require large volumes of specialized non-conductive fluid, for which there are limited manufacturers.

We maintain several key supplier relationships that are important to our business for securing mining hardware, infrastructure components and other materials.

Due to the complexity of developing mining hardware, only a few suppliers can produce ASICs miners at scale.

All of our miner purchases in 2024 were from MicroBT.

Our potential purchase orders with MicroBT may have future delivery schedules that extend out many months before those miners are delivered to our Facilities.

These delivery timeline fluctuations require us to plan to purchase miners well in advance of their anticipated deployment.

The development and potential expansion of our Facilities require significant quantities of electrical infrastructure components and construction materials.

We seek to procure these materials from our suppliers in sufficient quantities to ensure we can deploy miners at scale on accelerated timelines.

Additionally, our immersion-cooled Bitcoin Mining activities require large volumes of specialized non-conductive fluid, for which there are limited manufacturers.

Global Logistics

Global supply logistics have caused delays across all channels of distribution.

Similarly, we have also experienced delays in certain of our miner delivery schedules and in our infrastructure development schedules due to constraints on the globalized supply chains for miners, electricity distribution equipment and construction materials.

Through the date of this Annual Report, we have been able to effectively mitigate any delivery delays to avoid materially impacting our miner deployment schedule;

however, there are no assurances we will be able to continue to mitigate any such delivery delays in the future.

Additionally, the development of the Corsicana Facility requires large quantities of construction materials, specialized electricity distribution equipment and other component parts that can be difficult to source.

We have procured and hold many of the required materials to help mitigate global supply logistic and pricing concerns.

We continue to monitor developments in the global supply chain and assess their potential impact on our expansion plans.

We anticipate that Bitcoin mining will be a focus for potential increased regulation in the near- and long-term, and we cannot predict how future regulations may affect our business or operations.

State regulation of Bitcoin mining is an important consideration with respect to where we conduct our mining operations.

Our Rockdale Facility and our Corsicana Facility are both located in the State of Texas.

To the extent that there is any state regulation of Bitcoin mining, we believe Texas is likely to remain one of the most favorable regulatory environments for Bitcoin miners.

In March 2022, the SEC issued proposed climate-related disclosure requirements for registrants and received thousands of comments on the proposal.

We continue to await the release of any potential finalized rules requiring such disclosures following the analysis of the comments.

Global supply chain logistics have continued to cause delays across all distribution channels.

Similarly, we have also experienced delays in certain miner delivery schedules and infrastructure development schedules due to constraints in the global supply chains for miners, electricity distribution equipment and construction materials.

Through the date of this Annual Report, we have effectively mitigated any delivery delays to prevent material impacts on our miner deployment schedule;

however, there are no assurances that we will be able to continue mitigating any such delivery delays in the future.

Additionally, the development and potential expansion of our Facilities require large quantities of construction materials, specialized electricity distribution equipment and other component parts that can be difficult to source.

To help mitigate global supply chain logistics and pricing concerns, we have procured and hold many of the required materials.

We continue to monitor global supply chain developments and assess their potential impact on our expansion plans.

We anticipate that Bitcoin mining will be a focus for potentially increased regulation in both the near- and long-term, and we cannot predict how future regulations may affect our business or operations.

The United States has imposed economic sanctions that affect transactions with designated foreign countries, foreign nationals, and others.

The Office of Foreign Assets Control (“OFAC”) is responsible for helping to ensure that U.S.

entities do not engage in transactions with certain prohibited parties, as defined by various Executive Orders and acts of Congress.

OFAC publishes, and routinely updates, lists of names of persons and organizations suspected of aiding, harboring or engaging in terrorist acts, including the Specially Designated Nationals (“SDNs”) and Blocked Persons List.

Our policies prohibit transactions with SDNs, and we take measures to prevent transactions that do not comply with OFAC and other applicable sanctions, including establishing a risk-based compliance program that has policies, procedures and controls designed to prevent us from having unlawful business dealings with prohibited countries, regions, individuals or entities, however, due to the pseudonymous nature of blockchain transactions, and our

reliance on third-party vendors to identify and prevent transactions with SDNs, we may unknowingly engage in transactions with SDNs, despite our best efforts.

State regulation of Bitcoin mining and related energy consumption is an important consideration with respect to where we conduct our mining operations.

The Rockdale Facility and the Corsicana Facility are both located in the State of Texas.

To the extent that there is any state regulation of Bitcoin mining or issues relating to the energy grid which may affect Bitcoin mining, we believe the State of Texas is likely to remain one of the most favorable regulatory environments for Bitcoin miners.

In 2024, we acquired Block Mining in the Commonwealth of Kentucky, which also maintains a favorable regulatory environment for Bitcoin mining.

In 2025, we announced a process for evaluating potential AI/HPC uses for the remaining 600 MW of capacity at the Corsicana Facility.

Accordingly, we will monitor potential regulatory developments affecting data centers more broadly and their affiliated energy use.

In March 2024, the SEC issued a final rule requiring climate-related disclosures in public company annual reports and registration statements for the year ending December 31, 2025 for large accelerated filers.

We have been evaluating the impact this rule may have on our disclosures, though due to ongoing litigation, the rule has been stayed, and due to the change in administration, we anticipate that the rule may ultimately be rescinded.

In January 2023, the Board of Governors of the Federal Reserve System (the “Federal Reserve”), Office of the Comptroller of the Currency, and FDIC issued a joint statement regarding perceived risks to banks with clients in crypto asset industries.

In January 2023, the Federal Reserve also issued a policy statement broadening its regulatory authority to limit the activities of state-chartered banks.

In January 2023, the Federal Reserve also issued a policy statement expanding its regulatory authority to limit the activities of state-chartered banks.

Several leaders in the U.S.

Congress sent oversight letters to the prudential regulators pushing back on any efforts to place limits on banking activity for digital asset industries.

Riot has also diversified banking relationships to mitigate any potential regulatory risk with respect to financial services.

In 2025, legislation and potential rules addressing fair access to banking are being considered to prevent such limitations.

To mitigate any potential regulatory risks with respect to financial services, we have diversified our banking relationships to mitigate any potential regulatory risk with respect to financial services.

Additionally, in January 2023, the U.S.

House of Representatives announced its first ever Financial Services Subcommittee on Digital Assets and its intention to develop a regulatory framework for the digital asset industry.

Bipartisan leadership of the Senate Banking Committee announced that goal as well.

Over the course of 2023, the House Financial Services Committee passed various bills, including a bill to provide a market structure for digital assets, but no such legislation has received a vote on the floor of the full House.

House of Representatives announced its first ever Financial Services Subcommittee on Digital Assets, with the intention of developing a regulatory framework for the digital asset industry.

In 2024, the U.S.

House of Representatives passed a bill titled the Financial Innovation and Technology for the 21 st Century Act, aiming to provide a market structure for digital assets, although it did not receive consideration in the Senate.

In January 2025, the House renewed its Subcommittee, and the Senate Banking Committee also announced its own Subcommittee on Digital Assets, with the shared goal of developing a regulatory framework.

We anticipate that such a market structure may be considered by both houses of Congress in 2025.

In January 2024, a decade after initial applications were filed, the SEC approved a series of spot Bitcoin exchange-traded funds, which have received billions of dollars of in-flows.

In 2025, the SEC established a working group that aims to establish regulatory certainty for digital asset industries.

Also in January 2024, the U.S.

Energy Information Administration initiated a provisional survey of electricity consumption information from cryptocurrency mining companies operating in the United States.

Energy Information Administration initiated a provisional survey to collect electricity consumption information from cryptocurrency mining companies operating in the United States.

The survey was authorized by the Office of Management and Budget as an emergency data request;

This action is purely a survey, and it remains unclear whether or how the information will be used in future regulatory efforts.

Leaders on both the U.S.

however, it was subsequently withdrawn following a successful lawsuit led by us and the Texas Blockchain Council.

In 2023 and 2024, leaders on both the U.S.

House Financial Services Committee and U.S.

Senate Banking Committee have expressed interest in passing legislation to provide additional regulatory authority to address risks related to the use of digital assets in illicit financial activity.

Treasury Department has also requested additional authorities to address such risks.

However, we have not seen sufficient support emerge in favor of any particular proposal to anticipate any specific changes at this time.

Senate Banking Committee expressed interest in passing legislation to provide additional regulatory authority to address risks related to the use of digital assets in illicit financial activity.

Treasury Department also requested additional authorities to address such risks.

However, we have not seen sufficient support emerge in favor of any particular proposal at this time to anticipate any specific changes.

The Trump administration has instead signaled a stronger focus on the benefits of digital assets as opposed to the risks, appointing a first-ever AI and Crypto Czar to foster growth in the industries in the U.S., and so we continue to see insufficient support for any particular proposal to advance additional regulatory measures to address risks in this space at this time.

We are aware that members of the U.S.

House Committee on Ways and Means, along with other leaders, are considering changes to the tax treatment of Bitcoin.

Potential changes could include taxing Bitcoin like similarly situated commodities at the point of sale, rather than at the point of mining as well as capital gains at the point of sale.

Additionally, we are aware of members considering a de minimis exemption for low-dollar Bitcoin transactions similar to the exemption that exists for foreign currencies, which could facilitate broader adoption of the asset at the consumer level.

We are unable to predict the impact that any new standards, legislation, or regulations may have on our business at the time of filing this Annual Report.

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Environmental

There are increasing concerns over the quantity of energy, particularly from non-renewable sources, used for Bitcoin mining and its effects on the environment.

Many media reports focus exclusively on the energy requirements of Bitcoin mining and cite it as an environmental concern.

However, those reports tend to omit discussion of the positive contributions associated with Bitcoin mining to other customers on the electrical grid.

Bitcoin mining operations present a stable demand for energy and can be quickly curtailed, uniquely positioning businesses that engage in Bitcoin mining to respond to increased electricity demand in emergency situations.

Throughout 2023, we voluntarily reduced our operations and curtailed our energy consumption to allow our energy provider to redirect our power allotment back into the ERCOT market during extreme weather events.

By taking such actions, we immediately helped to stabilize the grid by allowing our power allotment to be delivered to the areas of greatest need, such as heating homes and powering hospitals.

Overall, our operations incentivize new power generation development and our actions help to reduce the frequency and impact of power failures and electricity price surges.

In exchange for powering down our systems in response to high electricity demand, we receive benefits associated with the difference between our contractual cost of power and the price at which such power is sold on the ERCOT market (less any applicable fees payable to our consultants who assist with our participation in the ERCOT Demand Response Services Program).

Additionally, we voluntarily participate in load response programs operated by ERCOT, whereby we temporarily give ERCOT the right to curtail a set portion of our power load at their discretion in exchange for a fee.

Ultimately, these benefits are shared by us and all participants in the ERCOT market, through the positive incentivizing of energy supply and demand consistency across the ERCOT marketplace, which contributes positively to the overall health of the Texas grid.

Concerns have been raised over the quantity of energy used for Bitcoin mining, particularly the environmental effects of energy from non-renewable sources.

Many media reports focus exclusively on the energy requirements of Bitcoin mining but fail to include discussion of its positive contributions to other customers on the electrical grid.

Bitcoin mining operations can be quickly curtailed, uniquely positioning businesses that engage in Bitcoin mining to respond to increased electricity demand in emergency situations.

Throughout 2024, we voluntarily curtailed our operations’ energy consumption to allow our energy providers to redirect our power allotment back into the Electric Reliability Council of Texas (“ERCOT”) and Midcontinent Independent System Operator (“MISO”) markets during extreme weather events.

Such actions helped to stabilize the grid by allowing our power allotment to be delivered to the areas of greatest need, such as heating homes and powering hospitals.

In exchange for powering down our systems during times of high electricity demand, we receive benefits associated with the difference between our contractual cost of power and the price at which such power is sold on the ERCOT and MISO markets.

Additionally, we voluntarily participate in load response programs operated by ERCOT and MISO, whereby we temporarily give ERCOT and MISO the right to curtail a set portion of our power load at their discretion in exchange for a fee.

Overall, our operations incentivize the development of new power generation capacity and our actions help to reduce the frequency and impact of power failures and electricity price surges, which benefits are shared by us and all participants in the ERCOT and MISO markets.

Human Capital Resources

During the past year, we have made substantial investments in our workforce to retain and attract best-in-class employees, substantially growing our employee base, while also internally promoting individuals to key positions across the Company.

As of December 31, 2023, we had a total workforce of approximately 534 employees across our entire organization, including professionals in engineering, information and technology, operations, construction, manufacturing.

finance, legal, communications, and Bitcoin Mining operations.

During the past year, we have made substantial investments in our workforce to attract and retain best-in-class employees, substantially growing our employee base, while internally promoting individuals to key positions across the Company.

As of December 31, 2024, our total workforce consisted of approximately 783 employees across our entire organization, including professionals in engineering, information and technology, construction, manufacturing, finance, legal, communications, and Bitcoin Mining operations.

Of our total workforce, approximately 629 employees were in engineering, construction, manufacturing, and Bitcoin Mining operations and approximately 154 employees were in a general or administrative support function, such as information and technology, finance, legal or communications.

Approximately 43% of our workforce was in Colorado and 53% was in Texas.

Our strategy with human capital resources is to align the interests of our employees with our key long-term success drivers.

In execution of this strategy, we adopted a long-term performance incentive program, under which all eligible employees are granted a combination of service-based restricted stock awards that generally vest over a three-year period and performance-based restricted stock awards that are eligible to vest based on our achievement of specific performance or total stockholder return milestones.

As of December 31, 2024, approximately 28% of our workforce was in Colorado, 70% was in Texas, and 2% was in Kentucky.

Our human capital resources strategy aims to align the interests of our employees with our key long-term success drivers.

To support execution of this strategy, we have implemented a long-term performance incentive program, under which all eligible employees are granted a combination of service-based restricted stock awards that generally vest over a three-year period and performance-based restricted stock awards that are eligible to vest based on achievement of specific performance or total stockholder return milestones.

During 2023, certain employees under the long-term performance program were eligible to receive cash in lieu of restricted shares of our common stock awards based on achievement of these same performance milestones.

We believe our performance program is a key incentive for our employees that aligns their long-term interests with our long-term objectives as an organization.

In addition to Riot’s long-term incentive program and competitive cash compensation practices, our employees are provided with excellent health benefits, paid parental leave, paid time off, and additional benefits.

We believe our performance program is a key incentive for our employees aligning their long-term interests with our long-term objectives as an organization.

In addition to our long-term incentive program and competitive cash compensation practices, our employees are provided with excellent health benefits, paid maternal and parental leave, paid time off, and additional benefits.

We recognize the positive impact that leaders within a company can have on their teams, and we believe every employee is and should be a leader within our Company.

Consequently, in addition to seeking out top talent from outside of our organization to foster this positive impact, we offer management and executive leadership training, and encourage the continuous development of leaders across the Company, and motivate every Company employee to take ownership over their impact on the Company’s success.

We seek to attract a pool of diverse, best-in-class candidates and foster their career growth by hiring the best talent available, rather than relying solely on educational background.

In support of such initiative, we look for candidates in local communities and large cities alike, and from a variety of backgrounds.

Our goal is a long-term, growth-oriented career for each employee.

We also believe that our ability to retain our workforce is dependent on our ability to foster an environment that is sustainably safe, respectful, fair, and inclusive of everyone, and promotes diversity, equity, and inclusion both inside and outside of our business.

Diversity, Equity, and Inclusion

We support diversity and inclusion in a workplace where employees can thrive, and our policies are designed to promote fairness and respect for everyone.

Diverse backgrounds, experiences and opinions are encouraged and welcomed.

In support of such diversity and inclusion, we act in accordance with our Code of Ethics and Business Conduct and our Non-Discrimination and Anti-Harassment Policy to create a safe environment free from discrimination or harassment that respects the human rights of our employees.

We strive to achieve a workplace where opportunities for success are created and available for all employees.

In support of this goal, in 2023, we required all employees to complete unconscious bias and harassment trainings.

Consequently, in addition to seeking out top talent from outside of our organization to foster this positive impact, we offer management and executive leadership training and encourage the continuous development of leaders across the Company, and motivate every employee to take ownership over their impact on our success.

We seek to attract a pool of best-in-class candidates and foster their career growth by hiring the best talent available, rather than relying solely on educational background.

In support of such initiative, we actively seek candidates from local communities and large cities alike, with a variety of backgrounds and a goal of providing long-term, growth-oriented careers for each employee.

We also believe that our ability to retain our workforce is dependent on our ability to foster an environment that is sustainably safe, respectful, and fair.

Compensation and Benefits

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Bitcoin Mining Results

Bitcoin Mining Production and Bitcoin Sales

Bitcoin Mining Production, Purchases, and Sales

One way we measure the success of our operations is by the number and U.S.

Dollar value of the Bitcoin rewards we earn from our Bitcoin Mining activities.

The following table presents information regarding our Mining operations, including Bitcoin production and sales of the Bitcoin we mine.

The following table presents information regarding our Bitcoin Mining operations, including production, purchases, and sales of Bitcoin.

Balance as of January 1, 2022

Revenue recognized from Bitcoin mined

Proceeds from sale of Bitcoin

Exchange of Bitcoin for employee compensation

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Balance as of December 31, 2022

Cumulative effect upon adoption of ASU 2023-08

Revenue recognized from Bitcoin mined

Bitcoin receivable

Proceeds from sale of Bitcoin

Exchange of Bitcoin for employee compensation

Realized gain on sale/exchange of Bitcoin

Impairment of Bitcoin

Change in fair value of Bitcoin

Balance as of December 31, 2023

Cumulative effect upon adoption of ASU 2023-08

Revenue recognized from Bitcoin mined

Bitcoin receivable

Acquisitions of Bitcoin

Proceeds from sale of Bitcoin

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Balance as of December 31, 2024

We increased the quantity of Bitcoin rewards earned from our Bitcoin Mining operations from 5,554 Bitcoin mined in 2022, to 6,626 Bitcoin mined in 2023, representing an increase of approximately 19.3%.

The Bitcoin rewards earned from our Bitcoin Mining operations were 6,626 Bitcoin in 2023 and 4,828 Bitcoin in 2024, representing a decrease of approximately 27.1%.

Revenue recognized from our Bitcoin Mining activities increased from approximately $189.0 million during 2023 to $321.0 million during 2024, representing an increase of approximately 69.8%.

The increase was due to an increase in Bitcoin rewards earned as a result of an increase in the number of miners deployed from 88,556 as of December 31, 2022, to 112,944 as of December 31, 2023, partially offset by an increase in the global network hash rate.

The increase in revenue was primarily due to an increase in Bitcoin prices and rewards earned as a result of an increase in our deployed hash rate of 12.4 EH/s as of December 31, 2023, to 31.5 EH/s as of December 31, 2024, partially offset by the impact of the halving in April 2024.

Factors Affecting Profitability

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The prices of cryptocurrencies, including Bitcoin, have experienced substantial volatility, meaning that high or low prices may be based on speculation and incomplete information, subject to rapidly changing investor sentiment, and influenced by factors such as technology, regulatory void or changes, fraudulent actors, manipulation, and media reporting.

Bitcoin (as well as other cryptocurrencies) may have value based on various factors, including, but not limited to, their acceptance as a means of exchange by consumers and producers, scarcity, and market demand, all of which are beyond our control.

Bitcoin (as well as other cryptocurrencies) may have value based on various factors, including,

but not limited to, their acceptance as a means of exchange by consumers and producers, scarcity, and market demand, all of which are beyond our control.

Further affecting the industry, particularly for the Bitcoin blockchain, the Bitcoin reward for solving a block is subject to periodic incremental halving.

Halving is a process designed to control the overall supply and reduce the risk of inflation in Bitcoin, which uses a proof-of-work consensus algorithm.

At a predetermined block, the mining reward is cut in half, hence the term “halving.” For Bitcoin the reward was initially set at 50 Bitcoin currency rewards per block.

The Bitcoin blockchain has undergone halvings three times since its inception as follows:

The reward was initially set at 50 Bitcoin currency rewards per block.

The Bitcoin blockchain has undergone four halving events since its inception on the following dates:

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

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

and (3) on May 11, 2020, at block height 630,000, when the reward was reduced to its current level of 6.25 Bitcoin per block.

The next halving for the Bitcoin blockchain is currently anticipated to occur in April 2024 at block height 840,000.

Halvings will continue to occur until the total amount of Bitcoin currency rewards issued reaches approximately 21 million and the theoretical supply of new Bitcoin is exhausted, which is expected to occur around the year 2140.

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

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

The next halving for the Bitcoin blockchain is currently anticipated to occur in mid-2028 at block height 1,050,000.

Many factors influence the price of Bitcoin, and potential increases or decreases in prices in advance of or following a future halving is unknown.

Network Hash Rate and Difficulty

Generally, a Bitcoin miner’s chance of solving a block on the Bitcoin blockchain and earning a Bitcoin reward is a function of the miner’s hash rate, relative to the global network hash rate (i.e., the aggregate amount of computing power devoted to supporting the Bitcoin blockchain at a given time).

As demand for Bitcoin has increased, the global network hash rate has increased rapidly, and as greater adoption of Bitcoin occurs, we expect the demand for new Bitcoin will likewise increase as more mining companies are drawn into the industry by this increased demand.

Further, as a greater number of increasingly powerful miners have been deployed, the network difficulty for Bitcoin has consequently also increased.

Network difficulty is a measure of how difficult it is to solve a block on the Bitcoin blockchain, which is adjusted every 2,016 blocks (approximately every 2 weeks) so that the average time between each block validation remains approximately ten minutes.

A high difficulty means that more computing power will be required in order to solve a block and earn a new Bitcoin reward, which, in turn, makes the Bitcoin network more secure by limiting the possibility of one miner or mining pool gaining control of the network.

Therefore, as new and existing miners deploy additional hash rate, the global network hash rate will continue to increase, meaning a miner’s share of the global network hash rate (and therefore its chance of earning Bitcoin rewards) will decline if it fails to deploy additional hash rate at pace with the industry.

For further discussion of the factors affecting our profitability, see the discussion under Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the heading “Summary of Bitcoin Mining Results” of this Annual Report, as well as the discussion of various risks, factors, and uncertainties we believe may affect our revenue and results of operations under Part I, Item 1A.

A Bitcoin miner’s probability of solving a block on the Bitcoin blockchain and earning a Bitcoin reward generally depends on the miner’s hash rate in relation to the global network hash rate.

As more powerful miners have been deployed, the Bitcoin network’s difficulty has consequently increased.

Network difficulty is adjusted every 2,016 blocks (approximately every 2 weeks) to maintain an average time of approximately ten minutes between each block validation.

A higher network difficulty means more computational power is required to solve a block and earn a Bitcoin reward.

This, in turn, makes the Bitcoin network more secure by limiting the possibility of one miner or mining pool gaining control of the network.

Therefore, as new and existing miners increase their hash rate, the global network hash rate will continue to grow, meaning a miner’s share of the global network hash rate will decline if it fails to deploy additional hash rate at scale with the industry.

For further discussion of the factors affecting our profitability, see the discussion under Part II, Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the heading “Summary of Bitcoin Activity” of this Annual Report, as well as the discussion of various risks, factors, and uncertainties we believe may affect our revenue and results of operations under Part I, Item 1A.

“Risk Factors” of this Annual Report.

Performance Metrics

We seek to mine Bitcoin by using our miners to solve complex cryptographic algorithms to support the Bitcoin blockchain (in a process known as “solving a block”).

In return for solving a block, we receive the Bitcoin reward, which we can hold or sell on the market to generate cash.

Bitcoin miners generally measure their capability in terms of hash rate, which is measured in terms of the number of cryptographic hashing algorithms solved (or “hashes”) per second.

We aim to mine Bitcoin by utilizing our miners to solve blocks.

In exchange for solving a block, we receive a Bitcoin reward, which we can either hold or sell on the market to generate cash.

Bitcoin miners typically measure their performance in terms of hash rate, which is the number of cryptographic hashing algorithms solved (or “hashes”) per second.

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

However, as the relative market price for Bitcoin increases, more miners are encouraged to attempt to mine Bitcoin, which increases Bitcoin’s global network hash rate.

However, as the relative market price of Bitcoin increases, more miners are incentivized to mine Bitcoin, which increases the global network hash rate.

Therefore, to remain competitive, miners seek to continually increase their total hash rate, creating a feedback loop:

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In theory, this process should continually replicate itself until the supply of available Bitcoin is exhausted.

In response, miners have attempted to achieve greater hash rate by deploying increasingly sophisticated miners in ever greater quantities.

This has become the Bitcoin mining industry’s great “arms race.” There are very few manufacturers of miners capable of producing a sufficient number of miners of adequate quality to meet this need, and scarcity results, leading to higher prices.

Compounding this phenomenon, it has been observed that some manufacturers of Bitcoin miners may increase prices for new miners as the market price of Bitcoin increases.

Further, these manufacturers have also been impacted by the ongoing global supply chain crisis resulting from COVID-19, both in terms of increased prices for the components of these new miners resulting from the constrained supply of the semiconductors used in the production of the highly specialized ASIC chips miners rely on, and in terms of labor costs to manufacture new miners as workforces are affected by increased absenteeism due to COVID-19 restrictions and employee burnout.

Thus, miner manufacturers are subject to increasing price pressures due to both increased demand for new miners and decreased supply of necessary components and labor, ultimately leading manufacturers to charge higher prices for new miners.

Miners have attempted to boost their hash rate by deploying increasingly sophisticated miners in larger quantities.

This has led to an “arms race” within the Bitcoin mining industry.

There are very few miner manufacturers capable of producing the necessary number of high-quality miners to meet this demand, creating scarcity and driving up prices.

Furthermore, it has been noted that some manufacturers may increase prices for new miners in response to the rising market price of Bitcoin.

Intellectual Property

We actively use specific hardware and software for our Bitcoin Mining operations.

The Bitcoin blockchain is generally built on open-source code and, in certain cases, the source code and other software assets we use in our Bitcoin Mining operations may be subject to an open-source license.

We actively utilize specific hardware and software for our Bitcoin Mining operations.

The Bitcoin blockchain is primarily built on open-source code and, in certain cases, the source code and other software assets we use in our Bitcoin Mining operations may be subject to an open-source license.

For these works, we adhere to the terms of any license agreements that may be in place.

We also rely upon the intellectual property rights of others in certain respects in connection with our immersion-cooling technology.

We currently rely on trade secrets, trademarks, service marks, trade names, copyrights, and other intellectual property rights, and on licenses to use intellectual property rights owned and controlled by others.

In addition, we have developed and may further develop certain proprietary software and hardware applications in connection with Bitcoin Mining operations, including our immersion-cooled Bitcoin Mining developments.

We currently rely on trade secrets, trademarks, service marks, trade names, copyrights, and other intellectual property rights.

Additionally, we may obtain licenses to use intellectual property rights owned and controlled by others.

Furthermore, we have developed and may continue to develop certain proprietary software and hardware applications in connection with Bitcoin Mining operations, including our immersion-cooled Bitcoin Mining developments.

Information About Our Executive Officers

7 unchanged sentences

Senior Vice President, Chief Accounting Officer (principal accounting officer)

Jason Les (age 38) has served as our Chief Executive Officer (“CEO”) since February 2021 and as a member of the board of directors since October 2017.

Stephen Howell

Senior Vice President, Chief Operating Officer

Jason Les (age 39) has served as our Chief Executive Officer (“CEO”) since February 2021 and as a member of our Board of Directors (“Board”) since November 2017.

He has been deeply involved with Bitcoin since 2013, with significant experience in Bitcoin mining, as an engineer studying protocol development, and contributing to open-source projects.

2 unchanged sentences

He holds a Bachelor of Science, Computer Science from the University of California, Irvine.

Benjamin Yi (age 41) has served as our Executive Chairman since May 2021, as a member of the Board since October 2018, and as Chairman of the board of directors from November 2020 through May 2021.

Benjamin Yi (age 42) has served as our Executive Chairman since May 2021, as a member of the Board since October 2018, and as Chairman of the Board from November 2020 through May 2021.

In this role, he is directly involved in our day-to-day operations, playing a key role in setting and fulfilling the Board’s strategic aims for the Company.

1 unchanged sentence

Prior to joining Riot, Mr.

Yi led capital markets and corporate development at IOU

Financial, a fin-tech enabled lender to small businesses across North America and investee company of Neuberger Berman from January 2017 through May 2021.

Yi led capital markets and corporate development at IOU Financial, a fin-tech enabled lender to small businesses across North America and investee company of Neuberger Berman from January 2017 through May 2021.

Yi brings almost two decades of unique capital markets experience to the Company, and a particular expertise in fintech, specialty finance, and investing throughout a company’s capital structure.

Yi holds a Bachelor of Commerce, specialist in Finance, major in Economics from University of Trinity College and a Master of Finance from University of Toronto – Rotman School of Management.

Colin Yee (age 48) has served as our Executive Vice President, Chief Financial Officer since July 2023, and Chief Financial Officer from September 2022 to July 2023.

Colin Yee (age 49) has served as our Executive Vice President, Chief Financial Officer (“EVP-CFO”) since July 2023, and served as our Chief Financial Officer from September 2022 to July 2023.

Previously, he was our Head of Corporate and Financial Operations from April 2022 to September 2022.

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Yee is a Chartered Professional Accountant and holds a Bachelor of Science in Cellular Biology and a Bachelor of Commerce in Accounting from the University of Calgary.

William Jackman (age 40) has served as our Executive Vice President, General Counsel and Secretary, since September 2022, and as General Counsel and Secretary since July 2021.

William Jackman (age 41) has served as our Executive Vice President, General Counsel and Secretary, (“EVP-General Counsel”) since September 2022, and as General Counsel and Secretary since July 2021.

As a member of the executive team, Mr.

3 unchanged sentences

Prior to joining Riot, Mr.

Jackman was a Leader of Public Companies and Securities at Roger Towers, P.A., one of Florida’s oldest and most established law firms, from March 2018 to January 2022.

Jackman was a

Leader of Public Companies and Securities at Roger Towers, P.A., one of Florida’s oldest and most established law firms, from March 2018 to January 2022.

Additionally, he was a Senior Corporate Attorney at Holland & Knight LLP, a multinational law firm, from May 2014 through August 2017.

Jackman holds dual Juris Doctorate law degrees from the Universities of Windsor and Detroit, as well as an MBA from Nova Southeastern, and is a member of the New York, Florida, and Ontario Bar Associations.

Jason Chung (age 42) has served as our Executive Vice President, Head of Corporate Development & Strategy since July 2023, and Head of Corporate Development & Strategy from June 2022 to July 2023.

Jason Chung (age 43) has served as our Executive Vice President, Head of Corporate Development & Strategy (“EVP-Head of Corporate Development & Strategy”) since July 2023, and Head of Corporate Development & Strategy from June 2022 to July 2023.

Chung spearheads the coordination of Riot's corporate development, capital markets, and investor relations efforts.

13 unchanged sentences

Werner is a Certified Public Accountant and holds a Master of Accounting and Information Systems degree, as well as a Bachelor of Science in Accounting & Business Administration degree, both from the University of Kansas.

There are no familial relationships among our executive officers and any directors, except that Mr.

Yi is married to the first cousin of Hannah Cho, who serves on our board of directors.

Stephen Howell (age 49) has served as our Senior Vice President and Chief Operating Officer (“COO”) since June 2024.

Howell has also served as Chief Executive Officer at ESS Metron, LLC (“ESS Metron”), a leading manufacturer of power distribution centers, portable substations, low and medium voltage switchgear, custom controls and relays since December 2021.

Previously, Mr.

Howell served as Director of Business Development – South at ESS Metron from October 2019 through December 2021.

Prior to his role at ESS Metron, Mr.

Howell served as VP, Senior Sales Representative at Castleman Power Systems International, LLC, a power developer and technology solutions provider, from October 2011 through October 2019.

From January 2006 through October 2011, Mr.

Howell served as Outside Sales Executive for Consolidated Electrical Distributors, an electrical solutions distributor and product supplier.

Howell served as Estimator and Project Manager for Integrated Electrical Services Holdings, Inc., an integrated electrical design and installation company from January 2004 through January 2006, and as Outside Sales Engineer at Eaton Corporation plc, a power management and electrical systems company from January 2000 through January 2004.

Howell holds dual Bachelor of Science degrees in industrial distribution and marketing from the University of Alabama at Birmingham.

There are no familial relationships among our executive officers and any directors.

There are no arrangements or understandings between any of our executive officers and any other person pursuant to which any of such executive officers were selected.

11 unchanged sentences

www.riotplatforms.com through a link in the “Investors” section.

The contemplated documents are placed on our website as soon as practicable after their filing with the SEC.

The contemplated documents

are placed on our website as soon as reasonably practicable after their filing with the SEC.

The information posted on our website is not incorporated by reference into this Annual Report.

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

What changed 10-K

Item 1. Business