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What changed in Cipher Mining Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Cipher Mining Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+732 added−803 removedSource: 10-K (2026-02-24) vs 10-K (2025-02-25)

Top changes in Cipher Mining Inc.'s 2025 10-K

732 paragraphs added · 803 removed · 360 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

171 edited+126 added−62 removed107 unchanged
Biggest changeCONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2024 2023 Cash flows from operating activities Net loss $ (44,635) $ (25,777) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 101,798 58,972 Amortization of intangible assets 650 121 Amortization of operating right-of-use asset 1,249 822 Share-based compensation 42,132 38,470 Equity in losses (gains) of equity investees 384 2,530 Loss on disposal of assets 290 - Non-cash lease expense 919 1,940 Deferred income taxes (937) 3,366 Bitcoin received as payment for services (151,296) (126,319) Change in fair value of derivative asset 7,921 (26,836) Change in fair value of warrant liability (250) 243 Change in fair value of bitcoin collateral (546) - Change in fair value of bitcoin loan (669) - Unrealized gains on fair value of bitcoin (11,313) (3,299) Realized gains on sale of bitcoin (51,548) (7,739) Changes in assets and liabilities: Accounts receivable 26 (524) Receivables, related party (1,845) (1,203) Prepaid expenses and other current assets 283 3,531 Security deposits 12,370 (6,125) Other non-current assets (3,958) - Accounts payable 7,997 (9,306) Accounts payable, related party - (1,529) Accrued expenses and other current liabilities 3,467 5,311 Lease liabilities - (890) Net cash used in operating activities (87,511) (94,241) Cash flows from investing activities Proceeds from sale of bitcoin 148,870 111,188 Deposits on equipment (162,958) (33,906) Purchases of property and equipment (139,495) (20,480) Purchases and development of software (1,423) (634) Capital distributions from equity investees - 3,808 Investment in equity investees (37,123) (3,545) Prepayments on financing lease - (3,676) Net cash (used in) provided by investing activities (192,129) 52,755 Cash flows from financing activities Proceeds from the issuance of common stock 225,181 135,848 Offering costs paid for the issuance of common stock (3,487) (3,404) Repurchase of common shares to pay employee withholding taxes (27,641) (3,902) Proceeds from loans 25,000 - Principal payments on financing lease (5,541) (12,878) Net cash provided by financing activities 213,512 115,664 Net (decrease) increase in cash, cash equivalents, and restricted cash (66,128) 74,178 Cash, cash equivalents, and restricted cash, beginning of the period 86,105 11,927 Cash and cash equivalents, and restricted cash, end of the period $ 19,977 $ 86,105 F-8 The accompanying notes are an integral part of these consolidated financial statements CIPHER MINING INC.
Biggest changeCONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2025 2024 2023 Cash flows from operating activities Net loss $ (822,244) (44,635) (25,777) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 198,973 102,448 59,093 Amortization of operating right-of-use asset 1,646 1,249 822 Share-based compensation 52,787 42,132 38,470 Equity in losses of equity investees 20,822 384 2,530 Write-down of assets held for sale 96,056 - - Loss on disposal of assets 31,427 290 - Impairment of property and equipment 45,317 - - Amortization of debt discount and issuance costs 17,932 - - Non-cash lease expense 1,036 919 1,940 Deferred income taxes (4,269) (937) 3,366 Non-cash consideration received for services (223,851) (151,296) (126,319) Change in fair value of derivative assets (16,201) 7,921 (26,836) Change in fair value of warrant liability (19,290) (250) 243 Change in fair value of embedded derivative 450,440 - - Change in fair value of bitcoin collateral (5,731) (546) - Change in fair value of bitcoin loan 781 (669) - Unrealized gains on fair value of bitcoin 41,603 (11,313) (3,299) Realized gains on sale of bitcoin (7,126) (51,548) (7,739) Changes in operating assets and liabilities (68,046) 18,340 (10,735) Net cash used in operating activities (207,938) (87,511) (94,241) Cash flows from investing activities Proceeds from sale of bitcoin 214,737 148,870 111,188 Purchases of bitcoin (2,430) - - Deposits on equipment (4,874) (162,958) (33,906) Purchases of property and equipment (487,921) (139,495) (20,480) Purchases and development of software (1,442) (1,423) (634) Purchases of strategic contracts (32,554) - - Investment in equity investees (22,127) (37,123) (3,545) Capital distributions from equity investees - - 3,808 Prepayments on financing lease - - (3,676) Net cash (used in) provided by investing activities (336,611) (192,129) 52,755 Cash flows from financing activities Proceeds from notes, net of issuance costs 3,145,829 - - Proceeds from the issuance of common stock, net of offering costs 195,473 221,694 132,444 Proceeds from treasury stock reissued for PIPE investment 50,000 - - Purchase of capped call options (82,680) - - Repurchase of common shares to pay employee withholding taxes (89,585) (27,641) (3,902) Proceeds from loan - 25,000 - Principal payments on loan (25,000) - - Principal payments on financing lease (4,834) (5,541) (12,878) Net cash provided by financing activities 3,189,203 213,512 115,664 Net increase (decrease) in cash, cash equivalents, and restricted cash 2,644,654 (66,128) 74,178 Cash, cash equivalents, and restricted cash, beginning of the period $ 19,977 86,105 11,927 Cash and cash equivalents, and restricted cash, end of the period $ 2,664,631 $ 19,977 $ 86,105 13 The accompanying notes are an integral part of these consolidated financial statements CIPHER DIGITAL INC.
The estimated useful lives for all property and equipment are as follows: Useful lives (in years) Miners and mining equipment 3 Leasehold improvements 5 Other 3 to 7 Infrastructure assets 20 Intangible assets, net Intangible assets, net primarily includes strategic contracts acquired as part of asset acquisitions and relate to certain regulatory approvals related to energizing data centers.
The estimated useful lives for all property and equipment are as follows: Useful lives (in years) Miners and mining equipment 3 Leasehold improvements 5 to 20 Other 3 to 7 Infrastructure assets 10 to 20 Intangible assets, net Intangible assets, net primarily includes strategic contracts acquired as part of asset acquisitions and relate to certain regulatory approvals related to energizing data centers.
Unrealized gains associated with the derivative asset within the Level 3 category include changes in fair value that were attributable to amendments to the Luminant Power Agreement, changes to the quoted forward electricity rates, as well as unobservable inputs (e.g., changes in estimated usage rates and discount rate assumptions).
Unrealized gains and losses associated with the derivative asset within the Level 3 category include changes in fair value that were attributable to amendments to the Luminant Power Agreement, changes to the quoted forward electricity rates, as well as unobservable inputs (e.g., changes in estimated usage rates and discount rate assumptions).
Recently issued accounting pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”) . ASU 2023-09 seeks to improve transparency if income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disclosures.
Recently adopted accounting pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”) . ASU 2023-09 seeks to improve transparency if income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disclosures.
The Company uses a combination of proceeds from sales of bitcoin earned by or received from its bitcoin mining data centers, short-term financing arrangements, and strategic sales of shares through “at-the-market” offerings to support its operating expenses and capital expenditures.
The Company uses a combination of short-term and long-term financing arrangements, proceeds from sales of bitcoin earned by or received from its bitcoin mining data centers, and strategic sales of shares through “at-the-market” offerings to support its operating expenses and capital expenditures.
LEASES Odessa Facility Lease The Company entered into a series of agreements with affiliates of Luminant, including the Lease Agreement dated June 29, 2021, with amendment and restatement on July 9, 2021 and August 23, 2023 (as amended and restated, the “Luminant Lease Agreement”).
Odessa Facility Lease The Company entered into a series of agreements with affiliates of Luminant, including the Lease Agreement dated June 29, 2021, with amendment and restatement on July 9, 2021 and August 23, 2023 (as amended and restated, the “Luminant Lease Agreement”).
Concentrations of credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. Periodically, the Company maintains deposits in financial institutions in excess of government insured limits.
Concentrations of credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of Cash and cash equivalents, and Restricted cash. Periodically, the Company maintains deposits in financial institutions in excess of government insured limits.
DERIVATIVE ASSET Luminant Power Agreement On June 23, 2021, the Company entered into a power purchase agreement with Luminant, which was subsequently amended and restated on July 9, 2021, and further amended on February 28, 2022, August 26, 2022, and August 23, 2023 (as amended, the “Luminant Power Agreement”), for the supply of a fixed amount of electric power to the Odessa Facility at a fixed price for a term of five years, subject to certain early termination exemptions.
DERIVATIVE ASSETS On June 23, 2021, the Company entered into a power purchase agreement with Luminant, which was subsequently amended and restated on July 9, 2021, and further amended on February 28, 2022, August 26, 2022, and August 23, 2023 (as amended, the “Luminant Power Agreement”), for the supply of a fixed amount of electric power to the Odessa Facility at a fixed price for a term of five years, subject to certain early termination exemptions.
The most significant estimates inherent in the preparation of the Company’s consolidated financial statements include, but are not limited to, those related to equity instruments issued in share-based compensation arrangements, valuations of its derivative asset and warrant liability, useful lives of property and equipment, the asset retirement obligations and the valuation allowance associated with the Company’s deferred tax assets, among others.
The most significant estimates inherent in the preparation of the Company’s consolidated financial statements include, but are not limited to, those related to equity instruments issued in share-based compensation arrangements, valuations of its derivative asset and warrant liability, useful lives and impairment considerations of property and equipment, the asset retirement obligations and the valuation allowance associated with the Company’s deferred tax assets, among others.
Intangible assets under the scope of this subtopic are measured at fair value on the Company’s consolidated balance sheet. The Company determines the fair value of its bitcoin on a nonrecurring basis in accordance with ASC 820 based on quoted prices on the active trading platform that the Company has determined is its principal market for bitcoin (Level 1 inputs).
Intangible assets under the scope of this subtopic are measured at fair value on the Company’s consolidated balance sheets. The Company determines the fair value of its bitcoin on a nonrecurring basis in accordance with ASC 820 based on quoted prices on the active trading platform that the Company has determined is its principal market for bitcoin (Level 1 inputs).
Previously these amounts were held by each respective counterparty, and classified in the Company's financials as Security deposits. In September 2024, the Company moved the collateral to a money market account in the Company's name with a bank letter of credit. The collateral restrictions related to the Luminant Power Agreement will lapse upon termination of the agreement.
Derivative Asset) . Previously these amounts were held by each respective counterparty, and classified in the Company's financials as Security deposits. In September 2024, the Company moved the collateral to a money market account in the Company's name with a bank letter of credit. The collateral restrictions related to the Luminant Power Agreement will lapse upon termination of the agreement.
In order to determine the fair value of the ARO, the Company’s management made certain estimates and assumptions including, among other things, projected cash flows, the borrowing interest rate and an assessment of market conditions that could significantly impact the estimated fair value. These estimates and assumptions are subjective. See additional information regarding the ARO in Note 12.
In order to determine the fair value of the ARO, the Company’s management made certain estimates and assumptions including, among other things, projected cash flows, the borrowing interest rate and an assessment of market conditions that could significantly impact the estimated fair value. These estimates and assumptions are subjective. See additional information regarding the ARO in Note 15.
For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. As of December 31, 2024 and December 31, 2023, the Company did not have any significant uncertain tax positions. The Company will recognize interest and penalties related to uncertain tax positions in income tax expense.
For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. As of December 31, 2025 and December 31, 2024, the Company did not have any significant uncertain tax positions. The Company will recognize interest and penalties related to uncertain tax positions in income tax expense.
Further, until a study is completed by the Company and any limitation is known, no amounts are being presented as an uncertain tax position. At December 31, 2024 and December 31, 2023, the Company did not have any significant uncertain tax positions. The Company will recognize interest and penalties related to uncertain tax positions in income tax expense.
Further, until a study is completed by the Company and any limitation is known, no amounts are being presented as an uncertain tax position. At December 31, 2025 and December 31, 2024, the Company did not have any significant uncertain tax positions. The Company will recognize interest and penalties related to uncertain tax positions in income tax expense.
See additional information regarding valuation of the Luminant Power Agreement derivative in Note 18. Fair Value Measurements . The Company may opportunistically sell electricity in the ERCOT market in exchange for cash payments, rather than utilizing the power to mine for bitcoin at the Odessa Facility to manage the Company’s operating costs.
See additional information regarding valuation of the Luminant Power Agreement derivative in Note 20. Fair Value Measurements . The Company may opportunistically sell electricity in the ERCOT market in exchange for cash payments, rather than utilizing the power to mine for bitcoin at the Odessa Facility to manage the Company’s operating costs.
Fair Value Measurements , for further information about the Level 3 asset and liability rollforwards of activity and Level 3 inputs. Bitcoin Bitcoin are included in current assets on the consolidated balance sheets. Bitcoin received through the Company’s wholly-owned mining activities are accounted for in connection with the Company’s revenue recognition policy.
Fair Value Measurements , for further information about the Level 3 asset and liability activity and Level 3 inputs. Bitcoin Bitcoin are included in current assets on the consolidated balance sheets. Bitcoin received through the Company’s wholly-owned mining activities are accounted for in connection with the Company’s revenue recognition policy.
COMMITMENTS AND CONTINGENCIES Commitments In the normal course of business, the Company enters into contracts that contain a variety of indemnifications with its employees, licensors, suppliers and service providers. The Company’s maximum exposure under these arrangements, if any, is unknown as of December 31, 2024.
COMMITMENTS AND CONTINGENCIES Commitments In the normal course of business, the Company enters into contracts that contain a variety of indemnifications with its employees, licensors, suppliers and service providers. The Company’s maximum exposure under these arrangements, if any, is unknown as of December 31, 2025.
Specifically, the discounted cash flow estimation models contain quoted spot and forward prices for electricity, as well as estimated usage rates consistent with the terms of the Luminant Power Agreement, the initial term of which is five years, and a remaining term of approximately 2.6 years.
Specifically, the discounted cash flow estimation models contain quoted spot and forward prices for electricity, as well as estimated usage rates consistent with the terms of the Luminant Power Agreement, the initial term of which is five years, and a remaining term of approximately 1.6 years.
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.
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 audit in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
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.
Borrowings under the Coinbase Overnight Credit Facility are available on demand, open term, and collateralized by bitcoin transferred to the Lending Service Provider’s platform. Since the Lender has the right to rehypothecate the bitcoin held as collateral, the Company derecognized the bitcoin transferred.
Borrowings under the Coinbase Overnight Credit Facility are available on demand, open term, and collateralized by bitcoin transferred to the Lending Service Provider’s platform. Since the Lender has the right to rehypothecate the bitcoin held as collateral, the Company derecognizes the bitcoin transferred.
Level 3 asset The Company’s derivative asset, related to the Luminant Power Agreement, is divided between current and noncurrent assets, and was initially recorded on its consolidated balance sheets on the derivative asset’s effective date of July 1, 2022, with an offsetting amount recorded to change in fair value of derivative asset in costs and operating expenses on the consolidated statements of operations.
Power purchase agreement The Company’s power purchase agreement, related to the Luminant Power Agreement, is divided between current and noncurrent assets, and was initially recorded on its consolidated balance sheets on the derivative asset’s effective date of July 1, 2022, with an offsetting amount recorded to change in fair value of derivative asset in costs and operating expenses on the consolidated statements of operations.
For leases with a term exceeding 12 months, a 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.
For leases with a term exceeding 12 months, a lease liability is recorded on the Company’s consolidated balance sheets at lease commencement reflecting the present value of its fixed minimum payment obligations over the lease term.
In our opinion, based on our audits, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America.
In our opinion, based on our audits, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the years ended December 31, 2024 and 2023, in conformity with accounting principles generally accepted in the United States of America.
Intangible assets also includes capitalized software, which consists of consulting costs related to development of internal-use software. Intangible assets are presented net of the associated accumulated amortization. The Company accounts for the costs of software developed for internal use by capitalizing costs incurred during the application development stage to property and equipment, net on its consolidated balance sheets.
Intangible assets also includes capitalized software, which consists of consulting costs related to development of internal-use software. Intangible assets are presented net of the associated accumulated amortization. The Company accounts for the costs of software developed for internal use by capitalizing costs incurred during the application development stage to Intangible assets, net on its consolidated balance sheets.
The receivable is recorded at fair value, with changes in fair value recorded in Other income (expense) on the consolidated statements of operations. No allowance was recorded as of December 31, 2024.
The receivable is recorded at fair value, with changes in fair value recorded in Other income (expense) on the consolidated statements of operations. No allowance was recorded as of December 31, 2025 or 2024.
Risks and uncertainties Liquidity, capital resources and limited business history The Company has historically experienced net losses and negative cash flows from operations; however, proceeds from sales of bitcoin are categorized as cash flows from investing activities to the extent bitcoin is sold after seven days of receipt.
Risks and uncertainties Liquidity and capital resources The Company has historically experienced net losses and negative cash flows from operations; however, proceeds from sales of bitcoin are categorized as cash flows from investing activities to the extent bitcoin is sold after seven days from receipt.
Property and equipment, net Property and equipment consists primarily of miners and mining equipment, leasehold improvements and construction-in-progress at the Company’s data centers, and is stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets.
Property and equipment, net Property and equipment consists primarily of miners and mining equipment, leasehold improvements and construction-in-progress at the Company’s data centers which are held and used, and is stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets.
For warrants that are liability-classified, during periods when the impact is dilutive, the Company assumes share settlement of the instruments as of the beginning of the reporting period and adjusts the numerator to remove the change in fair value of the warrant liability and adjusts the denominator to include the dilutive shares calculated using the treasury stock method.
For warrants that are liability-classified, during periods when the impact is dilutive, the Company assumes share settlement of the instruments as of the beginning of the reporting period and adjusts the numerator to remove the change in fair value of the warrant liability and adjusts the denominator to include the dilutive shares calculated using the treasury stock method. 25 CIPHER DIGITAL INC.
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.
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.
Receivable for bitcoin collateral Receivable for bitcoin is included in current assets on the consolidated balance sheets. This balance represents bitcoin pledged to counterparties as collateral which can be rehypothecated, and therefore is derecognized from the Company’s Bitcoin balance.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Receivable for bitcoin collateral Receivable for bitcoin is included in current assets on the consolidated balance sheets. This balance represents bitcoin pledged to counterparties as collateral which can be rehypothecated, and therefore is derecognized from the Company’s bitcoin balance.
RELATED PARTY TRANSACTIONS Related party receivables The Company recorded related party receivables of approximately $2.1 million and $0.2 million, as of December 31, 2024 and December 31, 2023, respectively, representing amounts owed to the Company from its equity method investees.
RELATED PARTY TRANSACTIONS Related party receivables The Company recorded related party receivables of approximately $0.3 million and $2.1 million, as of December 31, 2025 and December 31, 2024, respectively, representing amounts owed to the Company from its equity method investees.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Short-term borrowings Short-term borrowings includes debt with maturity dates less than one year. The Company has elected the fair value option to debt denominated in bitcoin. The change in fair value for bitcoin denominated debt is recorded in Other income (expense). Refer to Note 19. Short-term borrowings for details on the Company’s borrowings.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Short-term borrowings Short-term borrowings includes debt with maturity dates less than one year. The Company has elected the fair value option for debt denominated in bitcoin. The change in fair value for bitcoin-denominated debt is recorded in Other income (expense). Refer to Note 16. Debt for details.
Additional lease information Components of the Company’s lease expenses are as follows (in thousands): Year Ended December 31, 2024 2023 Finance leases: Amortization of ROU assets (1) $ 3,043 $ 3,110 Interest on lease liability 1,430 1,940 Total finance lease expense 4,473 5,050 Operating leases: Operating lease expense 2,167 1,955 Total operating lease expense 2,167 1,955 Total lease expense $ 6,640 $ 7,005 (1) Amortization of finance lease ROU asset is included within depreciation expense.
Additional lease information Components of the Company’s lease expenses are as follows (in thousands): Year Ended December 31, 2025 2024 2023 Finance leases: Amortization of ROU assets (1) $ 3,044 $ 3,043 $ 3,110 Interest on lease liability 1,036 1,430 1,940 Total finance lease expense 4,080 4,473 5,050 Operating leases: Operating lease expense 2,642 2,167 1,955 Total operating lease expense 2,642 2,167 1,955 Total lease expense $ 6,722 $ 6,640 $ 7,005 (1) Amortization of finance lease ROU asset is included within depreciation expense.
Revenue Recognition Description of the Matter: As disclosed in Note 2 to the financial statements, the Company enters into bitcoin mining pools by executing a contract, as amended from time to time, with a mining pool operator to provide computing power to the mining pool.
Revenue Recognition Description of the Matter: As described more fully in Note 2 in the financial statements, the Company enters into bitcoin mining pools by executing a contract, as amended from time to time, with a mining pool operator to provide computing power to the mining pool.
F-2 How we Addressed the Matter in our Audit: Addressing this matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements.
How we Addressed the Matter in our Audit: 5 Addressing this matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The carrying values reported in the Company’s consolidated balance sheets for cash (excluding cash equivalents which are recorded at fair value on a recurring basis), accounts payable and accrued expenses and other current liabilities are reasonable estimates of their fair values due to the short-term nature of these items.
The carrying values reported in the Company’s consolidated balance sheets for cash (excluding cash equivalents which are recorded at fair value on a recurring basis), accounts payable and accrued expenses and other current liabilities are reasonable estimates of their fair values due to the short-term nature of these items. Refer to Note 20.
The valuations performed by the third-party valuation firm engaged by the Company utilized pre-tax discount rates of 5.96% and 6.11% as of December 31, 2024 and December 31, 2023, respectively, and include observable market inputs, but also include unobservable inputs based on qualitative judgment related to company-specific risk factors.
The valuations performed by the third-party valuation firm engaged by the Company utilized pre-tax discount rates of 4.80% and 5.96% as of December 31, 2025 and December 31, 2024, respectively, and include observable market inputs, but also include unobservable inputs based on qualitative judgment related to company-specific risk factors.
The Company’s share of investees’ earnings or losses is recorded, net of taxes, within equity in losses of equity investees on the Company’s consolidated statement of operations. Additionally, the Company’s interest in the net assets of its equity method investees is reflected on its consolidated balance sheet.
The Company’s share of investees’ earnings or losses is recorded, net of taxes, within equity in losses of equity investees on the Company’s consolidated statements of operations. Additionally, the Company’s interest in the net assets of its equity method investees is reflected on its consolidated balance sheets.
The Company’s potentially dilutive common shares have been excluded from the computation of diluted net loss per common share when the effect would be to reduce the net loss per common share, or increase the net income per common share.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company’s potentially dilutive common shares have been excluded from the computation of diluted net loss per common share when the effect would be to reduce the net loss per common share, or increase the net income per common share.
Management believes that the Company’s existing financial resources, combined with projected cash and bitcoin inflows from its data centers, its ability to sell bitcoin received or earned, and its intent and ability to sell common stock through at-the-market offerings will be sufficient to enable the Company to meet its operating and capital requirements for at least 12 months from the date these consolidated financial statements are issued.
Management believes that the Company’s existing financial resources, and ability to obtain project level financing, combined with projected cash and bitcoin inflows from its data centers, its ability to sell bitcoin received or earned, and its intent and ability to sell common stock through at-the-market offerings will be sufficient to enable the Company to meet its operating and capital requirements for at least 12 months from the date these consolidated financial statements are issued. 16 CIPHER DIGITAL INC.
STOCKHOLDERS’ EQUITY As of December 31, 2024, 510,000,000 shares with a par value of $0.001 per share are authorized, of which, 500,000,000 shares are designated as Common Stock and 10,000,000 shares are designated as preferred stock (“Preferred Stock”). Common Stock Holders of each share of Common Stock are entitled to dividends when, as and if declared by the Board.
STOCKHOLDERS’ EQUITY As of December 31, 2025, 1,010,000,000 shares with a par value of $0.001 per share are authorized, of which 1,000,000,000 shares are designated as Common Stock and 10,000,000 shares are designated as preferred stock (“Preferred Stock”). Common Stock Holders of each share of Common Stock are entitled to dividends when, as and if declared by the Board.
Pursuant to the Amended and Restated Sales Agreement, the Company may offer and sell, from time to time through or to the Agents, shares of the Company’s Common Stock, for aggregate gross proceeds of up to $725.7 million (the “Shares”), which consists of (i) up to $125.7 million remaining as authorized under the Company’s Registration Statement, the base prospectus contained within the Registration Statement, and the Prospectus Supplement, as amended on September 3, 2024 and (ii) up to $600.0 million of Shares, which can be issued and sold pursuant to the Company’s shelf registration statement on Form S-3ASR, filed with the SEC on September 3, 2024, which became immediately effective upon filing, and a prospectus supplement dated September 3, 2024, filed by the Company with the SEC.
Pursuant to the Amended and Restated Sales Agreement, the Company may offer and sell, from time to time through or to the Agents, shares of the Company’s Common Stock, for aggregate gross proceeds of up to $725.7 million (the “Shares”), which consists of up to $600.0 million of Shares, which can be issued and sold pursuant to the Company’s shelf registration statement on Form S-3ASR, filed with the SEC on September 3, 2024, which became immediately effective upon filing, and a prospectus supplement dated September 3, 2024, filed by the Company with the SEC.
Bitcoin awarded to the Company as distributions-in-kind from equity investees are accounted for in accordance with ASC 845, Nonmonetary Transactions , and recorded at fair value upon receipt. Bitcoin held by the Company are accounted for as intangible assets under ASC 350-60, Crypto Assets, issued by the FASB in December 2023.
Bitcoin awarded to the Company as distributions-in-kind from equity investees are accounted for in accordance with ASC 845, Nonmonetary Transactions , and recorded at fair value upon receipt. Bitcoin held by the Company are accounted for as intangible assets under ASC 350-60, Crypto Assets (“ASC 350-60”).
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Year Ended December 31, 2024 Bitcoin Mining Consolidated Revenue - bitcoin mining $ 151,270 $ 151,270 Costs and operating (expenses) income Cost of revenue (62,364) Depreciation and amortization (102,448) Change in fair value of derivative asset (7,921) Unrealized gains on fair value of bitcoin 11,313 Realized gains on sale of bitcoin 51,548 Equity in losses of equity method investees (384) Other segment items (1) 8,738 Segment operating income 49,752 49,752 Adjustments (2) (93,451) Operating loss (43,699) Interest income 3,384 Interest expense (1,708) Other non-operating items (3) (2,294) Loss before taxes $ (44,317) Year Ended December 31, 2023 Bitcoin Mining Consolidated Revenue - bitcoin mining $ 126,842 $ 126,842 Costs and operating (expenses) income Cost of revenue (50,309) Depreciation and amortization (59,093) Change in fair value of derivative asset 26,836 Unrealized gains on fair value of bitcoin 3,299 Realized gains on sale of bitcoin 7,739 Equity in losses of equity method investees (2,530) Other segment items (1) 12,296 Segment operating income 65,080 65,080 Adjustments (2) (85,195) Operating loss (20,115) Interest income 164 Interest expense (1,999) Other non-operating items (3) (260) Loss before taxes $ (22,210) (1) Other segment items included in Bitcoin Mining include Power sales, and Other gains.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Interest expense (36,559) Other non-operating items (3) (386,914) Loss before taxes $ (825,557) Year Ended December 31, 2024 Bitcoin Mining Consolidated Revenue - bitcoin mining $ 151,270 $ 151,270 Costs and operating (expenses) income Cost of revenue (62,364) Depreciation and amortization (102,448) Change in fair value of power purchase agreement (7,921) Unrealized gain on fair value of bitcoin 11,313 Realized gains on sale of bitcoin 51,548 Equity in losses of equity method investees (384) Other segment items (1) 8,738 Segment operating income 49,752 49,752 Adjustments (2) (93,451) Operating loss (43,699) Interest income 3,384 Interest expense (1,708) Other non-operating items (3) (2,294) Loss before taxes $ (44,317) Year Ended December 31, 2023 Bitcoin Mining Consolidated Revenue - bitcoin mining $ 126,842 $ 126,842 Costs and operating (expenses) income Cost of revenue (50,309) Depreciation and amortization (59,093) Change in fair value of power purchase agreement 26,836 Unrealized gain on fair value of bitcoin 3,299 Realized gains on sale of bitcoin 7,739 Equity in losses of equity method investees (2,530) Other segment items (1) 12,296 Segment operating income 65,080 65,080 Adjustments (2) (85,195) Operating loss (20,115) Interest income 164 Interest expense (1,999) Other non-operating items (3) (260) Loss before taxes $ (22,210) (1) Other segment items included in Bitcoin Mining include Power sales, and Other losses, including impairment on miners. 44 CIPHER DIGITAL INC.
Based on the weight of available evidence, both positive and negative, management has determined that it is more likely than not that the Company will not realize the benefits of these assets. Accordingly, the Company recorded a valuation allowance of $13.5 million as of December 31, 2024.
Based on the weight of available evidence, both positive and negative, management has determined that it is more likely than not that the Company will not realize the benefits of these assets. Accordingly, the Company recorded a valuation allowance of $95.1 million as of December 31, 2025.
Fair value of bitcoin is estimated using the closing price, which is a Level 1 input (i.e., an observable input such as a quoted price in an active market for an identical asset). The Company accounts for bitcoin on a first-in-first-out (“FIFO”) basis.
Fair value of bitcoin is estimated using the closing price at 23:59:59 UTC in the Company’s principal market, which is a Level 1 input (i.e., an observable input such as a quoted price in an active market for an identical asset). The Company accounts for bitcoin on a first-in-first-out (“FIFO”) basis.
Some of these claims, lawsuits and proceedings seek damages, including consequential, exemplary or punitive damages, in amounts that could, if awarded, be significant. Certain of the claims, lawsuits and proceedings arising in the ordinary course of business are covered by the Company’s insurance program.
Where appropriate, the Company vigorously defends such claims, lawsuits and proceedings. Some of these claims, lawsuits and proceedings seek damages, including consequential, exemplary or punitive damages, in amounts that could, if awarded, be significant. Certain of the claims, lawsuits and proceedings arising in the ordinary course of business are covered by the Company’s insurance program.
All share-based compensation expenses are recorded in general and administrative expense in the consolidated statements of operations. Forfeitures are recorded as they occur. See also Note 17. Share-Based Compensation below. The fair value of Service-Based RSUs is the closing market price of Common Stock on the date of the grant.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS recorded in general and administrative expense in the consolidated statements of operations. Forfeitures are recorded as they occur. See also Note 19. Share-Based Compensation below. The fair value of Service-Based RSUs is the closing market price of Common Stock on the date of the grant.
SEGMENT REPORTING The Company has one operating segment, Bitcoin Mining, which through operations produce bitcoin to generate revenue. The Chief Operating Decision Maker (“CODM”) for the Company consists of the CEO and chief financial officer (“CFO”).
SEGMENT REPORTING The Company currently has one operating segment, Bitcoin Mining, which through operations produce bitcoin to generate revenue. The Chief Operating Decision Maker (“CODM”) for the Company consists of the CEO and CFO.
Prior to the adoption of ASU 2023-08, bitcoin was accounted for as an intangible asset subject to impairment. Upon adoption of ASC 350-60 on January 1, 2023, the Company recorded an opening adjustment to retained earnings of $0.2 million.
Prior to the adoption of ASU 2023-08 Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”), bitcoin was accounted for as an intangible asset subject to impairment. Upon adoption of ASC 350-60 on January 1, 2023, the Company recorded an opening adjustment to retained earnings of $0.2 million.
The valuation allowance increased by $4.9 million during the year ended December 31, 2024, primarily as a result of the increased tax basis over book basis in property and equipment and the net operating losses generated in the current year.
The valuation allowance increased by $81.6 million during the year ended December 31, 2025. primarily as a result of the increased tax basis over book basis in property and equipment and the net operating losses generated in the current year.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the Company's internal control over financial reporting as of December 31, 2024, based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013 and our report dated February 25, 2025, expressed an adverse opinion on the effectiveness of the Company’s internal control over financial reporting because of the existence of a material weakness.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the Company's internal control over financial reporting as of December 31, 2025, based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013 and our report dated February 24, 2026, expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
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 the Company in the F-27 CIPHER MINING INC.
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 the Company in the accompanying consolidated balance sheets.
SHORT-TERM BORROWINGS Coinbase Master Loan Agreement The Company has the Coinbase Master Loan Agreement, under which the Company established the Coinbase Overnight Credit Facility of $25.0 million. The Company will not incur commitment fees for unused portions of the Coinbase Overnight Credit Facility.
NOTE 16. DEBT Short-term borrowings Coinbase Master Loan Agreement The Company has the Coinbase Master Loan Agreement, under which the Company established the Coinbase Overnight Credit Facility of $25.0 million, subject to credit review. The Company will not incur commitment fees for unused portions of the Coinbase Overnight Credit Facility.
The Company immediately repurchased 5,329,958 of these shares of Common Stock from officers and employees, with a fair value of approximately $27.6 million, to cover taxes related to the settlement of vested RSUs, as permitted by the Incentive Award Plan. The Company placed the repurchased shares in treasury stock.
The Company immediately repurchased 6,901,249 of these shares of Common Stock from officers and employees, with a fair value of approximately $89.6 million, to cover taxes related to the settlement of vested RSUs and PSUs, as permitted by the Incentive Award Plan. The Company placed the repurchased shares in treasury stock.
On the basis of current information, the Company does not believe there is a reasonable possibility that a material loss, if any, will result from any claims, lawsuits and proceedings to which the Company is subject to either individually, or in the aggregate.
On the basis of current information, the Company does not believe there is a reasonable possibility that a material loss, if any, 33 CIPHER DIGITAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS will result from any claims, lawsuits and proceedings, to which the Company is subject to either individually, or in the aggregate.
The initial term of the lease is ten years, and includes two consecutive renewal options for ten years each. Office leases The Company leases office space for its headquarters in New York, New York, and office space in Charleston, South Carolina, and Denver, Colorado. All of the Company's office leases are classified as operating leases.
The initial term of the lease is ten years, and includes two consecutive renewal options for ten years each. Office and warehouse leases The Company leases office space for its headquarters in New York, New York, and office space in Charleston, South Carolina, and Denver, Colorado.
ASC 410, Asset Retirement and Environmental Obligations (“ASC 410”) requires an entity to record the fair value of a liability for an ARO in the period in which it is incurred if a reasonable estimate of fair value can be made.
ASC 410, Asset Retirement and Environmental Obligations (“ASC 410”) requires an entity to record the fair value of a liability for an ARO in the period in which it is 20 CIPHER DIGITAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS incurred if a reasonable estimate of fair value can be made.
Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. F-18 CIPHER MINING INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return.
Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return.
As of December 31, 2024, the Company has awarded only RSUs with service-based vesting conditions (“Service-Based RSUs”) and performance-based RSUs with market-based vesting conditions (“Performance-Based RSUs”). Compensation expense for all awards is amortized based upon a graded vesting method over the estimated requisite service period.
As of December 31, 2025, the Company has awarded only RSUs with service-based vesting conditions (“Service-Based RSUs”) and performance-based RSUs with market-based vesting conditions (“Performance-Based RSUs”). Compensation expense for all awards is amortized based upon a graded vesting method over the estimated requisite service period. All share-based compensation expenses are 24 CIPHER DIGITAL INC.
The Company elected the practical expedient not to separate lease and non-lease components for all leases, which means all consideration that is fixed, or in-substance fixed, relating to the non-lease components will be captured as part of the Company’s lease components for balance sheet purposes. F-15 CIPHER MINING INC.
The Company elected the practical expedient not to separate lease and non-lease components for all leases, which means all consideration that is fixed, or in-substance fixed, relating to the non-lease components will be captured as part of the Company’s lease components for balance sheet purposes. Refer to Note 13. Leases for additional information. 21 CIPHER DIGITAL INC.
Given the complexity and judgment involved in the valuation of the derivative asset, auditing this account required significant auditor judgment and the use of valuation specialists. How we Addressed the Matter in our Audit: Addressing this matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements.
Given the complexity involved in the accounting and reporting of these derivatives, auditing this account required significant auditor judgment. How we Addressed the Matter in our Audit: Addressing this matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements.
At the end of the lease term for the Interconnection Electrical Facilities, the substation will be sold back to Luminant’s affiliate, Vistra Operations Company, LLC at a price to be determined based upon bids obtained in the secondary market.
Financing for use of the land and substation is provided by Luminant affiliates. At the end of the lease term for the Interconnection Electrical Facilities, the substation will be sold back to Luminant’s affiliate, Vistra Operations Company, LLC at a price to be determined based upon bids obtained in the secondary market.
One-third of the outstanding Performance-Based RSUs will vest upon the Company achieving a market capitalization equal to or exceeding $5 billion, $7.5 billion and $10 billion, in each case over a 30-day lookback period and subject to the CEO’s continuous service through the end of the applicable 30-day period.
One-third remains outstanding and will vest upon the company achieving a market capitalization equal to or exceeding $10 billion, over a 30-day lookback period and subject to the CEO’s continuous service through the end of the applicable 30-day period.
Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Cipher Mining Inc.
Opinion on the Financial Statements We have audited the accompanying consolidated balance sheet of Cipher Digital Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS • Constraining estimates of variable consideration • The existence of a significant financing component in the contract • Noncash consideration • Consideration payable to a customer Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
When determining the transaction price, an entity must consider the effects of all of the following: • Variable consideration • Constraining estimates of variable consideration • The existence of a significant financing component in the contract • Noncash consideration • Consideration payable to a customer Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
(2) Other operating items included in adjustments include Compensation and benefits, and General and administrative. (3) Other non-operating items include Change in fair value of warrant liability, and Other expense. NOTE 21.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (2) Other operating items included in adjustments include Compensation and benefits, and General and administrative. (3) Other non-operating items include Change in fair value of warrant liability, and Other expense. NOTE 22.
From power sales, the Company earned approximately $5.4 million and $9.9 million for the years ended December 31, 2024, and 2023, F-21 CIPHER MINING INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS respectively, and recorded this amount within costs and operating (expenses) income on the consolidated statement of operations, with the corresponding cost of the power sold recorded in Cost of revenue.
From Power sales, the Company earned approximately $7.9 million, $5.4 million, and $9.9 million for the years ended December 31, 2025, 2024, and 2023, respectively, and recorded this amount within Costs and operating (expenses) income on the consolidated statements of operations, with the corresponding cost of the power sold recorded in Cost of revenue. NOTE 5.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (in thousands, except for share amounts) Year Ended December 31, 2024 Common Stock Additional Paid-in Capital Accumulated Deficit Treasury Stock Total Stockholders’ Equity Shares Amount Shares Amount Balance as of December 31, 2023 296,276,536 $ 296 $ 627,822 $ (136,777) (5,318,674) $ (5) $ 491,336 Issuance of common shares, net of offering costs - At-the-market offering 52,825,758 53 221,642 - - - 221,695 Delivery of common stock underlying restricted stock units, net of shares settled for tax withholding settlement 12,330,155 12 (27,648) - (5,329,958) (6) (27,642) Share-based compensation - - 41,199 - - - 41,199 Net loss - - - (44,635) - - (44,635) Balance as of December 31, 2024 361,432,449 $ 361 $ 863,015 $ (181,412) (10,648,632) $ (11) $ 681,953 Year Ended December 31, 2023 Common Stock Additional Paid-in Capital Accumulated Deficit Treasury Stock Total Stockholders’ Equity Shares Amount Shares Amount Balance as of December 31, 2022 251,095,305 $ 251 $ 453,854 $ (111,209) (3,543,347) $ (4) $ 342,892 Cumulative effect upon adoption of ASU 2023-08 - - - 209 - - 209 Issuance of common shares, net of offering costs - At-the-market offering 37,433,923 37 132,406 - - - 132,443 Issuance of common stock - Black Pearl asset acquisition 2,397,424 2 6,998 - - - 7,000 Delivery of common stock underlying restricted stock units, net of shares settled for tax withholding settlement 4,942,906 5 (3,906) - (1,775,327) (1) (3,902) Share-based compensation 406,978 1 38,470 - - - 38,471 Net loss - - - (25,777) - - (25,777) Balance as of December 31, 2023 296,276,536 $ 296 $ 627,822 $ (136,777) (5,318,674) $ (5) $ 491,336 The accompanying notes are an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY (DEFICIT) (in thousands, except for share amounts) Year Ended December 31, 2023 Common Stock Additional Paid-in Capital Accumulated Deficit Treasury Stock Total Stockholders’ Equity Redeemable Noncontrolling Interest Shares Amount Shares Amount Balance as of December 31, 2022 251,095,305 $ 251 $ 453,854 $ (111,209) (3,543,347) $ (4) $ 342,892 $ - Cumulative effect upon adoption of ASU 2023-08 - - - 209 - - 209 Issuance of common shares, net of offering costs - At-the-market offering 37,433,923 37 132,406 - - - 132,443 - Issuance of common stock - Black Pearl asset acquisition 2,397,424 2 6,998 - - - 7,000 Delivery of common stock underlying restricted stock units, net of shares settled for tax withholding settlement 4,942,906 5 (3,906) - (1,775,327) (1) (3,902) - Share-based compensation 406,978 1 38,470 - - - 38,471 - Net loss - - - (25,777) - - (25,777) - Balance as of December 31, 2023 296,276,536 $ 296 $ 627,822 $ (136,777) (5,318,674) $ (5) $ 491,336 $ - The accompanying notes are an integral part of these consolidated financial statements. 12 CIPHER DIGITAL INC.
The Company expects to record amortization expense as follows over the next five subsequent years: (in thousands) Year Ended December 31, 2025 $ 746 Year Ended December 31, 2026 746 Year Ended December 31, 2027 746 Year Ended December 31, 2028 649 Year Ended December 31, 2029 $ 445 NOTE 9.
The Company expects to record amortization expense as follows over the next five subsequent years: (in thousands) Year Ended December 31, 2026 917 Year Ended December 31, 2027 917 Year Ended December 31, 2028 826 Year Ended December 31, 2029 615 Year Ended December 31, 2030 445 NOTE 10.
CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except for share and per share amounts) Year Ended December 31, 2024 2023 Revenue - bitcoin mining $ 151,270 $ 126,842 Costs and operating (expenses) income Cost of revenue (62,364) (50,309) Compensation and benefits (60,796) (57,399) General and administrative (32,655) (27,796) Depreciation and amortization (102,448) (59,093) Change in fair value of derivative asset (7,921) 26,836 Power sales 5,405 9,941 Equity in losses of equity investees (384) (2,530) Unrealized gains on fair value of bitcoin 11,313 3,299 Realized gains on sale of bitcoin 51,548 7,739 Other gains 3,333 2,355 Total costs and operating expenses (194,969) (146,957) Operating loss (43,699) (20,115) Other income (expense) Interest income 3,384 164 Interest expense (1,708) (1,999) Change in fair value of warrant liability 250 (243) Other expense (2,544) (17) Total other income (expense) (618) (2,095) Loss before taxes (44,317) (22,210) Current income tax expense (1,255) (201) Deferred income tax benefit (expense) 937 (3,366) Total income tax benefit (expense) (318) (3,567) Net loss $ (44,635) $ (25,777) Loss per share - basic and diluted $ (0.14) $ (0.10) Weighted average shares outstanding - basic and diluted 323,103,303 252,439,461 The accompanying notes are an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except for share and per share amounts) Year Ended December 31, 2025 2024 2023 Revenue - bitcoin mining $ 223,942 $ 151,270 $ 126,842 Costs and operating (expenses) income Cost of revenue (81,216) (62,364) (50,309) Compensation and benefits (79,129) (60,796) (57,399) General and administrative (36,382) (32,655) (27,796) Depreciation and amortization (198,973) (102,448) (59,093) Change in fair value of power purchase agreement (28,860) (7,921) 26,836 Power sales 7,870 5,405 9,941 Equity in losses of equity investees (20,822) (384) (2,530) Unrealized (losses) gains on fair value of bitcoin (41,603) 11,313 3,299 Realized gains on sale of bitcoin 7,126 51,548 7,739 Other operating (losses) gains (173,516) 3,333 2,355 Total costs and operating expenses (645,505) (194,969) (146,957) Operating loss (421,563) (43,699) (20,115) Other income (expense) Interest income 19,479 3,384 164 Interest expense (36,559) (1,708) (1,999) Change in fair value of warrant liability 19,290 250 (243) Other expense (406,204) (2,544) (17) Total other expense (403,994) (618) (2,095) Loss before taxes (825,557) (44,317) (22,210) Current income tax expense (956) (1,255) (201) Deferred income tax benefit (expense) 4,269 937 (3,366) Total income tax benefit (expense) 3,313 (318) (3,567) Net loss (822,244) (44,635) (25,777) Less: Net loss attributable to redeemable noncontrolling interest - - - Net loss available for common stockholders $ (822,244) $ (44,635) $ (25,777) Loss per share - basic and diluted $ (2.15) $ (0.14) $ (0.10) Weighted average shares outstanding - basic and diluted 381,602,904 323,103,303 252,439,461 The accompanying notes are an integral part of these consolidated financial statements. 10 CIPHER DIGITAL INC.
The following five steps are applied to achieve that core principle: • Step 1: Identify the contract with the customer • Step 2: Identify the performance obligations in the contract • Step 3: Determine the transaction price • Step 4: Allocate the transaction price to the performance obligations in the contract • Step 5: Recognize revenue when the company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS • Step 3: Determine the transaction price • Step 4: Allocate the transaction price to the performance obligations in the contract • Step 5: Recognize revenue when the company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct.
Significant influence is generally deemed to exist if the Company has an ownership interest in the voting stock of an investee of between 20 percent and 50 percent, or an ownership interest greater than three to five percent in certain partnerships, unincorporated joint ventures and limited liability companies, although other factors are considered in determining whether the equity method of accounting is appropriate.
Significant influence is generally deemed to exist if the Company has an ownership interest in the voting stock of an investee of between 20 percent and 50 percent, although other factors are considered in determining whether the equity method of accounting is appropriate.
Proceeds from sales of bitcoin are included within cash flows from operating activities on the consolidated statements of cash flows to the extent bitcoin are sold within seven days of being awarded, and investing cash flows if sold after that period. Any realized gains or losses from such sales are F-12 CIPHER MINING INC.
Proceeds from sales of bitcoin are included within cash flows from operating activities on the consolidated statements of cash flows to the extent bitcoin are sold within seven days of being awarded, and investing cash flows if sold after that period.
The Company did not incur any variable lease costs during any of the periods presented. F-26 CIPHER MINING INC.
The Company did not incur any variable lease costs during any of the periods presented.
WARRANTS Upon consummation of the business combination, the Company assumed Common Stock warrants that were originally issued in GWAC’s initial public offering (the “Public Warrants”), as well as warrants that were issued in a private placement that closed concurrently with GWAC’s initial public offering (the “Private Placement Warrants”).
WARRANTS The Company assumed Common Stock warrants that were originally issued in the Good Works Acquisition Corp (“GWAC”) initial public offering (the “Public Warrants”), as well as warrants that were issued in a private placement that closed concurrently with GWAC’s initial public offering (the “Private Placement Warrants”).
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Impairment of long-lived assets Management reviews long-lived assets, including leases and investments, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset, asset group or investment may not be recoverable.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The estimated useful lives for all intangible assets are as follows: Useful lives (in years) Software 3 Strategic contracts 20 Impairment of long-lived assets Management reviews long-lived assets, including leases and investments, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset, asset group or investment may not be recoverable.
Depreciation expense was approximately $101.8 million and $59.0 million, respectively, for the years ended December 31, 2024 and 2023, respectively, and included approximately $1.9 million and $1.7 million for the years ended December 31, 2024 and 2023, of accretion expense related to the Company’s asset retirement obligation for the Odessa Facility.
Depreciation expense was approximately $199.0 million, $102.4 million, and $59.1 million for the years ended December 31, 2025, 2024, and 2023, respectively, and included approximately $2.7 million, $1.9 million, and $1.7 million for the years ended December 31, 2025, 2024, and 2023, respectively, of accretion expense related to the Company’s asset retirement obligations.
December 31, 2024 2023 Public warrants 8,613,980 8,499,980 Private placement warrants — 114,000 Unvested RSUs 15,922,220 21,304,952 24,536,200 29,918,932 Recently issued and adopted accounting pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability.
December 31, 2025 2024 2023 Note conversion 161,930,746 — — Google warrants 24,178,576 — — Unvested RSUs 15,798,382 15,922,220 21,304,952 Public warrants — 8,613,980 8,499,080 Private placement warrants — — 114,000 201,907,704 24,536,200 29,918,032 Recently issued and adopted accounting pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

96 edited+196 added−339 removed88 unchanged
Biggest changeIn the future, we expect competition to further intensify with existing and new competitors, within and outside the United States, which may have various advantages over us, such as: • greater mining capabilities; • more timely introduction or adoption of new technologies; • preferred relationships with suppliers of mining machines and other equipment; • access to more competitively priced power; • greater financial resources to make acquisitions; • lower labor, compliance, risk mitigation and research and development costs; • larger and more mature intellectual property portfolios; • greater number of applicable licenses or similar authorizations; • established core business models outside of the mining or trading of digital assets, allowing them to operate on lesser margins or at a loss; • operations in certain jurisdictions with lower compliance costs and greater flexibility to explore new product offerings; and • substantially greater financial, technical and other resources.
Biggest changeWe expect competition to further intensify with existing and new competitors, and we may not be able to compete successfully against present or future competitors, which may have various advantages over us, such as more timely adoption of new technologies, greater access to capital, greater financial resources for data center constructions, 22 lower labor, compliance, risk mitigation and research and development costs, operations in certain jurisdictions with lower compliance costs and substantially greater financial, technical and other resources.
From time to time, we may also hedge some portion of the value of our bitcoin in inventory or some portion of the value of our expected forward production, which may limit our exposure to substantial increases in the price of bitcoin.
From time to time, we may also hedge some portion of our bitcoin in inventory or some portion of the value of our expected forward production, which may limit our exposure to substantial increases in the price of bitcoin.
Our success and future growth, to a significant degree, depends on the skills and services of our management team. The loss of any of our management team, our inability to execute an effective succession plan, or our inability to attract and retain qualified personnel, could adversely affect our business.
The loss of any of our management team, our inability to execute an effective succession plan, or our inability to attract and retain qualified personnel, could adversely affect our business. Our success and future growth, to a significant degree, depends on the skills and services of our management team.
This could discourage, delay or prevent a third party from acquiring or merging with us, whether or not it is desired by, or beneficial to, its stockholders. This could also have the effect of discouraging others from making tender offers for our common stock, including transactions that may be in our stockholders’ best interests.
This could discourage, delay or prevent a third party from acquiring or merging with us, whether or not it is desired by, or beneficial to, its stockholders. This could also have the effect of discouraging others from making tender offers for our common stock, including transactions that 34 may be in our stockholders’ best interests.
We also may be subject to significant damages or injunctions that may cause a material adverse effect to our business and operations, if we cannot license or develop an alternative for any infringing 19 aspect of its business, and may result in a material loss in revenue, which could adversely affect the trading price of our shares and harm our investors.
We also may be subject to significant damages or injunctions that may cause a material adverse effect to our business and operations, if we cannot license or develop an alternative for any infringing aspect of its business, and may result in a material loss in revenue, which could adversely affect the trading price of our shares and harm our investors.
This provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act. Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts 42 over all such Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims.
This provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act. Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims.
Furthermore, if we fail to execute an effective contingency or succession plan with the loss of any member of management, the loss of such management personnel may significantly disrupt our business. Furthermore, the loss of key members of our management or other employees could inhibit our growth prospects.
Furthermore, if we fail to execute an effective contingency or succession plan with the loss of any member of management, the loss of such management personnel may significantly disrupt our business. 20 Furthermore, the loss of key members of our management or other employees could inhibit our growth prospects.
We may also be impacted by disruptions in the supply chain for cryptocurrency hardware. During the course of implementing any such new technology into our operations, we may experience system interruptions and failures during such implementation.
We may also be impacted by disruptions in the supply chain for hardware. During the course of implementing any such new technology into our operations, we may experience system interruptions and failures during such implementation.
Our focus on developing and offering HPC hosting may also disrupt our bitcoin mining business, divert our resources, and require significant management attention that would otherwise be available for overseeing and developing our existing bitcoin mining operations business.
Our focus on developing and offering HPC hosting may also disrupt our bitcoin mining operations, divert our resources, and require significant management attention that would otherwise be available for overseeing and developing our existing bitcoin mining operations.
Pursuant to the Incentive Award Plan, approximately 7.0% of the fully diluted shares of our common stock was initially reserved for future issuance, which reserve amount has increased each year since then, and is subject to increase annually or from time to time in the discretion of our compensation committee.
Pursuant to the Incentive Award Plan, approximately 7.0% of the fully diluted shares of our common stock was initially reserved for future issuance, which reserve amount has increased each year since then, and is subject to increase annually or from time to time in the discretion of the Compensation Committee of the Board of Directors.
Additionally, any such changes to our business model or strategy could cause us to become subject to additional regulatory scrutiny and a number of additional requirements, including licensing and permit requirements. Any of the foregoing could have a material adverse effect on our business, prospects, financial condition, and operating results.
Additionally, any such changes to our business model or strategy could cause us to become subject to additional regulatory scrutiny and a number of additional requirements, including licensing and permit requirements. Any of the foregoing could have a material adverse effect on our business, prospects, financial condition, and results of operations.
Currently, we do not use a formula or specific methodology to determine whether or when we will hedge or sell bitcoin that we hold, or the number of bitcoins we will hedge or sell. Rather, decisions to hold, hedge or sell bitcoins are currently determined by management by analyzing forecasts and monitoring the market in real time.
Currently, we do not use a formula or specific methodology to determine whether or when we will hedge or sell bitcoin that we hold, or the amount of bitcoin we will hedge or sell. Rather, decisions to hold, hedge or sell bitcoins are currently determined by management by analyzing forecasts and monitoring the market in real time.
Our future success depends, in large part, on our ability to attract, retain and motivate key management and operating 17 personnel.
Our future success depends, in large part, on our ability to attract, retain and motivate key management and operating personnel.
The issuance of additional shares or other equity securities of equal or senior rank would have the following effects: • existing stockholders’ proportionate ownership interest in us will decrease; • the amount of cash available per share, including for payment of dividends in the future, may decrease; • the relative voting strength of each previously outstanding our common stock may be diminished; and 41 • the market price of our common stock or public warrants may decline.
The issuance of additional shares or other equity securities of equal or senior rank would have the following effects: • existing stockholders’ proportionate ownership interest in us will decrease; • the amount of cash available per share, including for payment of dividends in the future, may decrease; • the relative voting strength of each previously outstanding our common stock may be diminished; and • the market price of our common stock may decline.
Actions by government regulators, or the issuance of any new regulations, that restrict our ability to operate HPC hosting or bitcoin mining data centers may reduce the availability and/or increase the cost of electricity in the geographic locations in which our operating facilities are located, or could otherwise adversely impact our business.
Actions by government regulators, or the issuance of any new regulations, that restrict our ability to operate HPC data centers may reduce the availability and/or increase the cost of electricity in the geographic locations in which our operating facilities are located, or could otherwise adversely impact our business.
For example, our bitcoin mining operations require approval to operate from Oncor, AEP and ERCOT, which can be onerous to obtain. If Oncor, AEP or ERCOT delay in providing such approval, or change the requirements to operate bitcoin mining facilities, our business plans may be disrupted and our results of operations may be negatively affected.
For example, our operations require approval to operate from Oncor, AEP and/or ERCOT, which can be onerous to obtain. If Oncor, AEP and/or ERCOT delay in providing such approval, or change the requirements to operate HPC facilities, our business plans may be disrupted and our results of operations may be negatively affected.
We believe our brand and reputation, particularly in the cryptocurrency ecosystem, is an important factor in the success and development of our business. As part of our strategy, we seek to structure our relationships with our equipment and service providers, power suppliers and other potential partners as long-term relationships.
We believe our brand and reputation is an important factor in the success and development of our business. As part of our strategy, we seek to structure our relationships with our equipment and service providers, power suppliers and other potential partners as long-term relationships.
A number of governments or governmental bodies have introduced or are contemplating environmental and energy legislative and regulatory changes in response to the increasing focus on power consumption required to operate large-scale data centers.
In addition, a number of governments or governmental bodies have introduced or are contemplating environmental and energy legislative and regulatory changes in response to the increasing focus on power consumption required to operate industrial-scale data centers.
We continue to evaluate emerging technologies like artificial intelligence, machine learning and generative artificial intelligence for incorporation into our business. State and federal regulations relating to these emerging technologies are quickly evolving, and, should we adopt such technologies, we may require significant resources to maintain our business practices while seeking to comply with U.S. laws.
We continue to evaluate emerging technologies like artificial intelligence for incorporation into our business. State and federal regulations relating to emerging technologies are quickly evolving, and, should we adopt such technologies, we may require significant resources to maintain our business practices while seeking to comply with U.S. laws.
Such factors include, but are not limited to, the worldwide growth in the adoption and use of bitcoins, the maintenance and development of the software protocol of the Bitcoin network, changes in consumer demographics and public tastes, fraudulent or illegitimate actors, real or perceived scarcity, and political, economic, regulatory or other conditions.
Such factors include, but are not limited to, the worldwide growth in the adoption and use of bitcoin, the maintenance and development of the software protocol of the Bitcoin network, changes in consumer demographics and preferences, fraudulent or illegitimate actors, real or perceived scarcity, and political, economic, regulatory or other conditions.
We are also reliant on critical equipment to supply power to our bitcoin mining operations at our data center facilities and we are exposed to the risk of disruptions or other failures in the overall global supply chain for bitcoin mining and related data center hardware.
We are also reliant on critical equipment to supply power to our data center facilities and we are exposed to the risk of disruptions or other failures in the overall global supply chain for related data center hardware.
See “— Any unfavorable global economic, business or political conditions, such as geopolitical tensions, military conflicts, acts of terrorism, natural disasters, pandemics, trade restrictions, tariffs, or similar events could adversely affect our business, financial condition and results of operations .” Furthermore, if we raise additional funds through equity financing, our existing stockholders could experience significant dilution.
See “— Any unfavorable global economic, business or political conditions, such as geopolitical tensions, military conflicts, acts of terrorism, natural disasters, pandemics, trade restrictions, tariffs, or similar events could have material adverse effect on our business, financial condition and results of operations .” Furthermore, if we raise additional funds through equity financing, our existing stockholders could experience significant dilution.
Further, we cannot provide any assurance that we will successfully identify all emerging trends and growth opportunities within the digital assets industry, the HPC market or other markets we seek to expand into, and we may lose out on such opportunities.
Further, we cannot provide any assurance that we will successfully manage growth and identify all emerging trends and future growth opportunities within the HPC market or other markets we seek to expand into, and we may lose out on such opportunities.
Certain institutional investors, investor advocacy groups, investment funds, creditors and other influential financial markets participants have become increasingly focused on companies’ ESG practices in evaluating their investments and business relationships, including the impact of bitcoin mining operations on the environment. Certain 18 organizations also provide ESG ratings, scores and benchmarking studies that assess companies’ ESG practices.
Certain institutional investors, investor advocacy groups, investment funds, creditors and other influential financial markets participants have become increasingly focused on companies’ ESG practices in evaluating their investments and business relationships, including the impact of industrial-scale data center operations on the environment. Certain organizations also provide ESG ratings, scores and benchmarking studies that assess companies’ ESG practices.
Furthermore, pricing may be the result of, and may continue to result in, speculation regarding future appreciation in the value of bitcoin, or our share price, making prices more volatile.
Furthermore, pricing may be the result of, and may continue to result in, speculation regarding future appreciation in the value of bitcoin, making prices more volatile.
Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including: • changes in the valuation of our deferred tax assets and liabilities; • expected timing and amount of the release of any tax valuation allowances; • tax effects of stock-based compensation; • costs related to intercompany restructurings; • changes in tax laws, regulations or interpretations thereof; or • changes in tax rates in jurisdictions where we operate In addition, we may be subject to audits of our income, sales and other transaction taxes by taxing authorities.
Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including: • changes in the valuation of our deferred tax assets and liabilities; • expected timing and amount of the release of any tax valuation allowances; • tax effects of stock-based compensation; • costs related to intercompany restructurings; • changes in tax laws, regulations or interpretations thereof; or • changes in tax rates in jurisdictions where we operate.
Any unfavorable global economic, business or political conditions, such as geopolitical tensions, military conflicts, acts of terrorism, natural disasters, pandemics, trade restrictions, tariffs, or similar events could adversely affect our business, financial condition and results of operations.
Any unfavorable global economic, business or political conditions, such as geopolitical tensions, military conflicts, acts of terrorism, natural disasters, pandemics, trade restrictions, tariffs, or similar events could have material adverse effect on our business, financial condition and results of operations.
While we devote significant resources to develop policies and procedures to identify, monitor and manage our risks, we cannot assure you that our policies and procedures will always be effective against all types of risks, including unidentified or unanticipated risks, or that we will always be successful in monitoring or evaluating the risks to which we are or may be exposed in all market environments.
We cannot assure you that our policies and procedures will always be effective against all types of risks, including unidentified or unanticipated risks, or that we will always be successful in monitoring or evaluating the risks to which we are or may be exposed in all market environments.
See “ Business—Our Strategy—Establish our cost leadership and maintain strong relationships with our industry partners .” Thus, maintaining, protecting, and enhancing our reputation is also important to our development plans, operational stability, and relationships with our power suppliers, equipment and service providers and other counterparties.
See “ Business—Our Strategy—. ” Thus, maintaining, protecting, and enhancing our reputation is also important to our development plans, operational stability, and relationships with our power suppliers, equipment and service providers and other counterparties.
The cryptocurrency ecosystem is highly innovative, rapidly evolving, and characterized by competition, experimentation, changing customer needs, frequent introductions of new products and services, and subject to uncertain and evolving industry and regulatory requirements.
The HPC industry is highly innovative, rapidly evolving, and characterized by competition, experimentation, frequent introductions of new products and services, and subject to uncertain and evolving industry and regulatory requirements.
Furthermore, there can be no assurances that we will recognize, in a timely manner or at all, the benefits that we may expect as a result of our implementing new technology into our operations. As a result, our business, prospects, financial condition and operating results could be adversely affected.
Furthermore, there can be no assurances that we will recognize, in a timely manner or at all, the benefits that we may expect as a result of our implementing new technology into our operations. Any of the risks above could have a material adverse effect on our business, prospects, financial condition, and operating results.
Our limited insurance protection exposes us and our shareholders to the risk of loss of our bitcoin for which no person is liable. We do not currently maintain our own insurance coverage for our bitcoin holdings, which are held in custody by our custodians.
For details on our current competitive landscape, see “ Business — Competition .” Our limited insurance protection exposes us and our shareholders to the risk of loss of our bitcoin for which no person is liable. We do not currently maintain our own insurance coverage for our bitcoin holdings, which are held in custody by our custodians.
There can be no assurance that we will ever operate an HPC hosting business profitably and it may be possible that a continued focus on operating bitcoin mining data centers would have been more profitable.
There can be no assurance that we will ever operate an HPC hosting business profitably and it may be possible that a continued focus on operating bitcoin mining data centers would have been more profitable. Regulatory developments surrounding AI may negatively impact our HPC data center operations.
In addition, pursuant to an at-the-market offering agreement with Cantor Fitzgerald & Co., Canaccord Genuity LLC, Needham & Company, LLC, Compass Point Research & Trading, LLC, Keefe, Bruyette & Woods, Inc., Virtu Americas LLC and BTIG, LLC, we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $725.7 million, which consists of (i) up to $125.7 million remaining as authorized under the Company’s Registration Statement on Form S-3, which was declared effective by the Securities and Exchange Commission (“SEC”) on October 6, 2022, and (ii) up to $600.0 million of Shares, which can be issued and sold pursuant to the Company’s shelf registration statement on Form S-3ASR, filed with the SEC on September 3, 2024, which became immediately effective upon filing.
In addition, pursuant to an at-the-market offering agreement with Cantor Fitzgerald & Co., Canaccord Genuity LLC, Needham & Company, LLC, Compass Point Research & Trading, LLC, Keefe, Bruyette & Woods, Inc., Virtu Americas LLC and BTIG, LLC, we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $600.0 million of Shares, which can be issued and sold pursuant to the Company’s shelf registration statement on Form S-3ASR, filed with the SEC on September 3, 2024, which became immediately effective upon filing.
We depend on third parties, including electric grid operators Oncor Electric Delivery Company LLC (“Oncor”) and American Electric Power Company, Inc. (“AEP”) , the Texas electric utility ERCOT, and manufacturers of critical components for our mining equipment and our data centers, which may be subject to price fluctuations or shortages.
We depend on third parties, including transmission and distribution utilities like Oncor Electric Delivery Company LLC (“Oncor”) and AEP, the Texas grid operator, ERCOT, and manufacturers of critical components for our mining equipment and our data centers, which may be subject to price fluctuations or shortages.
Our success and future growth, to a significant degree, depends on the skills and services of our management team. If our management team, including any new hires that we may make, fails to work together effectively and to execute our plans and strategies on a timely basis, our business could be significantly harmed.
If our management team, including any new hires that we may make, fails to work together effectively and to execute our plans and strategies on a timely basis, our business could be significantly harmed.
Depending upon the effectiveness of any price risk management activity undertaken by us, an increase in market prices for power, generation capacity, and ancillary services may adversely affect our business, prospects, financial condition, and operating results. 14 Long- and short-term power prices may fluctuate substantially due to a variety of factors outside of our control, including, but not limited to: • increases and decreases in generation capacity; • changes in power transmission or fuel transportation capacity constraints or inefficiencies; • volatile weather conditions, particularly unusually hot or mild summers or unusually cold or warm winters; • technological shifts resulting in changes in the demand for power or in patterns of power usage, including the potential development of demand-side management tools, expansion and technological advancements in power storage capability and the development of new fuels or new technologies for the production or storage of power; • federal and state power, market and environmental regulation and legislation; and • changes in capacity prices and capacity markets.
Long- and short-term power prices may fluctuate substantially due to a variety of factors outside of our control, including, but not limited to: • increases and decreases in generation capacity; • changes in power transmission or fuel transportation capacity constraints or inefficiencies; • volatile weather conditions, particularly unusually hot or mild summers or unusually cold or warm winters and natural disasters; • technological shifts resulting in changes in the demand for power or in patterns of power usage, including the potential development of demand-side management tools, expansion and technological advancements in power storage capability and the development of new fuels or new technologies for the production or storage of power; • federal and state power, market and environmental regulation and legislation; and • changes in capacity prices and capacity markets.
As we continue to develop and expand our operations, we may require personnel with different skills and experiences, who have a sound understanding of our business and the cryptocurrency industry, for example, specialists in power contract negotiations and management, as well as data center specialists.
As we continue to develop and expand our operations, we may require personnel with different skills and experiences, who have a sound understanding of our business, data center construction, and the HPC industry, for example, specialists in power contract negotiations and management, as well as data center specialists, and we may also compete for talent in other related fields, such as finance and real estate.
For details on our current competitive landscape, see “ Business—Competition .” Competition from existing and future competitors could result in our inability to secure acquisitions and partnerships that we may need to expand our business in the future.
Competition from existing and future competitors could result in our inability to secure acquisitions and partnerships that we may need to expand our business in the future.
Therefore, a loss may be suffered with respect to our bitcoin that is not covered by insurance and for which no person is liable in damages, which could adversely affect our operations and, consequently, an investment in us. We may need to raise additional capital, which may not be available on terms acceptable to us, or at all.
Therefore, a loss may be suffered with respect to our bitcoin that is not covered by insurance and for which no person is liable in damages, which could adversely affect our operations and, consequently, an investment in us.
To stay current with a digital assets industry that is rapidly evolving, we expect the services and products associated with them to evolve and, thus, that our business model may need to evolve. From time to time, we may modify aspects of our business model or engage in various strategic initiatives, which may be complimentary to our bitcoin mining operations.
To stay current with technology and an industry that is rapidly evolving, we expect the services and products associated with them to evolve and, thus, require that our business model evolve, as well. From time to time, we may modify aspects of our business model or engage in various strategic initiatives, which may be complementary to our existing operations.
There can be no assurance that the market price of common stock and warrants will not fluctuate widely or decline significantly in the future in response to a number of factors, including, among others, the following: • changes in financial estimates by us or by any securities analysts who might cover our stock; • proposed changes to laws in the U.S. or foreign jurisdictions relating to our business, or speculation regarding such changes; • delays, disruptions or other failures in the supply of cryptocurrency hardware, including chips; • conditions or trends in the digital assets industries and, specifically the bitcoin mining space; • stock market price and volume fluctuations of comparable companies; • fluctuations in prices of bitcoin and other cryptocurrencies; • announcements by us or our competitors of significant acquisitions, strategic partnerships or divestitures; • significant lawsuits or announcements of investigations or regulatory scrutiny of its operations or lawsuits filed against us; • recruitment or departure of key personnel; • investors’ general perception of our business or management; • trading volume of our common stock; • overall performance of the equity markets; • publication of research reports about us or our industry or positive or negative recommendations or withdrawal of research coverage by securities analysts; • general global, political and economic conditions; and • other events or factors, many of which are beyond our control.
The trading price of our common stock has, at times, fluctuated significantly and could be subject to wide fluctuations in response to any of the risk factors listed in this “Risk Factors” section, and others, including: • changes in financial estimates by us or by any securities analysts who might cover our stock; • proposed changes to laws in the U.S. or foreign jurisdictions relating to our business, or speculation regarding such changes; • delays, disruptions or other failures in the HPC data center infrastructure supply chain; • conditions or trends in the HPC or bitcoin mining space; • stock market price and volume fluctuations of comparable companies; • fluctuations in prices of bitcoin and other cryptocurrencies; • announcements by us or our competitors of significant acquisitions, strategic partnerships or divestitures; • significant lawsuits or announcements of investigations or regulatory scrutiny of its operations or lawsuits filed against us; • recruitment or departure of key personnel; • investors’ general perception of our business or management; • overall performance of the equity markets; • publication of research reports about us or our industry or positive or negative recommendations or withdrawal of research coverage by securities analysts; • general global, political and economic conditions; and • other events or factors, many of which are beyond our control.
Furthermore, even without such regulation, increasing awareness of climate change and any negative publicity in the global marketplace about potential impacts on climate change by us or other companies in our industry could harm our reputation.
Furthermore, even without such regulation, increasing awareness of climate change and any negative publicity in the global marketplace about potential impacts on climate change by us or other companies in our industry could harm our reputation. Any of the foregoing could have a material adverse effect on our financial position, prospects, results of operations and cash flows.
In addition, our ability to use NOL carryforwards and other tax attributes may be subject to significant limitations under Section 382 of the Internal Revenue Code of 1986, as amended and corresponding provisions of state tax law. Risks Related to Cryptocurrency Our sources of revenue are dependent on bitcoin and the Bitcoin ecosystem, which can be highly volatile.
In addition, our ability to use NOL carryforwards and other tax attributes may be subject to significant limitations under Section 382 of the Internal Revenue Code of 1986, as amended and corresponding provisions of state tax law.
A data breach or security incident may also trigger mandatory data breach notification obligations under applicable privacy and data protection laws, which, if applicable, could lead to widespread negative publicity and a loss in confidence regarding the effectiveness of our data security measures.
In addition, a data breach or cybersecurity incident may trigger mandatory notification obligations under applicable privacy and data protection laws, which could result in negative publicity and a loss of confidence in our security measures.
We depend on third parties, including electric grid operators, electric utility providers and manufacturers of certain critical and specialized equipment, and rely on components and raw materials that may be subject to price fluctuations or shortages, including ASIC chips that have been subject to periods of significant shortage and high innovation pace.
We depend on third parties, including transmission and distribution utilities, grid operators, electric utility providers and manufacturers of certain critical and specialized equipment, and rely on components and raw materials that may be subject to price fluctuations or shortages.
Unfavorable press about, or ratings or assessments of, our ESG strategies or practices, regardless of whether or not we comply with applicable legal requirements, regulations and executive orders, may lead to negative investor sentiment toward us, which could have a negative impact on our stock price and our access to and cost of capital.
Unfavorable press about, or ratings or assessments of, our ESG strategies or practices, regardless of whether or not we comply with applicable legal requirements, regulations and executive orders, may lead to negative investor sentiment toward us, which could have a negative impact on our stock price and our access to and cost of capital. 21 Our compliance and risk management methods might not be effective and may result in outcomes that could adversely affect our reputation, operating results, and financial condition.
Regulatory developments surrounding HPC may negatively impact our efforts to expand into HPC hosting. 37 The regulatory landscape surrounding HPC, artificial intelligence (“AI”) and bitcoin mining operations is evolving rapidly, and we anticipate increased scrutiny and potential regulation in the near and long term. These developments may affect our business and operations in ways that are difficult to predict.
The regulatory landscape surrounding AI is evolving rapidly, and we anticipate increased scrutiny and potential regulation in the near and long term. These developments may affect our business and operations in ways that are difficult to predict.
The realization of any of these risks and uncertainties could have a material adverse effect on our reputation, business, financial condition, results of operations, growth and future prospects as well as our ability to accomplish our strategic objectives.
The realization of any of these risks and uncertainties could have a material adverse effect on our reputation, business, financial condition, results of operations, growth and future prospects as well as our ability to accomplish our strategic objectives. In that event, the market price of our common stock could decline and you could lose part or all of your investment.
We, our business and commercial partners rely extensively on third-party service providers’ information technology, computer systems, hardware, software, technology infrastructure and online sites and networks (collectively, “IT Systems”), including renewable energy infrastructure, cloud-based systems and on-premises servers (i.e., data centers), to record and process transactions and manage our operations, among other matters.
We and our partners rely extensively on third-party information technology systems, including cloud-based systems, on-premises servers and data centers, renewable energy infrastructure and other networked systems (collectively, “IT Systems”), to record and process transactions and manage our operations.
We expect that regulatory efforts in this area will continue to evolve and potentially affect our business. As a company operating at the intersection of HPC, AI, and bitcoin mining, we are committed to maintaining a proactive and adaptive approach to regulatory compliance.
We expect that regulatory efforts in this area will continue to evolve and potentially affect our business. As an HPC data center operator for AI companies, we are committed to maintaining a proactive and adaptive approach to regulatory compliance.
Our business operations and reputation depend on our ability to maintain the confidentiality, integrity and availability of data, digital assets and systems related to our business, personal information, proprietary technologies, processes and intellectual property (“Confidential Information”).
Our business operations and reputation depend on our ability, and the ability of our third-party service providers, including mining pool service providers, custodians and other counterparties, to maintain the confidentiality, integrity and availability of our information technology systems, digital assets and confidential information, including proprietary technologies, processes, intellectual property and personal information (“Confidential Information”).
Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets, including conditions that are outside of our control.
Our ability to complete the construction of, and then operate, our HPC data centers could be adversely affected by general conditions in the global economy and in the global financial markets, including conditions that are outside of our control.
We continue to monitor legislative and regulatory developments closely and engage in dialogue with relevant stakeholders to ensure our business practices align with the evolving legal and regulatory framework. However, there can be no assurance that our business will not be adversely impacted by future developments.
We continue to monitor legislative and regulatory developments closely and engage in dialogue with relevant stakeholders to ensure our business practices align with the evolving legal and regulatory framework.
Additionally, rapid growth in our business may place a strain on our managerial, operational and financial resources and systems. We may not grow as we expect, if we fail to manage our growth effectively or to develop and expand our managerial, operational and financial resources and systems, our business, prospects, financial condition and operating results could be adversely affected.
If we fail to manage our growth effectively or to develop and expand our managerial, operational and financial resources and systems, our business, prospects, financial condition and operating results could be adversely affected. If we fail to maintain and enhance our brand and reputation, our business, operating results and financial condition may be adversely affected.
If we are not able to secure capital or financing to fund our construction efforts with respect to HPC hosting facilities, the completion of such projects may be delayed and our ability to collect any potential renal revenue or to otherwise monetize such facilities may be compromised, which could have an adverse effect on our expansion strategy and our ability to generate significant or any revenue from an HPC hosting business.
If we are unable to fund our construction efforts with respect to HPC hosting facilities, the completion of such projects may be delayed, our ability to collect any potential revenue or to otherwise monetize such facilities may be compromised and we may be less competitive in our industry, which could have a material adverse impact on our business, results of operations and financial condition, including our expansion strategy, our ability to generate significant or any revenue from an HPC hosting business and on the market price for our securities.
If we are treated as a general unsecured creditor, we may not be able to recover our bitcoin in the event of a bankruptcy of any of our custodians or any other custodian we may use in the future. The Bitcoin we hold is not insured and not subject to FDIC or SIPC protections.
If we are treated as a general unsecured creditor, we may not be able to recover our bitcoin in the event of a bankruptcy of any of our custodians or any other custodian we may use in the future. Our success and future growth, to a significant degree, depends on the skills and services of our management team.
To finance any acquisitions or joint ventures, we may choose to issue shares of common stock, preferred stock, debt or a combination of debt and equity as consideration, which could significantly dilute the ownership of our existing stockholders or provide rights to such preferred stockholders in priority over our common stockholders.
To finance any acquisitions or joint ventures, we may choose to issue shares of common stock, preferred stock, or debt, which could significantly dilute the ownership of our existing stockholders or provide rights to such preferred stockholders in priority over our common stockholders. Additional funds may not be available on terms that are favorable to us, or at all.
We have concentrated our operations and, thus, are particularly exposed to the performance of the Odessa Facility and changes in the regulatory environment, market conditions and natural disasters in Texas.
We have concentrated our operations and, thus, are particularly exposed to the performance of our data centers located in Texas and changes in the regulatory environment, market conditions and natural disasters in Texas. We currently operate all of our data centers in Texas, and the data centers we are constructing for our HPC tenants are located in Texas as well.
A changing legislative environment could create economic and regulatory uncertainty for our business because the industries in which we operate, bitcoin mining and HPC, with their high energy demand, could become targets for future environmental and energy regulations.
A changing legislative environment could create economic and regulatory uncertainty for our business because the industries in which we operate, with their high energy demand, could become targets for future environmental and energy regulations. The trend of increased environmental regulation is not linear and can fluctuate depending on the administration and jurisdiction, even within the same county.
The occurrence of any such event in the future could damage our reputation or otherwise materially harm our business, operating results, and financial condition. 16 The value of bitcoin has historically been subject to wide swings, and our operating results may be adversely affected by our hedging activity.
Any failure to protect our IT Systems, digital assets or Confidential Information could materially and adversely affect our business, operating results, financial condition and reputation. The price of bitcoin has historically been subject to wide swings, and our operating results may be adversely affected by our hedging activity.
These provisions may make it more difficult for stockholders to replace or remove members of the Board. Because the Board is responsible for appointing the members of the management team, these provisions could in turn frustrate or prevent any attempt by stockholders to replace or remove the current management.
Because the Board is responsible for appointing the members of the management team, these provisions could in turn frustrate or prevent any attempt by stockholders to replace or remove the current management. In addition, these provisions could limit the price that investors might be willing to pay in the future for shares of our common stock.
Such modifications may increase the complexity of our business and place significant strain on our management, personnel, operations, systems, technical performance, financial resources and internal financial control and reporting functions. Moreover, we may not be able to 10 manage growth effectively, which could damage our reputation, limit our growth and adversely affect our operating results.
Such modifications may increase the complexity of our business and place significant strain on our management, personnel, operations, systems, technical performance, financial resources and internal financial control and reporting functions.
As a result, our mining operations can only be successful if we can obtain sufficient electrical power for that site on a cost-effective basis, and our establishment of new mining data centers requires us to find sites where that is the case.
As a result, the success of any data center facility we establish is subject to obtaining sufficient electrical power for that facility on a cost-effective basis, and our establishment of new facilities requires us to find locations where that is the case.
Large-scale acceptance of bitcoin as a means of payment has not, and may never, occur. The growth of this industry in general, and the use of bitcoin in particular, is subject to a high degree of uncertainty, and the slowing or stopping of the development or acceptance of developing protocols may occur unpredictably.
The use of AI technology is part of a new and rapidly evolving industry. The growth of this industry is subject to a high degree of uncertainty, and the slowing or stopping of the development or acceptance of developing protocols may occur unpredictably.
In that event, the market price of our common stock or public warrants could decline and you could lose part or all of your investment. Unless the context otherwise requires, references in this Annual Report to the “Company,” “Cipher,” “Cipher Mining,” “we,” “us” or “our” refers to Cipher Mining Inc. and its consolidated subsidiaries, unless otherwise indicated.
Unless the context otherwise requires, references in this Annual Report to the “Company,” “Cipher,” “Cipher Digital,” “we,” “us” or “our” refers to Cipher Digital Inc. and its consolidated subsidiaries, unless otherwise indicated.
Additional funds may not be available on terms that are favorable to us, or at all. If the price of our common stock is low or volatile, we may not be able to acquire other companies or fund a joint venture project using stock as consideration.
If the price of our common stock is low or volatile, we may not be able to acquire other companies or fund a joint venture project using stock as consideration. Additionally, rapid growth in our business may place a strain on our managerial, operational and financial resources and systems.
We may issue additional shares of our common stock or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of our common stock.
As a result, you may not receive any return on an investment in our common stock unless you sell your shares of common stock for a price greater than that which you paid for it. 33 We may issue additional shares of our common stock or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of our common stock.
Constructing data centers for HPC hosting requires significantly higher capital expenditures compared to bitcoin mining data centers, and we may be unable to secure capital or financing for our construction efforts to develop data centers for HPC hosting.
Constructing data centers for HPC hosting requires significant capital expenditures, and we may be unable to secure capital or financing for our construction efforts to develop data centers for HPC hosting. Constructing data center facilities for HPC hosting requires significant capital expenditures, and we anticipate that future strategic growth initiatives will likewise continue to be capital-intensive.
If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited and it could have a material adverse effect on our business, prospects, financial condition, and operating results. 22 The storage and custody of our bitcoin assets are subject to cybersecurity breaches, hacking, fraud risks and restriction on access, and we may not have adequate sources of recovery if our bitcoin assets are lost, stolen or destroyed.
See “ Risks Related to Our Indebtedness—Our debt agreements contain restrictions that will limit flexibility in operating our business .” If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited and it could have a material adverse effect on our business, prospects, financial condition, and operating results.
See “—We are vulnerable to severe weather conditions and natural disasters, including severe heat, winter weather events, earthquakes, fires, floods, hurricanes, as well as power outages and other industrial incidents or mechanical failures, which could severely disrupt the normal operation of our business and adversely affect our results of operations.” Texas, through its regulatory and economic incentives, has encouraged bitcoin mining companies, like ours, to locate their operations in the state.
See “—We are vulnerable to severe weather conditions and natural disasters, including severe heat, winter weather events, earthquakes, fires, floods, hurricanes, as well as power outages and other industrial incidents or mechanical failures, which could severely disrupt the normal operation of our business and adversely affect our results of operations.” Due to our heavy concentration of data centers in Texas, if the regulatory and economic environment in Texas 17 were to become less favorable to data center operators like us or HPC operations, including by way of increased taxes or policies that limit the ability of data center operators to expand their footprint, our heavy concentration of sites in Texas means our business, financial condition and results of operations could be adversely affected.
For example, we are increasing our focus on diversification into constructing and operating data centers for HPC companies. We cannot offer any assurance that these or any other modifications will be successful or will not result in harm to the business, damage our reputation and limit our growth.
We cannot offer any assurance that our expansion into HPC services or any other modifications to our business model or our strategy will be successful or will not result in harm to our business, reputation and our growth potential.
It may take significant time and expenditure to develop an HPC hosting business through continued development at our existing and planned sites, and our efforts may not be successful. The continued development of our existing and planned facilities is subject to various factors beyond our control.
However, there can be no assurance that our business will not be adversely impacted by future developments. 24 It may take significant time and expenditure to develop an HPC hosting business through continued development at our existing and planned sites, and our efforts may not be successful.
Securities litigation against us could result in substantial costs and divert management’s attention from other business concerns, which could seriously harm its business.
Securities litigation against us could result in substantial costs and divert management’s attention from other business concerns, which could seriously harm its business. The issuance of shares of our common stock upon conversion of the Convertible Notes will dilute the ownership interests of our stockholders and could depress the trading price of our common stock.
In addition, in the past, stockholders have initiated class action lawsuits against public companies following periods of volatility in the market prices of these companies’ stock.
In addition, in the past, stockholders have initiated class action lawsuits against public companies following periods of volatility in the market prices of these companies’ stock. Such litigation, if instituted against us, could cause it to incur substantial costs and divert management’s attention and resources from our business.
Any of the risks above could have a material adverse effect on our business, prospects, financial condition, and operating results.
Any such delays, and any failure to execute the construction of our data centers, could have a material adverse effect on our business, financial condition, cash flows and results of operations. Our business is exposed to construction risks.
In addition, our ability to pay dividends may be limited by covenants of any existing and future outstanding indebtedness it or its subsidiaries incur. As a result, you may not receive any return on an investment in our common stock unless you sell your shares of common stock for a price greater than that which you paid for it.
In addition, our ability to pay dividends may be limited by covenants of any existing and future outstanding indebtedness it or its subsidiaries incur.
See “ Risks Related to Regulatory Framework—Regulatory changes or actions may restrict the use of bitcoin in a manner that adversely affects our business, prospects or operations ” and “ —Any unfavorable global economic, business or political conditions, such as geopolitical tensions, military conflicts, acts of terrorism, natural disasters, pandemics, trade restrictions, tariffs, or similar events could adversely affect our business, financial condition and results of operations .” We may not be able to compete successfully against present or future competitors.
See also “— Any unfavorable global economic, business or political conditions, such as geopolitical tensions, military conflicts, acts of terrorism, natural disasters, pandemics, trade restrictions, tariffs, or similar events could have material adverse effect on our business, financial condition and results of operations .” If this critical equipment malfunctions or we have delays in the ability to fix such equipment, it could adversely affect our operations and financial results.
Additionally, we may not be able to ensure the adequacy of our security measures or those employed by third parties, including our mining pool service providers, custodians or other counterparties.
We also may not be able to ensure the adequacy of the security measures implemented by our third-party service providers, custodians or counterparties, many of which store or process our sensitive data and digital assets.
Remote and hybrid working arrangements at our company, and at many third-party providers, also increase cybersecurity risks due to the challenges associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks.
Remote and hybrid working arrangements at our company and at many of our third-party providers may further increase cybersecurity risks due to challenges associated with managing distributed computing assets and non-corporate networks. In addition, any integration of artificial intelligence in our or our service providers’ or partners’ operations, products or services may pose new or unknown cybersecurity risks.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeSee “ Risk Factors—Risks Related to Our Business, Industry and Operations— If we or our third-party providers fail to protect confidential information and/or experience cybersecurity incidents, such as cyber-attacks, data breaches, hacking attacks or malware, there may be disruptions to our operations, triggering significant liability for us, which could harm our operating results and financial condition, and damage our reputation or otherwise materially harm our business .” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity and other information technology risks.
Biggest changeSee “ Risk Factors—Risks Related to Our Business, Industry and Operations— If we or our third-party providers fail to protect our information technology systems, digital assets or confidential information, or experience cybersecurity incidents, our business, operating results, financial condition and reputation could be materially harmed .” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity and other information technology risks.
Key elements of our cybersecurity risk management program include: • risk assessments designed to help identify material risks from cybersecurity threats to our critical systems, information, services, and our broader enterprise IT environment; • individuals, including employees and external third party service providers, who are responsible for managing our cybersecurity risk assessment processes, our security controls, and our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; • cybersecurity awareness training of our employees, incident response personnel, and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for key service providers, suppliers, and vendors based on our assessment of their criticality to our operations and respective risk profile.
Key elements of our cybersecurity risk management program include: • risk assessments designed to help identify material risks from cybersecurity threats to our critical systems, information, services, and our broader enterprise IT environment; • individuals, including employees and external third party service providers, who are responsible for managing our cybersecurity risk assessment processes, our security controls, and our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; 36 • cybersecurity awareness training of our employees, incident response personnel, and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for key service providers, suppliers, and vendors based on our assessment of their criticality to our operations and respective risk profile.
Our management team is responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. Members of our management team have prior work experience in supervising and implementing cybersecurity risk mitigation efforts in highly-regulated industries.
Members of the Audit Committee have experience in overseeing and managing cybersecurity and data privacy risks. Our management team is responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants.
Our internal cybersecurity personnel and retained external cybersecurity consultants also have a breadth of expertise across core cybersecurity disciplines including governance, risk, compliance, and security architecture.
Members of our management team have prior work experience in supervising and implementing cybersecurity risk mitigation efforts in highly-regulated industries. Our internal cybersecurity personnel, including our Chief Information Security Officer (CISO), and retained external cybersecurity consultants also have a breadth of expertise across core cybersecurity disciplines including governance, risk, compliance, and security architecture.
The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity. The full Board also receives briefings from management on our cyber risk management program.
The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity. The full Board also receives briefings from management on our cyber risk management program. Board members receive presentations on cybersecurity topics from our management team, internal security staff or external experts as part of the Board’s continuing education on topics that impact public companies.
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Board members receive presentations on cybersecurity topics from our Chief Technology Officer (CTO), internal security staff or external experts 44 as part of the Board’s continuing education on topics that impact public companies. Members of the Audit Committee have experience in overseeing and managing cybersecurity and data privacy risks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. As of December 31, 2024, we leased all of our office space located in New York, New York, Charleston, South Carolina, and Denver, Colorado. We also lease land for our data center facilities in Odessa, Texas, Winkler County, Texas, and Cotulla, Texas. We own land in West Texas for two of our sites.
Biggest changeItem 2. Properties. As of December 31, 2025, we lease office space in New York, New York, Charleston, South Carolina, and Denver, Colorado. We lease land for data center facilities in West Texas, and own land options in Texas and Ohio for additional sites. See Item 1. Business for further descriptions of our facilities and sites.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. We are not a party to any material pending legal proceedings. From time to time, we may be subject to legal proceedings and claims arising in the ordinary course of business. The outcome of any such claims or proceedings, regardless of the merits, is inherently uncertain.
Biggest changeItem 3. Legal Proceedings. We are not a party to any material pending legal proceedings. From time to time, we may be subject to legal proceedings and claims arising in the ordinary course of business. The outcome of any such claims or proceedings, regardless of the merits, is inherently uncertain. 37 Item 4. Mine Safety Disclosures.
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The information contained in “Note 14—Commitments and Contingencies” in the notes to the consolidated financial statements included elsewhere in this Annual Report is incorporated by reference into this Item 3. Item 4. Mine Safety Disclosures. Not applicable. 45 PART II
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Not applicable. 38 PART II - OTHER INFORMATION

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock and public warrants are listed and traded on the Nasdaq Stock Exchange under the symbols “CIFR” and “CIFRW,” respectively.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is listed and traded on the Nasdaq Stock Exchange under the symbols “CIFR”. Holders As of February 24, 2026, there were 16 holders of record of our common stock.
The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners but whose shares are held in street name by brokers or other nominees.
Such numbers do not include beneficial owners holding our securities through nominee names. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners but whose shares are held in street name by brokers or other nominees.
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Holders As of February 24, 2025, there were 25 holders of record of our common stock and 1 holder of record of our public warrants. Such numbers do not include beneficial owners holding our securities through nominee names.
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Stock Performance Graph The information required by this item will be included in the 2026 Proxy Statement and is incorporated herein by reference. Item 6. [Reserved] 39

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following is a reconciliation of our Adjusted Earnings to the most directly comparable GAAP measure for the periods indicated (in thousands): Year Ended December 31, 2024 2023 Reconciliation of Adjusted Earnings: Net loss $ (44,635) $ (25,777) Change in fair value of derivative asset 7,921 (26,836) Share-based compensation expense 42,132 38,470 Depreciation and amortization 102,448 59,093 Deferred income tax expense (937) 3,366 Other gains - nonrecurring — (2,355) Change in fair value of warrant liability (250) 243 Adjusted (loss) earnings $ 106,679 $ 46,204 The following is a reconciliation of our Adjusted Earnings (Loss) per share - diluted to the most directly comparable GAAP measure for the periods indicated: 58 Year Ended December 31, 2024 2023 Reconciliation of Adjusted Earnings per share - diluted: Net loss per share - diluted $ (0.14) $ (0.10) Change in fair value of derivative asset per diluted share 0.02 (0.11) Share-based compensation expense per diluted share 0.13 0.15 Depreciation and amortization per diluted share 0.32 0.23 Deferred income tax expense per diluted share — 0.01 Other gains - nonrecurring per diluted share — (0.01) Change in fair value of warrant liability per diluted share — — Adjusted (loss) earnings per diluted share $ 0.33 $ 0.17 Critical Accounting Policies, and Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period.
Biggest changeThe following is a reconciliation of our Adjusted Earnings (loss) to the most directly comparable GAAP measure for the periods indicated (in thousands): 51 Year Ended December 31, 2025 2024 2023 Reconciliation of Adjusted Earnings: Net loss $ (822,244) $ (44,635) $ (25,777) Change in fair value of power purchase agreement 28,860 7,921 (26,836) Share-based compensation expense 52,787 42,132 38,470 Depreciation and amortization 198,973 102,448 59,093 Deferred income tax (benefit) expense (4,269) (937) 3,366 Other losses (gains) - nonrecurring 416,688 — (2,355) Change in fair value of warrant liability (19,290) (250) 243 Loss on miners held for sale 96,056 — — Impairment of long lived assets 45,317 — — Disposal of miners 29,358 — — Adjusted (loss) earnings $ 22,236 $ 106,679 $ 46,204 The following is a reconciliation of our Adjusted Earnings (loss) per share - diluted to the most directly comparable GAAP measure for the periods indicated: Year Ended December 31, 2025 2024 2023 Reconciliation of Adjusted Earnings per share - diluted: Net loss per share - diluted $ (2.15) $ (0.14) $ (0.10) Change in fair value of power purchase agreement per diluted share 0.07 0.02 (0.11) Share-based compensation expense per diluted share 0.14 0.13 0.15 Depreciation and amortization per diluted share 0.52 0.32 0.23 Deferred income tax (benefit) expense per diluted share (0.01) — 0.01 Other losses (gains) - nonrecurring per diluted share 1.09 — (0.01) Change in fair value of warrant liability per diluted share (0.05) — — Loss on miners held for sale per diluted share 0.25 — — Impairment of long lived assets per diluted share 0.12 — — Disposal of miners per diluted share 0.08 — — Adjusted earnings per diluted share $ 0.06 $ 0.33 $ 0.17 Critical Accounting Policies, and Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period.
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. Leases We account for leases in accordance with ASC 842, Leases . Accordingly, management determines whether an arrangement contains a lease at the inception of the arrangement.
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. Leases We account for leases in accordance with ASC 842. Accordingly, management determines whether an arrangement contains a lease at the inception of the arrangement.
When determining the transaction price, an entity must consider the effects of all of the following: • Variable consideration 62 • Constraining estimates of variable consideration • The existence of a significant financing component in the contract • Noncash consideration • Consideration payable to a customer Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
When determining the transaction price, an entity must consider the effects of all of the following: • Variable consideration • Constraining estimates of variable consideration • The existence of a significant financing component in the contract • Noncash consideration • Consideration payable to a customer Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
The carrying values reported in our consolidated balance sheets for cash (excluding cash equivalents which are recorded at fair value on a recurring basis), accounts payable and accrued expenses and other current liabilities are reasonable estimates of their fair values due to the short-term nature of these items. 59 Bitcoin Bitcoin are included in current assets on our consolidated balance sheets.
The carrying values reported in our consolidated balance sheets for cash (excluding cash equivalents which are recorded at fair value on a recurring basis), accounts payable and accrued expenses and other current liabilities are reasonable estimates of their fair values due to the short-term nature of these items. Bitcoin Bitcoin are included in current assets on our consolidated balance sheets.
We enter into a bitcoin mining pools by executing a contract, which may be amended from time to time, with a mining pool operator to provide computing power to the mining pool. Providing computing power to a mining pool operator for the purpose of cryptocurrency transaction verification is an output of our ordinary activities.
We enter into bitcoin mining pools by executing a contract, which may be amended from time to time, with a mining pool operator to provide computing power to the mining pool. Providing computing power to a mining pool 56 operator for the purpose of cryptocurrency transaction verification is an output of our ordinary activities.
As of December 31, 2023, we have awarded only RSUs with service-based vesting conditions (“Service- Based RSUs”) and performance-based RSUs with market-based vesting conditions (“Performance-Based RSUs”). Compensation expense for all awards is amortized based upon a graded vesting method over the estimated requisite service period.
As of December 31, 2023, we have 57 awarded only RSUs with service-based vesting conditions (“Service-Based RSUs”) and performance-based RSUs with market-based vesting conditions (“Performance-Based RSUs”). Compensation expense for all awards is amortized based upon a graded vesting method over the estimated requisite service period.
If, upon our contribution of nonfinancial assets to a joint venture, there is any difference between the cost of the investment and the amount of the underlying equity in the net assets of the investee, the difference is required to be accounted for as if the investee were a consolidated subsidiary.
If, upon our contribution of nonfinancial assets to a joint venture, there is any difference between the cost of the investment and the amount of the underlying equity in the net assets of the investee, the difference 54 is required to be accounted for as if the investee were a consolidated subsidiary.
Management’s assessment of the lease term reflects the non-cancelable term of the lease, inclusive of any rent-free periods and/or periods 61 covered by early-termination options which we are reasonably certain of not exercising, as well as periods covered by renewal options which we are reasonably certain of exercising.
Management’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 we are reasonably certain of not exercising, as well as periods covered by renewal options which we are reasonably certain of exercising.
Accordingly, the Luminant Power Agreement (the non-hedging derivative contract) is recorded at an estimated fair value each reporting period with the change in the fair value recorded in change in fair value of derivative asset in the consolidated statements of operations.
Accordingly, 53 the Luminant Power Agreement (the non-hedging derivative contract) is recorded at an estimated fair value each reporting period with the change in the fair value recorded in change in fair value of derivative asset in the consolidated statements of operations.
Fair value of financial instruments Our financial assets and liabilities are accounted for in accordance with ASC 820, Fair Value Measurement , which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
Fair value of financial instruments Our financial assets and liabilities are accounted for in accordance with ASC 820, Fair Value Measurement (“ASC 820”), which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
In order to determine the fair value of the ARO, management made certain estimates and assumptions including, among other things, projected cash flows, the borrowing interest rate and an assessment of market conditions that could significantly impact the estimated fair value. These estimates and assumptions are subjective.
In order to determine the fair value of an ARO, management makes certain estimates and assumptions including, among other things, projected cash flows, the borrowing interest rate and an assessment of market conditions that could significantly impact the estimated fair value. These estimates and assumptions are subjective.
Bitcoin we hold is accounted for under ASC 350-60, Crypto Assets, issued by the FASB in December 2023. Intangible assets under the scope of this subtopic are measured at fair value on our consolidated balance sheet.
Bitcoin we hold is accounted for under ASC 350-60, Crypto Assets (“ASC 350-60”) , issued by the FASB in December 2023. Intangible assets under the scope of this subtopic are measured at fair value on our consolidated balance sheet.
Revisions to the estimated ARO for items such as (i) new liabilities incurred, (ii) liabilities settled during the period and (iii) revisions to estimated future cash flow requirements (if any), will result in adjustments to the related capitalized asset and corresponding liability.
Revisions to the estimated AROs for items such as (i) new liabilities incurred, (ii) liabilities settled during the period and (iii) revisions to estimated future cash flow requirements (if any), will result in adjustments to the related capitalized asset and corresponding liability.
We are accreting these basis differences and recognizing the accretion as a reduction to our share of the losses recognized by Alborz LLC, Bear LLC and Chief Mountain LLC within the equity in losses of equity investees on the consolidated statement of operations over the depreciation period for the miners. 52 Changes in fair value of bitcoin and realized gain/loss on sale of bitcoin All of our bitcoin is recorded as a current asset on our consolidated balance sheet as we expect to begin regularly exchanging our bitcoin held for fiat currency to fund our operating expenses.
We are accreting these basis differences and recognizing the accretion as a reduction to our share of the losses recognized by Alborz LLC, Bear LLC and Chief Mountain LLC within the equity in losses of equity investees on the consolidated statements of operations over the depreciation period for the miners. 45 Changes in fair value of bitcoin and realized gain/loss on sale of bitcoin All of our bitcoin is recorded as a current asset on our consolidated balance sheet as we expect to begin regularly exchanging our bitcoin held for fiat currency to fund our operating expenses.
Pursuant to the master loan agreement, we currently have a secured line of credit up to $25.0 million (the “Coinbase Overnight Credit Facility”). We will not incur commitment fees for unused portions of the Coinbase Overnight Credit Facility.
Pursuant to the master loan agreement, we currently have a secured line of credit up to $25.0 million (the “Coinbase Overnight Credit Facility”), subject to credit review. We will not incur commitment fees for unused portions of the Coinbase Overnight Credit Facility.
We are entitled to a fractional share of the fixed cryptocurrency award from the mining pool operator (referred to as a “block reward”) and potentially transaction fees generated from blockchain users and distributed to individual miners by the mining pool operator.
We are entitled to a fractional share of the set cryptocurrency award from the mining pool operator (referred to as a “block reward”) and potentially transaction fees generated from blockchain users and distributed to individual miners by the mining pool operator.
These supplemental financial measures are not measurements of financial performance under accounting principles generally accepted in the United Stated (“GAAP”) and, as a result, these supplemental financial measures may not be comparable to similarly titled measures of other companies.
These supplemental financial measures are not measurements of financial performance under accounting principles generally accepted in the United States (“GAAP”) and, as a result, these supplemental financial measures may not be comparable to similarly titled measures of other companies.
These assumptions were used to estimate share-based compensation expense related to our Performance-Based RSUs, which was recognized in our consolidated financial statements years ended December 31, 2024 and December 31, 2023, and which will continue to impact our consolidated financial results over the remaining weighted average derived service period of the Performance-Based RSUs, which, as of December 31, 2024 is expected to occur over the next 0.5 years. 64
These assumptions were used to estimate share-based compensation expense related to our Performance-Based RSUs, which was recognized in our consolidated financial statements years ended December 31, 2025 and December 31, 2024, and which will continue to impact our consolidated financial results over the remaining weighted average derived service period of the Performance-Based RSUs, which, as of December 31, 2025 is expected to occur over the next 0.5 years. 58
The ARO is accreted based on the original discount rate and is recognized as an increase in the carrying amount of the liability and as a charge to accretion expense, which is included in depreciation expense in the consolidated statements of operations.
The AROs are accreted based on the original discount rate and is recognized as an increase in the carrying amount of the liability and as a charge to accretion expense, which is included in depreciation expense in the consolidated statements of operations.
Annually, or 60 more frequently if an event occurs that would dictate a change in assumptions or estimates underlying the obligation, management reassesses the ARO to determine whether any revisions to the obligation are necessary.
Annually, or more frequently if an event occurs that would dictate a change in assumptions or estimates underlying the obligation, management reassesses the AROs to determine whether any revisions to the obligation are necessary.
Management determined that the Luminant Lease Agreement and the Luminant Purchase and Sale Agreement should be combined for accounting purposes under ASC 842 (collectively, the “Combined Luminant Lease Agreement”) and that amounts exchanged under the combined contract should be allocated to the various components of the overall transaction based on relative fair values.
Management determined that the Luminant Lease Agreement and the Luminant Purchase and Sale Agreement should be combined for accounting purposes under ASC 842, Leases (“ASC 842”) (collectively, the “Combined Luminant Lease Agreement”) and that amounts 50 exchanged under the combined contract should be allocated to the various components of the overall transaction based on relative fair values.
Our fractional share of the block reward is based on the proportion of computing power we contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm, over the contract term. The block reward is pre-determined and hard coded into the protocol governing the relevant blockchain.
Our fractional share of the block reward is based on the proportion of computing power we contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm, over the contract term. The block reward is pre-determined in the protocol governing the relevant blockchain.
In exchange for providing computing power pursuant to Foundry’s terms of service, we are entitled to noncash consideration in the form of bitcoin, measured under the Full Pay Per Share (“FPPS”) approach.
In exchange for providing computing power pursuant to the mining pool’s terms of service, we are entitled to noncash consideration in the form of bitcoin, measured under the Full Pay Per Share (“FPPS”) approach.
For leases with a term of 12 months or less, any fixed payments are recognized on a straight-line basis over the lease term and are not recognized on the Company’s consolidated balance sheet as an accounting policy election. Leases qualifying for the short-term lease exception are insignificant.
For leases with a term of 12 months or less, any fixed payments are recognized on a straight-line basis over the lease term and are not recognized on our consolidated balance sheets as an accounting policy election. Leases qualifying for the short-term lease exception are insignificant.
A valuation allowance is recorded against substantially all of our net deferred tax assets, which are composed primarily of federal and state net operating loss carryforwards, stock-based compensation, non-goodwill intangibles, investments in joint ventures and lease liabilities; in addition, we have deferred tax liabilities resulting from our derivative and right-to-use assets.
A valuation allowance is recorded against substantially all of our net deferred tax assets, which are composed primarily of federal and state net operating loss carryforwards, stock-based compensation, intangible assets other than goodwill, investments in joint ventures and lease liabilities; in addition, we have deferred tax liabilities resulting from our derivative and right-to-use assets.
Power sales At our Odessa Facility, we sell excess electricity that was available under the Luminant Power Agreement, but not needed in our mining operations, back to the ERCOT market through Luminant. We sold power for proceeds of $5.4 million and $9.9 million for the year ended December 31, 2024, and 2023, respectively.
Power sales At our Odessa Facility, we sell excess electricity that is available under the Luminant Power Agreement, but not needed in our mining operations, back to the ERCOT market through Luminant. We sold power for proceeds of $7.9 million and $5.4 million for the year ended December 31, 2025, and 2024, respectively.
All share-based compensation expenses are recorded in general and administrative expense in the consolidated statements of operations. Forfeitures are recorded as they occur. The fair value of Service-Based RSUs is the closing market price of our common stock on the date of the grant.
All share-based compensation expenses are recorded in Compensation and benefits in the consolidated statements of operations. Forfeitures are recorded as they occur. The fair value of Service-Based RSUs is the closing market price of our common stock on the date of the grant.
In the past few years there have been many new entrants and existing competitors in the bitcoin mining space and a general increase in the competition for industrial-scale bitcoin mining companies with whom we compete over aspects of our industry, such as hashrate and power capacity.
Competition . Our business environment is constantly evolving. In the past few years there have been many new entrants and existing competitors in the bitcoin mining space and a general increase in the competition for industrial-scale bitcoin mining companies with whom we compete over aspects of our industry, such as hashrate and power capacity.
The Company elected the practical expedient not to separate lease and non-lease components for all leases, which means all consideration that is fixed, or in-substance fixed, relating to the non-lease components will be captured as part of the Company’s lease components for balance sheet purposes. Revenue recognition We recognize revenue under ASC 606, Revenue from Contracts with Customers .
We elected the practical expedient not to separate lease and non-lease components for all leases, which means all consideration that is fixed, or in-substance fixed, relating to the non-lease components will be captured as part of our lease components for balance sheet purposes. 55 Revenue recognition We recognize revenue under ASC 606, Revenue from Contracts with Customers (“ASC 606”).
The valuations performed by the third-party valuation firm engaged by management utilized pre-tax discount rates of 5.96% and 6.11% as of December 31, 2024 and December 31, 2023, respectively, and include observable market inputs, but also include unobservable inputs based on qualitative judgment related to company-specific risk factors.
The valuations performed by the third-party valuation firm engaged by management utilized pre-tax discount rates of 4.80% and 5.96% as of December 31, 2025 and December 31, 2024, respectively, and include observable market inputs, but also include unobservable inputs based on qualitative judgment related to company-specific risk factors.
The estimated fair value of our derivative asset was derived from Level 2 and Level 3 inputs, and, due to a lack of quoted prices for similar type assets, is classified in Level 3 of the fair value hierarchy.
The estimated fair value of our power purchase agreement was derived from Level 2 and Level 3 inputs, and, due to a lack of quoted prices for similar type assets, is classified in Level 3 of the fair value hierarchy.
Bitcoin earned is measured at fair value at contract inception and is recognized in revenue over the contract term as hashrate is provided. Cost of revenue Cost of revenue consists of direct production costs of bitcoin mining operations, primarily electricity expenses, as well as other facilities costs associated with our wholly-owned Odessa Facility, but excludes depreciation which is separately stated.
Bitcoin earned is measured at fair value at contract inception and is recognized in revenue over the contract term as hashrate is provided. Cost of revenue Cost of revenue consists of direct production costs of bitcoin mining operations, primarily electricity expenses, as well as other facilities costs, but excludes depreciation which is separately stated.
Power sales fluctuate each period based on power and bitcoin prices which are volatile. Equity in losses of equity investees Equity in losses of equity investees totaled $0.4 million for the year ended December 31, 2024 compared to losses of $2.5 million for the year ended December 31, 2023.
Power sales fluctuate each period based on power and bitcoin prices, which are volatile. Equity in losses of equity investees Equity in losses of equity investees totaled $20.8 million for the year ended December 31, 2025 compared to $0.4 million for the year ended December 31, 2024.
Management believes that our existing financial resources, combined with projected cash and bitcoin inflows from our data centers, our intent and ability to sell bitcoin received or earned, and our intent and ability to sell common stock through at-the-market offerings will be sufficient to enable us to meet our operating and capital requirements for at least 12 months from the date the consolidated financial statements included in this Annual Report are issued and the foreseeable future. 56 Cash Flows The following table summarizes our sources and uses of cash for the periods indicated (in thousands): Year Ended December 31, 2024 2023 Net cash used in operating activities $ (87,511) $ (94,241) Net cash provided by (used in) investing activities (192,129) 52,755 Net cash provided by (used in) financing activities 213,512 115,664 Net increase (decrease) in cash and cash equivalents $ (66,128) $ 74,178 Operating Activities Net cash used in operating activities decreased by $6.7 million to $87.5 million for the year ended December 31, 2024 from $94.2 million for the year ended December 31, 2023.
Management believes that our existing financial resources, combined with projected cash and bitcoin inflows from our data centers, our intent and ability to sell bitcoin received or earned, and our intent and ability to sell common stock through at-the-market offerings will be sufficient to enable us to meet our operating and capital requirements for at least 12 months from the date the consolidated financial statements included in this Annual Report are issued and the foreseeable future. 49 Cash Flows The following table summarizes our sources and uses of cash for the periods indicated (in thousands): December 31, 2025 2024 2023 Net cash used in operating activities $ (207,938) $ (87,511) $ (94,241) Net cash (used in) provided by investing activities (336,611) (192,129) 52,755 Net cash provided by financing activities 3,189,203 213,512 115,664 Net increase (decrease) in cash and cash equivalents, and restricted cash $ 2,644,654 $ (66,128) $ 74,178 Operating Activities Net cash used in operating activities increased by $120.4 million to $207.9 million for the year ended December 31, 2025 from $87.5 million for the year ended December 31, 2024.
As of, and for the year ended December 31, 2024, the most significant estimates inherent in the preparation of our consolidated financial statements include, but are not limited to, those related to equity instruments issued in share-based compensation arrangements, valuations of the derivative asset, determination of our asset retirement obligations and the valuation allowance associated with our deferred tax assets.
As of, and for the year ended December 31, 2025, the most significant estimates inherent in the preparation of our consolidated financial statements include, but are not limited to, those related to equity instruments issued in share-based compensation arrangements, valuations of level 3 assets and liabilities, determination of our asset retirement obligations, impairment on long-lived assets, and the valuation allowance associated with our deferred tax assets.
Specifically, the discounted cash flow estimation models contain quoted spot and forward prices for electricity, as well as estimated usage rates consistent with the terms of the Luminant Power Agreement, the initial term of which is five years.
Specifically, the discounted cash flow estimation models contain quoted spot and forward prices for electricity, as well as estimated usage rates consistent with the terms of the Luminant Power Agreement.
Asset retirement obligations Asset retirement obligations relate to the legal obligations associated with the retirement of long-lived assets that result from the construction, development and/or normal operation of a long-lived asset. We currently have one asset retirement obligation (“ARO”) recorded related to the construction of the data center and installation of the related electrical infrastructure at the Odessa Facility.
Asset retirement obligations Asset retirement obligations relate to the legal obligations associated with the retirement of long-lived assets that result from the construction, development and/or normal operation of a long-lived asset. We currently have asset retirement obligations (“ARO”) recorded related to the construction of data centers and installation of the related electrical infrastructure at the Odessa and Black Pearl Facilities.
Monthly rent payments associated with the amended lease are approximately $0.2 million. We also entered into a series of agreements with affiliates of Luminant ET Services Company LLC ( “Luminant”), including the Lease Agreement dated June 29, 2021, with amendment and restatement on July 9, 2021 (as amended and restated, the “Luminant Lease Agreement”).
We also entered into a series of agreements with affiliates of Luminant ET Services Company LLC (“Luminant”), including the Lease Agreement dated June 29, 2021, with amendment and restatement on July 9, 2021 (as amended and restated, the “Luminant Lease Agreement”).
A liability for the fair value of the ARO based on the expected present value of estimated future decommissioning costs with a corresponding increase to the carrying value of the related long-lived asset (leasehold improvements) was recorded upon commencement of the lease in November 2022.
A liability for the fair value of the ARO based on the expected present value of estimated future decommissioning costs with a corresponding increase to the carrying value of the related long-lived asset (leasehold improvements) recorded upon commencement of the respective site leases.
Change in fair value of derivative asset Change in fair value of derivative asset was a $7.9 million decrease for the year ended December 31, 2024 and was driven by the fair value of the Luminant Power Agreement.
Change in fair value of power purchase agreement Change in fair value of power purchase agreement was a $28.9 million decrease for the year ended December 31, 2025 and was driven by the fair value of the Luminant Power Agreement.
We adopted ASU 2023-08 effective January 1, 2023, which requires cryptocurrencies to be measured at fair value each reporting period with changes in fair value being reported in net income.
We adopted ASU 2023-08 Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”) effective January 1, 2023, which requires cryptocurrencies to be measured at fair value each reporting period with changes in fair value being reported in net income.
We evaluate our ability to recognize our deferred tax assets annually by considering all positive and negative evidence available as proscribed by the Financial Accounting Standards Board (“FASB”) under its general principles of Accounting Standards Codification (“ASC”) 740, Income Taxes . 53 Results of Operations The following table presents sets forth our results of operations for the periods indicated (in thousands): Year Ended December 31, 2024 2023 Revenue - bitcoin mining $ 151,270 $ 126,842 Costs and operating (expenses) income Cost of revenue (62,364) (50,309) Compensation and benefits (60,796) (57,399) General and administrative (32,655) (27,796) Depreciation and amortization (102,448) (59,093) Change in fair value of derivative asset (7,921) 26,836 Power sales 5,405 9,941 Equity in losses of equity investees (384) (2,530) Unrealized gains on fair value of bitcoin 11,313 3,299 Realized gains on sale of bitcoin 51,548 7,739 Other gains 3,333 2,355 Total costs and operating expenses (194,969) (146,957) Operating loss (43,699) (20,115) Other income (expense) Interest income 3,384 164 Interest expense (1,708) (1,999) Change in fair value of warrant liability 250 (243) Other expense (2,544) (17) Total other income (expense) (618) (2,095) Loss before taxes (44,317) (22,210) Current income tax expense (1,255) (201) Deferred income tax benefit (expense) 937 (3,366) Total income tax benefit (expense) (318) (3,567) Net loss $ (44,635) $ (25,777) Comparative Results for the Years Ended December 31, 2024 and 2023 Revenue Revenue for the year ended December 31, 2024 was $151.3 million, compared to $126.8 million for the year ended December 31, 2023, and was generated entirely from bitcoin mining operations at the Odessa Facility.
We evaluate our ability to recognize our deferred tax assets annually by considering all positive and negative evidence available as proscribed by the Financial Accounting Standards Board (“FASB”) under its general principles of Accounting Standards Codification (“ASC”) 740, Income Taxes . 46 Results of Operations The following table sets forth our results of operations for the periods indicated (in thousands): Year Ended December 31, 2025 2024 2023 Revenue - bitcoin mining $ 223,942 $ 151,270 $ 126,842 Costs and operating (expenses) income Cost of revenue (81,216) (62,364) (50,309) Compensation and benefits (79,129) (60,796) (57,399) General and administrative (36,382) (32,655) (27,796) Depreciation and amortization (198,973) (102,448) (59,093) Change in fair value of power purchase agreement (28,860) (7,921) 26,836 Power sales 7,870 5,405 9,941 Equity in losses of equity investees (20,822) (384) (2,530) Unrealized (losses) gains on fair value of bitcoin (41,603) 11,313 3,299 Realized gains on sale of bitcoin 7,126 51,548 7,739 Other operating (losses) gains (173,516) 3,333 2,355 Total costs and operating expenses (645,505) (194,969) (146,957) Operating loss (421,563) (43,699) (20,115) Other income (expense) Interest income 19,479 3,384 164 Interest expense (36,559) (1,708) (1,999) Change in fair value of warrant liability 19,290 250 (243) Other expense (406,204) (2,544) (17) Total other expense (403,994) (618) (2,095) Loss before taxes (825,557) (44,317) (22,210) Current income tax expense (956) (1,255) (201) Deferred income tax benefit (expense) 4,269 937 (3,366) Total income tax benefit (expense) 3,313 (318) (3,567) Net loss (822,244) (44,635) (25,777) Less: Net loss attributable to redeemable noncontrolling interest $ — $ — $ — Net loss available for common stockholders $ (822,244) $ (44,635) $ (25,777) Comparative Results for the Year Ended December 31, 2025 and 2024 Revenue Revenue for the year ended December 31, 2025 was $223.9 million, compared to $151.3 million for the year ended December 31, 2024, and was generated from bitcoin mining operations at the Odessa and Black Pearl Facilities.
On a state level, there have been several recent legislative efforts to manage power consumption and support grid reliability, which affects our business, as an operator of industrial-scale data centers.
Recently, there have been several legislative and regulatory efforts to manage power consumption and support grid reliability, which affect our business as an operator of industrial-scale data centers.
Our actual results may differ materially from those anticipated in these forward‑looking statements as a result of various factors, including those set forth in Part 1, Item 1A, “Risk Factors” and other factors set forth in other parts of this Annual Report.
This discussion contains forward‑looking statements based upon current plans, expectations and beliefs involving risks and uncertainties. Our actual results may differ materially from those anticipated in these forward‑looking statements as a result of various factors, including those set forth in Part II, Item 1A, “Risk Factors” and other factors set forth in other parts of this Annual Report.
Changes in fair value of the noncash consideration post-contract inception that are due to reasons other than form of consideration (other than changes in the market value of bitcoin) are measured based on the guidance on variable consideration, including the constraint on estimates of variable consideration. 63 Because the consideration to which we expect to be entitled for providing computing power is entirely variable, as well as being noncash consideration, we assess the estimated amount of the variable noncash consideration at contract inception and subsequently, to determine when and to what extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur once the uncertainty associated with the variable consideration is subsequently resolved (the “constraint”).
Because the consideration to which we expect to be entitled for providing computing power is entirely variable, as well as being noncash consideration, we assess the estimated amount of the variable noncash consideration at contract inception and subsequently, to determine when and to what extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur once the uncertainty associated with the variable consideration is subsequently resolved (the “constraint”).
For more information on our at-the-market sales agreement and our at-the-market offerings, see “Note 15, Stockholders’ Equity — At-the-Market Sales Agreement .” On August 14, 2023, we entered into a master loan agreement with Coinbase Credit, Inc., as lender, and Coinbase, Inc., as lending service provider.
For more information on our at-the-market sales agreement and our at-the-market offerings, see Note 17. Stockholders’ Equity . We have a master loan agreement with Coinbase Credit, Inc., as lender, and Coinbase, Inc., as lending service provider.
For the year ended December 31, 2024, we received net proceeds on sales of 52.8 million shares of common stock under the Amended and Restated Sales Agreement of approximately $221.7 million (net of commissions and expenses) at an average net selling price of $4.20 per share.
For the year ended December 31, 2025, we received net proceeds on sales of 33.3 million shares of common stock under the Amended and Restated Sales Agreement of approximately $195.5 million (net of commissions and expenses) at an average net selling price of $5.88 per share.
Additionally, changes in assets and liabilities resulted in an increase in cash used of $29.1 million between the years ended December 31, 2024 and 2023.
Additionally, changes in assets and liabilities resulted in an increase in cash used of $86.4 million between the year ended December 31, 2025 and 2024.
We incurred a net loss of $44.6 million for the year ended December 31, 2024, compared to a net loss of $25.8 million for the year ended December 31, 2023, representing an increase of $18.9 million.
We incurred a net loss of $822.2 million for the year ended December 31, 2025, compared to a net loss of $44.6 million for the year ended December 31, 2024, representing an increase of $777.6 million.
Non-GAAP Financial Measures We are providing supplemental financial measures for Adjusted Earnings (Loss) and Adjusted Earnings (Loss) per share - diluted, in each case that exclude the impact of (i) the non-cash change in fair value of derivative asset, (ii) share-based compensation expense, (iii) depreciation and amortization, (iv) deferred income tax expense, (v) nonrecurring gains and losses and (vi) the non-cash change in fair value of warrant liability.
Non-GAAP Financial Measures This press release includes supplemental financial measures for Adjusted Earnings (Loss) and Adjusted Earnings (Loss) per share - diluted, in each case that exclude the impact of (i) the non-cash change in fair value of derivative asset, (ii) share-based compensation expense, (iii) depreciation and amortization, (iv) deferred income tax expense, (v) nonrecurring gains and losses, (vi) the non-cash change in fair value of warrant liability, (vii) non-cash losses related to miners reclassified as held for sale, (viii) impairment of long-lived assets, and (ix) non-cash disposal of miners.
Cost of revenue Cost of revenue for the year ended December 31, 2024 was $62.4 million, compared with $50.3 million for the year ended December 31, 2023, and consisted primarily of power costs at the Odessa Facility.
Cost of revenue Cost of revenue for the year ended December 31, 2025 was $81.2 million, compared with $62.4 million for the year ended December 31, 2024, and consisted primarily of power costs at our data centers.
Investing Activities Cash flows used in investing activities increased by $245 million to $192.1 million of net cash used in investing activities for the year ended December 31, 2024 compared to $52.8 million of net cash provided by investing activities for the year ended December 31, 2023.
Investing Activities Cash used in investing activities increased by $144.5 million to $336.6 million of net cash used in investing activities for the year ended December 31, 2025 compared to $192.1 million of net cash used in investing activities for the year ended December 31, 2024.
Financing Activities Cash flows provided by financing activities increased by $97.8 million to $213.5 million net cash provided by financing activities for the year ended December 31, 2024 from $115.7 million net cash used in financing activities for the year ended December 31, 2023.
Financing Activities Cash flows provided by financing activities increased by $2,975.7 million to $3,189.2 million net cash provided by financing activities for the year ended December 31, 2025 from $213.5 million net cash provided by financing activities for the year ended December 31, 2024.
Depreciation and amortization Depreciation and amortization for the year ended December 31, 2024 was $102.4 million, an increase of $43.3 million compared to Depreciation and amortization of $59.1 million for the year ended December 31, 2023.
Depreciation and amortization Depreciation and amortization for the year ended December 31, 2025 was $199.0 million, an increase of $96.6 million compared to Depreciation and amortization of $102.4 million for the year ended December 31, 2024.
In 2025, the Texas legislature introduced legislation to support ERCOT’s grid reliability by proposing minimum transmission rates on certain large loads and removing phantom loads from its interconnection queue to enhance accuracy of actual future load growth. Such regulation may increase the costs of running our current data centers and sourcing new potential sites in Texas.
In 2025, the Texas legislature enacted legislation SB 6 to support ERCOT’s grid reliability by proposing minimum transmission rates on certain large loads and removing phantom loads from its interconnection queue to enhance accuracy of actual future load growth.
Additionally, an ARO for our Black Pearl Facility will be analyzed and recorded upon completion of construction. The estimated capitalized asset retirement costs are depreciated using the straight-line method over the estimated remaining useful life of the related long-lived asset, with such depreciation included in depreciation expense in the consolidated statements of operations.
The estimated capitalized asset retirement costs are depreciated using the straight-line method over the estimated remaining useful life of the related long-lived asset, with such depreciation included in depreciation expense in the consolidated statements of operations.
Equity in losses of equity investees consists of our 49% share in the earnings (losses) generated by our three partially-owned mining sites, and the accretion of the basis differences in our investments in the equity investees that resulted from contributions of miners during the year ended December 31, 2022.
Equity in losses of equity investees consists of our 49% share in the losses generated by our three partially-owned bitcoin mining sites, and the accretion of the basis differences in our investments in the equity investees.
General and administrative expenses General and administrative expenses represent insurance expense, rent expense, professional fees, including accounting and audit, consulting, legal, public relations and/or investor relations expenses, non-income taxes and licenses, travel, and other expenses.
Compensation and benefits Compensation and benefits includes payroll and payroll-related expenses, as well as stock based compensation awarded to employees of the Company. General and administrative expenses General and administrative expenses represent insurance expense, rent expense, professional fees, including accounting and audit, consulting, legal, public relations and/or investor relations expenses, non-income taxes and licenses, travel, and other expenses.
Our management determined that the Combined Luminant Lease Agreement contains two lease components; and the components should be accounted for together as a single lease component, because the effect of accounting for the land lease separately would be insignificant. 57 The Combined Luminant Lease Agreement commenced on November 22, 2022 and has an initial term of five years, with renewal provisions that are aligned with the Luminant Power Agreement.
Our management determined that the Combined Luminant Lease Agreement contains two lease components; and the components should be accounted for together as a single lease component, because the effect of accounting for the land lease separately would be insignificant.
Borrowings under the Coinbase Overnight Credit Facility are available on demand, open term, and collateralized by bitcoin transferred to the lending service provider’s platform. As of December 31, 2024 we had $25.0 million drawn from the Coinbase Overnight Credit Facility, $15 million of which was repaid prior to February 25, 2025.
Borrowings under the Coinbase Overnight Credit Facility are available on demand, open term, and collateralized by bitcoin transferred to the lending service provider’s platform. As of December 31, 2025 we had nothing drawn on the Coinbase Overnight Credit Facility. We also have a $100.0 million secured credit facility with Two Prime Lending Limited (“Two Prime Credit Facility”).
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes included elsewhere in this Annual Report. This discussion contains forward‑looking statements based upon current plans, expectations and beliefs involving risks and uncertainties.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following management’s discussion and analysis covers the years ended December 31 2025 and 2024. You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes included elsewhere in this Annual Report.
The decrease was primarily related to interest income on excess cash held in interest bearing accounts in the current year period. Provision for (benefit from) income taxes For the year ended December 31, 2024, we recorded a provision for income taxes of $0.3 million as a result of projected income for the current year in the jurisdictions which we operate.
Income tax benefit (expense) For the year ended December 31, 2025, we recorded a provision for income taxes of $3.3 million as a result of projected taxable income for the current year in the jurisdictions which we operate. For the year ended December 31, 2024, we recorded a provision for income taxes of $0.3 million.
As of February 25, 2025, we owe $139 million remaining for these machine purchases. 47 Factors Affecting Our Results of Operations We believe that our performance and future success depend on a number of factors that present significant opportunities for us. These factors also pose risks and challenges, including those discussed in Part I, Item 1A.
Inc. 41 Factors Affecting Our Results of Operations We believe that our performance and future success depend on a number of factors that present significant opportunities for us. These factors also pose risks and challenges, including those discussed in Part I, Item 1A. “Risk Factors” of this Annual Report. Ability to Expand HPC Business and Secure Customers.
The increase was primarily due to increased miners, and mining equipment at the Odessa Facility, as well as the change in the estimated useful life of our miners from five years to three years.
The increase was primarily due to increased miners, and mining equipment at the Odessa Facility as a result of the Odessa fleet upgrade in the fourth quarter of 2024, increased fixed assets placed into service as a result of the Black Pearl Facility commencing operations in July 2025, and the change in the estimated useful life of our miners from five years to three years as of June 1, 2024.
This change was primarily driven by $89.3 million increase in proceeds from the issuance of common stock during the year ended December 31, 2024. Contractual Obligations and Other Commitments On December 17, 2021, we entered into a lease agreement for office space, amended in the second quarter of 2024, with a term through May 2029.
Contractual Obligations and Other Commitments On December 17, 2021, we entered into a lease agreement for office space, amended in the second quarter of 2024, with a term through May 2029. Monthly rent payments associated with the amended lease are approximately $0.2 million.
See “ Risk Factors — Risks Related to Our Business, Industry and Operations — We operate in a highly competitive industry and we compete against companies that operate in less regulated environments as well as companies with greater financial and other resources, and our business, operating results, and financial condition may be adversely affected if we are unable to respond to our competitors effectively .” Global Supply Chain Constraints.
See “ Risk Factors — Risks Related to Our Business, Industry and Operations — We operate in a highly competitive, rapidly evolving industry and if we are unable to respond to our competitors effectively, it could have a material adverse effect on our business, results of operations, and financial condition .” Global Supply Chain Constraints.
Accordingly, the actual results could differ significantly from those estimates. While our significant accounting policies are described in the notes to our consolidated financial statements included elsewhere in this Annual Report, we believe that the following critical accounting policies are most important to understanding and evaluating our reported and future financial results.
While our significant accounting policies are described in the notes to our consolidated financial statements included elsewhere in this Annual Report, we believe that the following critical accounting policies are most important to understanding and evaluating our reported and future financial results. 52 Recent Accounting Pronouncements Information regarding recent accounting pronouncements applicable to us, adopted and not yet adopted as of the date of this report, is included in Note 2 to our consolidated financial statements located in “Part IV - Financial Statements, Item 1.
This change primarily related to $129.1 million of deposits primarily related to new miner purchases, and a $33.6 million increase in contributions to equity investees related to capital expenditures and operations at the Bear and Chief facilities, partially offset by a $119.0 million increase in purchases of property and equipment related to building out the Black Pearl facility, and acquisition of the Barber Lake Facility.
This change primarily related to an increase of $348.4 million in purchases of property and equipment related to building out the Black Pearl and Barber Lake Facilities and new miner purchases, partially offset by a decrease of $158.1 million in deposits on equipment and an increase of $65.9 million in proceeds from the sale of bitcoin.
We operate in a complex and rapidly evolving regulatory environment and we are subject to a wide range of laws and regulations enacted by U.S. federal, state and local governments, governmental agencies and regulatory authorities, including the SEC, the CFTC, the FTC and FinCEN, as well as similar entities in other countries.
Our operations are subject to a broad range of U.S. federal, state, and local laws and regulations, including oversight by the SEC, CFTC, FTC, FinCEN, and comparable authorities in other jurisdictions. While the regulatory environment remains complex and rapidly changing, we remain committed to responsible, innovative operations and to maintaining compliance amid regulatory uncertainty.
The increase was primarily due to an increase in headcount year-over-year. General and administrative General and administrative expenses for the year ended December 31, 2024 was $32.7 million, an increase of $4.9 million compared to $27.8 million for the year ended December 31, 2023.
General and administrative General and administrative expenses for the year ended December 31, 2025 was $36.4 million, an increase of $3.7 million compared to $32.7 million for the year ended December 31, 2024. The increase was primarily driven by an increase in legal fees related to strategic initiatives, including our lease negotiations and financing transactions.
Unless the context otherwise requires, references in this Annual Report to the “Company,” “Cipher,” “Cipher Mining,” “we,” “us” or “our” refers to Cipher Mining Inc. and its consolidated subsidiaries, unless otherwise indicated. Overview We develop and operate industrial-scale data centers. Our active portfolio and development pipeline is expected to consist of more than 3.0 GW of capacity across 11 sites.
Unless the context otherwise requires, references in this Annual Report to the “Company,” “Cipher,” “Cipher Digital,” “we,” “us” or “our” refers to Cipher Digital Inc. and its consolidated subsidiaries, unless otherwise indicated. Overview We are dedicated to developing and operating industrial-scale data centers engineered for next-generation computing at the highest standards of innovation, precision, and excellence.
Because the number of bitcoin mined is directly related to the size and efficiency of a bitcoin mining company’s fleet of miners, we believe we need to deploy increasingly sophisticated miners in ever greater quantities to remain competitive as the overall hashrate and difficulty of the Bitcoin network increases.
Because the number of bitcoin mined is directly related to the size and efficiency of a miner’s fleet, maintaining competitiveness in a rising network hashrate and difficulty environment has required continued investment in increasingly sophisticated mining equipment.
The increase year over year was primarily driven by an overall increase in bitcoin price in the current year, partially offset by the halving in April 2024 which reduced the bitcoin reward per block from 6.25 to 3.125.
The increase year over year was primarily driven by an increase in the average bitcoin price in the current year, partially offset by a decrease in the amount of bitcoin mined as a result of the bitcoin halving in April 2024.
We are accreting these basis differences over the five-year useful life of the miners. Unrealized gains on fair value of bitcoin Unrealized gains on fair value of bitcoin totaled $11.3 million and $3.3 million for the year ended December 31, 2024, and 2023, respectively.
Unrealized (losses) gains on fair value of bitcoin Unrealized losses on fair value of bitcoin totaled $41.6 million for the year ended December 31, 2025, compared to Unrealized gains on fair value of bitcoin of $11.3 million for the year ended December 31, 2024.
Realized gains on sale of bitcoin Realized gains on sale of bitcoin totaled $51.5 million and $7.7 million for the year ended December 31, 2024, and 2023, respectively.
Unrealized (losses) gains on fair value of bitcoin is driven by the cost of bitcoin mined compared to the price of bitcoin at the end of the period. Realized gains on sale of bitcoin Realized gains on sale of bitcoin totaled $7.1 million for the year ended December 31, 2025 compared to $51.5 million in the prior year period.
We believe that to maintain our competitive advantage over the long term, we must develop and maintain strong relationships across the mining rig supply chain, and strategically invest in state-of-the art miners at attractive prices, while effectively managing our fleet as it ages along the obsolescence curve. Cost and Source of Power .
We believe our focus on cost discipline, mining efficiency and controlled access to low-cost power has been a key competitive advantage, supported by capital investments in state-of-the-art miners, strong supply-chain relationships, and active fleet management as equipment ages along the obsolescence curve.
We closely monitor legislative and regulatory developments and engage in dialogue with relevant stakeholders to ensure our business practices align with the evolving legal and regulatory framework. Despite uncertainties posed by a changing regulatory landscape, we remain committed to maintaining innovative and responsible business practices in data center, bitcoin mining and HPC hosting markets.
As a data center operator in an energy-intensive industry like HPC, we take a proactive and adaptive approach to regulatory compliance by closely monitoring legislative and regulatory developments and engaging with relevant stakeholders to align our business practices with an evolving legal framework.
In 2025, the PUCT also required operators of large virtual currency mining operations connected to register their facilities with the PUCT.
These developments, along with potential requirements relating to grid stability, voltage ride-through, frequency ride-through and curtailment obligations, could increase costs, delay project timelines, or impose additional operational constraints. In 2024, the PUCT also required operators of large virtual currency mining operations connected to register their facilities with the PUCT.
As of December 31, 2024, we had cash and cash equivalents of $5.6 million, total stockholders’ equity of $682.0 million and an accumulated deficit of $181.4 million. We fund operations primarily through a combination of at-the-market stock issuances and bitcoin sales.
We fund operations primarily through a combination of at-the-market stock issuances, short-term and long-term financing arrangements, and bitcoin sales.
Financing for use of the land and substation is provided by Luminant affiliates.
The Combined Luminant Lease Agreement commenced on November 22, 2022 and has an initial term of five years, with renewal provisions that are aligned with the Luminant Power Agreement. Financing for use of the land and substation is provided by Luminant affiliates.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk. We were a smaller reporting company as defined by Rule 12b-2 of the Exchange Act, as of June 30, 2024, the last business day of our most recently completed second fiscal quarter, and are not required to provide the information under this item. Item 8. Financial Statements and Supplementary Data.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk. The following discussion of our market risks involves forward-looking statements. Actual results could differ materially from those projected in our forward-looking statements.
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For more information regarding the forward-looking statements used in this section and elsewhere in this Annual Report, see the Cautionary Note Regarding Forward-Looking Statements at the forepart of this Annual Report. Our primary market risks are described below. We use various strategies to manage these risks; however, they may still from time to time impact our consolidated financial statements.
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Bitcoin Price Risk We hold bitcoin on our inventory at fair value, and as such we are exposed to the impact of the change in bitcoin price. As of December 31, 2025, we had 1,433 bitcoin in inventory.
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A 20% decrease in the price of bitcoin would result in an estimated $25.1 million increase in Net loss for the year ended December 31, 2025. Power Price Risk The estimated fair value of our Derivative asset related to our power purchase agreement is derived from Level 2 and Level 3 inputs.
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Specifically, the discounted cash flow estimation models contain quoted spot and forward prices for electricity. A 10% decrease in power prices would result in an estimated $13.1 million decrease in the estimated fair value of the Derivative asset and increase in Net loss for the year ended December 31, 2025. Item 8. Financial Statements and Supplementary Data.

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