Riot Platforms, Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ​ ​ Reports of Independent Registered Public Accounting Firms* F-1 Consolidated Balance Sheets as of December 31, 2024 and 2023 F-4 Consolidated Statements of Operations for the years ended December 31, 2024, 2023, and 2022 F-5 Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2024, 2023, and 2022 F-6 Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2024, 2023, and 2022 F-7 Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023, and 2022 F-8 Notes to Consolidated Financial Statements F-10 ​ * Deloitte & Touche LLP, PCAOB Firm ID No. 34 ​ ​ ​ 55 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ​ To the stockholders and the Board of Directors of Riot Platforms, Inc. Opinion on the Financial Statements ​ We have audited the accompanying consolidated balance sheets of Riot Platforms, Inc. and subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows, for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the 2024 and 2023 financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. The consolidated financial statements of the Company for the year ended December 31, 2022, before the effects of the retrospective adjustments to the disclosures for a change in the composition of reportable segments and the adoption of ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), discussed in Notes 2 and 20 to the financial statements, were audited by predecessor auditors whose report, dated March 2, 2023, expressed an unqualified opinion on those statements. We have also audited the adjustments to the 2022 consolidated financial statements to retrospectively adjust the disclosures for a change in the composition of reportable segments and apply the change in accounting for the adoption of ASU 2023-07 in 2024, as discussed in Notes 2 and 20 to the financial statements. Our procedures included (1) comparing the amounts of segment revenues, segment costs of revenue, and gross profit (loss) for both the change in composition of reportable segments and the adoption of ASU 2023-07 to the Company’s underlying accounting analysis, (2) comparing the previously reported segment information per the Company’s accounting analysis to the adjustments for the adoption of ASU 2023-07, and (3) recalculating the mathematical accuracy of the reconciliations of segment amounts to the consolidated financial statements. In our opinion, such retrospective adjustments are appropriate and have been properly applied. However, we were not engaged to audit, review, or apply any procedures to the 2022 consolidated financial statements of the Company other than with respect to these retrospective adjustments, and accordingly, we do not express an opinion or any other form of assurance on the 2022 consolidated financial statements taken as a whole. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2025, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion ​ These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. F-1 Table of Contents Mining Revenue – Refer to Notes 2 to the financial statements Critical Audit Matter Description The Company participates in a digital asset mining pool (“the mining pool”) by executing agreements with mining pool operators for the provision of hash calculation services to the mining pool. The Company decides when to provide hash calculation services under the agreements and the Company’s enforceable rights to compensation begins only when and lasts as long as the Company provides hash calculation services to the mining pool operator and is created as power is provided over time. In exchange for providing hash calculation services, the Company is entitled to a payout of Bitcoin based on a contractual formula, which primarily calculates the hash rate provided to the mining pool as a percentage of total network hash rate, and other inputs. Revenue is recognized on the same day that control of the contracted service transfers to the mining pool operator, which is the same day as contract inception. For the years ended December 31, 2024, and 2023, Bitcoin Mining revenue was $321.0 million, and $189.0 million, respectively. We identified the auditing of Bitcoin Mining revenue as a critical audit matter due to the extent of audit effort required to perform audit procedures over the Company’s hash calculation services provided to the mining pool operator, the associated contractual payouts including the blockchain contractual inputs, the Company’s valuation of Bitcoin received from the mining pool operator and evaluating the results of those procedures. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the Company’s process for recording Bitcoin Mining revenue included the following, among others: ● With the assistance of our Information Technology (IT) specialists, we identified the significant systems used to monitor hash calculation services and tested the general IT controls over each of these systems. ● We tested the effectiveness of controls over the Company’s Bitcoin Mining revenue calculation. ● We tested the amount of the Bitcoin Mining revenue recorded by developing an expectation for the amount recorded based on the hash calculation services provided to the mining pool operator and the payout method prescribed in the contract with the mining pool operator and comparing our expectation to the amount recorded by the Company. ● We confirmed with the mining pool operator the significant contractual terms utilized in the determination of Bitcoin Mining revenue, total mining rewards earned, and the digital asset wallet addresses in which the rewards are deposited. ● We utilized our proprietary audit tool to independently obtain evidence from the Bitcoin blockchain to test the occurrence and accuracy of Bitcoin Mining revenue. ● With the assistance of our Valuation specialists, we evaluated the reasonableness of the prices utilized by the Company to value Bitcoin by obtaining independent Bitcoin prices and comparing those to the prices selected by the Company. ​ /s/ DELOITTE & TOUCHE LLP Houston, TX February 27, 2025 ​ We have served as the Company’s auditor since 2023. ​ F-2 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors of Riot Platforms, Inc. Opinion on the Financial Statements ​ We have audited, before the effects of the retrospective adjustments to the disclosures for a change in the composition of reportable segments and the adoption of ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”) discussed in Note 2 and Note 20 to the consolidated financial statements, comprising of the consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows of Riot Platforms, Inc. (the “Company”) for the year ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”) (the 2022 consolidated financial statements before the effects of the adjustments discussed in Note 2 and Note 20 to the financial statements are not presented herein). In our opinion, the 2022 financial statements, before the effects of the retrospective adjustments to the disclosures for a change in the composition of reportable segments and adoption of ASU 2023-07 discussed in Note 2 and Note 20 to the financial statements, present fairly, in all material respects, the results of the Company’s operations and its cash flows for the year ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America. ​ We were not engaged to audit, review, or apply any procedures to the retrospective adjustments to the disclosures for a change in the composition of reportable segments and adoption of ASU 2023-07 discussed in Note 2 and Note 20 to the consolidated financial statements, and accordingly, we do not express an opinion or any other form of assurance about whether such retrospective adjustments are appropriate and have been properly applied. Those retrospective adjustments were audited by other auditors. ​ Basis for Opinion ​ These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. ​ Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. ​ ​ /s/ Marcum llp ​ Marcum llp ​ We have served as the Company’s auditor from 2019 through May 18, 2023. ​ Los Angeles, CA March 2, 2023 ​ ​ F-3 Table of Contents Riot Platforms, Inc. Consolidated Balance Sheets (in thousands, except for share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ December 31, 2023 ASSETS ​ ​ Current assets ​ ​ Cash and cash equivalents ​ $ 277,860 ​ $ 597,169 Restricted cash ​ ​ 73,441 ​ ​ — Accounts receivable, net ​ 27,124 ​ 24,706 Contract assets ​ 6,478 ​ 15,359 Prepaid expenses and other current assets ​ 40,288 ​ 29,107 Bitcoin ​ — ​ 311,178 Derivative asset, current portion ​ ​ 40,020 ​ ​ 30,781 Equity method investment - marketable securities, at fair value ​ 134,265 ​ — Future power credits, current portion ​ ​ — ​ ​ 271 Total current assets ​ 599,476 ​ 1,008,571 ​ ​ ​ ​ ​ ​ ​ Property and equipment, net ​ 1,338,787 ​ 704,194 Bitcoin ​ ​ 1,654,468 ​ ​ — Deposits ​ 30,115 ​ 215,009 Finite-lived intangible assets, net ​ 34,053 ​ 15,697 Derivative asset, less current portion ​ ​ 109,475 ​ ​ 73,437 Operating lease right-of-use assets ​ ​ 27,492 ​ ​ 20,413 Future power credits, less current portion ​ 589 ​ 638 Goodwill ​ ​ 121,887 ​ ​ — Other long-term assets ​ 18,965 ​ 13,121 Total assets ​ $ 3,935,307 ​ $ 2,051,080 ​ ​ ​ LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ Current liabilities ​ ​ Accounts payable ​ $ 17,609 ​ $ 23,157 Contract liabilities ​ 9,644 ​ 4,073 Accrued expenses ​ ​ 75,672 ​ ​ 62,371 Deferred gain on acquisition post-close dispute settlement ​ ​ 26,007 ​ ​ 26,007 Deferred revenue, current portion ​ 2,892 ​ 2,458 Contingent consideration liabilities, current portion ​ 23,626 ​ 271 Current portion of long-term debt ​ ​ 314 ​ ​ 257 Operating lease liability, current portion ​ 4,621 ​ 2,421 Total current liabilities ​ 160,385 ​ 121,015 ​ ​ ​ Deferred revenue, less current portion ​ 13,590 ​ 15,801 Operating lease liability, less current portion ​ 23,915 ​ 18,924 Contingent consideration liabilities, less current portion ​ 3,229 ​ 638 Long-term debt, less current portion ​ ​ 584,311 ​ ​ 526 Other long-term liabilities ​ 6,192 ​ 6,154 Total liabilities ​ 791,622 ​ 163,058 ​ ​ ​ Commitments and contingencies - Note 17 ​ ​ ​ ​ ​ Stockholders’ equity ​ ​ Preferred stock, no par value, 15,000,000 shares authorized: ​ ​ 2 % Series A Convertible Preferred stock, 2,000,000 shares authorized; no shares issued and outstanding as of December 31, 2024 and 2023 ​ — ​ — 0 % Series B Convertible Preferred stock, 1,750,001 shares authorized; no shares issued and outstanding as of December 31, 2024 and 2023 ​ — ​ — Common stock, no par value; 680,000,000 shares authorized; 344,890,208 and 230,836,624 shares issued and outstanding as of December 31, 2024 and 2023, respectively ​ 3,833,882 ​ 2,687,692 Accumulated deficit ​ ( 690,419 ) ​ ( 799,820 ) Accumulated other comprehensive income (loss), net ​ ​ 222 ​ ​ 150 Total stockholders’ equity ​ 3,143,685 ​ 1,888,022 Total liabilities and stockholders’ equity ​ $ 3,935,307 ​ $ 2,051,080 ​ See accompanying Notes to Consolidated Financial Statements. ​ F-4 Table of Contents Riot Platforms, Inc. Consolidated Statements of Operations (in thousands, except for share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2024 ​ 2023 ​ 2022 Revenue: ​ ​ ​ ​ Bitcoin Mining ​ $ 321,002 ​ $ 188,996 ​ $ 156,870 Engineering ​ 38,491 ​ 64,303 ​ 65,342 Other ​ 17,165 ​ 27,379 ​ 36,959 Total revenue ​ 376,658 ​ 280,678 ​ 259,171 ​ ​ ​ ​ Costs and expenses: ​ ​ ​ Cost of revenue (excludes depreciation and amortization presented below): ​ ​ ​ ​ ​ ​ ​ ​ ​ Bitcoin Mining ​ 189,224 ​ 96,597 ​ 74,335 Engineering ​ 41,731 ​ 60,614 ​ 57,455 Other ​ 31,800 ​ 97,122 ​ 61,906 Acquisition-related costs ​ 5,541 ​ — ​ 78 Selling, general, and administrative ​ 266,915 ​ 100,346 ​ 67,452 Depreciation and amortization ​ 212,053 ​ 252,354 ​ 107,950 Change in fair value of Bitcoin ​ ​ ( 457,409 ) ​ ​ ( 184,734 ) ​ ​ — Change in fair value of derivative asset ​ ( 45,277 ) ​ ( 6,721 ) ​ ( 71,418 ) Power curtailment credits ​ ​ ( 33,685 ) ​ ​ ( 71,215 ) ​ ​ ( 27,345 ) Change in fair value of contingent consideration ​ ( 2,459 ) ​ — ​ ( 159 ) Realized gain on sale of Bitcoin ​ — ​ — ​ ( 30,346 ) Loss (gain) on sale/exchange of equipment ​ ​ 17,429 ​ ​ 5,336 ​ ​ ( 16,281 ) Casualty-related charges (recoveries), net ​ ​ ( 2,795 ) ​ ​ ( 5,974 ) ​ ​ 9,688 Impairment of Bitcoin ​ ​ — ​ ​ — ​ ​ 147,365 Impairment of goodwill ​ ​ — ​ ​ — ​ ​ 335,648 Impairment of miners ​ ​ — ​ ​ — ​ ​ 55,544 Total costs and expenses ​ 223,068 ​ 343,725 ​ 771,872 Operating income (loss) ​ 153,590 ​ ( 63,047 ) ​ ( 512,701 ) ​ ​ ​ ​ Other income (expense): ​ ​ ​ Interest income ​ ​ 27,166 ​ ​ 11,076 ​ ​ 1,763 Interest expense ​ ​ ( 1,985 ) ​ ​ ( 2,854 ) ​ ​ ( 1,309 ) Unrealized gain (loss) on equity method investment - marketable securities ​ ​ ( 69,489 ) ​ ​ — ​ ​ ( 8,996 ) Other income (expense) ​ ​ 863 ​ 260 ​ ( 59 ) Total other income (expense) ​ ( 43,445 ) ​ 8,482 ​ ( 8,601 ) ​ ​ ​ ​ Net income (loss) before taxes ​ 110,145 ​ ( 54,565 ) ​ ( 521,302 ) ​ ​ ​ ​ Current income tax benefit (expense) ​ ( 744 ) ​ 48 ​ ( 789 ) Deferred income tax benefit (expense) ​ — ​ 5,045 ​ 12,538 Total income tax benefit (expense) ​ ( 744 ) ​ ​ 5,093 ​ ​ 11,749 ​ ​ ​ ​ Net income (loss) ​ $ 109,401 ​ $ ( 49,472 ) ​ ​ ( 509,553 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic net income (loss) per share ​ ​ 0.40 ​ ​ ( 0.28 ) ​ ​ ( 3.65 ) Diluted net income (loss) per share ​ ​ 0.34 ​ ​ ( 0.28 ) ​ ​ ( 3.65 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic weighted average number of shares outstanding ​ ​ 275,980,010 ​ ​ 175,026,051 ​ 139,433,901 Diluted weighted average number of shares outstanding ​ 318,925,961 ​ 175,026,051 ​ 139,433,901 ​ See accompanying Notes to Consolidated Financial Statements. ​ ​ F-5 Table of Contents Riot Platforms, Inc. Consolidated Statements of Comprehensive Income (Loss) (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ 2024 ​ 2023 ​ 2022 Net income (loss) ​ $ 109,401 ​ $ ( 49,472 ) ​ $ ( 509,553 ) Other comprehensive income (loss): ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized holding gains (losses) on convertible note ​ ​ 72 ​ ​ 150 ​ ​ — Comprehensive income (loss) ​ $ 109,473 ​ $ ( 49,322 ) ​ $ ( 509,553 ) ​ See accompanying Notes to Consolidated Financial Statements. ​ ​ ​ ​ F-6 Table of Contents Riot Platforms, Inc. Consolidated Statements of Stockholders’ Equity (in thousands, except for share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated other ​ Total ​ ​ Preferred Stock ​ Common Stock ​ Accumulated ​ comprehensive ​ stockholders’ ​ ​ Shares Amount Shares Amount deficit income (loss) ​ equity Balance as of January 1, 2022 2,199 ​ $ 11 116,748,472 ​ $ 1,595,147 ​ $ ( 246,789 ) ​ $ — ​ $ 1,348,369 Issuance of restricted stock, net of forfeitures and delivery of common stock underlying stock awards, net of tax withholding — ​ — 13,947,829 ​ ( 10,138 ) ​ — ​ ​ — ​ ( 10,138 ) Issuance of common stock/At-the-market offering, net of offering costs — ​ — 37,052,612 ​ 298,209 ​ — ​ ​ — ​ 298,209 Conversion of preferred stock to common stock ( 2,199 ) ​ ( 11 ) 2,199 ​ 11 ​ — ​ ​ — ​ — Stock-based compensation — ​ — — ​ 24,555 ​ — ​ ​ — ​ 24,555 Net income (loss) — ​ — — ​ — ​ ( 509,553 ) ​ ​ — ​ ( 509,553 ) Balance as of December 31, 2022 — ​ — 167,751,112 ​ 1,907,784 ​ ( 756,342 ) ​ ​ — ​ 1,151,442 Cumulative effect upon adoption of ASU 2023-08 ​ — ​ ​ — ​ — ​ ​ — ​ ​ 5,994 ​ ​ — ​ ​ 5,994 Issuance of restricted stock, net of forfeitures and delivery of common stock underlying stock awards, net of tax withholding — ​ — 809,302 ​ ( 14,035 ) ​ — ​ ​ — ​ ( 14,035 ) Issuance of common stock/At-the-market offering, net of offering costs — ​ — 62,206,045 ​ 761,773 ​ — ​ ​ — ​ 761,773 Issuance of common stock in connection with acquisition of ESS Metron — ​ — 70,165 ​ — ​ — ​ ​ — ​ — Stock-based compensation — ​ — — ​ 32,170 ​ — ​ ​ — ​ 32,170 Net income (loss) — ​ — — ​ — ​ ( 49,472 ) ​ ​ — ​ ( 49,472 ) Other comprehensive income (loss) ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ 150 ​ ​ 150 Balance as of December 31, 2023 — ​ ​ — 230,836,624 ​ ​ 2,687,692 ​ ​ ( 799,820 ) ​ ​ 150 ​ ​ 1,888,022 Issuance of restricted stock, net of forfeitures and delivery of common stock underlying stock awards, net of tax withholding — ​ — 16,006,545 ​ ( 11,562 ) ​ — ​ ​ — ​ ( 11,562 ) Issuance of common stock/At-the-market offering, net of offering costs — ​ — 90,626,416 ​ 956,637 ​ — ​ ​ — ​ 956,637 Issuance of common stock in connection with the Block Mining Acquisition — ​ — 7,240,623 ​ 73,999 ​ — ​ ​ — ​ 73,999 Issuance of common stock to a third-party advisor ​ — ​ ​ — ​ 180,000 ​ ​ 1,912 ​ ​ — ​ ​ — ​ ​ 1,912 Stock-based compensation — ​ — — ​ 125,204 ​ — ​ ​ — ​ 125,204 Net income (loss) — ​ — — ​ — ​ 109,401 ​ ​ — ​ 109,401 Other comprehensive income (loss) ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ 72 ​ ​ 72 Balance as of December 31, 2024 — ​ $ — 344,890,208 ​ $ 3,833,882 ​ $ ( 690,419 ) ​ $ 222 ​ $ 3,143,685 ​ See accompanying Notes to Consolidated Financial Statements. ​ F-7 Table of Contents Riot Platforms, Inc. Consolidated Statements of Cash Flows (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ 2024 2023 2022 Operating activities ​ ​ ​ ​ ​ Net income (loss) ​ $ 109,401 ​ $ ( 49,472 ) ​ $ ( 509,553 ) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: ​ ​ ​ ​ Stock-based compensation ​ 125,204 ​ 32,170 ​ 24,555 Issuance of common stock to a third-party advisor ​ ​ 1,912 ​ ​ — ​ ​ — Depreciation and amortization ​ 212,053 ​ 252,354 ​ 107,950 Amortization of license fee revenue ​ ( 97 ) ​ ( 97 ) ​ ( 97 ) Noncash lease expense ​ 3,908 ​ 2,509 ​ 12,181 Amortization of debt issuance costs ​ ​ 250 ​ ​ — ​ ​ — Deferred income tax expense (benefit) ​ — ​ ( 5,045 ) ​ ( 11,749 ) Impairment of Bitcoin ​ — ​ — ​ 147,365 Impairment of goodwill ​ ​ — ​ ​ — ​ ​ 335,648 Impairment of miners ​ ​ — ​ ​ — ​ ​ 55,544 Change in fair value of Bitcoin ​ ​ ( 457,409 ) ​ ​ ( 184,734 ) ​ ​ — Change in fair value of derivative asset ​ ( 45,277 ) ​ ( 6,721 ) ​ ( 71,418 ) Change in fair value of contingent consideration ​ ( 2,459 ) ​ — ​ ( 159 ) Unrealized (gain) loss on equity method investment - marketable securities ​ ​ 69,489 ​ ​ — ​ ​ 8,996 Realized gain on sale of Bitcoin ​ — ​ — ​ ( 30,346 ) Loss (gain) on sale/exchange of equipment ​ 17,429 ​ 5,336 ​ ( 16,281 ) Casualty-related charges ​ ​ 310 ​ ​ 1,526 ​ ​ 9,688 Revenue recognized from Bitcoin mined ​ ​ ( 321,002 ) ​ ​ ( 188,996 ) ​ ​ ( 156,870 ) Proceeds from sale of Bitcoin ​ ​ 9,518 ​ ​ 176,219 ​ 79,529 Changes in assets and liabilities: ​ ​ ​ (Increase)/decrease in operating assets ​ ​ 7,839 ​ ​ 6,352 ​ ​ 12,058 Increase/(decrease) in operating liabilities ​ ​ 13,879 ​ ​ ( 8,316 ) ​ ​ 3,489 Net cash provided by (used in) operating activities ​ ( 255,052 ) ​ 33,085 ​ 530 ​ ​ ​ ​ Investing activities ​ ​ ​ Proceeds from the sale of marketable equity securities ​ ​ — ​ ​ — ​ ​ 1,808 Block Mining Acquisition, net of cash acquired ​ ​ ( 7,203 ) ​ ​ — ​ ​ — E4A Solutions Acquisition, net of cash acquired ​ ​ ( 50,861 ) ​ ​ — ​ ​ — Acquisition of Bitcoin ​ ​ ( 577,500 ) ​ ​ — ​ ​ — Deposits on equipment ​ ( 442,473 ) ​ ( 230,397 ) ​ ( 194,923 ) Security deposits ​ ​ ( 4,095 ) ​ ​ — ​ ​ ( 3,809 ) Investment in equity method investment - marketable securities ​ ​ ( 203,754 ) ​ ​ — ​ ​ — Investment in convertible debt ​ ​ — ​ ​ ( 4,500 ) ​ ​ — Purchases of property and equipment, including construction in progress ​ ( 240,340 ) ​ ( 193,704 ) ​ ( 148,412 ) Casualty-related recoveries ​ ​ 3,105 ​ ​ 7,500 ​ ​ — Proceeds from the sale of equipment ​ ​ 14,316 ​ ​ 6,369 ​ ​ — Patent costs incurred ​ — ​ ( 34 ) ​ ( 9,527 ) Net cash provided by (used in) investing activities ​ ( 1,508,805 ) ​ ( 414,766 ) ​ ( 354,863 ) ​ ​ ​ ​ Financing activities ​ ​ ​ Proceeds from the issuance of common stock / At-the-market offering ​ 977,030 ​ 778,430 ​ 304,849 Offering costs for the issuance of common stock / At-the-market offering ​ ( 20,393 ) ​ ( 16,657 ) ​ ( 6,640 ) Proceeds from issuance of convertible notes ​ ​ 594,383 ​ ​ — ​ ​ — Payments on contingent consideration liability - future power credits ​ ​ — ​ ​ — ​ ​ ( 15,725 ) Proceeds from Credit and Security Facility ​ ​ — ​ ​ 6,920 ​ ​ — Repayments of Credit and Security Facility ​ ​ ( 866 ) ​ ​ ( 6,059 ) ​ ​ — Debt issuance costs ​ ​ ( 15,249 ) ​ ​ ( 77 ) ​ ​ — Repayment of debt assumed in Block Mining Acquisition ​ ​ ( 5,002 ) ​ ​ — ​ ​ — Repayment of note payable ​ ​ ( 352 ) ​ ​ — ​ ​ — Repurchase of common shares to pay employee withholding taxes ​ ( 11,562 ) ​ ( 14,035 ) ​ ( 10,138 ) Net cash provided by (used in) financing activities ​ 1,517,989 ​ 748,522 ​ 272,346 ​ ​ ​ ​ Net increase (decrease) in cash and cash equivalents and restricted cash ​ ( 245,868 ) ​ 366,841 ​ ( 81,987 ) Cash and cash equivalents and restricted cash at beginning of period ​ 597,169 ​ 230,328 ​ 312,315 Cash and cash equivalents and restricted cash at end of period ​ $ 351,301 ​ $ 597,169 ​ $ 230,328 ​ ​ See accompanying Notes to Consolidated Financial Statements. ​ F-8 Table of Contents Riot Platforms, Inc. Consolidated Statements of Cash Flows - continued (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ 2024 2023 2022 Supplemental information: ​ ​ ​ Cash paid for interest ​ $ 45 ​ $ 84 ​ $ — Cash paid for taxes ​ $ 107 ​ $ 680 ​ $ — Non-cash transactions ​ ​ ​ Issuance of common stock for the Block Mining Acquisition ​ $ 73,999 ​ $ — ​ $ — Contingent liability entered into for the Block Mining Acquisition ​ $ 26,085 ​ $ — ​ $ — Contingent liability entered into for the E4A Solutions Acquisition ​ $ 2,640 ​ $ — ​ $ — Reclassification of deposits to property and equipment ​ $ 623,316 ​ $ 78,376 ​ $ 422,865 Construction in progress included in accrued expenses ​ $ 15,146 ​ $ 23,451 ​ $ 16,621 Bitcoin exchanged for employee compensation ​ $ 2,478 ​ $ 869 ​ $ 1,495 Conversion of preferred stock to common stock ​ $ — ​ $ — ​ $ 11 Cumulative effect upon adoption of ASU 2023-08 ​ $ — ​ $ 5,994 ​ $ — Right of use assets exchanged for new operating lease liabilities ​ $ 10,987 ​ $ 1,249 ​ $ 10,333 Property and equipment obtained in exchange transaction ​ $ — ​ $ — ​ $ 10,409 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following reconciles cash, cash equivalents, and restricted cash to the amounts presented above: ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash, cash equivalents, and restricted cash, beginning of the period: ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 597,169 ​ $ 230,328 ​ $ 312,315 Restricted cash ​ ​ — ​ ​ — ​ ​ — Total cash, cash equivalents, and restricted cash as presented above ​ $ 597,169 ​ $ 230,328 ​ $ 312,315 Cash, cash equivalents, and restricted cash, end of the period: ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 277,860 ​ $ 597,169 ​ $ 230,328 Restricted cash ​ ​ 73,441 ​ ​ — ​ ​ — Total cash, cash equivalents, and restricted cash as presented above ​ $ 351,301 ​ $ 597,169 ​ $ 230,328 ​ See accompanying Notes to Consolidated Financial Statements. ​ ​ ​ ​ ​ F-9 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements Note 1. Organization and Basis of Presentation Organization Riot Platforms is a vertically-integrated Bitcoin mining company principally engaged in enhancing our capabilities to mine Bitcoin in support of the Bitcoin blockchain. The Rockdale Facility is a large-scale Bitcoin mining facility in Rockdale, Texas and we completed Phase I of development of a second large-scale Bitcoin mining facility, the Corsicana Facility, which is currently equipped to provide up to 400 MW of capacity for our Bitcoin Mining. Upon completion, the Corsicana Facility is expected to have approximately 1 GW of capacity available. During 2024, the Company acquired the Kentucky Facility, which has existing operational Bitcoin mining capacity and the potential for significant expansion. Also, during 2024, the Company acquired E4A Solutions, a leading provider of electrical engineering services to a diverse customer base of energy developers and data center operators. ​ Basis of presentation and principles of consolidation The accompanying consolidated financial statements (“Consolidated Financial Statements”) and these notes (these “Notes”) have been prepared in accordance with GAAP. In the opinion of management, the Consolidated Financial Statements reflect all adjustments, consisting of normal and recurring adjustments, considered necessary for a fair presentation of such results. The accompanying audited Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. ​ Unless otherwise indicated, amounts 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. ​ As described in Note 20. Segment Information , we operate in two reportable business segments: Bitcoin Mining and Engineering. ​ Note 2. Significant Accounting Policies and Recent Accounting Pronouncements Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenue and expenses during the reporting periods. Actual results may differ materially from those estimates. The most significant accounting estimates inherent in the preparation of the Company’s financial statements include revenue recognition; valuation of the derivative asset classified under Level 3 on the fair value hierarchy; determination of the useful lives and recoverability of long-lived assets; impairment analysis of fixed assets and finite-lived intangibles; impairment analysis of goodwill; allocating the fair value of purchase consideration to assets acquired and liabilities assumed in business acquisitions; stock-based compensation; and the valuation allowance associated with the Company’s deferred tax assets. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. The reclassifications did not have a material impact on the Company’s Consolidated Financial Statements and related disclosures. The impact on any prior period disclosures was immaterial. Cash and cash equivalents Cash and cash equivalents consists of cash on hand and highly liquid investments. We consider any highly liquid investments with an original maturity of three months or less at acquisition to be cash equivalents. From time to time, the Company’s cash account balances exceed the balances as covered by the FDIC. The Company has never suffered a loss due to such excess balances. Accounts receivable The Company’s accounts receivable balance consists of amounts due from its mining pool operator and engineering customers. The Company records accounts receivable at the invoiced amount less an allowance for any potentially uncollectable accounts under the current expected credit loss (“CECL”) impairment model and presents the net amount of the receivable expected to be collected. F-10 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements The CECL impairment model requires an estimate of expected credit losses, measured over the contractual life of an instrument, which considers forecasts of future economic conditions in addition to information about past events and current conditions. Based on this model, the Company considers many factors, including the age of the balance, collection history, and current economic trends. Bad debts are written off after all collection efforts have ceased. Allowances for credit losses are recorded as a direct reduction from an asset’s amortized cost basis. Credit losses and recoveries are recorded in Selling, general and administrative expenses in the Consolidated Statements of Operations. Recoveries of financial assets previously written off are recorded when received. For the years ended December 31, 2024, 2023, and 2022, the Company recognized $ 0.1 million, $ 0.0 million, and $ 0.0 million respectively, in bad debt expense. Based on the Company’s current and historical collection experience, management recorded allowances for doubtful accounts of $ 2.9 million and $ 1.5 million as of December 31, 2024 and December 31, 2023, respectively. As of December 31, 2024 and 2023, retainage of $ 1.0 million and $ 3.2 million, respectively, was included in Accounts receivable, net , on the Consolidated Balance Sheets. Bitcoin The Company’s Bitcoin is recorded at fair value, as determined using the period-end closing price of Bitcoin on the Company’s principal market, Coinbase (the “Principal Market”), and changes in fair value are recognized in Change in fair value of Bitcoin , in Operating income (loss) on the Consolidated Statements of Operations. During 2024, Riot made the strategic decision to temporarily halt the sale of its Bitcoin production and instead, increase its Bitcoin holdings. As a result of its intent to hold its Bitcoin, the Company began classifying its Bitcoin held as a non-current asset on its Consolidated Balance Sheet. For all periods presented, all sales of Bitcoin occurred before the strategic decision and, as such Bitcoin was sold nearly immediately after receipt by the Company, the proceeds were recognized within Operating activities on the Consolidated Statements of Cash Flows. Long-term investments For equity investments, the Company initially records equity investments at cost then adjusts the carrying value of such equity investments through earnings when there is an observable transaction involving the same or a similar investment with the same issuer or upon an impairment. For debt investments, such as convertible notes, the Company classifies them as available-for-sale debt instruments and recognizes the investments at fair value in Other long-term assets on the Consolidated Balance Sheets. Unrealized changes in the fair value of the convertible note are recognized in Other comprehensive income (loss) on the Consolidated Statements of Comprehensive Income (Loss). Interest income is recognized within Interest income (expense) on the Consolidated Statements of Operations. Revenue recognition Bitcoin Mining The Company participates in digital asset mining pools by executing agreements with mining pool operators for the provision of hash calculation services to the mining pool. Currently, the Company only participates in a Full-Pay-Per-Share (“FPPS”) mining pool. The Company decides when to provide hash calculation services under the agreements and the Company’s enforceable right to compensation begins only when, and lasts as long as, the Company provides hash calculation services to the mining pool operator and is created as power is provided over time. The only consideration due to the Company relates to the provision of hash calculation services. Such agreements are freely terminable at any time by the Company or by the pool operator, without penalty to either party. Providing hash calculation services in digital asset transaction verification services is an output of the Company’s ordinary activities and is the only performance obligation in the agreements with mining pool operators. The transaction consideration received, if any, is noncash consideration in the form of Bitcoin. Changes in the fair value of the noncash consideration after contract inception due to the form of the consideration (changes in the market price of Bitcoin) are not included in the transaction price and, therefore, are not included in revenue. Certain mining pool operators charge fees to cover the costs of maintaining the pool. These fees are deducted from amounts we may otherwise earn and are treated as a reduction to the F-11 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements consideration received. Fees fluctuate and historically have averaged no more than approximately 2 % per reward earned. Under the agreements neither party can dispute settlement terms after approximately 35 days following settlement. In exchange for providing hash calculation services, the Company is entitled to a FPPS payout of Bitcoin based on a contractual formula, which primarily calculates the hash rate provided to the mining pool as a percentage of total network hash rate, and other inputs. The Company is entitled to consideration even if a block is not successfully placed by the mining pool operator. Bitcoin network block subsidies are based on the total amount of block subsidies that are expected to be generated on the Bitcoin network as a whole during the 24-hour period beginning at 0:00:00 UTC daily (i.e., the “measurement period”), while network transaction fees are based on the total amount of transaction fees and block rewards that are actually generated on the blockchain network as a whole during the measurement period. The Company is also entitled to a fractional share of the Bitcoin award and transaction fees from the mining pool operator as determined based on the hash rate provided by the Company to the mining pool as a percentage of the total expected Bitcoin network hash rate based on the current network difficulty. The Company is entitled to its relative share of consideration at the end of each measurement period, even if a block is not successfully placed by the mining pool. For accounting purposes, the agreement by and between the Company and the mining pool operator has a duration of less than 24 hours as a result of the agreement being continually renewed at the beginning of each measurement period. However, the continual renewal of the agreement does not represent a material right requiring separate performance obligations, as the FPPS formula remains the same upon each renewal. Consideration is all variable. Revenue is recognized on the same day that control of the contracted service transfers to the mining pool operator, which is the same day as contract inception. As it is probable that a significant reversal of cumulative revenue will not occur and we are able to calculate the payout based on the contractual formula, revenue is estimated and recognized based on the spot price of Bitcoin determined using the Company’s Principal Market at the beginning of each measurement period, which the Company considers to be 0:00:00 UTC on the date of contract inception. Noncash consideration is measured at fair value at agreement inception. The fair value of the crypto asset consideration is determined using the quoted price per the Principal Market at the beginning of each measurement period at the single Bitcoin level (one Bitcoin). There is no significant financing component in these transactions, due to the performance obligations and settlement of the transactions being on a daily basis. Engineering Substantially all revenue is derived from the sale of custom products built to customers’ specifications under fixed-price contracts with one identified performance obligation. Revenue is recognized over time as performance creates or enhances an asset with no alternative use, and for which the Company has an enforceable right to receive compensation as defined under the contract. To determine the amount of revenue to recognize over time, the Company utilizes the cost-to-cost method as management believes cost incurred best represents the amount of work completed and remaining on projects. As the cost-to-cost method is driven by incurred cost, the Company calculates the percentage of completion by dividing costs incurred to date by the total estimated cost. The percentage of completion is then multiplied by the estimated contract amount to determine inception-to-date revenue. Approved changes to design plans are generally recognized as a cumulative adjustment to the percentage of completion calculation. Revenue recognized for the period is the current inception-to-date recognized revenue less the prior period inception-to-date recognized revenue. If a contract is projected to result in a loss, the entire contract loss is recognized in the period when the loss was first determined, and any additional losses incurred subsequently are recognized in the subsequent reporting periods as they are identified. Additionally, contract costs incurred to date and expected total contract costs are continuously monitored during the term of the contract. Changes in the job performance, job conditions and final contract settlements are factors that influence management’s assessment of total contract value and the total estimated costs to complete those contracts, and therefore, profit and revenue recognition. Any costs to obtain a contract are not material to the Company’s financial statements and would be expensed as incurred. Because of the inherent uncertainties in estimating costs, it is at least reasonably possible that the estimates used will change within the near term. The length of time for the Company to complete a custom product varies but is typically between four to 12 weeks. Customers are typically required to make periodic progress payments to the Company based on contractually agreed-upon milestones. Invoices are due net, 30 days, and retainage, if any, is generally due 30 days after delivery. Taxes collected from F-12 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements customers and remitted to governmental authorities are excluded from revenue. Shipping and handling costs are treated as fulfillment costs and are included in cost of sales. Fair value measurement Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. Fair value measurements are classified and disclosed in one of the following three categories: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Observable inputs other than Level 1 prices, for similar assets or liabilities that are directly or indirectly observable in the marketplace. Level 3: Unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company will update its assumptions each reporting period based on new developments and record such amounts at fair value based on the revised assumptions until the agreements expire or contingency is resolved, as applicable. Property and equipment Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Estimated useful lives for leasehold improvements are typically the lesser of the estimated useful life of the asset or the life of the term of the lease. The estimated useful lives for all the Company’s property and equipment are as follows: ​ ​ ​ ​ ​ Life (Years) Buildings and building improvements 10 - 25 Miners and mining equipment 3 Machinery and facility equipment 5 - 10 Office and computer equipment 3 ​ Impairment of long-lived assets Management reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Goodwill Goodwill represents the cost of a business acquisition in excess of the fair value of the net assets acquired. Goodwill is not amortized and is reviewed for impairment annually as of December 31, or more frequently if facts and circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. We use both qualitative and quantitative analyses in making this determination. The Company determined that it has two reporting units for goodwill impairment testing purposes, Bitcoin Mining and Engineering, which are consistent with internal management reporting and management’s oversight of operations. Our analyses require significant assumptions and judgments, including assumptions about future economic conditions, revenue growth, and operating margins, among other factors. Examples of events or changes in circumstances considered in the qualitative analysis, many of which are subjective in nature, include: a significant negative trend in our industry or overall F-13 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements economic trends, a significant change in how we use the acquired assets, a significant change in our business strategy, a significant decrease in the market value of the asset, a significant change in regulations or in the industry that could affect the value of the asset, and a change in segments. If it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company performs the quantitative test to identify and measure the amount of goodwill impairment loss by comparing the fair value of the reporting unit with its carrying amount. If the carrying amount exceeds the fair value, goodwill of the reporting unit is considered impaired and that excess is recognized as a goodwill impairment loss. Finite-lived intangible assets Intangible assets with finite lives are comprised of customer contracts, trademarks, UL Listings, and patents that are amortized on a straight-line basis over their expected useful lives, which is their contractual term or estimated useful life. Patent costs consisting of filing and legal fees incurred are initially recorded at cost. The Company performs assessments to determine whether finite-lived classification is still appropriate at least annually. The carrying value of finite-lived assets and their remaining useful lives are also reviewed at least annually to determine if circumstances exist which may indicate a potential impairment or revision to the amortization period. A finite-lived intangible asset is considered to be impaired if its carrying value exceeds the estimated future undiscounted cash flows to be derived from it. We exercise judgment in selecting the assumptions used in the estimated future undiscounted cash flows analysis. Impairment is measured by the amount that the carrying value exceeds fair value. The use of different estimates or assumptions could result in significantly different fair values for our reporting units and intangible assets. Business combinations The Company uses the acquisition method of accounting by recognizing the identifiable tangible and intangible assets acquired and liabilities assumed, and any non-controlling interest in the acquired business, measured at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the aforementioned amounts. Contingent consideration is included within the purchase price and is recognized at its fair value on the acquisition date. A liability resulting from contingent consideration is remeasured to fair value as of each reporting date until the contingency is resolved, and subsequent changes in fair value are recognized in earnings. Contingent consideration is recorded in current and long-term liabilities on our Consolidated Balance Sheets. While we use our best estimates and assumptions to accurately apply preliminary values to assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, these estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of the assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the Consolidated Statements of Operations. Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date, including estimates for intangible assets, contractual obligations assumed, pre-acquisition contingencies, and contingent consideration, where applicable. The fair value assigned to acquired assets and liabilities assumed are based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. Critical estimates in valuing certain of the intangible assets we have acquired include future expected cash flows from customer contracts, discount rates, and estimated market changes in the value of the Rockdale PPA, which is accounted for as a nonhedged derivative contract. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates, or actual results. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred. Investment in marketable equity securities For investments in marketable equity securities in which the Company has the ability to exercise significant influence, but not control, over the operating and financial policies of the investee, the Company accounts for its investment using the equity method of accounting. Determining the ability of an investor to exercise significant influence is not always clear and applying judgment is necessary to assess the status of each investment. ​ F-14 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements The Company has elected to measure its equity method marketable equity securities at fair value at each balance sheet date, with unrealized holding gains and losses recorded in other income (expense), as the shares have a readily determinable fair value since they are publicly traded and have significant average daily volume traded. Convertible Debt Arrangements Convertible debt securities contain embedded conversion options that must be first evaluated to determine if bifurcation and separate accounting would be required for the embedded feature. As a result, the Company is required: (1) to analyze whether the conversion feature meets the definition of a derivative and is not eligible for an exception from this guidance (otherwise, the conversion feature will be recognized as a derivative) and (2) to analyze whether there is a significant premium associated with the convertible debt instrument (otherwise, the Company will allocate the debt proceeds with the premium being allocated to equity). If neither condition is met, the entire instrument will be accounted for as debt (i.e., no bifurcation is needed). The embedded conversion features in the Company’s convertible debt securities are deemed to be indexed to the Company’s common stock and meet the criteria for classification in stockholders’ equity, and therefore derivative accounting does not apply. Therefore, the Company recognizes its convertible debt securities as long-term debt on its Consolidated Balance Sheets, net of unamortized debt issuance costs. The associated debt issuance costs are amortized into interest expense on the Consolidated Statements of Operations using the effective interest method over the term of the debt. Leases The Company determines whether an arrangement contains a lease at the inception of the arrangement. If a lease is determined to exist, the term of such lease is assessed based on the date on which the underlying asset is made available for the Company’s use by the lessor. The Company’s assessment of the lease term reflects the non-cancelable term of the lease, inclusive of any rent-free periods and/or periods covered by early-termination options which the Company is reasonably certain of not exercising, as well as periods covered by renewal options which the Company is reasonably certain of exercising. The Company also determines lease classification as either operating or finance at lease commencement, which governs the pattern of expense recognition and the presentation reflected on the Consolidated Statements of Operations over the lease term. For all periods presented, the Company only had operating leases. For leases with a term exceeding 12 months, an operating lease liability is recorded on the Company’s consolidated balance sheet at lease commencement reflecting the present value of its fixed minimum payment obligations over the lease term. A corresponding operating lease right-of-use asset equal to the initial lease liability is also recorded, adjusted for any prepaid rent and/or initial direct costs incurred in connection with execution of the lease and reduced by any lease incentives received. For purposes of measuring the present value of its fixed payment obligations for a given lease, the Company uses its incremental borrowing rate, determined based on information available at lease commencement, as rates implicit in its leasing arrangements are typically not readily determinable. The Company’s incremental borrowing rate reflects the rate it would pay to borrow on a secured basis and incorporates the term and economic environment of the associated lease. For the Company’s operating leases, fixed lease payments are recognized as lease expense on a straight-line basis over the lease term. For leases with a term of 12 months or less, any fixed lease payments are recognized on a straight-line basis over the lease term and are not recognized on the Consolidated Balance Sheets as an accounting policy election. Leases qualifying for the short-term lease exception were insignificant. Variable lease costs are recognized as incurred and primarily consist of common area maintenance and utility charges not included in the measurement of right of use assets and operating lease liabilities. Operating segments Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the chief operating decision maker (“CODM”), which is comprised of several members of its executive management team, including the CEO, Executive Chairman, EVO-CFO, EVP-Head of Corporate Development & Strategy, and COO. The CODM uses segment gross profit (loss) to assess the performance of, manage the operations of, and allocate capital and operational resources to the Company’s two reportable segments. Change in Reportable Segments Previously, the Company operated in three reportable business segments: Bitcoin Mining, Data Center Hosting, and Engineering. As of January 1, 2024, the Company has terminated all contracts with its legacy data center hosting customers and made the strategic decision to no longer offer data center hosting services to customers. Commencing with the three months ended March 31, 2024, the F-15 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements Data Center Hosting Segment no longer met the quantitative requirements as a reportable segment, and the CODM ceased analyzing the performance of the Company’s legacy data center hosting operations. As such, the Data Center Hosting Segment has been eliminated as a separate reportable segment. Bitcoin Mining and Engineering are the Company’s two remaining reportable business segments. See Note 20. Segment Information for more information. Income taxes The Company accounts for income taxes under the asset and liability method, in which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. A valuation allowance is required to the extent any deferred tax assets may not be realizable. Contract balances Contract assets consist of costs and estimated earnings in excess of billings on uncompleted engineering contracts. Deferred revenue relates to upfront payments and consideration received from customers for the upfront license fee generated from our legacy animal health business. Contract liabilities consist of billings in excess of costs and estimated earnings on uncompleted engineering contracts. ​ Remaining performance obligations Remaining performance obligations represent the transaction price of contracts for work that has not yet been performed. The Company elected the practical expedient to not adjust the transaction price for the existence of a significant financing component if the timing difference between a customer’s payment and our performance is one year or less. ​ Stock-based compensation The Company accounts for share-based payment awards exchanged for services at the estimated grant date fair value of the award, which is based on the fair market value of the Company’s common stock at the time of the grant. For performance-based share-based payment awards, the Company recognizes compensation cost over the performance period when achievement of the milestones and targets is probable. The Company has elected to account for forfeitures of awards as they occur. Recently issued accounting pronouncements The Company continually assesses new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequences of such change to its Consolidated Financial Statements and assures that there are proper controls in place to ascertain that the Company’s Consolidated Financial Statements properly reflect the change. In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 expands existing income tax disclosures for rate reconciliations by requiring disclosure of certain specific categories and additional reconciling items that meet quantitative thresholds and expands disclosures for income taxes paid by requiring disaggregation by certain jurisdictions. ASU 2023-09 is effective for annual periods beginning after December 15, 2024; early adoption is permitted. The Company is evaluating the impact the updated guidance will have on its disclosures. In December 2023, the FASB issued ASU 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets, which establishes accounting guidance for crypto assets meeting certain criteria. Bitcoin meets this criteria. The amendments require crypto assets meeting the criteria to be recognized at fair value with changes recognized in net income for each reporting period. Upon adoption, a cumulative-effect adjustment is made to the opening balance of retained earnings as of the beginning of the annual reporting period of adoption. ASU 2023-08 is effective for fiscal years beginning after December F-16 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements 15, 2024, including interim periods within those fiscal years. Early adoption is permitted. The Company elected to early adopt ASU 2023-08 for the year ended December 31, 2023. As a result of the adoption, the Company recorded a cumulative effect adjustment to its Accumulated deficit balance of approximately $ 6.0 million as of January 1, 2023, as a result of recognizing its Bitcoin held as of January 1, 2023, at fair value. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 is intended to enhance reportable segment disclosures by requiring disclosures of significant segment expenses regularly provided to the CODM, requiring disclosure of the title and position of the CODM and explanation of how the reported measures of segment profit and loss are used by the CODM in assessing segment performance and allocation of resources. ASU 2023-07 is effective for the Company for annual periods beginning after December 31, 2023. The Company adopted ASU 2023-07 for the year ended December 31, 2024. As a result of the adoption, the Company expanded its disclosures in Note 20. Segment Information , to present significant expenses that are included within cost of revenue, by reportable segment, which are presented to the CODM. In December 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). ASU 2024-03 requires, in the notes to the financial statements, disclosures of specified information about certain costs and expenses specified in the updated guidance. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact the updated guidance will have on its disclosures. ​ ​ Note 3. Acquisitions E4A Solutions Acquisition On December 16, 2024, the Company acquired 100 % of the equity interests of E4A Solutions, a Texas-based electrical engineering solutions company, for total consideration of approximately $ 54.4 million, which was comprised of $ 51.8 million paid for using the Company’s existing cash and a contingent purchase price payable to the sellers with an estimated fair value of $ 2.6 million. Under the contingent purchase price payable, the sellers are eligible to earn potential earn-out targets based on E4A Solutions’ Adjusted EBITDA during the two years ending December 31, 2026, payable in cash or Riot common stock at the Company’s discretion. The potential earnout is calculated as 2.65 times the amount the average adjusted EBITDA exceeds the Earnout threshold, as defined in the purchase agreement. E4A Solutions is a provider of electrical engineering services to a diverse customer base of energy developers and data center operators. This acquisition adds to Riot’s vertically integrated strategy by adding engineering expertise to service its own existing and future electrical infrastructure as well as provide solutions and services to the rapidly growing market for electrical infrastructure. ​ The acquisition was accounted for as an acquisition of a business using the acquisition method of accounting, which requires recognition of assets acquired and liabilities assumed at their respective fair values on the date of acquisition. As of December 31, 2024, the Company has completed a preliminary allocation of the purchase consideration. Therefore, the allocation of the purchase price to assets acquired and liabilities assumed is based on provisional estimates and is subject to continuing management analysis, with assistance from third party valuation advisors. The Company expects to finalize the valuation of these assets and liabilities, and consideration transferred, as soon as practicable, but not later than one year from the acquisition date. Any changes to the preliminary estimates of the fair value of the assets acquired and liabilities assumed will be recorded as adjustments to those assets and liabilities and residual amounts will be allocated to goodwill. F-17 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements The following table presents the preliminary allocation of the purchase consideration: ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 915 Accounts receivable ​ ​ 3,961 Prepaid expenses and other current assets ​ ​ 169 Contract assets ​ ​ 2,135 Property and equipment ​ ​ 136 Operating lease right-of-use asset ​ ​ 612 Finite-lived intangible assets: ​ ​ ​ Customer contracts ​ ​ 23,100 Trademark ​ ​ 1,100 Other long-term assets ​ ​ 44 Accounts payable ​ ​ ( 1,497 ) Deferred revenue, current portion ​ ​ ( 374 ) Accrued expenses ​ ​ ( 242 ) Operating lease liability, current portion ​ ​ ( 323 ) Operating lease liability, less current portion ​ ​ ( 289 ) Other long-term liabilities ​ ​ ( 53 ) Total identifiable assets and liabilities acquired ​ ​ 29,394 Goodwill ​ ​ 25,022 Total purchase consideration ​ $ 54,416 The fair values of cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, other long-term assets, accounts payable, contract liabilities, accrued expenses, and other long-term liabilities were determined to be the carrying values due to the immaterial and/or short-term nature of the assets and liabilities. The finite-lived intangible assets consist of a trademark and customer relationships. The fair value of the trademark was estimated using the relief from royalty rate method, which estimated future royalty charges attributable to the trademark. The fair value of the customer relationships was estimated using the income approach, which estimated future revenues and costs of the existing customer relationships. The estimated fair values of the trademark and customer relationship utilized a discount rate of 13.4 % . The right of use asset and operating lease liabilities consisted of an operating lease of office and commercial space in Houston, Texas. The lease has annual payments of approximately $ 0.4 million and a remaining lease term of approximately two years as of acquisition. ​ Goodwill was attributable to the assembled workforce of experienced personnel at E4A Solutions and synergies expected to be achieved from the combined operations of Riot and E4A Solutions. The goodwill recognized is not expected to be deductible for tax purposes. We assigned the goodwill to our Engineering reportable segment. The operating results of E4A Solutions have been included in the Company’s Consolidated Statements of Operations since the acquisition date. Through December 31, 2024, the Company recognized approximately $ 2.7 million of acquisition-related costs related to this acquisition that were expensed as incurred. From the acquisition date through December 31, 2024, E4A Solution’s total revenue and net income was approximately $ 0.8 million and less than $ 0.1 million, respectively. ​ Block Mining Acquisition On July 23, 2024, the Company acquired 100 % of the equity interests of Block Mining, for total consideration of approximately $ 113.6 million, which was comprised of $ 13.5 million in cash (adjusted for net working capital acquired and other items, excluding the payoff of debt of $ 5.0 million, which was accounted for as a transaction separate from the acquisition) from the Company’s existing cash, 7.2 million shares of Riot common stock valued at approximately $ 74.0 million, and a contingent purchase price payable to the sellers with an estimated fair value of $ 26.1 million. Under the contingent purchase price payable, the sellers are eligible to earn up to $ 32.5 million in potential earn-out targets if certain milestones are reached by December 31, 2025. The Block Mining Acquisition immediately increased Riot’s hash rate, expanded Riot’s footprint geographically, and provided exposure to additional energy markets outside of ERCOT , including the Paducah Power Systems, Tennessee Valley Authority (TVA) F-18 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements and Big Rivers Electric Corporation in the MISO region . Block Mining is a vertically-integrated Bitcoin miner consisting of two operational sites, both in Kentucky, which consist of existing operational Bitcoin mining capacity, with the potential to expand. Additionally, Block Mining owns a separate greenfield expansion opportunity in Kentucky, adjacent to an existing substation, presenting the opportunity for further expansion. Block Mining is a capital efficient developer and operator of Bitcoin mining facilities with an experienced management team that will add to Riot’s ability to execute on its vertically-integrated strategy. The acquisition was accounted for as an acquisition of a business using the acquisition method of accounting, which requires recognition of assets acquired and liabilities assumed at their respective fair values on the date of acquisition. As of December 31, 2024, the Company has completed a preliminary allocation of the purchase consideration. Therefore, the allocation of the purchase price to assets acquired and liabilities assumed is based on provisional estimates and is subject to continuing management analysis, with assistance from third party valuation advisors. The Company expects to finalize the valuation of these assets and liabilities, and consideration transferred, as soon as practicable, but not later than one year from the acquisition date. Any changes to the preliminary estimates of the fair value of the assets acquired and liabilities assumed will be recorded as adjustments to those assets and liabilities and residual amounts will be allocated to goodwill. The following table presents the preliminary allocation of the purchase consideration: ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 6,295 Accounts receivable ​ ​ 362 Prepaid expenses and other current assets ​ ​ 2,877 Property and equipment ​ ​ 20,165 Operating lease right-of-use asset ​ ​ 3,733 Accounts payable ​ ​ ( 1,471 ) Accrued expenses ​ ​ ( 833 ) Operating lease liability, current portion ​ ​ ( 2,410 ) Operating lease liability, less current portion ​ ​ ( 1,323 ) Long-term debt ​ ​ ( 10,678 ) Total identifiable assets and liabilities acquired ​ ​ 16,717 Goodwill ​ ​ 96,865 Total purchase consideration ​ $ 113,582 ​ The fair values of cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable, and accrued expenses were determined to be the carrying values due to the short-term nature of the assets and liabilities. The fair value of property and equipment was estimated by applying the cost approach, which uses the replacement cost as an indicator of fair value. The assumptions of the cost approach include replacement cost new and physical deterioration factors including remaining life and effective age. The replacement cost new was based on a price per terahash consistent with prices the Company pays for new Bitcoin miners and an effective age of three years, consistent with the Company’s current estimated useful life of Bitcoin miners. The right of use asset and operating lease liabilities consisted of an operating lease of a data center in Calvert City, Kentucky. The lease has annual payments of approximately $ 1.4 million and a remaining lease term of approximately 3.0 years as of acquisition. The assumed debt consisted of a $ 5.0 million secured loan and a $ 5.7 million note payable. The secured loan was paid off on the date of acquisition. The note payable carries a fixed rate of 8.81 % , and matures in December 2035, with annual principal and accrued interest payments beginning on December 31, 2024. The fair value of the debt at acquisition of $ 5.7 million was determined to equal its carrying value due at acquisition, as the interest rate is reasonably consistent with rates the Company would expect to incur for similar debt instruments. Goodwill was attributable to the assembled workforce of experienced personnel at Block Mining and synergies expected to be achieved from the combined operations of Riot and Block Mining. The goodwill recognized is not expected to be deductible for tax purposes. We assigned the goodwill to our Bitcoin Mining reportable segment. The operating results of Block Mining have been included in the Company’s Consolidated Statements of Operations since the acquisition date. Through December 31, 2024, the Company recognized $ 2.8 million of acquisition-related costs related to this acquisition that were expensed as incurred. F-19 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements From the acquisition date through December 31, 2024, Block Mining’s total revenue and net loss were approximately $ 13.3 million and $ 20.9 million, respectively. Pro-forma financial information The following unaudited pro forma financial information summarizes the combined results of operations for Riot, Block Mining, and E4A Solutions, as if the companies were combined as of January 1, 2023. The unaudited pro forma information does not reflect the effect of costs or synergies that may result from the acquisition and excludes acquisition-related costs of $ 5.5 million incurred during the year ended December 31, 2024. This unaudited pro forma information is presented for informational purposes only and is not necessarily indicative of future operating results of the combined company. This information should not be used as a predictive measure of the Company’s future financial position, results of operations, or liquidity. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2024 2023 Revenue ​ $ 423,602 ​ $ 330,820 Net income (loss) ​ $ 121,891 ​ $ ( 41,330 ) ​ Acquisition of Corsicana Facility land site During the year ended December 31, 2022, the Company initiated a large-scale development to expand its Bitcoin mining capabilities with the acquisition of a 265 -acre site in Navarro County, Texas, strategically located next to the Navarro switch, for $ 10.1 million. See Note 7. Property and Equipment , for more information about the Corsicana Facility. ​ ​ Note 4. Revenue from Contracts with Customers Disaggregated revenue Revenue disaggregated by reportable segment is presented in See Note 20. Segments Information . Contract balances Contract assets relate to uncompleted Engineering contracts. As of December 31, 2024 and 2023, contract assets were $ 6.5 million and $ 15.4 million, respectively. Contract liabilities primarily relate to upfront payments and consideration received from a legacy data center hosting customer and uncompleted Engineering contracts. As of December 31, 2024 and 2023, contract liabilities and deferred revenue were $ 26.1 million and $ 22.3 million, respectively. ​ During the years ended December 31, 2024 and 2023, $ 6.1 million and $ 11.2 million, respectively, of the beginning balance of contract liabilities and deferred revenue was recognized as revenue. During the years ended December 31, 2024 and 2023, $3.5 million and $0.7 million, respectively, was recognized as revenue as a result of satisfying performance obligations in previous periods. Remaining performance obligation The following table presents the estimated future recognition of the Company’s remaining performance obligations, which represent the transaction price of current contracts for work to be performed. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 2026 2027 2028 ​ 2029 Thereafter Total Legacy data center hosting contract $ 2,422 $ 2,362 $ 2,362 $ 2,362 ​ $ 2,362 $ 3,850 $ 15,720 Engineering ​ 62,210 ​ 7,601 ​ — ​ — ​ ​ — ​ — ​ 69,811 Other ​ ​ 97 ​ ​ 97 ​ ​ 97 ​ ​ 97 ​ ​ — ​ ​ — ​ ​ 388 Total contract liabilities ​ $ 64,729 ​ $ 10,060 ​ $ 2,459 ​ $ 2,459 ​ $ 2,362 ​ $ 3,850 ​ $ 85,919 ​ ​ F-20 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements Note 5. Bitcoin The following table presents information about the Company’s Bitcoin balance held: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quantity Amounts Balance as of December 31, 2023 ​ ​ 7,362 ​ $ 311,178 Revenue recognized from Bitcoin mined ​ ​ 4,828 ​ ​ 321,002 Change in Bitcoin receivable ​ ​ 5 ​ ​ ( 625 ) Acquisition of Bitcoin ​ ​ 5,784 ​ ​ 577,500 Proceeds from sale of Bitcoin ​ ​ ( 212 ) ​ ​ ( 9,518 ) Exchange of Bitcoin for employee compensation ​ ​ ( 45 ) ​ ​ ( 2,478 ) Change in fair value of Bitcoin ​ ​ — ​ ​ 457,409 Balance as of December 31, 2024 ​ ​ 17,722 ​ $ 1,654,468 ​ ​ ​ ​ ​ ​ ​ Carrying value of Bitcoin as of December 31, 2024 (a) ​ ​ ​ ​ $ 1,093,793 Realized gains on the sale or exchange of Bitcoin for the year ended December 31, 2024 (b) ​ ​ ​ ​ $ 7,983 ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2022 ​ ​ 6,974 ​ $ 109,420 Cumulative effect upon adoption of ASU 2023-08 ​ ​ — ​ ​ 5,994 Revenue recognized from Bitcoin mined ​ ​ 6,626 ​ ​ 188,996 Change in Bitcoin receivable ​ ​ ( 21 ) ​ ​ ( 878 ) Proceeds from sale of Bitcoin ​ ​ ( 6,185 ) ​ ​ ( 176,219 ) Exchange of Bitcoin for employee compensation ​ ​ ( 32 ) ​ ​ ( 869 ) Change in fair value of Bitcoin ​ ​ — ​ ​ 184,734 Balance as of December 31, 2023 ​ ​ 7,362 ​ $ 311,178 ​ ​ ​ ​ ​ ​ ​ Carrying value of Bitcoin as of December 31, 2023 (a) ​ ​ ​ ​ $ 199,928 Realized gains on the sale or exchange of Bitcoin for the year ended December 31, 2023 (b) ​ ​ ​ ​ $ 80,174 ​ (a) The carrying value of Bitcoin is equal to the post-impairment value of all Bitcoin held as of the adoption of ASU 2023-08 on January 1, 2023; for Bitcoin produced subsequent to the adoption ASU 2023-08, the initial value of the Bitcoin as determined for revenue recognition purposes; and, for Bitcoin acquired, the acquisition value. ​ (b) Bitcoin is sold on a first in, first out (FIFO) basis. For all periods presented, gains were recognized on all sales of Bitcoin and exchanges of Bitcoin for employee compensation and are included in Change in fair value of Bitcoin on the Consolidated Statements of Operations. ​ All additions of Bitcoin were the result of Bitcoin generated by the Company’s Bitcoin Mining operations (see Note 4. Revenue from Contracts with Customers ) and acquisitions on the open market. All dispositions of Bitcoin were the result of sales on the open market to fund Company operations and for compensation for certain employees. ​ Note 6. Investments Equity method investment - marketable securities During the year ended December 31, 2024, the Company acquired approximately 90.1 million common shares of Bitfarms Ltd. (“Bitfarms”) on the open market for approximately $ 203.8 million. As of December 31, 2024, the Company’s investment in Bitfarms was equal to approximately 19.9 % of all outstanding Bitfarms common stock. In September 2024, the Company and Bitfarms entered into a settlement agreement, under which the Company intends to review its investment in Bitfarms on a continuing basis and, subject to the terms of the settlement agreement, depending upon various factors, including without limitation, any discussion between the Company, Bitfarms and/or the Board of Bitfarms and Bitfarms’ advisors regarding, among other things, Bitfarms’ financial position and strategic direction, overall market conditions, other investment opportunities available to the Company, and the availability of securities of Bitfarms at prices that would make the purchase or sale of such securities desirable, the Company may (i) increase or decrease its position in Bitfarms through, among other things, the purchase or sale of securities of Bitfarms, including through transactions involving its common shares and/or other equity, debt, F-21 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements notes, other securities, or derivative or other instruments that are based upon or relate to the value of securities of Bitfarms in the open market or otherwise, (ii) enter into transactions that increase or hedge its economic exposure to its investment without affecting its beneficial ownership of Bitfarms common stock or (iii) consider or propose other actions, including submitting a revised proposal to acquire Bitfarms. ​ On September 23, 2024, Bitfarms appointed an independent director to its board of directors that the Company proposed to be nominated and supported. As a result, for accounting purposes, the Company determined it obtained the ability to exercise significant influence over its investment. Therefore, the Company began accounting for its investment under the equity method of accounting and elected to account for it at fair value. There have been no intra-entity transactions, and therefore, no intra-entity profits or losses. Unrealized gains and losses are recognized in Other income (expense) on the Consolidated Statements of Operations. The fair value measurement of the Company’s investment in Bitfarms is based on quoted prices in an active market and valued at the closing price reported at the end of each period and thus represents a Level 1 measurement on the fair value hierarchy. The following table presents information about the equity method investment - marketable securities (“marketable securities): ​ ​ ​ ​ ​ Investment, at cost ​ $ 203,754 Unrealized losses ​ ​ ( 69,489 ) Fair value as of December 31, 2024 ​ $ 134,265 ​ Convertible note During the year ended December 31, 2023, the Company invested in a $ 4.5 million convertible note at face value. The convertible note has a three-year term and earns interest at a rate of 12 % per annum, which may be paid in cash or in-kind, and converts into equity of the issuer of the convertible note at the end of the three-year term. The convertible note is accounted for as an available-for-sale debt instrument and is recognized at fair value in Other long-term assets on the Consolidated Balance Sheets. Unrealized changes in the fair value of the convertible note are recognized in Other comprehensive income (loss) on the Consolidated Statements of Comprehensive Income (Loss). Interest income is recognized within Interest income (expense) on the Consolidated Statements of Operations. The fair value measurement of the convertible note is based on significant inputs not observable in the market and thus represents a Level 3 measurement on the fair value hierarchy. The significant assumptions used to estimate fair value of the convertible note as of December 31, 2024, primarily consisted of a discount rate of 12.4 % , which reflected the issuance date spread premium over the selected yield for the remaining time to maturity. ​ The following table presents information about the convertible note: ​ ​ ​ ​ ​ Fair value as of December 31, 2023 $ 4,709 Accrued interest 564 Amortized costs basis 5,273 Unrealized holding gains (losses) in accumulated other comprehensive income ​ ​ 72 Fair value as of December 31, 2024 $ 5,345 ​ The Company determined that the issuer of the convertible preferred note was a variable interest entity (“VIE”) and that the Company held a variable interest in the issuer of the convertible preferred note. The Company has considered the amount it is contributing to the issuer, its lack of decision-making rights and control, among other factors, and has concluded that it does not hold a controlling financial interest and does not have majority decision-making control. Therefore, the Company is not the primary beneficiary of the VIE, and as a result, the Company is not required to consolidate the VIE. The entire $ 4.5 million investment is at risk of loss. Coinsquare and Mogo In September 2017, and February 2018, the Company acquired a minority interest for $ 9.4 million in Coinsquare Ltd., a Canadian cryptocurrency exchange (“Coinsquare”), which operates a digital cryptocurrency exchange platform in Canada. The investment resulted in an approximately 11.7 % ownership in Coinsquare by the Company on a fully diluted basis. The Company elected to account for the investment using the measurement alternative as the equity securities are without a readily determinable fair value F-22 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements and do not give the Company significant influence over Coinsquare. Per the measurement alternative, the investment is recorded at cost, less any impairment, plus or minus changes resulting from observable price changes. During the year ended December 31, 2021, under agreements between Coinsquare, Coinsquare’s shareholders (including Riot) and Mogo Inc. (NASDAQ: MOGO), a digital payments and financial technology company (“Mogo”), Riot sold all 3.4 million common shares of Coinsquare in exchange for approximately 3.2 million common shares of Mogo and approximately $ 1.8 million in cash. During the year ended December 31, 2022, the Company sold all 3.2 million shares of its shares of Mogo for proceeds of $ 1.8 million, resulting in realized losses of approximately $ 9.0 million. Note 7. Property and Equipment The following table presents the Company’s property and equipment: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2024 2023 Buildings and building improvements ​ $ 715,862 ​ $ 348,865 Land rights and land improvements ​ 10,904 ​ 10,320 Miners and mining equipment ​ 927,866 ​ 496,230 Machinery and facility equipment ​ ​ 44,377 ​ ​ 39,144 Office and computer equipment ​ 3,081 ​ 2,108 Construction in progress ​ 82,965 ​ 166,970 Total cost of property and equipment ​ 1,785,055 ​ 1,063,637 Less accumulated depreciation ​ ( 446,268 ) ​ ( 359,443 ) Property and equipment, net ​ $ 1,338,787 ​ $ 704,194 ​ Depreciation and amortization expense related to property and equipment totaled approximately $ 206.2 million, $ 246.5 million, and $ 105.9 million, for the years ended December 31, 2024, 2023, and 2022, respectively. The Company recognized an impairment charge for its miners and mining equipment during the year ended December 31, 2022, as described below, but did not incur any other impairment charges for its property and equipment for the years ended December 31, 2024 and 2023. Miners and mining equipment As of December 31, 2024, the Company had deployed miners in its Bitcoin Mining operations at its Rockdale Facility, Corsicana Facility, and Kentucky Facility. As of December 31, 2023, all the Company’s deployed miners were at its Rockdale Facility. During the year ended December 31, 2023, the Company entered into the Master Agreement to acquire miners from MicroBT . In 2023 , we executed purchase orders with MicroBT to acquire U.S.-manufactured miners with a total hash rate of 25.6 EH/s, for a total purchase price of approximately $ 453.4 million, subject to downward adjustment, as provided under the Master Agreement. Delivery of these miners to the Corsicana Facility, for deployment in immersion cooling systems, began in 2023, and all miners under these purchase orders are expected to be received and deployed by mid-2025. The Master Agreement also provides the Company with an option to purchase additional miners with a total hash rate of approximately 75.0 EH/s, on the same terms as the initial order. ​ During the year ended December 31, 2024, the Company entered into an additional purchase order with MicroBT under the Master Agreement to acquire 31,500 air-cooled miners with a total hash rate of 5.9 EH/s for a total purchase price of approximately $ 96.7 million. This purchase order is in addition to existing purchase options under the Master Agreement. Delivery of these miners occurred during the year ended December 31, 2024. During the years ended December 31, 2024 and 2023, we sold 19,817 and 2,700 , underperforming Antminer model S19 XP miners, respectively, for which we recognized losses of $ 17.4 million and $ 5.3 million during the years ended December 31, 2024 and 2023, respectively. Effective January 1, 2024, as a result of new information about the useful lives of Bitcoin miners, the Company determined the estimated useful life of its Bitcoin miners will be increased from two years to three years . In making this determination, the Company F-23 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements took into consideration its first-hand experience of miners remaining in service beyond a two-year period, as well as its increased use of immersion-based mining, which the Company anticipates will extend the useful life of miners, due to improved heat removal and reduced exposure to particulates, as compared to traditional air-cooled mining. For the year ended December 31, 2024, the effect of this change in estimate was a reduction in depreciation expense and an increase in net income of approximately $ 78.3 million, and increases in basic earnings per share of $ 0.28 and diluted earnings per share of $ 0.25 . ​ Impairment of miners During the year ended December 31, 2022, adverse changes in business climate, including decreases in the price of Bitcoin and resulting decrease in the market price of miners, indicated that an impairment triggering event had occurred. Testing performed indicated the estimated fair value of the Company’s miners to be less than their net carrying value as of December 31, 2022, and an impairment charge of $ 55.5 million was recognized, decreasing the net carrying value of the Company’s miners to their estimated fair value. The estimated fair value of the Company’s miners was classified in Level 2 of the fair value hierarchy due to the quoted market prices for similar assets. Casualty-related charges (recoveries), net In December 2022, the Rockdale Facility was damaged during severe winter storms in Texas. As of December 31, 2024, the Company estimated that total damages of $ 10.3 million had been incurred. During the year ended December 31, 2024, the Company received net insurance recoveries of $ 2.8 million, in addition to the $ 7.5 million recovered during the year ended December 31, 2023, primarily related to the damage incurred at Rockdale Facility. Recoveries are recognized when they are probable of being received. Construction in progress In 2022, the Company initiated development of the Corsicana Facility to expand its Bitcoin Mining capabilities, on a 265 -acre site in Navarro County, Texas, located near the Navarro Switch. The initial phase of development of the Corsicana Facility involves the construction of immersion-cooled Bitcoin Mining infrastructure, including a high-voltage power substation and electrical and water transmission facilities to supply power and water to the facility. Operations of this initial phase of the development commenced in April 2024, following energization of the substation. As of December 31, 2024, the initial phase of Corsicana was complete with deployed Bitcoin Mining infrastructure comprising of four operational buildings, Buildings A1, A2, B1, and B2. During the year ended December 31, 2023, the Company entered into a purchase agreement to acquire immersion cooling systems for use in Bitcoin Mining facilities developed at the Corsicana Facility. Delivery and installation of these immersion cooling systems was completed during the year ended December 31, 2024, with miner installation and operations commencing progressively as the systems were installed. The purchase agreement also provides the Company an option to purchase additional immersion cooling systems from the same manufacturer, on the same terms as the initial order, through December 31, 2025. ​ During the year ended December 31, 2024, the Company entered into a second purchase agreement to acquire immersion cooling systems from a different manufacturer for use in the Bitcoin Mining facilities at the Corsicana Facility. Delivery of these immersion cooling systems was completed during the year ended December 31, 2024. Through December 31, 2024, the Company incurred total costs of approximately $ 415.9 million related to the development of the first phase of the Corsicana Facility (exclusive of miners), including $ 10.1 million paid to acquire the land on which the facility was developed. ​ Related party land transaction During the year ended December 31, 2022, the Company began an initiative to provide certain on-site temporary housing for stakeholders, including partners, analysts, stockholders, employees, vendors, and other visitors to the Rockdale Facility, which is located in a relatively remote area of central Texas with limited accommodations for visitors. During the year ended December 31, 2023, Riot completed its acquisition of property and land for the development of temporary housing from Lyle Theriot (indirectly, through a limited liability company controlled by Mr. Theriot) for approximately $ 1.1 million, consisting of $ 0.2 million for land and $ 0.9 million for buildings and improvements. At the time of the transaction, Mr. Theriot was part of the management team at Riot and was considered a related party of Riot. The transaction was accounted for as an asset acquisition. ​ F-24 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements ​ Note 8. Goodwill and Intangible Assets Goodwill The goodwill balance of $ 121.9 million as of December 31, 2024, was attributable to the assembled workforces of experienced personnel at Block Mining and E4A Solutions and synergies expected to be achieved as a result of the Company’s acquisitions. See Note 3. Acquisitions . During the second quarter of 2022, adverse changes in business climate, including decreases in the price of Bitcoin and increased volatility of equity markets, as evidenced by declines in the market price of the Company’s securities, those of its peers, and major market indices, reduced market multiples and increased weighted-average costs of capital, primarily driven by an increase in interest rates. Market concerns related to inflation, supply chain disruption issues and other macroeconomic factors were some of the primary causes for these declines. Additionally, the price of Bitcoin had declined significantly, notably during the second quarter of 2022. Due to these factors, the Company determined that a triggering event had occurred, and therefore, performed a goodwill impairment assessment as of June 30, 2022. The valuation of the Company’s reporting units was determined with the assistance of an independent valuation specialist firm using a market approach. The market approach was based on the Guideline Public Company Method, which is derived from metrics of publicly traded companies or historically completed transactions of comparable businesses. The selection of comparable businesses was based on the markets in which the reporting units operated, giving consideration to risk profiles, size, geography, and diversity of products and services. Under the market approach, the Company evaluated the fair value based on trailing and forward-looking earnings and revenue multiples derived from comparable publicly traded companies with similar market position and size as the Company’s reporting units. The unobservable inputs used to measure the fair value included projected revenue growth rates, the price of Bitcoin, the global Bitcoin network hash rate, the timing of miner shipments under currently executed contracts and their subsequent deployment, and the determination of appropriate market comparison companies. The trailing-twelve-month and next-twelve-month enterprise value-to-revenue multiples assumed in the analysis ranged from approximately 0.7x to approximately 3.9x. The resulting estimated fair values of the combined reporting units were reconciled to the Company’s market capitalization, including an estimated implied control premium of approximately 30 %. The results of the quantitative test indicated the fair value of the reporting units did not exceed their carrying amounts, including goodwill, in excess of the carrying value of the goodwill. As a result, the entire carrying amount of the goodwill was recognized as a non-cash impairment charge during the year ended December 31, 2022. Finite-lived intangible assets The following table presents the Company’s finite-lived intangible assets as of December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ Gross ​ Accumulated ​ Net book ​ average life ​ book value amortization value (years) Customer contracts ​ $ 29,400 ​ $ ( 1,911 ) ​ $ 27,489 10 Trademark ​ 6,100 ​ ( 1,542 ) ​ 4,558 10 UL Listings ​ 2,700 ​ ( 694 ) ​ 2,006 12 Patents ​ 10,060 ​ ( 10,060 ) ​ — Various Finite-lived intangible assets ​ $ 48,260 ​ $ ( 14,207 ) ​ $ 34,053 ​ ​ ​ The customer contracts and trademark were recognized as the result of the E4A Solutions Acquisition in December 2024 and the ESS Metron acquisition which occurred during the year ended December 31, 2021. The UL listings were recognized as the result of the ESS Metron acquisition which occurred during the year ended December 31, 2021. During the year ended December 31, 2022, the Company paid $ 9.5 million to license a patent for technology being used in the development of the Corsicana Facility. The amount paid was amortized over the term of the license, which expired on December 31, 2024. F-25 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements The following table presents the Company’s finite-lived intangible assets as of December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ Gross Accumulated Net book ​ average life ​ book value amortization value (years) Customer contracts ​ $ 6,300 ​ $ ( 1,292 ) ​ $ 5,008 10 Trademark ​ 5,000 ​ ( 1,042 ) ​ 3,958 10 UL Listings ​ 2,700 ​ ( 469 ) ​ 2,231 12 Patents ​ 10,060 ​ ( 5,560 ) ​ 4,500 Various Finite-lived intangible assets ​ $ 24,060 ​ $ ( 8,363 ) ​ $ 15,697 ​ ​ ​ During the years ended December 31, 2024, 2023, and 2022, amortization expense related to finite-lived intangible assets was $ 5.8 million, $ 5.8 million, and $ 2.1 million, respectively. The following table presents the estimated future amortization of the Company’s finite-lived intangible assets as of December 31, 2024: ​ ​ ​ ​ 2025 ​ $ 3,775 2026 ​ 3,775 2027 ​ 3,775 2028 ​ 3,775 2029 ​ 3,775 Thereafter ​ 15,178 Total ​ $ 34,053 ​ ​ The Company did not identify any impairment of its finite-lived intangible assets during the years ended December 31, 2024, 2023, and 2022. ​ Note 9. Power Supply Agreements Rockdale Facility Power Purchase Agreement In May 2020, the Company, through its subsidiary, Whinstone, entered into the Rockdale PPA to provide for the delivery of power to its Rockdale Facility, via the nearby Sandow Switch. Pursuant to the Rockdale PPA, the Company has agreed to acquire a total of 345 MW of long-term, fixed-price power, in multiple blocks, as follows: 130 MW contracted in May 2020, at fixed prices through April 30, 2030; 65 MW contracted in March 2022, at fixed prices through April 30, 2030; and 150 MW contracted in November 2022, at fixed prices through October 31, 2027. Additionally, under the Rockdale PPA, the Company has the option to purchase additional power at market prices, as needed. Under the Rockdale PPA, the Company may also elect not to utilize its long-term, fixed-price power for its operations, and instead elect to sell that power in exchange for credits against future power costs when there is a benefit to the Company, depending on the spot market price of electricity. The Company’s power strategy combines participation in Demand Response Services Programs, as described below, participation in ERCOT’s Four Coincident Peak (“4CP”) program, and sales of power, to attempt to manage operating costs most efficiently. During the years ended December 31, 2024, 2023, and 2022, the Company earned credits against future power costs in exchange for power resold of approximately $ 33.7 million, $ 71.2 million, and $ 27.3 million, respectively. These amounts are recorded in Power curtailment credits on the Consolidated Statements of Operations. The Company determined the Rockdale PPA meets the definition of a derivative because it allows for net settlement. However, because the Company has the ability to offer the power back for sale outside of the Rockdale PPA, rather than taking physical delivery, the Company determined that physical delivery is not probable through the entirety of the contract and therefore, the Company does not believe the normal purchases and normal sales scope exception applies to the Rockdale PPA. Accordingly, the Rockdale PPA (a non-hedging derivative contract) is accounted for as a derivative and recorded at its estimated fair value each reporting period in Derivative asset on the Consolidated Balance Sheets with the change in the fair value recorded in Change in fair F-26 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements value of derivative asset on the Consolidated Statements of Operations. The Rockdale PPA is not designated as a hedging instrument. The Facilities Agreement, Demand Response Service Programs, and the 4CP program are not part of the Rockdale PPA, and are therefore not subject to treatment and valuation as a derivative along with Rockdale PPA. The terms of the Rockdale PPA require margin-based collateral, calculated as exposure resulting from fluctuations in the market cost rate of electricity versus the fixed price stated in the contract. As of December 31, 2024, the margin-based collateral requirement of the Company was zero . While the Company manages operating costs at the Rockdale Facility in part by periodically selling back unused or uneconomical power, the Company does not consider such actions to be trading activities. Demand Response Services Programs Concurrently with the Rockdale PPA, Whinstone entered into an interconnection agreement for the extension of delivery system transmission/substation facilities to facilitate delivery of electricity to the Rockdale Facility (the “Facilities Agreement”). Power costs incurred under the Facilities Agreement are determined every 15 minutes using settlement information provided by ERCOT and are recorded in Cost of revenue on the Consolidated Statements of Operations. During the year ended December 31, 2024, the construction of the interconnection was completed and power costs under the Facilities Agreement are no longer being incurred. ERCOT has implemented Demand Response Services Programs for customers like the Company that have the ability to reduce or modify electricity use in response to ERCOT instructions or signals. These Demand Response Services Programs provide the ERCOT market with valuable grid stability and economic services by helping to preserve system reliability, enhancing competition and load predictability, mitigating price spikes, and stabilizing the grid by encouraging the demand side of the market to give more visibility and control of their power consumption to grid operators. Market participants with flexible electrical loads, like the Company, may participate in these Demand Response Service Programs directly by offering their electrical loads into the ERCOT markets, or indirectly by voluntarily reducing their energy usage in response to increasing power demand in the ERCOT marketplace. The Demand Response Services Programs run concurrent with the Rockdale PPA. ​ Under these Demand Response Services Programs, the Company can participate in a variety of programs known as “ancillary services” by electing to designate a portion of its available electrical load for participation in such programs on a forward basis. For each respective Demand Response Services Program, the Company receives compensation based on hourly rates for power and the amount of electrical load which it has bid into the program. Through ancillary services, the Company competitively bids amongst other market participants to sell ERCOT the ability to control the Company’s electrical load on demand, which requires the Company to remain powered on during the times in which its power is bid into ancillary services, and giving ERCOT the ability to direct the Company to power down the amount of power bid into the program. The Company receives compensation for its participation in ancillary services whether or not the Company is actually called to power down. The Company also participates in the 4CP program, which refers to the highest-load settlement intervals in each of the four summer months (June, July, August, and September), during which time, demand for power is typically at its highest across the ERCOT grid. The 4CP program participants may voluntarily power down operations during these times and in doing so, reduce the electrical load demand on the ERCOT grid. Participants that reduce their load in these peak periods receive credits to transmission costs on future power bills during the subsequent year, reducing overall power costs for the year. As a result of participation in the 4CP program in 2023, the Company’s transmission charges in its ongoing 2024 monthly power bills are substantially reduced. The 4CP program has an indefinite life. Corsicana Facility During the year ended December 31, 2024, the Company’s subsidiary, Riot Corsicana, LLC, entered into an agreement with ICE Futures U.S., Inc., a subsidiary of the InterContinental Exchange to access the exchange for the execution of electricity futures contracts. The Company intends to purchase agreements up to the amount of power used at the Corsicana Facility. These financial instruments meet the definition of derivatives, but are not designated as hedging instruments, and will be recognized at fair value, with any gains or losses recognized in Net income (loss) on the Consolidated Statements of Operations. The Company has entered into the electricity futures contracts to manage electricity price risk and reduce the variability of cash flows associated with purchases of electricity used for the Company’s Bitcoin Mining operations at the Corsicana Facility. F-27 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements As of December 31, 2024, the Company held outstanding electricity futures contracts for 26,992 mWh with a combined fair value of $ 0.3 million included in Prepaid expenses and other current assets on the Consolidated Balance Sheets. During the year ended December 31, 2024, realized and unrealized gains of $ 0.3 million were recognized in Other income (expense) on the Consolidated Statements of Operations. ​ During the year ended December 31, 2024, the Company’s subsidiary, Riot Corsicana, LLC, also entered into a requirements contract with MEMS Industrial Supply (“MEMSIS” or “Mitsui”) under which it will purchase retail power to meet the consumption requirements of the Corsicana Facility. Electric power will be invoiced by MEMSIS based upon the market price for electric power at the ERCOT North Load Zone, plus a retail adder corresponding to the peak consumption threshold of the Corsicana Facility, and pass through charges (ex., ancillary charges, taxes, congestion, and line loss), based on the actual variable consumption of the Corsicana Facility. The contract, dated November 12, 2024, has a 3-year term ending November 25, 2027. Although this contract does not require the supply of power at a fixed price, it allows the parties to enter into fixed-price contracts. Under the requirements contract with MEMSIS, during the year ended December 31, 2024, Riot and MEMSIS entered into the Corsicana PPA, a 3-year contract (January 1, 2025 through December 31, 2027, but excluding July and August contracts during the period) for a fixed quantity of 25 MW at a fixed price of $ 43.95 per mWh. ​ The Company determined the Corsicana PPA with MEMSIS meets the definition of a derivative and, accordingly, the Corsicana PPA (a non-hedging derivative contract) is recorded at its estimated fair value each reporting period in Derivative asset on the Consolidated Balance Sheets with the change in the fair value recorded in Change in fair value of derivative asset on the Consolidated Statements of Operations. The requirements contract is not designated as a hedging instrument. ​ Kentucky Facility In April 2021, the Company’s subsidiary, Block Mining, entered into the Kentucky PPA, a long-term power purchase agreement to provide power to one of its locations in Kentucky. Pursuant to the Kentucky PPA, the Company has the ability, but not the obligation, to acquire up to a total of 60 MW of power at one of its facilities through mid-April 2041. The all-in power rate includes a portion of the total fee that is at a fixed rate and another portion that adjusts annually. The Company determined the Kentucky PPA does not meet the definition of a derivative because it does not contain a notional amount. Under the Kentucky PPA, the Company may also elect not to utilize its long-term, fixed-price power for its operations, and instead elect to sell that power back into the MISO grid in exchange for credits against future power costs when there is a benefit to the Company, depending on the spot market price of electricity. The Company’s power strategy combines participation in Demand Response Services Programs and sales of power, to attempt to manage operating costs most efficiently. ​ Derivative Asset ​ The following table presents the unobservable inputs used in the valuation of the Derivative asset : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Valuation Date ​ Significant Unobservable Input ​ Range ​ Average December 31, 2024 ​ Forward prices (per mWh) ​ $ 31.22 - $ 95.58 ​ $ 51.98 December 31, 2023 ​ Forward prices (per mWh) ​ $ 26.35 - $ 83.60 ​ $ 43.80 ​ The following table presents changes in the estimated fair value of the Derivative asset : ​ ​ ​ ​ ​ Balance as of December 31, 2023 ​ $ 104,218 Change in fair value of derivative asset: ​ ​ Change due to future price curve ​ ​ 60,186 Change due to passage of time and settlements ​ ​ ( 14,909 ) Total change in fair value of derivative assets ​ ​ 45,277 Balance as of December 31, 2024 ​ $ 149,495 ​ The estimated fair values of the Rockdale PPA and Corsicana PPA are classified under Level 3 of the fair value hierarchy due to the significant unobservable inputs utilized in the valuation, which include the fixed price of each block for all 345 MW of power to be delivered per the Rockdale PPA and 25 MW of power to be delivered per the Corsicana PPA, discounted cash flow estimation models containing quoted commodity exchange spot and forward prices in mWh and are adjusted for basis spreads for load zone-to-hub differentials through the term of the Rockdale PPA, which is scheduled to end as of April 30, 2030, and the term of the Corsicana F-28 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements PPA, which is scheduled to end as of December 31, 2027, and a discount rate of 23.8 %. Actual power usage is not a variable input in the determination of the fair value as the price and quantity of power to be delivered per the Rockdale PPA and the Corsicana PPA are fixed despite the existence of multiple blocks with separate power amounts. The discount rate reflects the nature of the contract as it relates to the risk and uncertainty of the estimated future mark-to-market adjustments, forward price curves of the power supply, broker/dealer quotes, and other similar data obtained from quoted market prices or independent pricing vendors, risk-free rate of return, which is determined from United States Treasury Bond yields, estimated cost of debt, which includes a Moody’s rating, and an equity risk premium based upon market data provided by a global cost of capital service provider. The discount rate includes observable market inputs, but also includes unobservable inputs based on qualitative judgment related to Company credit risk. ​ ​ Note 10. Deposits The following table presents the activity of the Company’s deposits paid: ​ ​ ​ ​ ​ Deposits on equipment: ​ Balance as of December 31, 2023 ​ $ 185,294 Additions ​ 442,517 Reclassifications to property and equipment ​ ( 623,316 ) Balance as of December 31, 2024 ​ ​ 4,495 Security deposits ​ 25,620 Total long-term deposits ​ $ 30,115 ​ Deposits on equipment ​ During the year ended December 31, 2024, the Company made deposits and advance payments of $ 364.8 million to MicroBT for the purchase of miners and made deposits of $ 77.7 million for the purchases of other property and equipment, primarily consisting of electrical components and immersion tanks used in the development of the Corsicana Facility. During the year ended December 31, 2024, the Company reclassified $ 540.4 million of deposits made to MicroBT and $ 82.9 million of other deposits to property and equipment in connection with the receipt of the equipment. See Note 7. Property and Equipment. Security deposits During the year ended December 31, 2023, the Company paid $ 23.0 million, all of which remains held as a deposit as of December 31, 2024, as a security deposit in connection with its 215 MW increase to the long-term, fixed-price power secured under the Rockdale PPA, resulting in a total of 345 MW under contract at fixed prices at the Rockdale Facility. See Note 9. Power Supply Agreements . The Company has other security deposits totaling approximately $ 2.6 million for its offices and facilities, including $ 1.8 million associated with its ground lease. ​ Note 11. Accrued Expenses The following table presents the Company’s accrued expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ 2024 ​ 2023 Property and equipment ​ $ 15,146 ​ $ 23,451 Power related costs and remittances ​ 19,636 ​ 11,114 Compensation ​ ​ 21,218 ​ ​ 14,888 Insurance ​ 11,672 ​ 7,490 Other ​ 8,000 ​ 5,428 Total accrued expenses ​ $ 75,672 ​ $ 62,371 ​ ​ F-29 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements ​ Note 12. Debt 2030 Notes In December 2024, the Company sold $ 594.4 million aggregate principal of 0.75 % Convertible Senior Notes (the “2030 Notes”). Interest is payable semiannually in arrears on January 15 and July 15 of each year, beginning on July 15, 2025. The notes will mature on January 15, 2030, unless earlier repurchased, redeemed, or converted. Until July 15, 2029, the 2030 Notes may be converted at the option of the holder only upon the occurrence of certain events. On or after July 15, 2029, until the close of business on the second trading day immediately preceding the maturity date, the 2030 Notes may be converted at the option of the holder at the conversion rate then in effect. The Company may not redeem the 2030 Notes prior to January 20, 2028, at which time the Company may redeem the 2030 Notes upon the occurrence of certain events. The Company will settle any conversions of the 2030 Notes by paying or delivering cash, shares of common shares, or a combination of cash and shares of common shares, at the Company’s election. The 2030 Notes are convertible based upon an initial conversion rate of 67.2767 shares of the Company's common stocks per $ 1,000 principal amount of the 2030 Notes, equivalent to an initial conversion price of approximately $ 14.86 per share of Company common stock. The conversion rate is subject to adjustment upon the occurrence of certain anti-dilutive events. The Company incurred $ 15.2 million of issuance costs related to the 2030 Notes, which it will amortize into Interest expense, (income) on the Consolidated Statements of Operations over the term of the 2030 Notes. The 2030 Notes are recognized as long-term debt on the Consolidated Balance Sheets, net of unamortized debt issuance costs, and as of December 31, 2024, the amount recognized was $ 579.3 million ($ 594.4 million principal less $ 15.1 million of unamortized debt issuance costs). During the year ended December 31, 2024, the Company recognized $ 0.2 million of amortization of the deferred issuance costs. As of December 31, 2024, the 2030 Notes had an estimated fair value of approximately $ 548.6 million. The estimated fair value is based on quoted prices in an active market and valued at the closing price reported at the end of the period and thus represents a Level 1 measurement on the fair value hierarchy. Revolving Credit Facilities $50 Million Credit Facility In July 2024, the Company entered into a one-year $ 50.0 million Revolving Credit Facility (“$50 Million Credit Facility”). Revolving Loans borrowed by the Company under the $50 Million Credit Facility carry a per annum interest rate of 1.25 % plus the Secured Overnight Financing Rate. Letters of Credit issued under the $50 Million Credit Facility have a one-year term and incur fees of 1.25 % per annum on the amount of Letters of Credit outstanding. Letters of Credit require the issuance of cash collateral by the Company equal to 105 % of the Letter of Credit exposure. Concurrent with entry into the $50 Million Credit Facility, as required by the agreement, the Company funded the entire $ 50.0 million amount of the credit facility as security into a control account maintained by the lender to serve as collateral. The balance maintained in the control account is included in Restricted cash on the Consolidated Balance Sheets. Variable interest, equal to approximately 5.6 % per annum as of December 31, 2024, is earned by the Company on the amount held in the control account. During the year ended December 31, 2024, the Company issued $ 8.4 million in Letters of Credit against the $50 Million Credit Facility. $20 Million Credit Facility In August 2024, the Company entered into a two-year $ 20.0 million Revolving Credit Facility (“$20 Million Credit Facility”). Revolving Loans borrowed by the Company under the $20 Million Credit Facility carry a per annum interest rate of 1.60 % plus the Secured Overnight Financing Rate. Letters of Credit issued under the $20 Million Credit Facility have a one-year term and incur F-30 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements fees of 1.5 % per annum on the amount of Letters of Credit outstanding. Letters of Credit require the issuance of cash collateral by the Company equal to 105 % of the Letter of Credit exposure. Concurrent with entry into the $20 Million Credit Facility, as required by the agreement, the Company funded the entire $ 20.0 million amount as security into a control account maintained by the lender to serve as collateral. The balance maintained in the control account is included in Restricted cash on the Consolidated Balance Sheets. Variable interest, equal to approximately 3.96 % per annum as of December 31, 2024, is earned by the Company on the amount held in the control account. During the year ended December 31, 2024, the Company did no t issue any Letters of Credit against the $20 Million Credit Facility. Note Payable As part of the Block Mining Acquisition, the Company assumed a $ 5.7 million note payable with a fixed rate of 8.81 % . The note matures in December 2035, with annual principal and accrued interest payments due beginning on December 31, 2024. The following table presents the future minimum principal payments due on the note payable as of December 31, 2024: ​ ​ ​ ​ ​ 2025 ​ $ 314 2026 ​ 343 2027 ​ 373 2028 ​ 405 2029 ​ 443 Thereafter ​ 3,445 Total ​ $ 5,323 ​ As of December, 31, 2024, the note payable had an estimated fair value of approximately $ 5.1 million. The fair value measurement of the note payable is based on significant inputs not observable in the market and thus represents a Level 3 measurement on the fair value hierarchy. The significant assumptions used to estimate fair value of the convertible note as of December 31, 2024, primarily consisted of management’s best estimate of both the probability and timing of a conversion event and an interest rate range of 8.9 % to 10.5 % , which reflected the issuance date spread premium over the selected yield for the remaining time to maturity. ​ Credit and Security Facility ​ The Company’s subsidiary, ESS Metron, had a Credit and Security Facility Agreement, as amended, which provided for a $ 10.0 million credit and security facility consisting of a $ 6.0 million revolving line of credit (the “Revolving Line of Credit”) and a $ 4.0 million equipment guidance line (the “Equipment Guidance Line”). ​ The Revolving Line of Credit matured in December 2024 and had interest due monthly and principal due at maturity. Upon maturity, the Revolving Line of Credit was not renewed or extended. All amounts borrowed under the Revolving Line of Credit carried a variable interest of not less than 4.0 % and were secured by the assets of ESS Metron. There were no borrowings under the Revolving Line of Credit during the year ended December 31, 2024. As of December 31, 2023, the outstanding balance on the Revolving Line of Credit was $ 0 . ​ The Equipment Guidance Line also matured in December 2024 and permitted the Company to finance up to 80.0 % of certain equipment purchases. Upon maturity, the Equipment Guidance Line was not renewed or extended. All amounts borrowed under the Equipment Guidance Line carried a variable interest of not less than 4.0 % and were secured by the assets of ESS Metron. During the year ended December 31, 2024, there were no borrowings under the Equipment Guidance Line and approximately $ 0.5 million outstanding under the Equipment Guidance Line converted to a fixed rate term loan (see below). A s of December 31, 2023, the outstanding balance on the Equipment Guidance Line was $ 0.5 million. ​ All borrowings and accrued interest under the Equipment Guidance Line converted to fixed rate term loans every six months, which had either five-year terms for borrowings used to acquire vehicles and manufacturing equipment (“Manufacturing Term Loans”) or three-year terms for borrowings of equipment other than vehicles and manufacturing equipment (“Equipment Term Loans”). The Manufacturing Term Loans made upon the first conversion of guidance line loans carried interest at a fixed rate equal to the five-year treasury rate plus 2.5 % as of conversion and the Equipment Term Loans made upon the first conversion of guidance line loans carried interest at a fixed rate equal to the three-year treasury rate plus 2.5 % as of conversion. All subsequent conversions to Manufacturing Term Loans and Equipment Term Loans carried interest at a fluctuating rate equal to the lender’s prime rate. F-31 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements ​ During the year ended December 31, 2024, approximately $ 0.5 million outstanding under the Equipment Guidance Line was converted into a three-year Equipment Term Loan with a fixed interest rate of 6.6 %. The outstanding Equipment Term Loan principal of $ 0.8 million was paid in full during the year ended December 31, 2024. As of December 31, 2023, the outstanding balance on the Equipment Term Loan was $ 0.3 million. ​ ​ ​ Note 13. Leases As of December 31, 2024, the Company had operating leases primarily for its various offices, the manufacturing facilities of ESS Metron and E4A Solutions, a ground lease for the Rockdale Facility, and the Kentucky Facility data center, all of which expire on various dates through January 2032. During the year ended December 31, 2024, the Company acquired an operating lease of a data center in Calvert City, Kentucky as part of the Block Mining Acquisition and an office and commercial space in Houston, Texas as part of the E4A Solutions Acquisition. See Note. 3. Acquisitions . Subsequent to the Block Mining Acquisition, the data center lease capacity was further expanded and the term of the expanded lease was extended from three years to five years . During the year ended December 31, 2022, the Company executed an amendment to the ground lease for the Rockdale Facility to add a second 100-acre tract of land, adjacent to the land subject to the original ground lease, for an additional $ 0.9 million in annual payments. The term of the amended lease is scheduled to expire on January 31, 2032, followed by three ten-year renewal periods at the Company’s option, unless terminated earlier. Concurrent with the amendment to the ground lease, the Company extended the term of its Water Reservation Agreement for the Rockdale Facility (see Note 17. Commitments and Contingencies ). As of December 31, 2024 and 2023, operating lease right of use assets were $ 27.5 million and $ 20.4 million, respectively, and operating lease liabilities were $ 28.5 million and $ 21.3 million, respectively. The following table presents the components of the Company’s lease expense. Ground and facilities lease expenses are included in Cost of revenue and office lease expenses are included in Selling, general, and administrative on the Consolidated Statements of Operations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ 2024 2023 2022 Operating lease cost ​ $ 4,965 ​ $ 3,747 ​ $ 3,193 Variable lease cost ​ 646 ​ 240 ​ 182 Operating lease expense ​ $ 5,611 ​ $ 3,987 ​ $ 3,375 ​ The following table presents supplemental lease information: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 2022 ​ Operating leases net operating cash outflows ​ $ 5,498 ​ $ 3,522 ​ $ 2,789 ​ Right of use assets exchanged for new operating lease liabilities ​ $ 10,987 ​ $ 1,249 ​ $ 10,333 ​ Weighted-average remaining lease term – operating leases ​ 6.0 ​ 7.5 ​ 8.5 ​ Weighted-average discount rate – operating leases ​ 7.1 % 6.7 % 6.6 % ​ The following table presents the Company’s future minimum operating lease payments as of December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ground lease Office and other leases Total 2025 ​ $ 2,058 ​ $ 4,457 ​ $ 6,515 2026 ​ 2,119 ​ 4,028 ​ 6,147 2027 ​ ​ 2,183 ​ ​ 3,433 ​ ​ 5,616 2028 ​ 2,249 ​ 2,989 ​ 5,238 2029 ​ 2,316 ​ 2,275 ​ 4,591 Thereafter ​ 5,053 ​ 2,106 ​ 7,159 Total undiscounted lease payments ​ 15,978 ​ 19,288 ​ 35,266 Less present value discount ​ ( 3,724 ) ​ ( 3,006 ) ​ ( 6,730 ) Present value of lease liabilities ​ $ 12,254 ​ $ 16,282 ​ $ 28,536 ​ F-32 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements Note 14. Stockholders’ Equity Preferred Stock 0 % Series B Convertible Preferred Stock On November 3, 2017, the Company designated 1,750,001 shares of preferred stock as “ 0 % Series B Convertible Preferred Stock.” The shares of 0 % Series B Convertible Preferred Stock are non-voting and convertible into shares of common stock based on a conversion calculation equal to the stated value of the 0 % Series B Convertible Preferred Stock, plus all accrued and unpaid dividends, if any, as of such date of determination, divided by the conversion price. The stated value of each share of 0 % Series B Convertible Preferred Stock is $ 6.80 and the initial conversion price is $ 6.80 per share, each subject to adjustment for stock splits, stock dividends, recapitalizations, combinations, subdivisions or other similar events. Holders of 0 % Series B Convertible Preferred Stock are entitled to receive dividends if and when declared by the Company’s Board. The 0 % Series B Convertible Preferred Stock is also subject to beneficial ownership limitations and conversion limitations. During the year ended December 31, 2022, the remaining 2,199 shares outstanding of the Company’s 0 % Series B Convertible Preferred Stock were converted to 2,199 shares of its common stock. As of December 31, 2024 and 2023, no shares of the Company’s 0 % Series B Convertible Preferred Stock were outstanding. Common Stock The Company is authorized to issue up to 680,000,000 shares of Common Stock, without any par value per share. ​ Each holder of Common Stock is entitled to one vote for each share held of record on all matters to be voted on by such holders. Holders of Common Stock are entitled to receive dividends, if declared. Upon liquidation, dissolution or winding-up, holders of Common Stock are entitled to share ratably in the net assets legally available for distribution after payment of all debts and other liabilities, subject to any preferential rights of the holders of Preferred Stock, if any. ​ ATM Equity Offerings August 2024 ATM Program ​ In August 2024, the Company established the August 2024 ATM Program, under which it could offer and sell up to $ 750.0 million in shares of the Company’s common stock. ​ During the year ended December 31, 2024, the Company received net proceeds of approximately $ 380.0 million ($ 387.8 million of gross proceeds, net of $ 7.8 million in commissions and expenses) from the sale of 41,336,261 shares of its common stock at a weighted average fair value of $ 9.38 per share under the August 2024 ATM Program. As of December 31, 2024, approximately $ 362.2 million of shares of the Company’s common stock were available for sale under the August 2024 ATM Program. ​ February 2024 ATM Program ​ In February 2024, the Company established the February 2024 ATM Program, under which it could offer and sell up to $ 750.0 million in shares of the Company’s common stock. ​ During the year ended December 31, 2024, the Company received net proceeds of approximately $ 462.5 million ($ 471.9 million of gross proceeds, net of $ 9.4 million in commissions and expenses) from the sale of 40,646,055 shares of its common stock at a weighted average fair value of $ 11.61 per share under the February 2024 ATM Program. With the sale and issuance of those shares, no additional shares of common stock will be offered or sold under the February 2024 ATM Program. F-33 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements ​ 2023 ATM Program ​ In August 2023, the Company established the 2023 ATM Program, under which it could offer and sell up to $ 750.0 million in shares of the Company’s common stock. During the year ended December 31, 2023, the Company received net proceeds of approximately $ 571.6 million ($ 583.3 million of gross proceeds, net of $ 11.7 million in commissions and expenses) from the sale of 45,758,400 shares of its common stock at a weighted average fair value of $ 13.07 per share under the 2023 ATM Program. ​ During the year ended December 31, 2024, the Company received net proceeds of approximately $ 114.9 million ($ 117.3 million of gross proceeds, net of $ 2.4 million in commissions and expenses) from the sale of 8,644,100 shares of its common stock at a weighted average fair value of $ 13.57 per share under the 2023 ATM Program. With the sale and issuance of those shares, no additional shares of common stock will be offered or sold under the 2023 ATM Program. 2022 ATM Program ​ In March 2022, the Company entered into an ATM sales agreement under which it could offer and sell up to $ 500.0 million in shares of the Company’s common stock. During the year ended December 31, 2022, the Company received gross proceeds of approximately $ 304.8 million ( $ 298.2 million, net of $ 6.6 million in commissions and expenses), from the sale of 37,052,612 shares of common stock at an average fair value of $ 8.23 per share under the 2022 ATM Program. During the year ended December 31, 2023, the Company received net proceeds of approximately $ 191.2 million ( $ 195.2 million of gross proceeds, net of $ 3.9 million in commissions and expenses) from the sale of 16,447,645 shares of its common stock at a weighted average fair value of $ 11.86 per share under its 2022 ATM Program. With the sale and issuance of these shares, all $ 500.0 million in shares of the Company’s common stock available for sale under its 2022 ATM Program had been issued. Under the terms of the August 2024, February 2024, 2023, and 2022 ATM Programs, the Company only issued shares of its common stock. Warrants During the year ended December 31, 2021, the Company issued warrants to XMS Capital Partners, LLC as partial payment for its advisory services in connection with the acquisition of Whinstone. The warrants entitle XMS to purchase up to 63,000 shares of the Company’s common stock at a purchase price of $ 48.37 per share. The warrants may be exercised at any time through August 12, 2026. The warrants are recognized as a liability with a fair value of zero upon issuance and a redemption value of zero as of December 31, 2024 and 2023. 2024 Transactions During the year ended December 31, 2024, the Company increased its authorized shares of common stock from 340.0 million shares to 680.0 million shares. During the year ended December 31, 2024, the Company issued approximately 7.2 million shares of common stock with a value of approximately $ 74.0 million as consideration for the Block Mining Acquisition (see Note 3. Acquisitions ). During the year ended December 31, 2024, approximately 16.0 million shares of restricted stock, net of forfeitures and delivery of common stock underlying stock awards, and net of tax withholding, were issued. The Company withheld approximately 1.1 million shares of the common stock issued upon vesting, with a fair value of approximately $ 11.6 million, to cover the withholding taxes related to the settlement of these vested restricted stock awards, as permitted by the 2019 Equity Incentive Plan. See Note 15. Stock-Based Compensation , for a complete description of the 2019 Equity Incentive Plan. F-34 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements In June 2024, the Company’s stockholders approved the Sixth Amendment to the 2019 Equity Incentive Plan, which increased the shares of common stock reserved for issuance by 15.0 million shares. 2023 Transactions During the year ended December 31, 2023, approximately 5.0 million shares of restricted stock, net of forfeitures and delivery of common stock underlying the stock awards, and net of tax withholding, were issued. The Company withheld approximately 1.3 million shares of the common stock issued upon vesting, with a fair value of approximately $ 14.0 million, to cover the withholding taxes related to the settlement of these vested restricted stock awards, as permitted by the 2019 Equity Incentive Plan. In June 2023, the Company’s stockholders approved the Fourth Amendment to the 2019 Equity Incentive Plan, which increased the shares of common stock reserved for issuance under the 2019 Equity Incentive Plan by 4.0 million shares. In December 2023, the Company’s stockholders approved the Fifth Amendment to the 2019 Equity Incentive Plan, which increased the shares of common stock reserved for issuance under the 2019 Equity Inventive Plan by 13.0 million shares. On December 1, 2021, the Company acquired 100 % of the equity interests in ESS Metron for consideration that included 715,413 shares of the Company’s common stock, 70,165 shares of which were withheld as security for the sellers’ indemnification obligations for 18 months . During the year ended December 31, 2023, the indemnification period ended and all 70,165 of the withheld shares were issued to the ESS Metron sellers. 2022 Transactions During the year ended December 31, 2022, the Company increased its authorized shares of common stock from 170.0 million shares to 340.0 million shares. During the year ended December 31, 2022, approximately 1.8 million shares of restricted stock, net of forfeitures and delivery of common stock underlying stock awards, and net of tax withholding, were issued. The Company withheld approximately 0.7 million shares of the common stock issued upon vesting, with a fair value of approximately $ 10.1 million, to cover the withholding taxes related to the settlement of these vested restricted stock units, as permitted by the 2019 Equity Incentive Plan. During the year ended December 31, 2022, 2,199 shares of the Company’s 0 % Series B Convertible Preferred Stock were converted into 2,199 shares of its common stock, leaving no shares outstanding. In July 2022, the Company’s stockholders approved the Third Amendment to its 2019 Equity Incentive Plan, which increased the number of shares of the Company’s common stock reserved for issuance by 10.0 million shares . Note 15. Stock-Based Compensation The 2019 Equity Incentive Plan authorizes the granting of stock-based compensation awards to directors, officers, employees, and advisors of the Company in the form of restricted stock awards (“RSAs”), restricted stock units (“RSUs”), or stock options, all of which settle in shares of the Company’s common stock upon vesting. In July 2023, the Company adopted a new long-term incentive program under its 2019 Equity Incentive Plan, under which employees are eligible to receive performance-based RSAs or RSUs and service-based RSAs or RSUs. The performance-based awards are eligible to vest based on the relative performance of the Company’s common stock (“Total Stockholder Return” or “TSR”), compared to the performance of the Russell 3000 Index (the “Index TSR”), during the three-year performance period commencing as of the grant date of the TSR award (collectively, the “TSR Awards”). The TSR Awards have a vesting range of 0 % to 200 % of the recipient’s target award, which is calculated based on the difference between the Company’s TSR and the Index TSR over the three-year performance period, subject to the recipient’s continuous employment with the Company through the third anniversary of the award’s grant date. The service-based awards are eligible to vest in one-third annual installments over a three-year service period commencing on the award’s grant date, subject to the recipient’s continuous employment with the Company through the applicable vesting dates. As of December 31, 2024, the Company had 14,666,096 shares of common stock reserved for issuance under the 2019 Equity Incentive Plan. F-35 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements The following table presents the Company’s stock-based compensation expense by category: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2024 2023 2022 Performance-based stock awards and units ​ $ 99,178 ​ $ ( 4,703 ) ​ $ 16,444 Service-based stock awards and units ​ ​ 26,026 ​ ​ 36,873 ​ ​ 8,111 Total stock-based compensation ​ $ 125,204 ​ $ 32,170 ​ $ 24,555 ​ Stock-based compensation expense is recognized within Selling, general and administrative on the Consolidated Statements of Operations. Performance-Based Awards and Units Performance-based RSAs and RSUs and units are eligible to vest over a three-year performance period based on the Company’s TSR as compared to the performance of the Index TSR. ​ The following table presents a summary of the activity of the performance-based RSAs: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ ​ ​ ​ Grant-Date ​ ​ ​ ​ Per Share ​ Number of Shares Fair Value Balance as of January 1, 2024 ​ 4,928,526 ​ $ 21.71 Granted ​ 18,089,198 ​ $ 12.39 Vested ​ ( 252,380 ) ​ $ 23.30 Forfeited ​ ( 3,149,956 ) ​ $ 22.08 Balance as of December 31, 2024 ​ 19,615,388 ​ $ 13.03 ​ During the year ended December 31, 2023, the Company granted 2,076,340 with a grant-date fair value of $ 36.3 million. During the year ended December 31, 2022, the Company granted 245,266 performance-based RSAs with a grant date fair value of $ 1.7 million. As of December 31, 2024, there was approximately $ 159.1 million of unrecognized compensation cost related to the performance-based RSAs, which is expected to be recognized over a remaining weighted-average vesting period of approximately 1.8 years. The following table presents a summary of the activity of the performance-based RSUs: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ ​ ​ ​ Grant-Date ​ ​ ​ ​ Per Share ​ Number of Units Fair Value Balance as of January 1, 2024 ​ 246,426 ​ $ 19.59 Granted ​ 1,522,612 ​ $ 11.41 Vested ​ — ​ ​ — Forfeited ​ — ​ ​ — Balance as of December 31, 2024 ​ 1,769,038 ​ $ 12.55 ​ During the year ended December 31, 2023, the Company granted 246,426 performance-based RSUs with a grant date fair value of $ 4.8 million. During the year ended December 31, 2022, the Company granted 1,412,299 performance-based RSUs with a grant date fair value of $ 15.1 million and all outstanding performance-based RSUs were converted into performance-based RSAs. As of December 31, 2024, there was approximately $ 13.9 million of unrecognized compensation cost related to the performance-based RSUs, which is expected to be recognized over a remaining weighted-average vesting period of approximately 1.9 years. F-36 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements Service-Based Awards and Units Service-based awards vest over a one , two , and three-year service periods. ​ The following table presents a summary of the activity of the service-based RSAs: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ ​ ​ ​ Grant-Date ​ ​ ​ ​ Per Share ​ Number of Shares Fair Value Balance as of January 1, 2024 ​ 4,897,894 ​ $ 9.14 Granted ​ 8,172,345 ​ $ 10.02 Vested ​ ( 4,280,308 ) ​ $ 7.88 Forfeited ​ ( 6,077,072 ) ​ $ 11.98 Balance as of December 31, 2024 2,712,859 ​ $ 11.76 ​ During the year ended December 31, 2023, the Company awarded 1,313,925 service-based RSAs with a grant date fair value of $ 20.3 million. During the year ended December 31, 2022, the Company awarded 10,310,115 service-based RSAs with a grant date fair value of $ 69.4 million. As of December 31, 2024, there was approximately $ 25.6 million of unrecognized compensation cost related to the service-based RSAs, which is expected to be recognized over a remaining weighted-average vesting period of approximately 2.2 years. The following table presents a summary of the activity of the service-based RSUs: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ ​ ​ ​ Grant-Date ​ ​ ​ ​ Per Share ​ Number of Units Fair Value Balance as of January 1, 2024 ​ 155,213 ​ $ 19.30 Granted ​ 294,608 ​ $ 9.95 Vested ​ ( 87,396 ) ​ $ 16.83 Forfeited ​ — ​ ​ — Balance as of December 31, 2024 362,425 ​ $ 12.29 ​ During the year ended December 31, 2023, the Company awarded 155,213 service-based RSUs with a grant date fair value of $ 3.0 million. During the year ended December 31, 2022, the Company awarded 922,552 service-based RSUs with a grant date fair value of $ 6.4 million and all outstanding service-based RSUs were converted into service-based RSAs. As of December 31, 2024, there was approximately $ 3.6 million of unrecognized compensation cost related to the service-based RSUs, which is expected to be recognized over a remaining weighted-average vesting period of approximately 2.2 years. F-37 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements Note 16. Fair Value Measurements Assets and liabilities measured at fair value on a recurring basis The following tables present the Company’s assets and liabilities measured at fair value on a recurring basis: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value measured as of December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Significant ​ ​ ​ ​ ​ Quoted prices in ​ Significant other ​ unobservable ​ ​ Total carrying ​ active markets ​ observable inputs ​ inputs ​ Value (Level 1) (Level 2) (Level 3) Bitcoin (a) ​ $ 1,654,468 ​ $ 1,654,468 ​ $ — ​ $ — Equity method investment - marketable securities (b) ​ $ 134,265 ​ $ 134,265 ​ $ — ​ $ — Convertible note (b) ​ $ 5,345 ​ $ — ​ $ — ​ $ 5,345 Derivative asset (c) ​ $ 149,495 ​ $ — ​ $ — ​ $ 149,495 Contingent consideration liabilities (d) ​ $ 26,855 ​ $ — ​ $ — ​ $ 26,855 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value measured as of December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Significant ​ ​ ​ ​ ​ Quoted prices in ​ Significant other ​ unobservable ​ ​ Total carrying ​ active markets ​ observable inputs ​ inputs ​ Value (Level 1) (Level 2) (Level 3) Bitcoin (a) ​ $ 311,178 ​ $ 311,178 ​ $ — ​ $ — Convertible note (b) ​ $ 4,709 ​ $ — ​ $ — ​ $ 4,709 Derivative asset (c) ​ $ 104,218 ​ $ — ​ $ — ​ $ 104,218 Contingent consideration liability (d) ​ $ 909 ​ $ — ​ $ — ​ $ 909 ​ (a) See Note 5. Bitcoin (b) See Note 6. Investments (c) See Note 9. Power Supply Agreements (d) See Note 17. Commitments and Contingencies ​ There were no transfers of financial instruments between Level 1, Level 2, and Level 3 during the periods presented. Assets and liabilities not measured at fair value on a recurring basis In addition to assets and liabilities that are measured at fair value on a recurring basis, we also measure certain assets and liabilities at fair value on a nonrecurring basis. Our non-financial assets, including goodwill, intangible assets, operating lease right of use assets, and property, plant and equipment, are measured at fair value when there is an indication of impairment and the carrying amount exceeds the asset’s projected undiscounted cash flows. These assets are recorded at fair value only when an impairment charge is recognized. As of December 31, 2024 and 2023, the fair values of cash and cash equivalents, restricted cash, accounts receivable, contract assets, prepaid expenses and other current assets, accounts payable, contract liabilities, and accrued expenses approximated their carrying values because of the short-term nature of these instruments. ​ F-38 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements Note 17. Commitments and Contingencies Commitments Miners and mining equipment During the years ended December 31, 2024 and 2023, the Company paid a total of $ 555.9 million in deposits and payments to MicroBT for the purchase of miners pursuant to the Master Agreement described herein. The remaining commitment of approximately $ 1.0 million due as of December 31, 2024, was paid in January 2025. Infrastructure During 2024, the Company entered into agreements related to water supply infrastructure for the Corsicana Facility resulting in total remaining commitments of approximately $ 16.8 million. The Company expects to incur these costs throughout 2026. Operating leases The Company leases its primary office locations and Kentucky Facility data center and has a ground lease for its Rockdale Facility under noncancelable lease agreements that expire on varying dates through 2032. For additional information see Note 13. Leases . Water reservation agreement The Company has a water reservation agreement, as amended, with the lessor of its ground lease to secure a certain quantity of non-potable water from a nearby lake to be used by the Company at the Rockdale Facility. The water reservation agreement runs through January 2032 and requires annual payments of approximately $ 2.4 million. The Company concluded that the water reservation agreement was not a lease or a derivative instrument. Because the Company obtained an additional right of use for the reserved water amount, and the charges were increased by a standalone price commensurate with the additional water use rights and at market rates, the water reservation agreement was determined to be a lease modification accounted for as a separate contract. As such, the fees of the water reservation agreement were excluded from the lease payments of the ground lease and the water reservation agreement was accounted for as a separate executory contract. Contingent consideration liabilities Block Mining As part of the Block Mining Acquisition, the sellers are eligible to earn an additional $ 32.5 million in potential earn-out targets, payable in cash or stock, if certain milestones are reached by December 31, 2025 (See Note 3. Acquisitions ). This contingent consideration was recognized as the acquisition date fair value of $ 26.1 million and is recognized on the Consolidated Balance Sheets in Contingent consideration liabilities, current portion. The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement on the fair value hierarchy. These inputs include management’s best estimate of both the probability and timing of achieving the milestones, a risk-free interest rate of approximately 5% based on the U.S. Treasury rate for the corresponding time periods and a credit spread of approximately 1% based on the median of Investment Grade High Yield Debt Instruments with a Standard & Poor’s BB credit rating. This credit rating was selected based on an independently-produced synthetic credit rating analysis. As of December 31, 2024, the Block Mining contingent consideration had an estimated fair value of $ 23.6 million. E4A Solutions As part of the E4A Solutions Acquisition, the sellers are eligible to earn potential earn-out targets based on E4A Solutions’ Adjusted EBITDA, calculated as 2.65 times the amount the average adjusted EBITDA exceeds the Earnout threshold, as defined in the purchase agreement, during the two years ending December 31, 2026, payable in cash or Riot common stock at the Company’s discretion. This contingent consideration was recognized as the acquisition date fair value of $ 2.6 million and is recognized on the Consolidated Balance Sheets in Contingent consideration liabilities, less current portion. The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement on the fair value hierarchy . These inputs include management’s best estimate of both the probability and timing of achieving the milestones, a risk-free interest rate of F-39 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements approximately 4.25% based on the U.S. Treasury rate for the corresponding time periods and a credit spread of approximately 1% based on the median of Investment Grade and High Yield Debt Instruments with a Standard & Poor’s BB credit rating. This credit rating was selected based on an independently-produced synthetic credit rating analysis. Whinstone In February 2021, the State of Texas experienced an extreme and unprecedented winter weather event that resulted in prolonged freezing temperatures and caused an electricity generation shortage that was severely disruptive to the whole state. While demand for electricity reached extraordinary levels due to the extreme cold, the supply of electricity significantly decreased in part because of the inability of certain power generation facilities to supply electric power to the grid. Due to the extreme market price of electricity during this time, at the request of ERCOT, the Company stopped supplying power to its customers and instead sold power back to the grid. In April 2021, under the provisions of the Rockdale PPA, and as a result of the weather event, the Company entered into a Qualified Scheduling Entity (“QSE”) Letter Agreement, which resulted in the Company being entitled to receive approximately $ 125.1 million for its power sales during the February winter storm, all under the terms and conditions of the QSE Letter Agreement. The Company received cash of $ 29.0 million in April 2021 (after deducting $ 10.0 million in power management fees owed by Whinstone), approximately $ 59.7 million was credited against power bills of the Company during 2022, with the remaining $ 26.3 million being contingent upon ERCOT’s future remittance. These amounts are recognized gross before fair value adjustments and expenses incurred by the Company for power management fees noted above and customer settlements. The fair value of the settlement agreement was estimated and recognized as an asset as part of acquisition accounting. As part of the acquisition of Whinstone, the Company is obligated to pay the seller up to $ 86.0 million, net of income taxes, (undiscounted) of additional consideration if certain power credits are received or realized by the Company arising from the February 2021 weather event. Upon the acquisition of Whinstone, the estimated fair value of the contingent consideration was approximately $ 83.0 million. The estimated fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement. Upon the acquisition of Whinstone, the Company estimated the fair value of the contingent consideration using a discounted cash flow analysis, which included estimates of both the timing and amounts of potential future power credits. These estimates were determined using the Company’s historical consumption quantities and patterns combined with management’s expectations of its future consumption requirements, which required significant judgment and depend on various factors outside the Company’s control, such as construction delays. The discount rate of approximately 2.5 % included observable market inputs, but also included unobservable inputs such as interest rate spreads, which were estimated based on qualitative judgment related to company-specific risk factors. Specifically, the Company used S&P Global’s B credit rating in the yield curve to estimate a reasonable interest rate spread to determine the cost of debt input because the power credits are subordinated obligations of the Company’s counterparty. Although these estimates are based on management’s best knowledge of current events, the estimates could change significantly from period to period. Approximately $ 1.2 million of remaining future power credits to be received are estimated to be received over a period of 12 years . The Company determined the value of the contingent consideration as of December 31, 2024, using a discount rate of approximately 8.0 % , which was based on the factors above, including the recent increase in interest rates. The following table presents the changes in the estimated fair value of the Company’s contingent consideration liabilities: ​ ​ ​ ​ ​ Balance as of December 31, 2023 ​ $ 909 Block Mining Acquisition ​ ​ 26,085 E4A Solutions Acquisition ​ ​ 2,640 Change in contingent consideration ​ ​ ( 320 ) Change in fair value of contingent consideration ​ ​ ( 2,459 ) Balance as of December 31, 2024 ​ $ 26,855 ​ F-40 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements Contingencies Legal Proceedings The Company, and our subsidiaries, are subject at times to various claims, lawsuits and governmental proceedings relating to our business and transactions arising in the ordinary course of business. We cannot predict the final outcome of such proceedings. Where appropriate, we vigorously defend such claims, lawsuits and proceedings. Some of these claims, lawsuits and proceedings seek damages, including, direct, consequential, exemplary, and/or punitive damages, in amounts that could, if awarded, be significant. Certain of the claims, lawsuits and proceedings arising in ordinary course of business are covered by our insurance program. We maintain property, and various types of liability insurance in an effort to protect ourselves from such claims. In terms of any matters where there is no insurance coverage available to us, or where coverage is available and we maintain a retention or deductible associated with such insurance, we may establish an accrual for such loss, retention or deductible based on current available information. In accordance with accounting guidance, if it is probable that an asset has been impaired or a liability has been incurred as of the date of the financial statements, and the amount of loss is reasonably estimable, then an accrual for the cost to resolve or settle these claims is recorded by us on the Consolidated Balance Sheets. If it is reasonably possible that an asset may be impaired as of the date of the financial statement, then we disclose the range of possible loss. Costs related to the defense of such claims are recorded by us as they are incurred. Management, with the assistance of outside counsel, may from time to time adjust such accruals according to new developments in the matter, court rulings, or changes in the strategy affecting our defense of such matters. On the basis of current information, we do not believe there is a reasonable possibility that any material loss, if any, will result from any claims, lawsuits and proceedings to which we are subject to either individually, or in the aggregate. Green Revolution Cooling Patent Dispute On March 22, 2024, GRC filed a complaint against the Company in Case No. 6:24-CV-152 in the Western District of Texas for patent infringement. More specifically, GRC has alleged that the immersion cooling systems provided to the Company by third parties infringe GRC’s U.S. Patent Nos. 9,992,914 (“the ’914 Patent”) and 10,123,463 (“the ’463 Patent”). In the complaint, GRC seeks unspecified damages and an injunction against all products that allegedly infringe the ’914 Patent and the ’463 Patent (or in lieu of an injunction, an award of a compulsory forward royalty). The Company has engaged counsel and is working with its counsel to evaluate and defend the Company from this infringement claim. While a preliminary investigation of GRC’s claims is underway, the Company cannot reasonably predict the outcome of such ongoing litigation, or the magnitude of such outcome, at this time. ​ Northern Data Working Capital Disputes ​ On September 7, 2022, the Company filed a complaint against Northern Data AG (“Northern Data”) in the Delaware Court of Chancery (Case No. C.A. No. 2022-0792-LWW) disputing the purchase price of Whinstone and seeking declaratory relief and specific performance of the stock purchase agreement. On March 31, 2023, the parties filed a stipulation agreeing to dismiss all claims without prejudice and to submit the dispute for final determination to an independent accountant. The Company placed approximately   $ 29.5   million in escrow pending the final determination of the independent accountant, and, on June 9, 2023, the independent accountant rendered a written final determination finding in favor of the Company on disputed issues totaling approximately   $ 27.1   million. Accordingly, approximately   $ 27.1   million of the escrowed amount was released from escrow and distributed to the Company on June 13, 2023, with the remaining approximately   $ 2.4   million held in escrow allocated to Northern Data. As a result, the Company recognized a Deferred gain on acquisition post-close dispute settlement of   $ 26.0   million on the Condensed Consolidated Balance Sheets. ​ Following the final determination, Northern Data filed a complaint against the Company in the Delaware Court of Chancery (the “Chancery Court”) on June 23, 2023 (Case No. C.A. No. 2023-0650-LWW) challenging the independent accountant’s written final determination and seeking to   re-litigate the purchase price adjustment process. The Company contests the legal and factual basis of Northern Data’s claims and filed a motion to dismiss the complaint on July 17, 2023, which the Chancery Court heard on February 13, 2024. The Chancery Court denied the motion to dismiss on May 17, 2024, at which time the court advised the parties that summary judgment briefing after focused discovery may be a worthwhile endeavor. Both the Company and Northern Data moved for summary judgment on November 6, 2024. On February 17, 2025, the Chancery Court heard the parties motions for summary judgment and took the matter under advisement. The Chancery Court has not yet issued a ruling on the motions. While the Company intends to vigorously oppose such complaint, the Company cannot accurately predict the outcome of the ongoing litigation, estimate the magnitude of such outcome, or forecast when such litigation will be resolved, at this time . F-41 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements Legacy Hosting Customer Disputes Rhodium On May 2, 2023, Whinstone filed a petition against Rhodium 30MW, LLC (“Rhodium 30MW”), Rhodium JV, LLC (“Rhodium JV”), Air HPC LLC (“Air HPC”), and Jordan HPC, LLC (“Jordan HPC” and, together with Rhodium 30MW, Rhodium JV, and Air HPC, collectively, the “Defendants”) in Case No. CV41873 in the 20th District Court (the “District Court”) of Milam County, Texas. In its amended petition filed May 3, 2023, Whinstone asserted breach of contract claims for Rhodium JV and Air HPC’s failure to pay certain hosting and service fees under the now-terminated Whinstone-Rhodium hosting agreements (“Hosting Agreements”) and sought a declaration regarding the rights and obligations under certain hosting agreements with the Defendants and that no power credits are owed to any Rhodium entity under any agreement. Whinstone sought recovery of more than $ 26   million, plus reasonable attorneys’ fees and costs, expenses, and pre- and post-judgment interest. On June 12, 2023, Defendants answered and, along with non-parties Rhodium Encore LLC, Rhodium 2.0 LLC, and Rhodium 10mw LLC (collectively, the “Rhodium Non-Parties” and, together with Defendants, collectively, “Rhodium”), filed contingent counterclaims for breach of contract and moved to compel arbitration for alleged unpaid energy sale credits and lost profits. On August 14, 2023, Whinstone filed a second amended petition to include a declaration regarding the rights and obligations under the now-terminated water agreement between Whinstone and various Rhodium entities. ​ On September 13, 2023, the District Court compelled Whinstone’s claims against Defendants to arbitration over Whinstone’s objection and stayed the lawsuit pending such arbitration. ​ On December 11, 2023, Rhodium submitted an arbitration demand to the American Arbitration Association (“AAA”), seeking damages and specific performance of unspecified contracts. Rhodium amended its demand on June 4, 2024 to include additional claims and disclosed it seeks at least $ 67   million in damages. Whinstone does not believe Rhodium’s claims have any merit, and will vigorously contest such claims, as appropriate. Whinstone objected to the AAA’s jurisdiction and authority to entertain the claims and decide any issues of arbitrability. Subject to those objections, Whinstone submitted counterclaims to the AAA on December 29, 2023 against Rhodium JV and Air HPC for breach of contract, seeking recovery of at least $ 20   million in past-due revenue share payments, plus reasonable attorneys’ fees and costs, expenses, and pre- and post-judgment interest. ​ After a permanent arbitrator was appointed and written discovery commenced, Rhodium filed for bankruptcy protection on August 24, 2024 and August 29, 2024 in a now jointly administered proceeding styled In re: Rhodium Encore LLC, et al. , Case No. 24-90448 (ARP), in the United States Bankruptcy Court for the Southern District of Texas—Houston Division (the "Bankruptcy Court"). Therein, Rhodium filed a motion to assume the Hosting Agreements, and the Bankruptcy Court set a contested hearing on the matter for November 12-29, 2024. ​ On October 3, 2024, Whinstone filed a motion for partial summary judgment and on October 16, 2024, Rhodium filed its own motion for partial summary judgment. The Bankruptcy Court denied both motions on November 8, 2024. From November 11, 2024 to November 14, 2024, the Bankruptcy Court heard phase one of Rhodium's Motion to Assume, which the Court granted in an interim order on December 16, 2024. Phase two of Rhodium’s Motion to Assume is set for February 26, 2025. The Company anticipates appealing the Bankruptcy Court’s decision and cannot reasonably predict the outcome of such ongoing proceedings, or the magnitude of such an outcome, at this time. ​ On February 11, 2025, Rhodium Encore LLC, Rhodium JV LLC, Rhodium 30MW LLC, Rhodium 2.0 LLC, Rhodium 10MW LLC, Air HPC LLC, Jordan HPC LLC, Rhodium Industries LLC and Rhodium Renewables LLC (collectively, "Plaintiffs") filed a complaint against Riot and Whinstone in the United States Bankruptcy Court for the Southern District of Texas, Houston Division. Plaintiffs allege damages for breach of contract and tortious interference, and requests an application for permanent injunctive relief seeking more than $300 million in damages. Riot and Whinstone believe Plaintiff's claims are without merit and intends to vigorously contest them, as appropriate. Because this litigation is still at this early stage, the Company cannot reasonably estimate the likelihood of an unfavorable outcome or the magnitude of such an outcome, if any. ​ SBI Crypto Co. On April 5, 2023, SBI Crypto Co., Ltd. (“SBI”) filed a complaint in the United States District Court for the Western District of Texas (Case No. 6:23-cv-252), which it later amended, against Whinstone alleging breach of contract, fraud, and negligent bailment claims related to a colocation services agreement between Whinstone and SBI that was terminated in 2021. On July 21, 2023, Whinstone filed a motion to dismiss the amended complaint, which was denied on October 25, 2023. SBI seeks recovery of at least $ 15.0   million in lost profits and at least $ 16.0   million for equipment damage, plus reasonable attorneys’ fees and costs, expenses, costs, and pre- F-42 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements and post-judgment interest. Whinstone believes many of the claims are barred or waived, and that all of SBI’s claims substantively lack merit, and Whinstone plans to vigorously contest the same, as appropriate. While a preliminary investigation of the merits of SBI’s claims has commenced and because this litigation is still at this early stage, the Company cannot reasonably estimate the outcome of such ongoing litigation, or the magnitude of such an outcome, at this time. GMO ​ On June 13, 2022, GMO Gamecenter USA, Inc. and its parent, GMO Internet Group, Inc., (collectively “GMO”) filed a complaint against Whinstone alleging breach of a colocation services agreement between GMO and Whinstone, which has since been terminated, seeking damages in excess of $ 150.0   million for lost profit and profit sharing payments GMO alleges it was owed from Whinstone. The case is pending in the United States District Court for the Southern District of New York (Case No. 1:22-cv-05974-JPC). Whinstone has responded to GMO’s claims and raised counterclaims of its own, alleging GMO itself breached the colocation services agreement, seeking a declaratory judgment and damages in excess of $ 25.0   million. On October 19, 2023, GMO filed its fourth amended complaint claiming an additional $ 496.0   million in damages, for loss of future profits and future profit sharing payments GMO alleges would have been received through the term of the agreement, based on Whinstone’s allegedly wrongful termination of the colocation services agreement as of June 29, 2023. The Company cannot reasonably estimate the outcome of such ongoing litigation, or the magnitude of such an outcome, at this time. ​ Note 18. Income taxes The following table presents the components of the loss before provision for income taxes: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, ​ 2024 2023 2022 Domestic ​ $ 110,145 ​ $ ( 54,565 ) ​ $ ( 521,302 ) Foreign ​ — ​ — ​ — Loss before provision for income taxes ​ $ 110,145 ​ $ ( 54,565 ) ​ $ ( 521,302 ) ​ The following table presents the components of income tax benefit (expense): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ 2024 2023 2022 Current: ​ ​ ​ ​ ​ ​ US Federal ​ $ — ​ $ — ​ $ — US State ​ ( 744 ) ​ 48 ​ ( 789 ) Foreign ​ — ​ — ​ — Total current benefit (expense) ​ $ ( 744 ) ​ $ 48 ​ $ ( 789 ) Deferred: ​ ​ ​ US Federal ​ $ — ​ $ 5,045 ​ $ 12,538 US State ​ — ​ — ​ — Foreign ​ — ​ — ​ — Total deferred benefit ​ — ​ 5,045 ​ 12,538 Total benefit (expense) for income taxes ​ $ ( 744 ) ​ $ 5,093 ​ $ 11,749 ​ F-43 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements The following table presents the tax effects of temporary differences and tax loss and credit carry forwards that give rise to significant portions of deferred tax assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ 2024 2023 Deferred income tax assets: ​ ​ ​ ​ Operating lease liability ​ $ 6,372 ​ $ 4,485 Deferred revenue ​ 3,497 ​ 3,735 Stock compensation ​ 4,799 ​ 2,348 Bitcoin ​ ​ — ​ ​ — Intangible assets ​ ​ 7,079 ​ ​ 6,523 Net operating losses ​ ​ 202,871 ​ ​ 116,872 Other deferred tax assets ​ ​ 2,515 ​ ​ 2,058 Total deferred tax assets ​ 227,133 ​ 136,021 Valuation allowance ​ ( 12,508 ) ​ ( 65,600 ) Net deferred tax assets ​ 214,625 ​ 70,421 ​ ​ ​ ​ ​ ​ ​ Deferred income tax liabilities: ​ ​ Derivative asset ​ ( 33,379 ) ​ ( 21,898 ) Right of use asset ​ ​ ( 6,139 ) ​ ​ ( 4,289 ) Fixed assets ​ ​ ( 30,725 ) ​ ​ ( 19,189 ) Bitcoin ​ ​ ( 125,471 ) ​ ​ ( 23,300 ) LT Investments ​ ​ ( 3,281 ) ​ ​ — Unrealized G/L ​ ​ ( 15,499 ) ​ ​ — Other deferred tax liabilities ​ ​ ( 131 ) ​ ​ ( 1,745 ) Total deferred tax liabilities ​ ( 214,625 ) ​ ( 70,421 ) Net deferred tax assets (liabilities) ​ $ — ​ $ — ​ The Company has approximately $ 896.0 million and $ 289.0 million of federal and state tax Net Operating Losses (“NOLs”), respectively, that may be available to offset future taxable income. Federal and state net operating loss carryforwards of $ 130.0 million and $ 159.0 million, respectively, if not utilized, expire between 2026 and 2037. Under the Tax Cuts and Jobs Act, $ 766.0 million federal and $ 130.0 million state NOLs incurred after December 31, 2017 are carried forward indefinitely, but may be limited in utilization to 80% of taxable income. Furthermore, as a result of changes in the ownership of our common stock and changes in our business operations, our ability to use our federal and state NOLs may be subject to annual limitations limited under Internal Revenue Code Section 382 and 383. The annual limitations may result in the expiration of net operating losses and credits before they are able to be utilized. The Company does not expect any previous ownership changes, as defined under Section 382 and 383 of the Internal Revenue Code, to result in an ultimate limitation that will materially reduce the total amount of net operating loss carryforwards and credits that can be utilized. The statute of limitations for assessment by the IRS and state tax authorities is open for tax years ending December 31, 2018 through 2023, although carryforward attributes that were generated prior to tax year 2018 may still be adjusted upon examination by the IRS or state tax authorities if they either have been or will be used in a future period. Currently, no federal or state income tax returns are under examination by the respective taxing authorities. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and taxing strategies in making this assessment. In case the deferred tax assets will not be realized in future periods, the Company has provided a valuation allowance for the full amount of the deferred tax assets as of December 31, 2024 and 2023. The valuation allowance decreased by approximately $ 53.0 million during the year ended December 31, 2024. F-44 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements The following table reconciles the income tax benefit (expense) based on the U.S. federal statutory rate with actual income tax benefit (expense): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, ​ ​ 2024 ​ 2023 ​ 2022 Federal statutory rate $ ( 23,410 ) 21.3 % $ 11,459 21.0 % $ 109,376 21.0 % State and local taxes, net of federal taxes ​ ( 2,087 ) ( 1.9 )% ​ 42 ( 0.1 )% ​ 3,403 0.7 % Goodwill impairment ​ — 0.0 % ​ — 0.0 % ​ ( 64,295 ) ( 12.3 )% Contingent payment ​ ​ — 0.0 % ​ ​ 5,045 9.2 % ​ ​ 12,538 2.4 % Section 162m compensation ​ ​ ( 25,093 ) 22.8 % ​ ​ ( 21,315 ) ( 39.1 )% ​ ​ ( 11,433 ) ( 2.2 )% Stock compensation ​ ​ ( 7 ) 0.0 % ​ ​ 2,648 4.9 % ​ ​ 2,904 0.6 % Return to provision ​ ​ 285 ( 0.3 )% ​ ​ ( 2,760 ) ( 5.1 )% ​ ​ 9,026 1.7 % Rate change on deferreds ​ ( 3,441 ) 3.1 % ​ 3,919 7.2 % ​ ( 3,321 ) ( 0.6 )% Deferred adjustment ​ — 0.0 % ​ ( 36,159 ) ( 66.3 )% ​ — 0.0 % Other ​ ( 84 ) ( 0.1 )% ​ ( 244 ) 0.4 % ​ — 0.0 % Change in valuation allowance ​ 53,093 ( 48.2 )% ​ 42,458 77.8 % ​ ( 46,449 ) ( 8.9 )% Income tax benefit (expense) ​ $ ( 744 ) 0.7 % ​ $ 5,093 9.3 % ​ $ 11,749 2.3 % ​ The Company has not identified any uncertain tax positions requiring a reserve as of December 31, 2023 and 2022. The Company’s policy is to recognize interest and penalties that would be assessed in relation to the settlement value of unrecognized tax benefits as a component of income tax expense. The Company did not accrue either interest or penalties for the years ended December 31, 2023 and 2022. The Company is subject to U.S. federal income tax and primarily Florida, Colorado, and Texas state income tax. The Company has not been under tax examination in any jurisdiction for the years ended December 31, 2023 and 2022. F-45 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements Note 19. Earnings Per Share The following table presents the computation of basic and diluted earnings per share (“EPS”): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2024 ​ 2023 ​ 2022 Numerator: ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) ​ $ 109,401 ​ $ ( 49,472 ) ​ $ ( 509,553 ) Interest incurred on the 2030 Notes, net of income taxes ​ ​ 382 ​ ​ — ​ ​ — Numerator for diluted EPS ​ $ 109,783 ​ $ ( 49,472 ) ​ $ ( 509,553 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator: ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator for basic EPS - weighted average shares outstanding ​ ​ 275,980,010 ​ ​ 175,026,051 ​ ​ 139,433,901 Effect of dilutive securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Unvested RSAs ​ ​ 2,553,095 ​ ​ — ​ ​ — Unvested RSUs ​ ​ 404,730 ​ ​ — ​ ​ — 2030 Notes ​ ​ 39,988,127 ​ ​ — ​ ​ — Dilutive potential common shares ​ ​ 42,945,951 ​ ​ — ​ ​ — Denominator for diluted EPS - adjusted weighted average shares outstanding ​ ​ 318,925,961 ​ ​ 175,026,051 ​ ​ 139,433,901 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic EPS ​ $ 0.40 ​ $ ( 0.28 ) ​ $ ( 3.65 ) Diluted EPS ​ $ 0.34 ​ $ ( 0.28 ) ​ $ ( 3.65 ) ​ The following table presents potentially dilutive securities that are not included in the computation of diluted net income (loss) per share as their inclusion would be anti-dilutive: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2024 2023 2022 Warrants to purchase common stock ​ 63,000 63,000 63,000 Unvested RSAs (a) ​ — ​ 9,824,546 ​ — Unvested RSUs ​ — 401,639 — Total ​ 63,000 10,289,185 63,000 ​ ​ (a) Unvested restricted stock awards are included in total common shares outstanding but are excluded from the calculation of basic earnings per share. ​ Note 20. Segment Information The Company has two reportable segments: Bitcoin Mining and Engineering. The reportable segments are identified based on the types of service performed. No operating segments have been aggregated to form the reportable segments. Gross profit (loss) is the segment performance measure the CODM uses to assess the Company’s reportable segments, and is before elimination of intersegment profits. Prior to 2024, the Company had a Data Center Hosting reportable segment but has since terminated all contracts with its Data Center Hosting customers. Commencing with the three months ended March 31, 2024, the CODM ceased analyzing the performance of the Data Center Hosting operations and the Company ceased reporting Data Center Hosting as a separate reportable business segment. The Company has no plans to offer data center hosting services to new customers. All residual revenue and costs of revenue related to Data Center Hosting incurred during the year ended December 31, 2024, are included in Revenue: Other and Cost of Revenue: Other. Prior period amounts related to Data Center Hosting have been recast into Revenue: Other and Cost of Revenue: Other . Other than the $ 96.9 million of goodwill from the Block Mining Acquisition allocated to the Bitcoin Mining segment, and $ 25.0 million of goodwill from the E4A Solutions Acquisition allocated to the Engineering segment, the Company does not allocate assets F-46 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements to the reporting segments because its assets are managed on an entity-wide basis and, therefore, does not separately disclose the total assets of its reportable operating segments. The Bitcoin Mining segment generates revenue from the Bitcoin the Company earns through its Bitcoin Mining activities. The Engineering segment generates revenue through customer contracts for custom engineered electrical products. All Revenue: Other revenue is from external customers. All revenue and cost of revenue from intersegment transactions have been eliminated in the Consolidated Statements of Operations. The following tables present segment revenue and segment gross profit (loss), including the significant expense items reviewed by the CODM: ​ Year ended December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Bitcoin Mining ​ Engineering ​ Total Revenue from external customers ​ $ 321,002 ​ $ 38,491 ​ $ 359,493 Intersegment revenue ​ ​ — ​ ​ 7,979 ​ ​ 7,979 Segment revenue ​ ​ 321,002 ​ ​ 46,470 ​ ​ 367,472 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reconciliation of revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ Other revenue (a) ​ ​ ​ ​ ​ ​ ​ ​ 17,165 Elimination of intersegment revenue ​ ​ ​ ​ ​ ​ ​ ​ ( 7,979 ) Total consolidated revenue ​ ​ ​ ​ ​ ​ ​ ​ 376,658 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less: ​ ​ ​ ​ ​ ​ ​ ​ ​ Power ​ ​ 149,019 ​ ​ — ​ ​ 149,019 Compensation ​ ​ 13,294 ​ ​ — ​ ​ 13,294 Insurance on miners ​ ​ 6,992 ​ ​ — ​ ​ 6,992 Ground rent and related water and property tax ​ ​ 5,945 ​ ​ — ​ ​ 5,945 Materials ​ ​ — ​ ​ 24,272 ​ ​ 24,272 Labor ​ ​ — ​ ​ 4,926 ​ ​ 4,926 Other segment items (b) ​ ​ 13,974 ​ ​ 18,399 ​ ​ 32,373 Segment gross profit (loss) ​ $ 131,778 ​ $ ( 1,127 ) ​ $ 130,651 ​ Year ended December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Bitcoin Mining ​ Engineering ​ Total Revenue from external customers ​ $ 188,996 ​ $ 64,303 ​ $ 253,299 Intersegment revenue ​ ​ — ​ ​ 8,522 ​ ​ 8,522 Segment revenue ​ ​ 188,996 ​ ​ 72,825 ​ ​ 261,821 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reconciliation of revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ Other revenue (a) ​ ​ ​ ​ ​ ​ ​ ​ 27,379 Elimination of intersegment revenue ​ ​ ​ ​ ​ ​ ​ ​ ( 8,522 ) Total consolidated revenue ​ ​ ​ ​ ​ ​ ​ ​ 280,678 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment cost of revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ Power ​ ​ 89,134 ​ ​ — ​ ​ 89,134 Insurance on miners ​ ​ 3,768 ​ ​ — ​ ​ 3,768 Materials ​ ​ — ​ ​ 42,729 ​ ​ 42,729 Labor ​ ​ — ​ ​ 4,214 ​ ​ 4,214 Other segment items (b) ​ ​ 3,695 ​ ​ 19,334 ​ ​ 23,029 Segment gross profit (loss) ​ $ 92,399 ​ $ 6,548 ​ $ 98,947 ​ F-47 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements Year ended December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Bitcoin Mining ​ Engineering ​ Total Revenue from external customers ​ $ 156,870 ​ $ 65,342 ​ $ 222,212 Intersegment revenue ​ ​ — ​ ​ 20,016 ​ ​ 20,016 Segment revenue ​ ​ 156,870 ​ ​ 85,358 ​ ​ 242,228 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reconciliation of revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ Other revenue (a) ​ ​ ​ ​ ​ ​ ​ ​ 36,959 Elimination of intersegment revenue ​ ​ ​ ​ ​ ​ ​ ​ ( 20,016 ) Total consolidated revenue ​ ​ ​ ​ ​ ​ ​ ​ 259,171 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment cost of revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ Power ​ ​ 54,294 ​ ​ — ​ ​ 54,294 Insurance on miners ​ ​ 234 ​ ​ — ​ ​ 234 Third-party hosting fees paid ​ ​ 19,002 ​ ​ — ​ ​ 19,002 Materials ​ ​ — ​ ​ 53,179 ​ ​ 53,179 Labor ​ ​ — ​ ​ 4,177 ​ ​ 4,177 Other segment items (b) ​ ​ 805 ​ ​ 12,927 ​ ​ 13,732 Segment gross profit (loss) ​ $ 82,535 ​ $ 15,075 ​ $ 97,610 ​ (a) Other revenue is primarily attributable to Data Center Hosting revenue and is therefore not included in the total for segment gross profit (loss). (b) For each reportable segment, the other segment items category primarily consists of: Bitcoin Mining – Bitcoin miner and network repair and maintenance costs. Engineering – Manufacturing overhead costs. ​ The following table presents the reconciliation of segment gross profit (loss) to net income (loss) before taxes : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2024 2023 2022 Segment gross profit (loss) ​ $ 130,651 ​ $ 98,947 ​ $ 97,610 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reconciling Items: ​ ​ ​ Other profit (loss) (a) ​ ​ ( 14,635 ) ​ ​ ( 69,743 ) ​ ​ ( 24,947 ) Elimination of intersegment profits ​ ( 2,113 ) ​ ( 2,859 ) ​ ( 7,188 ) Acquisition-related costs ​ ( 5,541 ) ​ — ​ ( 78 ) Selling, general, and administrative ​ ( 266,915 ) ​ ( 100,346 ) ​ ( 67,452 ) Depreciation and amortization ​ ( 212,053 ) ​ ( 252,354 ) ​ ( 107,950 ) Change in fair value of Bitcoin ​ ​ 457,409 ​ ​ 184,734 ​ ​ — Change in fair value of derivative asset ​ 45,277 ​ 6,721 ​ 71,418 Power curtailment credits ​ ​ 33,685 ​ ​ 71,215 ​ ​ 27,345 Change in fair value of contingent consideration ​ 2,459 ​ — ​ 159 Realized gain on sale of Bitcoin ​ ​ — ​ ​ — ​ ​ 30,346 (Loss) gain on sale/exchange of equipment ​ ​ ( 17,429 ) ​ ​ ( 5,336 ) ​ ​ 16,281 Casualty-related (charges) recoveries, net ​ 2,795 ​ 5,974 ​ ( 9,688 ) Impairment of Bitcoin ​ ​ — ​ ​ — ​ ​ ( 147,365 ) Impairment of goodwill ​ — ​ — ​ ( 335,648 ) Impairment of miners ​ ​ — ​ ​ — ​ ​ ( 55,544 ) Interest income ​ 27,166 ​ 11,076 ​ 1,763 Interest expense ​ ​ ( 1,985 ) ​ ​ ( 2,854 ) ​ ​ ( 1,309 ) Unrealized gain (loss) on equity method investment - marketable securities ​ ( 69,489 ) ​ — ​ ( 8,996 ) Other income (expense) ​ 863 ​ 260 ​ ( 59 ) Net income (loss) before taxes ​ $ 110,145 ​ $ ( 54,565 ) ​ $ ( 521,302 ) ​ F-48 Table of Contents Riot Platforms, Inc. Notes to Consolidated Financial Statements (a) Other profit (loss) is primarily attributable to Data Center Hosting activity and is therefore not included in the total for segment gross profit (loss). ​ Concentrations ​ During the years ended December 31, 2024 and 2023, aside from the Bitcoin Mining revenue generated as a result of the Company’s participation in a mining pool, no single customer or related group of customers contributed 10% or more of the Company’s total consolidated revenue . During the year ended December 31, 2022, aside from the Bitcoin Mining revenue generated as a result of the Company’s participation in a mining pool, the Company earned revenue of approximately $ 29.7 million from one customer, representing 11.4 % of the Company’s total consolidated revenue, in its Engineering segment. No other individual customer accounted for more than 10% of total revenue for the year ended December 31, 2022. As of December 31, 2024 and 2023, six customers accounted for more than 50 % and 70 %, respectively, of consolidated accounts receivable, net. During the years ended December 31, 2024 and 2023, Bitcoin Mining power was primarily obtained from ERCOT. ​ ​ F-49 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE As of May 18, 2023, the Company dismissed Marcum LLP (“Marcum”) as its independent registered public accounting firm, not as a result of any disagreement on any matter of accounting principles or practices, financial statement disclosure, or audit scope or procedure. ​ During the Company’s fiscal year ended December 31, 2022, as well as the subsequent interim periods through Marcum’s dismissal, there were no disagreements within the meaning of Item 304(a)(1)(iv) of Regulation S-K with Marcum on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to Marcum’s satisfaction, would have caused Marcum to make reference to the subject matter of the disagreements in connection with its reports on the Company’s financial statements for such fiscal years. There was a reportable event within the meaning of Item 304(a)(1)(v) of Regulation S-K during the fiscal year ended December 31, 2022, taking the form of an adverse opinion on the effectiveness of the Company’s internal control over financial reporting related to the existence of a material weakness for the fiscal year ended December 31, 2022. Specifically, Marcum’s report contained an adverse opinion regarding the Company’s control pertaining to the review of its Bitcoin for potential impairment . ​