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What changed in Core Scientific, Inc./tx's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Core Scientific, Inc./tx'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.

+438 added−594 removedSource: 10-K (2026-03-02) vs 10-K (2025-02-27)

Top changes in Core Scientific, Inc./tx's 2025 10-K

438 paragraphs added · 594 removed · 209 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

36 edited+56 added−85 removed7 unchanged
Biggest changeThe table below summarizes the contracted capacity in megawatts (“MW”) by facility location and electric utility provider as of December 31, 2024: Electric Utility Providers Contracted Power Capacity (MW) Facility Location Tennessee Valley Authority 150 Calvert City, Kentucky ("Calvert") Murphy Electric Power Board 35 Marble, North Carolina ("Marble 1") Duke Energy 68 Marble, North Carolina ("Marble 2") Dalton Utilities 53 Dalton, Georgia ("Dalton 1 & 2") Dalton Utilities 142 Dalton, Georgia ("Dalton 3") Nodak Electric Cooperative, Inc. 100 Grand Forks, North Dakota ("Grand Forks") Denton Municipal Electric 391 Denton, Texas ("Denton") Texas New-Mexico Power 253 Pecos, Texas ("Cottonwood”) Oklahoma Gas & Electric 100 Muskogee, Oklahoma ("Muskogee 1") Austin Energy 15 Austin, Texas Alabama Power Company 10 Auburn, Alabama Total 1,317 Facility Development Our experienced in-house facility development teams, utilizing from time to time the expertise of third parties, focus on sourcing, evaluating, designing, engineering, and developing the facilities where we host our customers HPC colocation needs and facilities where we earn digital assets, primarily bitcoin, through self-mining.
Biggest changeWe value our relationships with our power providers and work to leverage our operating capabilities to take advantage of any interruptible programs and cost saving opportunities. 10 Table of Contents The table below summarizes the gross utility power capacity in MW by facility location and electric utility provider as of December 31, 2025 : Electric Utility Providers Gross Utility Power Capacity (MW) Facility Location Tennessee Valley Authority 150 Paducah-Calvert City, Kentucky Murphy Electric Power Board 35 Marble, North Carolina Duke Energy 82 Marble, North Carolina Dalton Utilities 195 Dalton, Georgia Nodak Electric Cooperative, Inc. 100 Grand Forks, North Dakota Denton Municipal Electric 394 Dallas-Denton, Texas Texas New-Mexico Power 300 Pecos, Texas Oklahoma Gas & Electric 100 Muskogee, Oklahoma Austin Energy 20 Austin, Texas Alabama Power Company 50 Auburn, Alabama Total 1,426 Facility Development Our experienced in-house facility development teams, utilizing from time to time the expertise of third parties, focus on sourcing, evaluating, designing, engineering, and developing the facilities where we host our customers’ HPC colocation needs and facilities where we earn digital assets, primarily bitcoin, through self-mining.
Our Digital Asset Hosted Mining operation segment generates revenue through the sale of electricity-based consumption contracts for our hosting services, which are recurring in nature. Our Digital Asset Hosted Mining operation segment provides a full suite of services to our digital asset mining customers.
Our Digital Asset Hosted Mining segment generates revenue through the sale of electricity-based consumption contracts for our hosting services, which are recurring in nature. Our Digital Asset Hosted Mining operation segment provides a full suite of services to our digital asset mining customers.
Many of these competitors are better established, have better brand recognition, and are well capitalized, and organized to take advantage of certain tax benefits for their investors, lowering their external cost of capital.
Many of these competitors are more established, have better brand recognition, are well capitalized, and are organized to take advantage of certain tax benefits for their investors, lowering their external cost of capital.
As for our values, they include: (1) operating with integrity and maintaining the highest standards, and supporting each other as a single team, to ensure our collective success (“Team 8 Table of Contents First”); (2) acting as owners of the business, in the interest of all stakeholders, holding ourselves and each other accountable for our actions and outcomes (“Extreme Ownership”); (3) relentlessly seeking to accelerate the world’s digital transformation and improve the way we do business to reduce costs, improve quality and grow (“Innovate & Simplify”); and (4) seeking to maximize transparency with all our stakeholders to ensure understanding, alignment and constructive dialog (“Transparency”).
As for our values, they include : (1) operating with integrity and maintaining the highest standards, and supporting each other as a single team, to ensure our collective success (“Team First”); (2) acting as owners of the business, in the interest of all stakeholders, holding ourselves and each other accountable for our actions and outcomes (“Extreme Ownership”); (3) relentlessly seeking to accelerate the world’s digital transformation and improve the way we do business to reduce costs, improve quality and grow (“Innovate & Simplify”); and (4) seeking to maximize transparency with all our stakeholders to ensure understanding, alignment and constructive dialog (“Transparency”) .
HPC colocation leases may include all or portions of a data center, where customers may also lease office space to support their colocation operations where revenue is primarily based on power usage as well as square footage.
HDC colocation leases may include all or portions of a data center, where customers may also lease office space to support their colocation operations where revenue is primarily based on power usage as well as square footage.
We primarily engage third parties to construct our facilities according to our design specifications. Mining Equipment Our mining operations rely on specialized digital asset mining hardware equipped with ASIC chips ("ASICs") designed to solve cryptographic hashes for blockchain networks using the SHA-256 algorithm.
We primarily engage third-party contractors to construct our facilities according to our design specifications. Mining Equipment Our mining operations rely on specialized digital asset mining hardware equipped with ASIC chips ("ASICs") designed to solve cryptographic hashes for blockchain networks using the SHA-256 algorithm.
Our bitcoin self-mining operations compete globally with other mining operations throughout the world to complete new blocks on the blockchain and earn the reward in the form of bitcoin.
Our digital asset self-mining operations compete globally with other mining operations throughout the world to complete new blocks on the blockchain and earn the reward in the form of bitcoin.
Solving these algorithms is also known as “solving or completing a block.” In the Bitcoin network, solving a block results in a reward of bitcoin in a process known as “mining.” These rewards of bitcoin currently can be sold profitably when the sale price of bitcoin exceeds the cost of mining, which generally consists of the cost of mining hardware, the cost of the electrical power to operate the machine, and other facility and overhead costs associated with housing, operating and supporting the equipment.
In the Bitcoin network, solving a block results in a reward of bitcoin in a process known as “mining.” These rewards of bitcoin currently can be sold profitably when the sale price of bitcoin exceeds the cost of mining, which generally consists of the cost of mining hardware, the cost of the electrical power to operate the machine, and other facility and overhead costs associated with housing, operating and supporting the equipment.
Prior to April 1, 2024, we operated only in the Digital Asset Self-Mining and Digital Asset Hosted Mining segments.
Prior to April 1, 2024, we operated primarily in the Digital Asset Self-Mining and Digital Asset Hosted Mining segments.
We currently make our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy reports and all amendments to those reports available free of charge on our website as soon as reasonably practicable after we file such reports with, or furnish such reports to, the SEC.
Available Information We currently make our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy reports and all amendments to those reports available free of charge on our website at www.corescientific.com as soon as reasonably practicable after we file such reports with, or furnish such reports to, the SEC.
Our corporate website address is www.corescientific.com. Information contained on or accessible through our website is not a part of this Annual Report on Form 10-K, and the inclusion of our website address in this Annual Report on Form 10-K is an inactive textual reference.
Information contained on or accessible through our website is not a part of this Annual Report on Form 10-K, and the inclusion of our website address in this Annual Report on Form 10-K is an inactive textual reference.
These agreements provide for both firm and interruptible power supply through each provider’s transmission and distribution systems to dedicated substations owned by the power provider, the local utility or the 7 Table of Contents Company.
These agreements provide for both firm and interruptible power supply through each provider’s transmission and distribution systems to dedicated substations owned by the power provider, the local utility or the Company.
In addition, there are increasing concerns over the quantity of energy, particularly from non-renewable sources, used for bitcoin mining and its effects on the environment (with lesser recognition for any positive contributions by bitcoin mining to the operation of existing electrical grids and systems).
Some of these plants may be those our operations rely upon for power. In addition, there are increasing concerns over the quantity of energy, particularly from non-renewable sources, used for bitcoin mining and its effects on the environment (with lesser recognition for any positive contributions by bitcoin mining to the operation of existing electrical grids and systems).
We provide deployment, monitoring, troubleshooting, optimization and maintenance of our customers’ digital asset mining equipment and provide necessary electrical power, repair and other infrastructure services necessary for our customers to operate, maintain and efficiently mine digital assets. We do not expect to further expand our Digital Asset Hosted Mining operations in 2025 and future years.
We provide deployment, monitoring, troubleshooting, optimization and maintenance of our customers’ digital asset mining equipment and provide necessary electrical power, repair and other infrastructure services necessary for our customers to operate, maintain and efficiently mine digital assets.
Segments We have three operating segments: “Digital Asset Self-Mining,” consisting of performing digital asset mining for our own account, “Digital Asset Hosted Mining,” consisting of providing hosting services to third parties for digital asset mining, and “HPC Hosting,” consisting of providing hosting services to third parties for graphics processing unit (“GPU”) based HPC hosting operations.
Business Operations and Segments We have three operating segments: “Colocation,” consisting of providing high-density colocation services to third parties for AI / HPC operations, “Digital Asset Self-Mining,” consisting of performing digital asset mining for our own account, and “Digital Asset Hosted Mining,” consisting of providing hosting services to third parties for digital asset mining.
We believe that our experience in the digital asset mining market, our ability to rapidly deliver scalable, purpose-built data centers, combined with cutting-edge, energy-efficient technologies, will enable us to compete favorably within the HPC market.
We believe that our experienced data center and engineering leadership team, our proven ability to rapidly deliver scalable, purpose-built data centers, combined with cutting-edge, energy-efficient technologies, will enable us to compete favorably within the HDC market.
Intellectual Property We seek protection for our intellectual property as appropriate. To establish and protect our proprietary rights, we rely upon a combination of patent, copyright, trade secret and trademark laws and contractual restrictions such as confidentiality agreements, licenses and intellectual property assignment agreements.
To establish and protect our proprietary rights, we rely upon a combination of patent, copyright, trade secret and trademark laws and contractual restrictions such as confidentiality agreements, licenses and intellectual property assignment agreements. We have filed over 130 patent applications in technologies such as blockchain, data center management, infrastructure and cooling.
We obtain many components from software developed and released by contributors to independent open-source components of our platform. Open-source licenses grant licensees broad permissions to use, copy, modify and redistribute those open-source components of our platform. As a result, open-source development and licensing practices can limit the value of our software copyright assets.
Moreover, our platform incorporates software components licensed to the general public under open-source software licenses. We obtain many components from software developed and released by contributors to independent open-source components of our platform. Open-source licenses grant licensees broad permissions to use, copy, modify and redistribute those open-source components of our platform.
Seasonality The Company’s production of bitcoin and its HPC operation can be affected when extreme temperatures in locations where its data centers operate result in local power price volatility that necessitates economic or grid stabilization-driven curtailment. Our HPC data centers run on back-up generators in the event of a power outage or curtailment.
Seasonality The Company’s colocation operations can be affected when extreme temperatures in locations where its data centers operate result in local power price volatility that necessitates economic or grid stabilization-driven curtailment.
Our Digital Asset Self-Mining operation segment generates revenue from the deployment and operation our own large fleet of computers (“miners”) within our owned digital infrastructure as part of a pool of users that process transactions conducted on one or more blockchain networks. In exchange for this activity, we receive digital assets in the form of bitcoin.
Our Digital Asset Self-Mining segment generates revenue from the deployment and operation of our own large fleet of specialized computers, or “miners” within our owned digital infrastruc ture as part of a pool of users that solve complex cryptographic algorithms to validate transactions conducted on one or more blockchain networks.
Our mission and values reflect who we are and the way our employees interact with one another, our customers, partners, and shareholders. Working together and guided by our mission and values, we are committed to creating a company where everyone is included and respected, and where we support each other in reaching our full potential.
Our mission and values reflect who we are and the way our employees interact with one another, our customers, partners, and shareholders. Working together and guided by our mission and values, we are committed to creating a company where employees have the opportunity to advance their careers and make a difference in our business performance.
As of December 31, 2024, we had deployed approximately 171,100 bitcoin miners, which number consists of approximately 164,000 self-miners and approximately 7,100 hosted miners, which represented 19.1 exahash per second (“EH/s”) and 1.0 EH/s for self-miners and hosted miners, respectively. Human Resources As of December 31, 2024, we had 325 full-time employees.
As of December 31, 2024 , we deployed approximately 171,100 bitcoin miners, which number consists of approximately 164,000 self-miners and approximately 7,100 hosted miners, which represented 19.1 EH/s and 1.0 EH/s for self-miners and hosted miners, respectively. Competition Each of the HDC and bitcoin mining markets are highly competitive.
Our mission and values are the foundation for our Company culture. More specifically, our mission is to accelerate digital innovation by scaling high-value computing rapidly, efficiently, and responsibly.
None of our employees are represented by a labor union or covered by collective bargaining agreements, and we have not experienced any work stoppages. Our mission and values are the foundation for our Company culture. More specifically, our mission is to accelerate digital innovation by scaling high-density computing rapidly, efficiently, and responsibly.
Several public companies (traded in the United States, Canada, and internationally), such as the following, may be considered self-mining and hosting competitors to the Company: • Argo Blockchain PLC; • Bit Digital, Inc.; • Bitfarms Ltd.; 9 Table of Contents • Cipher Mining Inc.; • CleanSpark, Inc.; • Hive Blockchain Technologies Inc.; • Hut 8 Corp.; • Marathon Digital Holdings, Inc.; • Riot Platforms, Inc.; and • TeraWulf Inc.
Several public companies (traded in the United States, Canada, and internationally), such as the following, may be considered self-mining and hosting competitors to the Company: • Applied Digital Corporation • Bit Digital, Inc.; • Bitfarms Ltd.; • Cipher Mining Inc.; and • CleanSpark, Inc. Human Resources As of December 31, 2025 , we had 325 full-time employees.
Furthermore, the laws of certain countries do not protect proprietary rights to the same extent as the laws of the United States, and we therefore may be unable to protect our proprietary technology in certain jurisdictions. Moreover, our platform incorporates software components licensed to the general public under open-source software licenses.
These laws, procedures and restrictions provide only limited protection, and any of our intellectual property rights may be challenged, invalidated, circumvented, infringed or misappropriated. Furthermore, the laws of certain countries do not protect proprietary rights to the same extent as the laws of the United States, and we therefore may be unable to protect our proprietary technology in certain jurisdictions.
Suppliers Power Providers Historically, we have contracted with large electric utility providers to provide a sufficient supply of electricity to power the mining operations in our facilities. We have fixed, variable and interruptible bi-lateral power supply consumption agreements with electric power suppliers at our various facilities.
We do not expect to further expand our Digital Asset Hosted Mining operations in 2026 and future years and may not derive consequential digital asset hosting revenue in future periods . Suppliers Power Providers We have fixed, variable and interruptible bi-lateral power supply consumption agreements with electric power suppliers at our various facilities.
Our mining operations also compete with non-digital asset operations for access to suitable real estate and access to affordable and dependable electric power. In addition to competing to solve new blocks, we compete to acquire new miners, to raise capital, to obtain access to facilities for the location of mining operations, and to develop or acquire new technologies.
Our mining operations also compete with non-digital asset operations for access to suitable real estate and access to affordable and dependable electric power. Our hosting activities compete with a large number of other hosting operations.
We pursue the registration of our domain names, trademarks and service marks in the United States and in certain locations outside the United States.
As a result, open-source development and licensing practices can limit the value of our software copyright assets. We pursue the registration of our domain names, trademarks and service marks in the United States and in certain locations outside the United States. To protect our brand, we file trademark registrations in some jurisdictions.
Digital asset generation from the Company’s mining operations may also vary depending on the Company’s total hash rate at a given point in time relative to the total hash rate of the Bitcoin network. Corporate Information Our principal executive offices are located at 838 Walker Road, Suite 21-2105, Dover, Delaware 19904, and our telephone number is (512) 402-5233.
Corporate Information Our principal executive offices are located at 838 Walker Road, Suite 21-2105, Dover, Delaware 19904, and our telephone number is (512) 402-5233. Our corporate website address is www.corescientific.com.
All of our employees are located in the United States in more than 30 states. We also engage consultants and contractors to supplement our permanent workforce on an as needed basis. None of our employees are represented by a labor union or covered by collective bargaining agreements, and we have not experienced any work stoppages.
All of our employees are located in the United States in 26 states . We may also engage consultants and contractors from time to time to supplement our regular full-time workforce on an as needed 12 Table of Contents basis.
In general, efforts are being made by government regulators and others to reduce greenhouse gas emissions, particularly those from coal combustion power plants. Some of these plants may be those our operations rely upon for power.
Environmental The effects of human activity on global climate change have attracted considerable public and scientific attention, as well as the attention of the United States and other foreign governments. In general, efforts are being made by government regulators and others to reduce greenhouse gas emissions, particularly those from coal combustion power plants.
In the HPC market, we compete with numerous established data center providers, including Equinix, Inc., Digital Realty Trust, NTT, Switch, Inc., and CyrusOne Inc., as well as private operators specializing in HPC or colocation services, and digital asset miners looking to convert existing digital mining facilities into HPC colocation facilities.
In the HDC market, we compete with numerous established data center providers, including both public and private companies such as: • Aligned Data Centers; • Compass Datacenters; • Equinix, Inc.; • Digital Realty Trust; • NTT; • QTS; 11 Table of Contents • Switch, Inc.; • Vantage Data Centers; and • CyrusOne Inc.
Item 1. Business Overview Core Scientific, Inc. (“we,” “us,” “our,” the “Company,” “Core Scientific,” or “Core”) is a leader in designing, building and operating digital infrastructure for high-performance computing. Since our inception in 2018, we have been a premier provider and operator of dedicated, purpose-built facilities and software solutions for digital asset mining for ourselves and our third-party customers.
Item 1. Business Overview Core Scientific, Inc. (“we,” “us,” “our,” the “Company,” “Core Scientific,” or “Core”) designs, builds and operates large-scale, purpose-built data centers that support high-density colocation services and digital asset mining for both our own account and to a lesser extent, third- party customers.
We maintain a policy requiring our employees, contractors, consultants and other third parties to enter into confidentiality and proprietary rights agreements to control access to our proprietary information. These laws, procedures and restrictions provide only limited protection, and any of our intellectual property rights may be challenged, invalidated, circumvented, infringed or misappropriated.
The patent applications have been filed in the United States and in certain locations outside the United States. A subset of the patent applications have issued as patents. We maintain a policy requiring our employees, contractors, consultants and other third parties to enter into confidentiality and proprietary rights agreements to control access to our proprietary information.
Available Information Our principal executive offices and telephone number are listed on the cover page of this Annual Report on Form 10-K and our website address is www.corescientific.com. The contents of our website are not part of this Annual Report on Form 10-K and our internet address is included in this document as an inactive textual reference only.
The information contained on the websites referenced in this Annual Report on Form 10-K is not incorporated by reference into this filing, and references to such website addresses are intended to be inactive textual references only. 15 Table of Contents
Our HPC Hosting operation segment generates revenue by providing colocation, cloud and connectivity services to customers in exchange for a fee. Our HPC Hosting operation segment provides colocation, facilities operations, security and other services to third-party HPC customers to support workloads for machine learning and artificial intelligence.
We intend to convert every megawatt in our portfolio to HDC infrastructure over the next three years. Our Colocation segment provides space, power, cooling, facilities operations, security and other services to third-party customers to support workloads for machine learning and artificial intelligence. Under these contracts, customers pay fixed payments (based on electric capacity) and variable payments on a recurring basis.
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We believe that opportunities for growth exist in various applications of our data centers for third-party customers focused on cloud computing as well as machine learning and artificial intelligence, and in March 2024, we announced the provision of digital infrastructure colocation services to a third party engaged in high-performance computing (“HPC”).
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Our data centers are optimized for power-intensive, mission-critical computing workloads, with a focus on artificial intelligence (“AI”) and other high-performance computing (“HPC”) applications. As of December 31, 2025, we owned or leased ten data centers across seven U.S. states, representing approximately 1.4 gigawatts (“GW”) of gross utility power capacity, or approximately 920 megawatts (“MW”) of total leasable customer power capacity.
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In May 2024, we expanded our relationship with CoreWeave, Inc. (“CoreWeave”) the artificial intelligence (“AI”) hyperscaler, to provide approximately 200 megawatts (“MW”) of digital infrastructure to host CoreWeave’s HPC operations and provided CoreWeave options with respect to the Company’s existing facilities to provide approximately 500 MW of digital infrastructure on similar terms.
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A portion of these facilities were in operation as of December 31, 2025, with the remainder under construction or in various stages of development. Since its inception in 2017, Core Scientific has been focused on building and operating high-power, purpose-built data centers, initially for digital asset mining and hosting third-party digital asset mining customers.
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In June and August 2024, the Company announced CoreWeave’s execution of options to secure an additional 70 MW and 112 MW, respectively, of infrastructure to host its HPC operations. In October 2024, the Company announced that CoreWeave had exercised its final option for an additional 120 MW of infrastructure.
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The Company historically targeted sites with abundant, reliable and cost-effective power, strong network connectivity, available land or existing buildings suitable for redevelopment, attractive economic incentives, and access to utilities.
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These new agreements leverage the Company’s existing digital infrastructure and expertise in third-party hosting solutions. We believe that using our existing infrastructure for HPC hosting operations will provide more consistent dollar-based revenue and represents substantially less risk than our traditional digital asset self-mining or our digital asset hosted mining operations.
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In developing its facilities, the Company typically designed powered shells and sufficient fiber connectivity to high performance data center standards, enabling flexibility to support increasing power densities and evolving compute requirements over time.
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As a result, we intend to focus our business development and marketing efforts on expanding our HPC hosting customer base.
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In 2024, the Company announced its strategy to focus its data center infrastructure and expertise to the high-density colocation compute business and in February 2024, entered into long-term contract with CoreWeave, Inc. (“CoreWeave”) to deliver 16 MW of infrastructure at our Austin, Texas facility.
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As a result, we initiated a significant strategic transition from bitcoin mining to hosting and colocation services for customers employing hosting services for HPC workloads such as artificial intelligence-related applications. 4 Table of Contents During 2024, we were substantially engaged in constructing, refurbishing, reallocating or converting a substantial portion of our ten facilities in Alabama (1), Georgia (2), Kentucky (1), North Carolina (1), North Dakota (1), Oklahoma (1), and Texas (3) to support artificial intelligence-related workloads, primarily for our one existing HPC customer, but also to support our commitment to meeting the growing demand for HPC solutions and diversifying our revenue streams.
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In June 2024, Core Scientific announced that it had entered another contract with CoreWeave for 200 MW of leased customer power capacity. Through the exercise of several contractual options during 2024 and into early 2025, total leased customer power capacity under the relationship with CoreWeave increased to approximately 590 MW of leased power capacity.
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Currently, the vast majority of our revenue is from mining bitcoin for our own account (‘self-mining”). We remain committed to maintaining the efficiency of our digital asset mining while capitalizing on the opportunities presented by the growing HPC hosting business.
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In 2025, we derived the majority of our revenue from earning digital assets for our own account but expect that a meaningful amount of our revenue will be derived from high-density colocation (“HDC”) in 2026, as billable customer power capacity gets delivered to our end customer.
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Business Strategy Our business strategy is to grow our revenue and profitability by expanding our existing large-scale data center infrastructure portfolio configured for specialized computers performing specific, high-value applications such as cloud computing, machine learning and artificial intelligence, and maximizing the portion of our existing infrastructure portfolio contracted for HPC hosting.
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We intend to convert every megawatt in our portfolio to high-density colocation infrastructure over the next three years, while continuing to digital asset mine during conversion only to meet existing power commitments at facilities where HDC conversion is taking place or to honor a small number of digital asset mining hosting commitments.
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We intend to continue to strategically develop and make operational the infrastructure necessary to support our existing contractual commitments to our existing HPC customer and to support expected customer growth and additional demand by leveraging our data center expertise and capabilities.
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We are also actively evaluating opportunities to acquire new sites, including land and power capacity, to expand our data center footprint beyond our current portfolio.
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We intend to seek additional opportunities and to engage additional customers in the HPC Hosting segment to expand our business into these areas using our knowledge, expertise, existing and future infrastructure where favorable market opportunities exist.
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Industry Background We participate in the third-party colocation market, providing customers with access to purpose-built data center environments that deliver secure physical space, reliable electrical power, cooling systems and facility operations required to support IT and networking equipment.
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Our strategy is focused on hyperscale cloud-based providers and enterprises, including potential customers we believe have significant data center infrastructure needs that have not yet been outsourced or will require additional data center space and power to support their growth and their increasing reliance on technology infrastructure in their operations.
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Customers deploy and manage their own hardware, while the operator designs, builds and operates the underlying infrastructure needed to maintain uptime, power availability and cooling requirements.
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We believe our capabilities for serving the needs of large hyperscale providers and enterprises will continue to enable us to capitalize on the growing demand for outsourced data center facilities in our markets and in new markets where our customers are located or plan to be located in the future.
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Customers often utilize third-party colocation services as part of a broader infrastructure strategy to accelerate deployment timelines, expand into additional geographic markets or optimize capital allocation, while retaining control over their hardware, software and data. Within the third-party colocation market, providers offer wholesale, retail or hybrid colocation services, which differ primarily based on contract size, deployment scale and customer profile.
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Operations Blockchain and Bitcoin Blockchains are decentralized digital ledgers that record and enable secure peer-to-peer transactions without third-party intermediaries. Blockchains enable the existence of bitcoin by allowing participants to confirm transactions without the need for a central certifying authority.
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Our operations are primarily focused on wholesale colocation, which typically involves large, long-term agreements with a limited number of customers, often with initial terms of 10 years or more for dedicated suites, halls or entire buildings, with leased customer power capacity that can range from several megawatts to tens or hundreds of megawatts per customer.
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When a participant requests a transaction, a peer-to-peer computer network consisting of nodes validates the transaction and the user’s status using known algorithms. After the transaction is verified, it is combined with other transactions to create a new block of data for the ledger.
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Wholesale customers are commonly hyperscale cloud providers, AI and other HPC operators and large enterprises with the operational capability to manage hardware and networking at scale. Wholesale colocation agreements are commonly structured as either triple-net or modified gross leases, which differ in how operating costs are allocated between the operator and the customer.
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The new block is added to the existing blockchain in a way that is permanent and unalterable, thereby completing the transaction.
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Under a triple-net structure, the customer is generally responsible for substantially all operating expenses associated with the leased space, including power, maintenance, taxes, insurance and other facility-related costs. Modified gross leases, by contrast, typically involve the operator retaining responsibility for certain facility-level operating expenses, while the customer is billed separately for power and, in some cases, other variable operating costs.
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As each new block refers back to and “connects” with the immediately prior solved block associated with it, the addition of a new block adds to the blockchain in a manner similar to a new link being added to a chain.
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Both lease 8 Table of Contents structures are frequently paired with long-term, take-or-pay contractual commitments, under which the customer is obligated to pay for leased customer power capacity regardless of utilization, providing operators with revenue visibility over the contract term.
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Bitcoin, known as a cryptocurrency, is a medium of exchange that uses encryption techniques to control the creation of units and to verify the transfer of funds. Consumers use digital assets such as bitcoin because they offer lower cost and faster peer-to-peer payment options without the need to provide personal details.
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The colocation industry has evolved significantly in recent years, driven in particular by the large-scale deployment of infrastructure to support AI and other HPC workloads. We expect demand for AI-focused compute resources to continue to grow significantly as generative AI adoption accelerates and AI use cases expand across industries.
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Every single transaction, and the ownership of every single digital asset in circulation, is recorded in the blockchain, which effectively contains a record of all account balances. Companies and individuals engaged in mining use powerful miners that tally digital asset transactions to operate the blockchain.
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These compute-intensive environments require substantially higher rack power densities, specialized cooling technologies and access to large-scale, power capacity. As these requirements continue to increase, demand is shifting toward operators capable of supporting high-density, accelerator-driven workloads and delivering the associated power and cooling infrastructure at scale, trends that are expected to continue shaping the industry.
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These miners update stored records each time a transaction is made and ensure the authenticity of information. Each account on the blockchain is identified solely by its unique public key, which renders it effectively anonymous, and is secured with its associated private key, which is kept secret, like a password.
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Key Industry Trends Significant increase in power density and infrastructure requirements driven by AI and HPC. The rapid expansion of AI and other HPC workloads is driving materially higher infrastructure requirements across the colocation industry.
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The combination of private and public cryptographic keys constitutes a secure digital identity in the form of a digital signature, providing strong control of ownership. No single entity owns or operates the network associated with these bitcoin. The infrastructure that enables the network is collectively maintained by a decentralized public user base.
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Traditional enterprise and cloud deployments have historically operated at rack power densities of approximately 5 to 15 kilowatts per rack, whereas AI and HPC workloads increasingly require 50 kilowatts per rack or more, with deployments increasingly exceeding 100 kilowatts per rack.
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Because the network operates in a decentralized manner, it does not rely on governmental authorities or financial institutions to create, transmit or determine the value of bitcoin.
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Supporting these higher-density environments requires substantially greater electrical capacity, advanced cooling technologies and access to large, contiguous blocks of power, and introduces additional complexity in facility design and construction. As a result, traditional data center designs optimized for air-cooled environments are often insufficient for these workloads, and new developments increasingly incorporate liquid-cooled or hybrid cooling architectures.
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Rather, value is determined by market factors, primarily the supply and demand for the units, with prices being set in transfers by mutual agreement or through barter among transacting parties, as well as by the number of counterparties that may accept bitcoin.
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These shifts place greater importance on operators with the technical, engineering and construction experience required to design, build and operate high-density data center infrastructure at scale.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur ability to timely and successfully convert our existing facilities to support our HPC customers will be negatively impacted by: • deficiencies, delays or failures in performance by construction firms retained to build, build-out or remodel our facilities; • disruptions in the supply chain or excessive demand for construction materials, electrical transformers, generators and other materials used in high performance data centers that delay receipt of, or make unavailable, required supplies, materials and equipment; • difficulties in generating sufficient cash flow or obtaining necessary financing that delay or prevent the completion of planned facilities; • failure to timely pay construction costs and expenses, including failure on the part of our customers to pay or reimburse costs and expenses when due; or • delays in obtaining necessary government approvals, receipt of power allocations, land acquisitions and easements, as well as change orders, modification to designs and construction plans that delay construction, increase costs or that reduce the usable electrical power footprint.
Biggest changeOur ability to timely and successfully convert our existing facilities or construct new facilities to support our high-density colocation customers may be negatively impacted by: • deficiencies, delays or failures in performance by construction firms retained to build, build-out or remodel our facilities; • disruptions in the supply chain or excessive demand for construction materials, electrical transformers, generators and other materials used in high performance data centers that delay receipt of, or make unavailable, required supplies, materials and equipment; • difficulties in generating sufficient cash flow or obtaining necessary financing that delay or prevent the completion of planned facilities; • failure on the part of our customers to timely pay or reimburse construction costs and expenses when due; or failure on our part to timely pay construction costs and expenses; • delays in obtaining necessary government approvals, receipt of power allocations, land acquisitions and easements, as well as change orders, modification to designs and construction plans that delay construction, increase costs or that reduce the usable electrical power footprint; • customer-initiated changes in project design, specification, scope, or delivery sequencing; or • severe weather events, natural disasters, or other force majeure conditions, including hurricanes, tornadoes, winter storms, extreme heat, or flooding, that disrupt construction timelines, damage facilities or equipment, or limit the availability of construction labor or materials.
The Company will settle conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at its election.
The Company will settle conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at its election.
We believe the value of digital assets related to our business is dependent on a number of factors, including, but not limited to: • global digital asset supply; • global digital asset demand, which can be influenced by the growth of retail merchants’ and commercial businesses’ acceptance of digital assets as payment for goods and services, the security of online digital asset exchanges and digital wallets that hold digital assets, the perception that the use and holding of digital assets is safe and secure, transaction fees, and the regulatory restrictions on their use; • investors’ expectations with respect to the rate of inflation of fiat currencies; • investors’ expectations with respect to the rate of deflation of digital assets; • cyber theft of digital assets from online wallet providers, or news of such theft from such providers or from individuals’ online wallets; • the availability and popularity of businesses that provide digital asset-related services; • fees associated with processing a digital asset transaction; • changes in the software, software requirements or hardware requirements underlying digital assets; • changes in the rights, obligations, incentives, or rewards for the various participants in digital asset mining; • interest rates; • currency exchange rates, including the rates at which digital assets may be exchanged for fiat currencies; • fiat currency withdrawal and deposit policies on digital asset exchanges and liquidity on such exchanges; • interruptions in service or failures of major digital asset exchanges; • investment and trading activities of large investors and holders, including private and registered funds, that may directly or indirectly invest in or hold digital assets; • momentum pricing; • monetary policies of governments, trade restrictions, currency devaluations and revaluations; • regulatory measures, if any, that affect the use of digital assets, restrict digital assets as a form of payment, or limit the purchase of digital assets; • global or regional political, economic or financial events and conditions; • expectations that the value of digital assets will change in the near or long term.
We believe the value of digital assets related to our business is dependent on a number of factors, including, but not limited to: • global digital asset supply; • global digital asset demand, which can be influenced by the growth of retail merchants’ and commercial businesses’ acceptance of digital assets as payment for goods and services, the security of online digital asset exchanges and digital wallets that hold digital assets, the perception that the use and holding of digital assets is safe and secure, transaction fees, and the regulatory restrictions on their use; • investors’ expectations with respect to the rate of inflation of fiat currencies; • investors’ expectations with respect to the rate of deflation of digital assets; • cyber theft of digital assets from online wallet providers, or news of such theft from such providers or from individuals’ online wallets; • the availability and popularity of businesses that provide digital asset-related services; • fees associated with processing a digital asset transaction; • changes in the software, software requirements or hardware requirements underlying digital assets; • changes in the rights, obligations, incentives, or rewards for the various participants in digital asset mining; 39 Table of Contents • interest rates; • currency exchange rates, including the rates at which digital assets may be exchanged for fiat currencies; • fiat currency withdrawal and deposit policies on digital asset exchanges and liquidity on such exchanges; • interruptions in service or failures of major digital asset exchanges; • investment and trading activities of large investors and holders, including private and registered funds, that may directly or indirectly invest in or hold digital assets; • momentum pricing; • monetary policies of governments, trade restrictions, currency devaluations and revaluations; • regulatory measures, if any, that affect the use of digital assets, restrict digital assets as a form of payment, or limit the purchase of digital assets; • global or regional political, economic or financial events and conditions; • expectations that the value of digital assets will change in the near or long term.
Our success also depends in large part on our ability to attract additional customers and retain our existing customer for our HPC Hosting capabilities in a profitable manner, which we may not be able to do if: • there is a reduction in the demand for HPC hosting applications such as cloud computing, machine learning and artificial intelligence; • rapid innovation and technological disruption in cloud computing, machine learning and artificial intelligence decrease computational requirements and therefore lower demand for our HPC hosting offerings; • high energy costs, supply chain disruptions (including labor availability), government regulation, and compliance costs increase HPC hosting service costs, reduces potential demand for services and reduce revenue and profitability; • we fail to provide competitive hosting terms or effectively market them to potential customers; • we provide hosting services that are deemed by existing and potential customers or suppliers to be inferior to those of our competitors, or that fail to meet customers’ or suppliers’ ongoing and evolving program qualification standards, based on a range of factors, including available power, preferred design features, security considerations and connectivity; • businesses decide to host internally as an alternative to the use of our services; • we fail to successfully communicate the benefits of our services to potential customers; • we are unable to strengthen awareness of our brand; or • we are unable to provide services that our existing and potential customers desire.
Our success also depends in large part on our ability to attract additional customers and retain our existing customer for our high-density colocation capabilities in a profitable manner, which we may not be able to do if: • there is a reduction in the demand for high-density colocation applications such as cloud computing, machine learning and artificial intelligence; • rapid innovation and technological disruption in cloud computing, machine learning and artificial intelligence decrease computational requirements and therefore lower demand for our high-density colocation offerings; • high energy costs, supply chain disruptions (including labor availability), government regulation, and compliance costs increase high-density colocation service costs, reduces potential demand for services and reduce revenue and profitability; • we fail to provide competitive hosting terms or effectively market them to potential customers; • we provide hosting services that are deemed by existing and potential customers or suppliers to be inferior to those of our competitors, or that fail to meet customers’ or suppliers’ ongoing and evolving program qualification standards, based on a range of factors, including available power, preferred design features, security considerations and connectivity; • businesses decide to host internally as an alternative to the use of our services; • we fail to successfully communicate the benefits of our services to potential customers; • we are unable to strengthen awareness of our brand; or • we are unable to provide services that our existing and potential customers desire.
Consequently, there is a lack of financial incentive for developers to maintain or develop networks and the core developers may lack the resources to adequately address emerging issues with network protocols. Although the bitcoin and other leading networks are currently supported by core developers, such support may not continue or be sufficient in the future.
Consequently, there may be a lack of financial incentive for developers to maintain or develop networks and the core developers may lack the resources to adequately address emerging issues with network protocols. Although the bitcoin and other leading networks are currently supported by core developers, such support may not continue or be sufficient in the future.
Factors that could cause fluctuations in the trading price of our securities include the following: • price and volume fluctuations in the overall stock market from time to time; • volatility in the trading prices and trading volumes of technology stocks; • volatility in the price of bitcoin and other digital assets; • changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; • sales of shares of our securities by us or our stockholders; • failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • the financial projections we may provide to the public, any changes in those projections, or our failure to meet those projections; • announcements by us or our competitors of new products, features, or services; • the public’s reaction to our press releases, other public announcements and filings with the SEC; • rumors and market speculation involving us or other companies in our industry; • actual or anticipated changes in our results of operations or fluctuations in our results of operations; • actual or anticipated developments in our business, our competitors’ businesses or the competitive landscape generally; • litigation involving us, our industry, or both, or investigations by regulators into our operations or those of our competitors; • developments or disputes concerning our intellectual property or other proprietary rights; • announced or completed acquisitions of businesses, products, services or technologies by us or our competitors; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • changes in accounting standards, policies, guidelines, interpretations or principles; • any significant change in our management; and • general economic conditions and slow or negative growth of our markets.
Factors that could cause fluctuations in the trading price of our securities include the following: • price and volume fluctuations in the overall stock market from time to time; • volatility in the trading prices and trading volumes of technology stocks; • volatility in the price of bitcoin and other digital assets; • changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; • sales of shares of our securities by us or our stockholders; • failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • the financial projections we may provide to the public, any changes in those projections, or our failure to meet those projections; • announcements by us or our competitors of new products, features, or services; 37 Table of Contents • the public’s reaction to our press releases, other public announcements and filings with the SEC; • rumors and market speculation involving us or other companies in our industry; • actual or anticipated changes in our results of operations or fluctuations in our results of operations; • actual or anticipated developments in our business, our competitors’ businesses or the competitive landscape generally; • litigation involving us, our industry, or both, or investigations by regulators into our operations or those of our competitors; • developments or disputes concerning our intellectual property or other proprietary rights; • announced or completed acquisitions of businesses, products, services or technologies by us or our competitors; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • changes in accounting standards, policies, guidelines, interpretations or principles; • any significant change in our management; and • general economic conditions and slow or negative growth of our markets.
Our ability to generate revenue and the services we provide are subject to failures resulting from numerous factors, including: • power loss, curtailment and disruption; • equipment failure; • human error or accidents; • theft, sabotage and vandalism; • failure by us or our suppliers to provide adequate service or maintain our equipment; • network connectivity downtime and fiber cuts; • service interruptions resulting from server relocation; • security breaches of our infrastructure; • improper building maintenance; • physical, electronic and cybersecurity breaches; • animal incursions; • fire, earthquake, hurricane, tornado, flood and other natural disasters; • extreme temperatures; • water damage; 18 Table of Contents • public health emergencies; • riots, protests and disorder; and • terrorism, war and hostilities.
Our ability to generate revenue and the services we provide are subject to failures resulting from numerous factors, including: • power loss, curtailment and disruption; 19 Table of Contents • equipment failure; • human error or accidents; • theft, sabotage and vandalism; • failure by us or our suppliers to provide adequate service or maintain our equipment; • network connectivity downtime and fiber cuts; • service interruptions resulting from server relocation; • security breaches of our infrastructure; • improper building maintenance; • physical, electronic and cybersecurity breaches; • animal incursions; • fire, earthquake, hurricane, tornado, flood and other natural disasters; • extreme temperatures; • water damage; • public health emergencies; • riots, protests and disorder; and • terrorism, war and hostilities.
Future sales and issuances of our capital stock or rights to purchase our capital stock could result in substantial dilution to our existing stockholders. We may issue and sell New Common Stock, convertible securities, warrants and other equity securities in one or more transactions at prices and in a manner as we may determine from time to time.
Future sales and issuances of our capital stock or rights to purchase our capital stock could result in substantial dilution to our existing stockholders. We may issue and sell common stock, convertible securities, warrants and other equity securities in one or more transactions at prices and in a manner as we may determine from time to time.
Investing in bitcoin and other digital assets is speculative. Bitcoin and other digital assets have historically experienced significant intraday and long-term price volatility, significantly impacted by momentum pricing. Momentum pricing typically is associated with growth stocks and other assets whose valuation, as determined by the investing public, accounts for anticipated future appreciation in value.
Bitcoin and other digital assets have historically experienced significant intraday and long-term price volatility, significantly impacted by momentum pricing. Momentum pricing typically is associated with growth stocks and other assets whose valuation, as determined by the investing public, accounts for anticipated future appreciation in value.
The costs of electric power account for a significant portion of our cost of revenue. We require a significant electric power supply to conduct our mining activity and to provide many hosting services we offer, such as powering and cooling our and our customers’ servers and network equipment and operating critical mining and facility and equipment infrastructure.
We require a significant electric power supply to conduct our mining activity and to provide many hosting services we offer, such as powering and cooling our and our customers’ servers and network equipment and operating critical mining and facility and equipment infrastructure. The costs of electric power therefore account for a significant portion of our cost of revenue.
To the extent government enforcement authorities literally enforce these and other laws and regulations that are impacted by decentralized distributed ledger technology, we may be subject to investigation, administrative or court proceedings, and civil or criminal monetary fines and penalties, all of which could harm our reputation and could have a material adverse effect on our business, prospects, financial condition, and operating results. 27 Table of Contents If regulatory changes or interpretations of our activities require our registration as a money services business (“MSB”) under the regulations promulgated by the Financial Crimes Enforcement Network (“FinCEN”) under the authority of the U.S.
To the extent government enforcement authorities literally enforce these and other laws and regulations that are impacted by decentralized distributed ledger technology, we may be subject to investigation, administrative or court proceedings, and civil or criminal monetary fines and penalties, all of which could harm our reputation and could have a material adverse effect on our business, prospects, financial condition, and operating results. 29 Table of Contents If regulatory changes or interpretations of our activities require our registration as a money services business (“MSB”) under the regulations promulgated by the Financial Crimes Enforcement Network (“FinCEN”) under the authority of the U.S.
To the extent that material issues arise with the bitcoin or another network protocol and the core developers and open-source contributors are unable to address the issues adequately or in a timely manner, the networks may be adversely affected.
To the extent that material issues arise with Bitcoin or another network and the core developers and open-source contributors are unable to address the issues adequately or in a timely manner, the networks may be adversely affected.
However, to the extent that any such incentives arise (for example, with respect to bitcoin, a collective movement among transaction processors or one or more mining pools forcing bitcoin users to pay transaction fees as a substitute for, or in addition to, the award of new bitcoin upon the solving of a block), transaction 33 Table of Contents processors could delay the recording and verification of a significant number of transactions on a network’s blockchain.
However, to the extent that any such incentives arise (for example, with respect to bitcoin, a collective movement among transaction processors or one or more mining pools forcing bitcoin users to pay transaction fees as a substitute for, or in addition to, the award of new bitcoin upon the solving of a block), transaction 43 Table of Contents processors could delay the recording and verification of a significant number of transactions on a network’s blockchain.
After originally being founded in order to engage in the business of verifying and confirming transactions on a blockchain (also known as transaction processing, or “mining”), we have begun the provision of digital infrastructure colocation services to a third party engaged in high performance computing and have announced plans to convert most of our existing facilities to provide colocation services to other HPC customers.
After originally being founded in order to engage in the business of verifying and confirming transactions on a blockchain (also known as transaction processing, or “mining”), we have begun the provision of digital infrastructure colocation services to a third party engaged in high performance computing and have announced plans to convert most of our existing facilities to provide colocation services to other high-density colocation customers.
If we were to be deemed an inadvertent investment company, we may seek to rely on Rule 3a-2 under the 1940 Act, which allows an inadvertent investment company a grace period of one year from the earlier of (a) the date on which the issuer owns securities and/or cash having a value exceeding 50% of the issuer’s total assets on either a consolidated or unconsolidated basis or (b) the date on which the issuer owns or proposes to acquire investment securities having a value exceeding 40% of the value of such issuer’s total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis.
If we were to be deemed an inadvertent investment company, we may seek to rely on Rule 3a-2 under the 1940 Act, which allows an inadvertent investment company a grace period of one year from the earlier of (a) the date on which the issuer owns securities and/or cash having a value exceeding 50% of the issuer’s total assets on either a consolidated or unconsolidated basis or (b) the date on which the issuer owns or proposes to acquire investment securities having a value exceeding 40% of the value of such 30 Table of Contents issuer’s total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis.
We are putting in place 28 Table of Contents policies that we expect will work to keep the investment securities held by us at less than 40% of our total assets, which may include acquiring assets with our cash, liquidating our investment securities or seeking no-action relief or exemptive relief from the SEC if we are unable to acquire sufficient assets or liquidate sufficient investment securities in a timely manner.
We are putting in place policies that we expect will work to keep the investment securities held by us at less than 40% of our total assets, which may include acquiring assets with our cash, liquidating our investment securities or seeking no-action relief or exemptive relief from the SEC if we are unable to acquire sufficient assets or liquidate sufficient investment securities in a timely manner.
If we are not able to 16 Table of Contents obtain a sufficient number of digital asset mining machines at favorable prices, our growth expectations, liquidity, financial condition and results of operations will be negatively impacted. Miner manufacturers may continue requiring significant advance deposits before orders are fulfilled and delivered. Historically, miner manufacturers have required advance deposits for miner purchases.
If we are not able to obtain a sufficient number of digital asset mining machines at favorable prices, our growth expectations, liquidity, financial condition and results of operations will be negatively impacted. Miner manufacturers may continue requiring significant advance deposits before orders are fulfilled and delivered. Historically, miner manufacturers have required advance deposits for miner purchases.
To that end, public sentiment regarding electrical power generation, usage and storage, high volume electrical use and climate change, may limit our access to electrical power, decrease available facility sites, and increase our costs and limit the demand for our HPC colocation services.
To that end, public sentiment regarding electrical power generation, usage and storage, high volume electrical use and climate change may limit our access to electrical power, decrease available facility sites, and increase our costs and limit the demand for our high-density colocation services.
If we are unable to compete 26 Table of Contents successfully, or if competing successfully requires us to take costly actions in response to the actions of our competitors, our business, operating results and financial condition could be adversely affected.
If we are unable to 28 Table of Contents compete successfully, or if competing successfully requires us to take costly actions in response to the actions of our competitors, our business, operating results and financial condition could be adversely affected.
We may not have adequate sources of recovery if the bitcoin held by us are lost, stolen or destroyed due to third-party digital asset services, which could have a material adverse effect on our business, financial condition and results of operations. Certain digital assets held by us are stored usi ng Coinbase Global, Inc. (“Coinbase”), a third-party digital asset service.
We may not have adequate sources of recovery if the bitcoin held by us are lost, stolen or destroyed due to third-party digital asset services, which could have a material adverse effect on our business, financial condition and results of operations. Certain digital assets held by us are stored using Coinbase Global, Inc. (“Coinbase”), a third-party digital asset service.
If one or more noteholders elect to convert their notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity.
If one or more noteholders elect to convert their notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation 35 Table of Contents through the payment of cash, which could adversely affect our liquidity.
There is no certainty that, in such circumstances, the Company would succeed in recovering any of its deposit, which could materially and adversely affect its business, financial condition, and results of operations. Our reliance on third-party mining pool service providers for our earned mining reward payouts may have a negative impact on our operations.
There is no certainty that, in such circumstances, we would succeed in recovering any of our deposit, which could materially and adversely affect its business, financial condition, and results of operations. Our reliance on third-party mining pool service providers for our earned mining reward payouts may have a negative impact on our operations.
In the future, the currently anticipated tax treatment may be modified by legislative, judicial or administrative changes, possibly with retroactive effect. In addition, a tax authority or court may not agree with any particular interpretation of the relevant laws. 38 Table of Contents State, local or other jurisdictions could impose, levy or otherwise enforce tax laws against us.
In the future, the currently anticipated tax treatment may be modified by legislative, judicial or administrative changes, possibly with retroactive effect. In addition, a tax authority or court may not agree with any particular interpretation of the relevant laws. State, local or other jurisdictions could impose, levy or otherwise enforce tax laws against us.
In connection with the Disclosure Statement and Plan of Reorganization that we filed with the Bankruptcy Court and the hearing to consider confirmation of our Plan of Reorganization (as well as in certain other filings), we prepared projected financial information for various reasons, including to demonstrate to the Bankruptcy Court the feasibility of the Plan of Reorganization and our ability to continue operations upon our emergence from Chapter 11.
In connection with the Disclosure Statement and Plan of Reorganization that we filed with the Bankruptcy Court and the hearing to consider confirmation of our Plan of Reorganization (as well as in certain other filings), we prepared projected financial information for various reasons, including to demonstrate to the Bankruptcy Court the feasibility of the Plan of Reorganization and our 38 Table of Contents ability to continue operations upon our emergence from Chapter 11.
Energy costs and availability are vulnerable to seasonality, with increased costs primarily in the summer months and risks of outages and power grid damage as a result of inclement weather, animal incursion, sabotage and other events out of our control. Higher than expected power rates in 2022 materially impacted our operations.
Energy costs and availability are vulnerable to seasonality, with increased costs primarily in the summer months and risks of outages and power grid damage as a result of inclement weather, animal incursion, sabotage and other events out of our control. For example, higher than expected power rates in 2022 materially and adversely impacted our operations.
Nevertheless, the security procedures cannot guarantee the prevention of any loss due to a security breach, software defect or act of God that may be borne by us. In addition, Coinbase’s limited liability under its services agreement with us may limit our ability to recover losses relating to our bitcoin.
Nevertheless, the security procedures cannot guarantee the prevention of any loss due to a security breach, software defect or act of God that may be borne by us. In addition, Coinbase’s limited liability under its services 42 Table of Contents agreement with us may limit our ability to recover losses relating to our bitcoin.
See financial statement Note 5 — Property, Plant and Equipment, Net and Note 2 — Summary of Significant Accounting Policies in the consolidated financial statements for the year ended December 31, 2024, for discussions of recently recognized impairments. Losses relating to our business may be uninsured, or insurance may be limited.
See financial statement Note 5 — Property, Plant, and Equipment and Note 2 - Summary of Significant Accounting Policies in the consolidated financial statements for the year ended December 31, 2025, for discussions of recently recognized impairments. Losses relating to our business may be uninsured, or insurance may be limited.
These protocols may include a “proof-of-stake” algorithm or an algorithm based on a protocol other than proof-of-work, which may decrease the reliance on computing power as an advantage to validating blocks. Our mining operations are currently designed to primarily support a proof-of-work consensus algorithm.
These protocols may include a “proof-of-stake” algorithm or an algorithm based on a protocol other than proof-of-work, which may decrease the reliance on computing power as an advantage to validating blocks. Our mining operations are currently designed to primarily support Bitcoin and other protocols employing a proof-of-work consensus algorithm.
The market price and availability of new mining machines fluctuates with the price of bitcoin and can be volatile. Higher bitcoin prices increase the demand for mining equipment and increases the cost. In addition, as more companies seek to enter the mining industry, the demand for machines may outpace supply and create mining machine equipment shortages.
The market price and availability of new mining machines fluctuate with the price of bitcoin and can be volatile. Higher bitcoin prices increase the demand and cost for mining equipment. In addition, as more companies seek to enter the mining industry, the demand for machines may outpace supply and create mining machine equipment shortages.
For example, there may be issued patents of which we are not aware that our services or products infringe on. Also, there may be patents we believe we do not infringe on, but that we may ultimately be found to by a court of law or government 21 Table of Contents regulatory agency.
For example, there may be issued patents of which we are not aware that our services or products infringe on. Also, there may be patents we believe we do not infringe on, but that we may ultimately be found to by a court of law or government regulatory agency.
We believe that nation states are actively mining bitcoin for their own treasuries, increasing network hash rate, reducing the Company’s share of network hash rate, and thereby reducing the Company’s revenue, profitability and financial results of operations. Global conflict could negatively impact the Company’s business, results of operations and financial conditions.
We believe that nation states are actively mining bitcoin for their own treasuries, increasing network hash rate, reducing our share of network hash rate, and thereby reducing our revenue, profitability and financial results of operations. Global conflict could negatively impact our business, results of operations and financial conditions.
If we are not able to acquire and deploy additional miners on a timely basis, our proportion of the overall network hash rate will decrease and we will have a lower chance of solving new blocks which will have an adverse effect on our business and results of operations. 15 Table of Contents As more processing power is added to a network, our relative percentage of total processing power on that network is expected to decline absent significant capital investment, which has an adverse impact on our ability to generate revenue from processing transactions on that network and could have a material adverse effect on our business, financial condition and results of operations.
If we are not able to acquire and deploy additional miners on a timely basis, our proportion of the overall network hash rate will decrease and we will have a lower chance of solving new blocks and earning the related mining rewards, which will have an adverse effect on our business and results of operations. 17 Table of Contents As more processing power is added to a network, our relative percentage of total processing power on that network is expected to decline absent significant capital investment, which has an adverse impact on our ability to generate revenue from processing transactions on that network and could have a material adverse effect on our business, financial condition and results of operations.
The growth in our business is dependent in large part on the availability of new generation mining machines offered for sale at a price conducive to profitable digital asset mining, as well as the trading price of digital assets such as bitcoin.
The growth in our business is dependent in large part on the availability of new generation mining machines offered for sale at a price conducive to profitable digital asset mining, as well as the 26 Table of Contents trading price of digital assets such as bitcoin.
Most recently, in January 2025, the Acting SEC Chairman announced the launch of a crypto task force dedicated to developing a comprehensive and clear regulatory framework for crypto assets, in contrast to the SEC’s prior reliance on enforcement actions to regulate cryptocurrencies.
For example, in January 2025, the Acting SEC Chairman announced the launch of a crypto task force dedicated to developing a comprehensive and clear regulatory framework for crypto assets, in contrast to the SEC’s prior reliance on enforcement actions to regulate cryptocurrencies.
We believe that the security procedures that Coinbase utilizes, such as dual authentication security, secured facilities, segregated accounts 32 Table of Contents and cold storage, are reasonably designed to safeguard our bitcoin and other digital assets from theft, loss, destruction or other issues relating to hackers and technological attack.
We believe that the security procedures that Coinbase utilizes, such as dual authentication security, secured facilities, segregated accounts and cold storage, are reasonably designed to safeguard our bitcoin and other digital assets from theft, loss, destruction or other issues relating to hackers and technological attack.
If we sell any 39 Table of Contents such securities in subsequent transactions, investors may be materially diluted. New investors in such subsequent transactions could gain rights, preferences and privileges senior to those of holders of our New Common Stock.
If we sell any such securities in subsequent transactions, investors may be materially diluted. New investors in such subsequent transactions could gain rights, preferences and privileges senior to those of holders of our common stock.
Our success in our digital asset segments depends in large part on our ability to earn bitcoin and to provide services to the customers of our hosting capabilities in a profitable manner, which we may not be able to do if: • there is a reduction in the demand for bitcoin causing the price of bitcoin to fall reducing revenue from our self-mining operations; • high energy costs, supply chain disruptions or government regulation compliance costs increase mining costs and reduce revenue and profitability; or • we are unable to secure an adequate supply of new generation digital asset mining equipment.
Our success in our digital asset segments depends in large part on our ability to mine bitcoin in a profitable manner which we may not be able to do if: • there is a reduction in the demand for bitcoin causing the price of bitcoin to fall reducing revenue from our self-mining operations; • high energy costs, supply chain disruptions or government regulation compliance costs increase mining costs and reduce revenue and profitability; or • we do not secure or are unable to secure an adequate supply of new generation digital asset mining equipment.
Our business is highly dependent on a small number of digital asset mining equipment suppliers. Our business is highly dependent upon a few digital asset mining equipment suppliers providing an adequate and timely supply of new generation digital asset mining machines at economical prices.
Our business is highly dependent upon a few digital asset mining equipment suppliers providing an adequate and timely supply of new generation digital asset mining machines at economical prices.
The conditional conversion feature of the notes, if triggered, may adversely affect our financial condition and results of operations. In the event the conditional conversion feature of the notes is triggered, noteholders will be entitled to convert the notes at any time during specified periods at their option.
The conditional conversion feature of the notes, if triggered, may adversely affect our financial condition and results of operations. In the event the conditional conversion feature of the 2029 Convertible Notes or 2031 Convertible Notes is triggered, noteholders will be entitled to convert the notes at any time during specified periods at their option.
The added cost of any environmental taxes, charges, assessments or penalties levied on such power plants could be passed on to us, increasing the cost to run our facilities.
The added cost of any 20 Table of Contents environmental taxes, charges, assessments or penalties levied on such power plants could be passed on to us, increasing the cost to run our facilities.
The extent of such items is not presently known, and any of them could negatively impact the Company’s business, results of operations and financial condition. 22 Table of Contents Changes in tariffs or import restrictions could have a material adverse effect on our business, financial condition and results of operations.
The extent of such items is not presently known, and any of them could negatively impact our business, results of operations and financial condition. Changes in tariffs or import restrictions could have a material adverse effect on our business, financial condition and results of operations.
We have generated limited revenue from providing HPC services, and we do not know whether our change in business model will be successful. To date, our revenue has primarily come from digital asset mining for our own account and digital asset mining hosting services.
We have generated limited revenue from providing high-density colocation services, and we do not know whether our change in business model will be successful. To date, our revenue has primarily come from digital asset mining for our own account and digital asset mining hosting services.
Further, governments and government regulators may potentially seek to restrict or prohibit the ability of electricity 17 Table of Contents suppliers to provide electricity to our facilities in times of electricity shortage or otherwise.
Further, governments and government regulators may potentially seek to restrict or prohibit the ability of electricity suppliers to provide electricity to our facilities in times of electricity shortage or otherwise.
The businesses in which we currently operate and the HPC business in which we intend to grow are highly innovative, rapidly evolving and characterized by healthy competition, experimentation, frequent introductions of new products and services and uncertain and evolving industry and regulatory requirements.
The businesses in which we currently operate and the high-density colocation business in which we intend to grow are highly innovative, rapidly evolving and characterized by healthy competition, experimentation, frequent introductions of new products and services and uncertain and evolving industry and regulatory requirements.
If we fail to comply with these covenants or to make payments under our indebtedness when due, then we would be in default under that indebtedness, which could, in turn, result in that and our other indebtedness becoming immediately payable in full.
If we fail to comply with these covenants or to make payments under our 34 Table of Contents indebtedness when due, then we would be in default under that indebtedness, which could, in turn, result in that and our other indebtedness becoming immediately payable in full.
The ability to attract and retain key personnel is critical to the success of our business and may be affected by our emergence from bankruptcy. 40 Table of Contents The success of our business depends on key personnel.
The ability to attract and retain key personnel is critical to the success of our business and may be affected by our emergence from bankruptcy. The success of our business depends on key personnel.
We are no longer required to sell our digital assets, including bitcoin, as we receive them under our existing debt agreements. However, the significant cash required by our expected HPC hosting growth initiatives will require us to sell the digital assets we earn periodically as cash needs and our treasury management policies dictate.
We are no longer required to sell our digital assets, including bitcoin, as we receive them under our existing debt agreements. However, the significant cash required by our expected high-density colocation growth initiatives will require us to sell the digital assets we earn periodically as cash needs and our treasury management policies dictate.
We may not be able to obtain broad protection in the United States or internationally for all of our existing and future intellectual property and other proprietary rights, and we may not be able to obtain effective protection for our intellectual property and other proprietary rights in every country in which we operate.
We may not be able to obtain broad protection in the United States or internationally for all of our existing and future intellectual property and other proprietary rights, and we may not be able to obtain effective protection for our intellectual property and other proprietary rights in any country where we may operate.
Any systemic delays in the recording and confirmation of transactions on the blockchain could result in greater exposure to double-spending transactions and a loss of confidence in certain or all digital asset networks, which could have a material adverse effect on our business, prospects, financial condition, and operating results.
Any systemic delays in the recording and confirmation of transactions on the blockchain could result in greater exposure to double-spending transactions and a loss of confidence in certain or all digital asset networks, which could have a material adverse effect on our business, prospects, financial condition, and operating results. Item 1B. Unresolved Staff Comments. None.
Our HPC operations run on back-up generators in the event of a power outage or curtailment that may not be sufficient to support our operations for the magnitude or duration of the power outage or curtailment.
Our high-density colocation operations run on back-up generators in the event of a power outage or curtailment that may not be sufficient to support our operations for the magnitude or duration of the power outage or curtailment.
Currently our HPC business is highly dependent on a single customer. One customer, CoreWeave, currently accounts for 100% of our HPC Hosting segment revenue. Our success in the HPC Hosting segment is highly dependent on the success of CoreWeave and the fulfillment by it of its obligations under our existing contractual arrangements.
Currently our high-density colocation business is highly dependent on a single customer. One customer, CoreWeave, currently accounts for 100% of our Colocation segment revenue. Our success in the Colocation segment is highly dependent on the success of CoreWeave and the fulfillment by it of its obligations under our existing contractual arrangements.
Our indebtedness and liabilities could limit the cash flow available for our operations, expose us to risks that could adversely affect our business, financial condition and results of operations and impair our ability to satisfy our obligations under the notes. 35 Table of Contents As of December 31, 2024, we had approximately $1.12 billion aggregate principal amount of indebtedness for borrowed money.
Our indebtedness and liabilities could limit the cash flow available for our operations, expose us to risks that could adversely affect our business, financial condition and results of operations and impair our ability to satisfy our obligations under the notes. As of December 31, 2025, we had approximately $ 1.09 billion aggregate principal amount of indebtedness for borrowed money.
While certain validation protocols currently employ a “proof-of-work” consensus algorithm, whereby transaction processors are required to expend significant amounts of electrical and computing power to solve complex mathematical problems in order to validate transactions and create new blocks in a blockchain, there may be a shift towards adopting alternative validating protocols.
While certain blockchains currently employ a “proof-of-work” consensus algorithm, whereby transaction processors called “miners” are required to expend significant amounts of electrical and computing power to solve complex mathematical problems in order to validate transactions and create new blocks in a blockchain, there may be a shift towards adopting alternative consensus algorithms.
The cash needs of our HPC hosting growth initiatives will limit the amount of digital assets we hold, thus preventing us from recognizing any gain from the appreciation in value of the digital assets we have sold and may sell in the future.
The cash needs of our high-density colocation growth initiatives will limit the amount of digital assets we hold, thus preventing us from recognizing any gain from the appreciation in value of the digital assets we have sold and may sell in the future.
Although we implement a number of security procedures with various elements such as two-factor verification, segregated accounts and secured facilities and plan to implement the maintenance of data on computers and/or storage media that is not directly connected to, or accessible from, the internet and/or networked with other computers (“cold storage”), to minimize the risk of loss, damage and theft, and we update such security procedures whenever reasonably practicable, we may be unable to prevent such loss, damage or theft, whether caused intentionally, accidentally or by an act of God.
Although we implement a number of security procedures with various elements such as two-factor verification, segregated accounts and secured facilities and plan to implement the maintenance of data on computers and/or storage media that is not directly connected to, or accessible from, the internet and/or networked with other computers (“cold storage”), to minimize the risk 21 Table of Contents of loss, damage and theft, and we update such security procedures whenever reasonably practicable, there can be no assurance that these measures will be effective and we may be unable to prevent such loss, damage or theft, whether caused intentionally, accidentally or by an act of God.
Risks Related to our Businesses and Industries Our success depends in large part on our ability to timely and successfully convert our existing facilities to support our HPC customers and to attract new HPC customers.
Risks Related to our Businesses and Industries Our success depends in large part on our ability to timely and successfully convert our existing facilities to support our high- density colocation customers and to attract new high-density colocation customers.
Our digital infrastructure could be breached despite our security procedures. Our operational digital infrastructure may be breached due to the actions of outside parties, error or malfeasance of one of our employees, or otherwise, and, as a result, an unauthorized party may obtain access to our digital asset accounts, private keys, data or digital assets.
Our digital infrastructure and systems may be breached due to the actions of outside parties, error or malfeasance of one of our employees, or otherwise, and, as a result, an unauthorized party may obtain access to our digital asset accounts, private keys, data or digital assets.
In such case, the price of the relevant digital asset may decline substantially and could go to zero.
In such case, the price of the relevant digital asset may decline substantially and could go to 40 Table of Contents zero.
Our HPC hosting operations may be impacted by costs and expenses beyond our control or require capital investment that neither we nor our customers are able to bear, reducing our revenue and profitability.
Our high-density colocation operations may be impacted by costs and expenses beyond our control or require capital investment that neither we nor our customers are able to bear, reducing our revenue and profitability.
The costs of constructing, developing, operating and maintaining our HPC and digital mining facilities, and owning and operating a large fleet of the latest generation digital mining equipment, are substantial.
The costs of constructing, developing, operating and maintaining our high-density colocation and digital mining facilities, and owning and operating a large fleet of the latest generation digital mining equipment, are substantial.
Investors should be aware that bitcoin and other digital assets may not maintain their long-term value in terms of future purchasing power and that the acceptance of digital asset payments by mainstream retail merchants and commercial businesses may not continue to grow.
Investors should be aware that bitcoin and other digital assets may not maintain their long-term value in terms of future purchasing power and that the acceptance of digital asset payments by mainstream retail merchants and commercial businesses may not continue to grow. If the price of bitcoin or other digital assets declines, our profitability will decline.
If the price of bitcoin or other digital assets declines, our profitability will decline. 24 Table of Contents The “halving” of rewards available on the Bitcoin network, or the reduction of rewards on other networks, has had and in the future could have a negative impact on our ability to generate revenue as our customers may not have an adequate incentive to continue mining and customers may cease mining operations altogether, which could have a material adverse effect on our business, financial condition and results of operations.
The “halving” of rewards available on the Bitcoin network, or the reduction of rewards on other networks, has had and in the future could have a negative impact on our ability to generate revenue as our customers may not have an adequate incentive to continue mining and customers may cease mining operations altogether, which could have a material adverse effect on our business, financial condition and results of operations.
As of December 31, 2024, we had U.S. federal and state net operating loss (“NOL”) carryforwards of approximately $312.4 million and $128.1 million, respectively, U.S. federal and state capital loss carryforwards of approximately $220.7 million and $42.4 million, respectively, and certain other tax attributes, including disallowed business interest expense carryforwards under Section 163(j) of the Internal Revenue Code of 1986 (the “Internal Revenue Code”), that could be utilized to offset future taxable income.
As of December 31, 2025, we had U.S. federal and state net operating loss (“NOL”) carryforwards of approximately $727.8 million and $184.2 million , respectively, U.S. federal and state capital loss carryforwards of approximately $220.7 million and $47.8 million , respectively, and certain other tax attributes, including disallowed business interest expense carryforwards under Section 163(j) of the Internal Revenue Code of 1986 (the “Internal Revenue Code”), that could be utilized to offset future taxable income.
An inability to purchase and develop additional sources of low-cost sources of energy effectively or to obtain real estate, materials and equipment to operate our facilities efficiently will have a material adverse effect on our business, financial condition and results of operations. Our businesses require a significant amount of electric power.
An inability to purchase and develop 18 Table of Contents additional sources of low-cost sources of energy effectively or to obtain real estate, materials and equipment to operate our facilities efficiently will have a material adverse effect on our business, financial condition and results of operations.
We may issue additional securities, including shares of New Common Stock as a result of the conversion or exercise, as applicable, of the New Warrants, options or restricted stock units (“RSUs”). In addition, the Company may choose to issue shares of New Common Stock pursuant to the CVRs.
We may issue additional securities from time to time, including shares of common stock as a result of the exercise or vesting, as applicable, of options or restricted stock units (“RSUs”). In addition, we may choose to issue shares of common stock pursuant to the CVRs.
Much of the equipment necessary for HPC hosting and almost entirely all of the equipment necessary for digital asset mining is manufactured outside of the United States.
Much of the equipment necessary for high-density colocation and almost entirely all of the equipment necessary for digital asset mining is manufactured outside of the United States.
Should the algorithm shift from a proof-of-work 20 Table of Contents validation method to a proof-of-stake method, mining would require less energy and may render any company that maintains advantages in the current climate (for example, from lower priced electricity, processing, real estate or hosting) less competitive.
Should the Bitcoin consensus protocol shift from a proof-of-work consensus algorithm to a proof-of-stake consensus algorithm, or should new blockchains employ a proof-of-stake consensus algorithm, mining would require less energy and may render any company that maintains advantages in the current climate (for example, from lower priced electricity, processing, real estate or hosting) less competitive.
If our internal control over financial reporting or our disclosure controls and procedures are not effective, including the steps taken to remediate our prior material weaknesses, the reliability of our financial reporting, investor confidence, and the value of our securities could be materially and adversely affected.
If our disclosure controls and procedures or our internal control over financial reporting are not effective, the reliability of our financial reporting, investor confidence and the value of our securities could be materially and adversely affected.
Certain provisions in the 2029 Convertible Notes or 2031 Convertible Notes, or any future notes, and the indentures governing these notes could make a third-party attempt to acquire us more difficult or expensive.
Provisions in our indentures could delay or prevent an otherwise beneficial takeover of us. Certain provisions in the 2029 Convertible Notes or 2031 Convertible Notes, or any future notes, and the indentures governing these notes could make a third-party attempt to acquire us more difficult or expensive.
New digital asset transaction protocols are continuously being deployed, and existing and new protocols are in a state of constant change and development.
New blockchain consensus protocols are continuously being deployed, and existing and new protocols are in a state of constant change and development.
Any such change to transaction validating protocols could have a material adverse effect on our business, financial condition and results of operations. The further development and acceptance of cryptographic and algorithmic protocols governing transaction validation and the issuance of, and transactions in, digital assets are subject to a variety of factors that are difficult to evaluate.
Any such change to transaction validating protocols could have a material adverse effect on our business, financial condition and results of operations. 27 Table of Contents The further development and acceptance of consensus algorithms and other cryptographic and algorithmic protocols are subject to a variety of factors that are difficult to evaluate.
In addition, new laws, regulations, and regulatory actions could significantly restrict or eliminate the market for, or uses of, digital assets including bitcoin, which could have a negative effect on the value of bitcoin, which in turn would have a negative effect on the value of the Company’s securities. 29 Table of Contents There is no one unifying principle governing the regulatory status of digital assets nor whether digital assets are securities in any particular context.
In addition, new laws, regulations, and regulatory actions could significantly restrict or eliminate the market for, or uses of, digital assets including bitcoin, 31 Table of Contents which could have a negative effect on the value of bitcoin, which in turn would have a negative effect on the value of the Company’s securities.
The occurrence of any event that is not entirely covered by our insurance policies may result in interruption of our operations, subject us to significant losses or liabilities and damage our reputation as a provider of business continuity services. Risks Related to the Price of Bitcoin Digital assets, and bitcoin in particular, are subject to price volatility.
The occurrence of any event that is not entirely covered by our insurance policies may result in interruption of our operations, subject us to significant losses or liabilities and damage our reputation as a provider of business continuity services. Our business is highly dependent on a small number of digital asset mining equipment suppliers.
If executives, managers or other key personnel resign, retire or are terminated, or their service is otherwise interrupted, we may not be able to replace them in a timely manner and we could experience significant declines in productivity. Item 1B. Unresolved Staff Comments. None.
If executives, managers or other key personnel resign, retire or are terminated, or their service is otherwise interrupted, we may not be able to replace them in a timely manner and we could experience significant declines in productivity. Risks Related to the Price of Bitcoin Digital assets, and bitcoin in particular, are subject to price volatility.
Future increases in power costs and unfavorable prices for digital assets will harm our growth prospects and could have a material adverse effect on our business, financial condition and results of operations.
In the past, increases in power costs have impacted our ability to earn digital assets efficiently and a reduction in bitcoin’s market price has reduced our operating margins. Future increases in power costs and unfavorable prices for digital assets will harm our growth prospects and could have a material adverse effect on our business, financial condition and results of operations.
A slowdown in market and economic conditions, particularly those impacting the cloud computing, machine learning and AI industries, the demand for HPC infrastructure and services, and the blockchain industry and the blockchain hosting market, could have a material adverse effect on our business, financial condition and results of operations.
We may be unable to attract and retain our senior executives and other key personnel, which could have a material adverse effect on our business, financial condition and results of operations. 24 Table of Contents A slowdown in market and economic conditions, particularly those impacting the cloud computing, machine learning and AI industries, the demand for high-density colocation infrastructure and services, and the blockchain industry and the blockchain hosting market, could have a material adverse effect on our business, financial condition and results of operations.
Federal and state legislatures and regulatory agencies have already enacted and are expected to continue to introduce and enact new laws and regulations to regulate digital asset intermediaries, such as digital asset exchanges and custodians. The Federal Reserve Board, U.S. Congress and certain U.S. agencies (including the SEC, the U.S.
Federal and state legislatures and regulatory agencies have already enacted and are expected to continue to introduce and enact new laws and regulations to regulate digital asset issuers and intermediaries, such as digital asset exchanges and custodians. For example, in July 2025, the Guiding and Establishing National Innovation for U.S.
Such proposed modifications can be agreed upon, developed, adopted and implemented by a substantial majority of developers, transaction processors and users, which, in 34 Table of Contents such event, results in a “soft fork” or “hard fork” on the relevant network.
Such proposed modifications can be 44 Table of Contents agreed upon, developed, adopted and implemented by a substantial majority of transaction processors, which, in such event, results in a “soft fork” or “hard fork” on the relevant network. A “soft fork” occurs when an updated version of the validating protocol is still “backwards compatible” with previous versions of the protocol.
If an actual or perceived breach of our digital asset accounts occurs, the market perception of our effectiveness could be harmed. Our future success depends on our ability to keep pace with rapid technological changes that could make our current or future technologies less competitive or obsolete. Rapid, significant, and disruptive technological changes continue to impact our industry.
Our future success depends on our ability to keep pace with rapid technological changes that could make our current or future technologies less competitive or obsolete. Rapid, significant, and disruptive technological changes continue to impact our industry.
A decline in the popularity or acceptance of digital assets could have a material adverse effect on our business, financial condition and results of operations. We may not be able to adequately protect our intellectual property rights and other proprietary rights, which could have a material adverse effect on our business, financial condition and results of operations.
Therefore, the adaptation to new processes and technologies could result in lower revenue, lower margins and/or higher costs, which could have a material adverse effect on our business, financial condition and results of operations. 23 Table of Contents We may not be able to adequately protect our intellectual property rights and other proprietary rights, which could have a material adverse effect on our business, financial condition and results of operations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest change“Risk Factors,” of this Annual Report on Form 10-K, including but not limited to the risk factors titled, “ We may be vulnerable to both physical and cybersecurity breaches, which could disrupt our operations and have a material adverse effect on our business, financial condition and results of operations” 41 Table of Contents and “ We may be exposed to cybersecurity threats and breaches, which could have a material adverse effect on our business, financial condition and results of operations .” Governance Our information security team is led by our Chief Information Security Officer and is comprised of dedicated professionals responsible for overseeing cybersecurity risk management and mitigation, incident prevention, detection and remediation.
Biggest change“Risk Factors,” of this Annual Report on Form 10-K, including but not limited to the risk factor titled, “ If our information technology systems or those of the third parties with whom we work or our data, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigations; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse consequences.” Governance Our information security team is led by our Chief Information Security Officer and is comprised of dedicated professionals responsible for overseeing cybersecurity risk management and mitigation, incident prevention, detection and remediation.
We also periodically conduct simulated phishing exercises to practice appropriate response and augment employee awareness of established and emerging cyber threats. One of the key functions of our Board of Directors is informed oversight of our risk management process, including cybersecurity risk.
We also periodically conduct simulated phishing exercises to practice appropriate response and augment employee awareness of established and emerging cyber threats. One of the key functions of our Board of Directors is oversight of our risk management process, including cybersecurity risk.
Based on the results of these simulated exercises, we aim to harden any identified exposure points and adjust our security processes to ensure dynamism and responsiveness. Along with our in-house cybersecurity capabilities, we also periodically engage third parties to assist with detecting and responding to cybersecurity risks.
Based on the results of these exercises, we attempt to harden any identified exposure points and adjust our security processes to ensure dynamism and responsiveness. Along with our in-house cybersecurity capabilities, we also periodically engage third parties to assist with detecting and responding to cybersecurity risks.
In particular, our Board of Directors is responsible for monitoring and assessing strategic risk exposure and our Audit Committee has the responsibility to consider and discuss our major financial risk exposures and the steps our management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken.
In particular, our Board of Directors is responsible for monitoring and assessing strategic risk exposure and our Audit Committee has the responsibility to consider and discuss our major financial risk exposures, including risks from cybersecurity threats, and the steps our management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken.
These teams are spearheaded by professionals with decades of cybersecurity leadership experience across multiple industries, including our Chief Technology Officer. Our leadership working group meets on a weekly basis to discuss our approach to the rapidly-evolving cybersecurity landscape.
These teams are spearheaded by professionals that collectively hold decades of cybersecurity leadership experience across multiple industries, including our Chief Technology Officer. Our leadership working group meets on a weekly basis to discuss our approach to the rapidly-evolving cybersecurity landscape.
To ensure that our top-level strategy is disseminated throughout the Company, our information security team provides hands-on and often role-specific training and awareness programs to our employees. Our employees with network access participate annually in required training, including spear phishing and other awareness training.
To disseminate our top-level strategy throughout the Company, our information security team provides hands-on and often role-specific training and awareness programs to our employees. Our employees with network access participate annually in required training, including spear phishing and other awareness training.
Third parties may be engaged to assist with procedures including red and blue team training exercises and penetration testing. We require third-party service providers with access to personal, confidential or proprietary information to implement and maintain comprehensive cybersecurity practices consistent with applicable legal standards and industry best practices.
Third parties may be engaged to assist with procedures including red and blue team training exercises and penetration testing. As appropriate to the circumstance, we require third-party service providers with access to important personal, confidential or proprietary information to implement and maintain cybersecurity practices consistent with applicable legal standards and industry practices.
To date, we have not identified any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have, or are likely to, materially affect us, our business strategy, results of operation or financial condition. For more information on the risks from cybersecurity threats that we face, refer to Part I, Item 1A.
Our business depends on the availability, reliability, and security of our information systems, networks, data, and intellectual property. To date, we have not identified any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have, or are likely to, materially affect us, including our business strategy, results of operation or financial condition.
We have implemented a risk-based approach, guided by Federal Information Processing Standards Publication 199, to identify, classify, and appropriately assess the range of cybersecurity threats that could affect our business and information systems. Accordingly, security incidents are evaluated, classified by severity and prioritized for response, mitigation and remediation.
Item 1C. Cybersecurity. Risk Management and Strategy We are subject to various material cybersecurity risks that could adversely affect our business, financial condition, and results of operations. We have implemented a risk-based approach, guided by Federal Information Processing Standards Publication 199, to identify, classify, and appropriately assess the range of cybersecurity threats that could affect our business and information systems.
Pursuant to this approach, we have implemented controls to prevent, detect and mitigate cybersecurity risks posed by third parties. We use various tools and methodologies, including a written incident response plan and cybersecurity insurance, to manage and mitigate cybersecurity risk. Those tools and methodologies are evaluated on a regular and continuing basis.
Our cybersecurity program develops pragmatic strategies designed to preserve the confidentiality, integrity and availability of Company and customer information. Pursuant to this approach, we have implemented controls designed to prevent, detect and mitigate cybersecurity risks posed by third parties. We use various tools and methodologies, including a written incident response plan and cybersecurity insurance, to manage and mitigate such risk.
Our Board of Directors considers cybersecurity risk and mitigation as a critical component of its risk oversight function and intends to further develop specific cybersecurity oversight functions and protocols.
Our Board of Directors considers cybersecurity risk and mitigation as a critical component of its risk oversight function and continues to further develop specific cybersecurity oversight functions and pr otocols as we have improved our standing and continue to do so to meet the reality of the threat climate.
We also monitor and evaluate our cybersecurity posture and performance on an ongoing basis through regular vulnerability scans, penetration tests and threat intelligence feeds. Through both short-term “game day” events and more prolonged campaigns, red team programming is designed to continuously stress test the fortitude of our information security systems and assist in identifying areas of potential vulnerability.
Those tools and methodologies are periodically evaluated. Depending on the environments, we monitor and evaluate our cybersecurity posture and performance through vulnerability scans, penetration tests and threat intelligence feeds. Depending on the environment, we may conduct red team programming designed to stress test the functioning of our information security systems and assist in identifying areas of potential vulnerability.
From a high level, our incident response framework consists of five elements: (1) proactively identifying and appropriately managing cybersecurity risks to our systems, assets, data, and other capabilities; (2) designing and implementing the appropriate safeguards to timely deliver business services; (3) implementing systems and processes to detect the occurrence of cybersecurity events; (4) responding to events in a systematic and comprehensive fashion; and (5) utilizing mechanisms to promote system resilience and the restoration of critical business functions that may have been impaired due to a security incident.
At a high level, our incident response framework consists of five elements: (1) identifying and managing cybersecurity risks to our systems, assets, data, and other capabilities; (2) implementing safeguards designed to timely deliver business services; (3) implementing systems and processes designed to detect the occurrence of cybersecurity events; (4) responding to security events systematically; and (5) utilizing mechanisms designed to enable disaster recovery and business continuity. 45 Table of Contents Our cybersecurity program considers industry standards and practices, such as measures in the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework.
Removed
Item 1C. Cybersecurity. Risk Management and Strategy We are subject to various cybersecurity risks that could adversely affect our business, financial condition, and results of operations, including intellectual property theft; fraud; extortion; harm to employees or customers; violation of privacy laws and other litigation and legal risk; and reputational risk.
Added
Accordingly, security incidents are, as appropriate to the risk and circumstances, evaluated, classified by severity and prioritized for response, mitigation and/or remediation.
Removed
Our cybersecurity program is aligned with industry standards and best practices, such as the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework. Fundamentally, our information security program is tasked with developing pragmatic strategies for preserving the confidentiality, integrity and availability of Company and customer information.
Added
For more information on the risks from cybersecurity threats that may materially affect us and how they may do so, refer to Part I, Item 1A.
Removed
Amongst other controls, we maintain policies and practices that monitor, regulate and limit remote access of our information systems. Our business depends on the availability, reliability, and security of our information systems, networks, data, and intellectual property.
Removed
Any disruption, compromise, or breach of our systems or data due to a cybersecurity threat or incident could adversely affect our operations, customer service, product development, and competitive position. They may also result in a breach of our contractual obligations or legal duties to protect the privacy and confidentiality of our stakeholders.
Removed
Such a breach could expose us to business interruption, lost revenue, ransom payments, remediation costs, liabilities to affected parties, cybersecurity protection costs, lost assets, litigation, regulatory scrutiny and actions, reputational harm, customer dissatisfaction, harm to our vendor relationships, or loss of market share.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our corporate headquarters is located at 838 Walker Road, Suite 21-2105, Dover, Delaware 19904. In addition, we earn bitcoin through mining for our own account and for third-party hosting customers at our owned and leased facilities in Alabama, Georgia, Kentucky, North Carolina, North Dakota, and Texas.
Biggest changeItem 2. Properties. Our corporate headquarters is located at 838 Walker Road, Suite 21-2105, Dover, Delaware 19904, and we also maintain leased office space in Texas and Florida. Our data center facilities include leased sites in Alabama, North Dakota, and Texas and owned sites in Georgia, Kentucky, North Carolina, and Oklahoma.
Removed
We lease with an option to purchase at a nominal amount our facility in North Dakota. We also own property in Oklahoma where our facility is in development to support artificial intelligence-related workloads. We believe that our facilities are suitable and adequate to meet our current and anticipated near-term needs.
Added
We believe our facilities are suitable and adequate for our current operations. 46 Table of Contents
Removed
Please refer to the discussions contained in our Item 1. – “Business” for additional information.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeFor a description of our material pending legal proceedings, please see Note 11 — Commitments and Contingencies , to our consolidated financial statements in Item 8 of Part II of this Annual Report on Form 10-K . Please refer to the discussions contained in our Item 1. – “Business” under the subtitle “Emergence from Bankruptcy”; Item 1A.
Biggest changeInformation regarding our material pending legal proceedings is included in Note 11 — Commitments and Contingencies , to our consolidated financial statements in Item 8 of Part II of this Annual Report on Form 10-K and is incorporated herein by reference . Item 4. Mine Safety Disclosures. Not applicable. 47 Table of Contents Part II
Item 3. Legal Proceedings. We are involved in lawsuits and other contingencies in the ordinary course of business. While the outcome of such contingencies cannot be predicted with certainty, we believe that the liabilities arising from these matters will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.
Item 3. Legal Proceedings. We are involved in lawsuits, claims and other legal matters that arise in the ordinary course of business. The outcome of these matters cannot be predicted with certainty; however, we believe that the ultimate resolution of these matters will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.
However, to the extent the liability arising from the ultimate resolution of any matter exceeds our estimates reflected in the recorded reserves relating to such matter, we could incur additional charges that could be significant.
To the extent that the ultimate resolution of any matter differs from our current estimates reflected in the recorded reserves, we could incur additional charges that could be significant.
Removed
“Risk Factors”; Item 5. — “Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities”; Item 7. — “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the subtitle “Developments During 2024”; and our Notes to Consolidated Financial Statements; as well as elsewhere in this Annual Report on Form 10-K for further information regarding the commencement of the aforementioned Company’s emergence from bankruptcy and satisfaction and extinguishment of claims in the Chapter 11 Cases.
Removed
Item 4. Mine Safety Disclosures. Not applicable. 42 Table of Contents Part II

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 and Holders As of January 24, 2024, in connection with the effectiveness of the Plan of Reorganization our New Common Stock and New Warrants are traded on the Nasdaq Global Select Market under the symbols “CORZ,” “CORZW” and “CORZZ,” respectively.
Biggest changeMarket Information Our common stock trades on the Nasdaq Global Select Market under the symbol “CORZ.” Our publicly traded warrants trade under the symbols “CORZW” and “CORZZ.” Holders On February 26, 2026 , there were 437 holders of record of our common stock, 143 holders of record of our CORZW Warrants, and 139 holders of record of our CORZZ Warrants.
Stock Performance Graph The following performance graph compares the cumulative total return on our common stock with the cumulative total return of the Nasdaq Composite Index and Russell 2000 Index from January 24, 2024 through December 31, 2024. Such returns are based on historical results and are not intended to suggest future performance.
Stock Performance Graph The following performance graph compares the cumulative total return on our common stock with the cumulative total return of the Nasdaq Composite Index and Russell 2000 Index from January 24, 2024 (the date our common stock began trading on the Nasdaq Global Select Market) through December 31, 2025.
During the quarter ended December 31, 2024, 0.6 million shares of New Common Stock were issued upon the exercise of Tranche 1 Warrants in reliance on the exemption provided by Section 1145 of the Bankruptcy Code. The Company received cash proceeds from the exercise of $4.4 million.
During the quarter ended December 31, 2025 , we issued approximately 0.7 million shares of common stock upon the exercise of Tranche 1 Warrants and approximately 2.9 million shares of common stock upon the exercise of Tranche 2 Warrants, in each case in reliance on the exemption provided by Section 1145 of the Bankruptcy Code.
The Incentive Plan provides for the grant of up to 40,000,000 shares of the Company’s Common Stock. Recent Sales of Unregistered Securities Below are the sales of unregistered securities during the period covered by this Annual Report on Form 10-K, other than those previously reported in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K.
This performance graph shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or incorporated by reference into any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. 48 Table of Contents Recent Sales of Unregistered Securities Below are the sales of unregistered securities during the period covered by this Annual Report on Form 10-K, other than those previously reported in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers We had no share repurchase activity for the three months ended December 31, 2024. Item 6. [Reserved]
We received cash proceeds of approximately $5.1 million from the Tranche 1 Warrant exercises, and cash proceeds from the Tranche 2 Warrant exercises were immaterial. Use of Proceeds from Registered Securities Not applicable. Purchases of Equity Securities by the Issuer and Affiliated Purchasers We had no purchases of our equity securities for the three months ended December 31, 2025 .
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Our old common stock and old warrants were traded on OTC Markets under the symbols “CORZQ” and “CRZWQ.” through the year ended December 31, 2023. Any over-the-counter market quotations reflected inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
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Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
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On February 20, 2025, there were 250 holders of record of our New Common Stock, 210 holders of record of our Tranche 1 Warrants, and 207 holders of record of our Tranche 2 Warrants. Dividends The Company has not paid dividends on its common stock to date and does not intend to pay cash dividends in the foreseeable future.
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Because many shares are held in “street name,” the actual number of beneficial owners is substantially greater. Dividends We have not paid dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future. The Board of Directors currently intends to retain all available earnings for use in our business.
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The payment of cash dividends in the future will be dependent upon the terms of agreements restricting our ability to pay dividends, revenues and earnings, if any, capital requirements and general financial condition and the discretion of the Company’s Board of Directors.
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The comparison assumes an investment of $100 in our common stock and in each index on January 24, 2024 and that dividends, if any, were reinvested. The performance shown is based on historical results and is not necessarily indicative of future performance.
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It is the present intention of the Company’s Board of Directors to retain all earnings, if any, for use in the Company’s business operations and, accordingly, the Board of Directors does not anticipate declaring any dividends in the foreseeable future.
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The graph assumes a $100 investment on January 24, 2024 through December 31, 2024 in our common stock, the Nasdaq Composite Index and the Russell 2000 Index.
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This performance graph shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or incorporated by reference into any filing of Core Scientific, Inc. under the Securities Act, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. 43 Table of Contents Securities Authorized for Issuance Under Equity Compensation Plans In accordance with the Plan of Reorganization, the Company adopted an equity-based management incentive plan on April 26, 2024 (the “Incentive Plan”).
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During the quarter ended December 31, 2024, 60.9 million shares of New Common Stock were issued upon the exercise of Tranche 2 Warrants in reliance on the exemption provided by Section 1145 of the Bankruptcy Code. The Company received cash proceeds from the exercise of $0.6 million. Use of Proceeds from Registered Securities Not applicable.

Item 7. Management's Discussion & Analysis

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

43 edited+84 added−227 removed16 unchanged
Biggest changeYou should review the reconciliation of net loss to Adjusted EBITDA below and not rely on any single financial measure to evaluate our business. 55 The following table presents a reconciliation of net loss to Adjusted EBITDA for the years ended December 31, 2024, 2023 and 2022, (in thousands): Year Ended December 31, 2024 2023 1 2022 1 Adjusted EBITDA Net loss $ (1,315,005) $ (246,487) $ (2,146,318) Adjustments: Interest expense, net 37,070 86,238 96,826 Income tax expense (benefit) 859 683 (17,091) Depreciation and amortization 113,205 96,003 225,259 Stock-based compensation expense 51,924 58,892 182,894 Unrealized fair value adjustment on energy derivatives (2,262) 2,262 — Impairment of goodwill and other intangibles — — 1,059,265 Impairment of property, plant and equipment — — 590,673 Losses on exchange or disposal of property, plant and equipment 4,210 1,956 28,025 Gain on sale of intangible assets — — (5,904) Loss (gain) on debt extinguishment 487 (20,065) 287 Cash restructuring charges — — 1,320 Fair value adjustment on acquired vendor liability — — 9,498 Equity line of credit expenses — — 1,668 HPC organizational startup costs 4,611 — — Post-emergence bankruptcy advisory costs 4,822 — — Change in fair value of convertible notes — — 186,853 Fair value adjustment on derivative warrant liabilities — — (37,937) Reorganization items, net (111,439) 191,122 (197,405) Change in fair value of warrants and contingent value rights 1,369,157 — — Other non-operating expenses (income), net (325) (2,530) 5,232 Other 123 1,474 5,276 Adjusted EBITDA $ 157,437 $ 169,548 $ (11,579) 1 Certain prior year amounts have been omitted for consistency with the current year presentation.
Biggest changeYou should review the reconciliation of n et loss to Adjusted EBITDA below and not rely on any single financial measure to evaluate our business. 56 The following table presents a reconciliation of n et loss to Adjusted EBITDA for the year s ended December 31, 2025 and 2024 (in thousands): Year Ended December 31, 2025 2024 Adjusted EBITDA Net loss $ (288,616) $ (1,437,874) Adjustments: Interest (income) expense, net (3,277) 37,070 Income tax expense 583 859 Depreciation and amortization 68,841 113,205 Stock-based compensation expense 98,236 51,924 Unrealized fair value adjustment on energy derivatives — (2,262) Loss on disposal of property, plant and equipment 9,680 4,210 Impairment of property, plant and equipment 11,359 122,869 Site conversion demolition costs 4,442 — Loss on debt extinguishment 1,933 487 Colocation startup costs — 4,611 Merger Agreement related costs 21,588 — Post-emergence bankruptcy advisory costs 1,784 4,822 Reorganization items, net — (111,439) Change in fair value of warrants and contingent value rights 33,059 1,369,157 Loss on legal settlements 10,690 2,070 Other non-operating expense (income), net 39 (2,395) Other — 123 Adjusted EBITDA $ (29,659) $ 157,437 57 Results of Operations for the Year Ended December 31, 2025 and 2024 The following table sets forth our selected consolidated statements of operations for each of the periods indicated (in thousands).
This MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying Notes to Financial Statements (Part II, Item 8 of this Form 10-K). This section generally discusses the results of operations for 2024 compared to 2023.
This MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying Notes to Financial Statements (Part II, Item 8 of this Form 10-K). This section generally discusses the results of operations for 2025 compared to 2024.
For discussion related to the results of operations and changes in consolidated financial condition for 2023 compared to 2022 refer to Part II, Item 7. — “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our fiscal year 2023 Annual Report on Form 10-K, which was filed with the SEC on March 13, 2024.
For discussion related to the results of operations and changes in consolidated financial condition for 2024 compared to 2023 refer to Part II, Item 7. — “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our fiscal year 2024 Annual Report on Form 10-K, which was filed with the SEC on February 20, 2025.
This competition focuses primarily on the identification and acquisition of new, high-power sites, but also includes competition for the capital required to build or modify existing sites to support HPC hosting.
This competition focuses primarily on the identification and acquisition of new, high-power sites, but also includes competition for the capital required to build or modify existing sites to support high-density colocation.
Further, this non-GAAP financial measure should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). We compensate for these limitations by relying primarily on GAAP results and using Adjusted EBITDA on a supplemental basis.
Further, this non-GAAP financial measure should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. We compensate for these limitations by relying primarily on GAAP results and using Adjusted EBITDA on a supplemental basis.
The prices of digital assets, specifically bitcoin, have experienced substantial volatility, meaning that high or low prices may have little or no relationship to identifiable market forces, may be subject to rapidly changing investor sentiment, and may be influenced by factors such as technology, regulatory void or changes, fraudulent actors, manipulation, and media reporting.
The prices of digital assets, specifically bitcoin, have experienced substantial volatility, meaning that high or low prices may have little or no relationship to identifiable market forces, may be subject to rapidly changing investor sentiment, and may be influenced by factors such as technology, regulatory developments and enforcement actions.
For additional information, including the reconciliation of net loss to Adjusted EBITDA, please refer to the table below. We believe Adjusted EBITDA is an important measure because it allows management, investors, and our Board of Directors to evaluate and compare our operating results, including our return on capital and operating efficiencies, from period-to-period by making the adjustments described above.
We believe Adjusted EBITDA is an important measure because it allows management, investors, and our Board of Directors to evaluate and compare our operating results, including our return on capital and operating efficiencies, from period-to-period by making the adjustments described above.
In HPC hosting, we compete with other providers of high-power data center capacity, such as major data center real estate investment trusts (“REITs”), developers of data centers, hyperscalers and bitcoin miners with capacity suitable for HPC hosting.
In our Colocation operations, we compete with other providers of high-power data center capacity, such as major data center real estate investment trusts, developers of data centers, hyperscalers and bitcoin miners with capacity suitable for high-density colocation services.
Network Hash Rate Our business is not only impacted by the volatility in digital asset prices, but also by increases in the competition for digital asset production.
Bitcoin Network Fundamentals Our business is not only impacted by the volatility in digital asset prices and transaction fees, but also by increases in the competition for digital asset production.
Increases in power costs, inability to mine digital assets efficiently and to sell digital assets at favorable prices will reduce our operating margins, impact our ability to attract customers for our services, may harm our growth prospects and could have a material adverse effect on our business, financial condition and results of operations.
Increases in power costs, inability to mine digital assets efficiently and to sell digital assets at favorable prices will reduce our operating margins and could have a material near-term adverse effect on our business, financial condition and results of operations.
The HPC data center hosting business is characterized by implementation of long-term contracts with customers spanning several years with terms and conditions outlining and resulting in stable, predictable revenue and cash flows over each period.
The Colocation segment is characterized by the implementation of long-term contracts with customers spanning 10+ years with terms and conditions resulting in stable, predictable revenue and cash flows over each period.
Similarly, a decline in network hash rate results in a decrease in difficulty, increasing mining proceeds. Transaction Fees Bitcoin miners receive a transaction fee in the form of a portion of bitcoin for validating transactions on the Bitcoin network. The transaction fee can vary in value over time, with higher fees prioritizing certain transactions over those with lower fees.
Bitcoin miners also receive a transaction fee in the form of a portion of bitcoin for validating transactions on the Bitcoin network. The transaction fee can vary in value over time, with higher fees prioritizing certain transactions over those with lower fees. An increase in Bitcoin network transaction fees increases mining proceeds.
Key Factors Affecting Our Financial Performance Market Price of Digital Assets Our Digital Asset Self-Mining segment is heavily dependent on the spot price of bitcoin.
Bitcoin Market Conditions Our Digital Asset Self-Mining segment is heavily dependent on the spot price of bitcoin.
Prior to April 1, 2024, we operated only in the Digital Asset Self-Mining and Digital Asset Hosted Mining segments. Our Digital Asset Self-Mining operation segment generates revenue from the deployment and operation our own large fleet of miners within our owned digital infrastructure as part of a pool of users that process transactions conducted on one or more blockchain networks.
Our Digital Asset Self-Mining operation segment generates revenue from the deployment and operation of our own large fleet of miners within our owned digital infrastructure as part of a pool of users that process transactions conducted on one or more blockchain networks. In exchange for this activity, we receive digital assets in the form of bitcoin.
During 2024, we were substantially engaged in constructing, refurbishing, reallocating or converting a substantial portion of our ten facilities in Alabama (1), Georgia (2), Kentucky (1), North Carolina (1), North Dakota (1), Oklahoma (1), and Texas (3) to support artificial intelligence related workloads, primarily for our one existing HPC customer, but also to support our commitment to meeting the growing demand for HPC solutions and diversifying our revenue streams.
We are constructing, refurbishing , reallocating or converting our ten facilities in Alabama (1), Georgia (2), Kentucky (1), North Carolina (1), North Dakota (1), Oklahoma (1), and Texas (3) to support artificial intelligence related workloads, in support of our existing colocation customer, but also to support our commitment to meeting the growing demand for high-density colocation solutions and diversifying our c ustomer base.
Our data centers house bitcoin mining computers and will increasingly house graphics processing units (“GPUs”). These specialized facilities lever our specialized design and construction proficiency by employing high-density, low-cost engineering, power designs and modular construction.
Our data centers house bitcoin mining computers and will increasingly house specialized compute accelerators, including graphics processing units (“ GPUs ”). These facilities leverage our specialized design and construction capabilities by employing high- density, innovative engineering , power designs and modular construction.
Electricity Costs Electricity cost is the major operating cost for the mining fleet, as well as for the hosting services provided to customers and related parties. The cost and availability of electricity are affected primarily by changes in seasonal demand, with peak demand during the summer months driving higher costs and increased curtailments to support grid operators.
The cost and availability of electricity are affected primarily by changes in seasonal demand, with peak demand during the summer months driving higher costs and increased curtailments to support grid operators.
Our Digital Asset Hosted Mining operation segment provides a full suite of services to our digital asset mining customers. We provide deployment, monitoring, troubleshooting, optimization and maintenance of our customers’ digital asset mining equipment and provide necessary electrical power, repair and other infrastructure services necessary for our customers to operate, maintain and efficiently mine digital assets.
We provide deployment, monitoring, troubleshooting, optimization and maintenance of our customers’ digital asset mining equipment and provide necessary electrical power, repair and other infrastructure services necessary for our customers to operate, maintain and efficiently mine digital assets. We do not currently expect to further expand our Digital Asset Hosted Mining operations in future years.
Future Commitments and Contractual Obligations Our material cash commitments from known contractual and other obligations consist primarily of obligations for long-term debt and related interest, leases for property and equipment, and capital expenditures related to the conversion of a significant portion of our data centers to hosting HPC operations.
Material Cash Requirements Our material cash requirements from known contractual and other obligations consist primarily of (i) obligations for long-term debt and related interest, (ii) operating lease obligations for property, and (iii) capital expenditure commitments related to the conversion of a significant portion of our data centers to high-density colocation operations.
As a result, the cost of new miners can be unpredictable and could be significantly different than our historical cost for new miners. 51 Our Competition and Customers In addition to factors underlying our mining business growth and profitability, the success of our HPC hosting business greatly depends on our ability to retain and develop opportunities with our existing customers, secure additional infrastructure and attract new customers.
Our Competition and Customers In addition to factors underlying our mining business growth and profitability, the success of our Colocation business greatly depends on our ability to retain and develop opportunities with our existing customers, secure additional infrastructure and attract new customers.
Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure defined as our net loss, adjusted to eliminate the effect of (i) interest income, interest expense, and other income (expense), net; (ii) provision for income taxes; (iii) depreciation and amortization; (iv) stock-based compensation expense; (v) Reorganization items, net; (vi) unrealized fair value adjustment on energy derivatives; (vii) change in fair value of warrant and contingent value rights; (viii) HPC organizational startup costs which are not reflective of the ongoing costs incurred after startup, (ix) post-emergence bankruptcy advisory costs incurred related to reorganization which are not reflective of the ongoing costs incurred in post-emergence operations, and (x) certain additional non-cash items that do not reflect the performance of our ongoing business operations.
Adjusted EBITDA is defined as our net loss, adjusted to eliminate the effect of (i) interest income, interest expense, and other income (expense), net; (ii) provision for income taxes; (iii) depreciation and amortization; (iv) stock-based compensation expense; (v) Reorganization items, net; (vi) unrealized fair value adjustment on energy derivatives; (vii) change in fair value of warrant and contingent value rights; (viii) Colocation segment startup costs primarily related to the initial ramp up of new colocation sites, (ix) impairment of property, plant and equipment, (x) site demolition costs incurred in connection with the conversion of existing facilities to colocation data center operations, (xi) post- emergence bankruptcy advisory costs incurred related to reorganization, (xii) transaction costs incurred in connection with the Merger Agreement, including advisory, legal, and other professional or consulting fees, (xiii) loss on legal settlements, and (xiv) certain additional non-cash items that do not reflect the performance of our ongoing business operations.
For more detailed information regarding the 2031 Convertible Notes Offering and the 2029 Convertible Notes Offering conversion, refer to Note 8 — Convertible and Other Notes Payable to our consolidated financial statements in Item 8 of Part II of this Annual Report on Form 10-K.
For additional information regarding our operating lease obligations, convertible notes, and purchase commitments, refer to Note 7 — Leases , Note 8 — Convertible and Other Notes Payable , and Note 11 — Commitments and Contingencies , respectively , to our consolidated financial statements included in Item 8 of Part II of this Annual Report on Form 10-K.
These assessments rely on significant judgment and require assumptions about future events and conditions, including Bitcoin prices, mining difficulty rates, electricity costs, and anticipated technological advancements. Management believes that its current estimates and assumptions are reasonable based on the information available. Actual results may differ, and any such differences could materially impact the Company’s financial condition and results of operations.
Management believes that its current estimates and assumptions are reasonable based on the information available. Actual results may differ, and any such differences could materially impact the Company’s financial condition and results of operations.
Bitcoin (as well as other digital assets) may have value based on various factors, including their acceptance as a means of exchange by consumers and others, scarcity, and market demand. Our financial performance and continued growth depend in large part on our ability to mine for digital assets profitably and to attract customers for our digital asset hosted mining services.
Bitcoin (as well as other digital assets) may have value based on various factors, including their acceptance as a means of exchange by consumers and others, scarcity, and market demand.
Property, Plant, and Equipment The Company has made significant investments in Bitcoin mining equipment, which constitutes a substantial portion of its property, plant, and equipment. Accounting for this equipment involves significant judgment and estimation uncertainty, particularly regarding the determination of its estimated useful life for depreciation purposes and the assessment of potential impairment.
Accounting for this equipment involves significant judgment and estimation uncertainty, particularly regarding the determination of its estimated useful life for depreciation purposes and the assessment of potential impairment. The Company depreciates its Bitcoin mining equipment using the straight-line method over an estimated useful life of three years.
See “ Key Business Operating Metrics and Non-GAAP Financial Measures ” below for our definition of, and additional information related to Adjusted EBITDA. Developments During 2024 CoreWeave HPC Hosting Agreements On February 29, 2024, the Company entered into a long-term contract with CoreWeave, Inc. (“CoreWeave”) to deliver 16 MW of infrastructure at the Company’s Austin, Texas facility.
See “ Key Business Operating Metrics and Non-GAAP Financial Measures ” below for our definition of, and additional information related to Adjusted EBITDA. Developments During 2025 On July 7, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with CoreWeave, Inc.
Our strategy is focused on hyperscale cloud-based providers and enterprises, including potential customers we believe have significant data center infrastructure needs that have not yet been outsourced or will require additional data center space and power to support their growth and their increasing reliance on technology infrastructure in their operations.
Our customer strategy targets hyperscale cloud-based providers, neoclouds, and enterprises, including customers we believe have significant data center infrastructure needs that have not yet been outsourced or will require additional data center space and power to support their growth and their increasing reliance on technology infrastructure in their operations. 51 Segments We have three operating segments: “Colocation,” consisting of providing high-density colocation services to customers employing AI and HPC related workloads, “Digital Asset Self-Mining,” consisting of performing digital asset mining for our own account, and “Digital Asset Hosted Mining,” consisting of providing hosting services to third parties for digital asset mining .
Difficulty The increase in bitcoin’s network hash rate results in a regular increase in the cryptographic complexity associated with solving blocks on its blockchain, or its difficulty. Increased difficulty reduces the mining proceeds of the equipment proportionally and eventually requires bitcoin miners to upgrade their mining equipment to remain profitable and compete effectively with other miners.
Increases in network hash rate generally increase network difficulty over time, which can reduce the amount of bitcoin earned for a given level of deployed hash rate and power consumption. 53 Increased difficulty reduces the mining proceeds of the equipment proportionally and eventually requires bitcoin miners to upgrade their mining equipment to remain profitable and compete effectively with other miners.
We have assessed our current and expected operating and capital expenditure requirements and our current and expected sources of liquidity, and have determined, based on our forecasted financial results and financial condition as of December 31, 2024, that our operating cash flows, existing cash balances, and continued access to debt markets will be sufficient to satisfy our cash requirements over the next twelve months and beyond. 67 Cash, Cash Equivalents, Restricted Cash and Cash Flows Cash and cash equivalents include all cash balances and highly liquid investments with original maturities of three months or less from the date of acquisition.
We have assessed our current and expected operating and capital expenditure requirements and our current and expected sources of liquidity, and have determined, based on our forecasted financial results and financial condition as of December 31, 2025 , 62 that our available liquidity, including cash and cash equivalents and expected operating cash flows and customer funding related to our colocation arrangements, will be sufficient to satisfy our cash requirements for at least the next twelve months.
The Company evaluates its Bitcoin mining equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of the equipment may not be recoverable. Recoverability is assessed by comparing the carrying amount of the asset to the sum of the undiscounted futures cash flows expected from its use and disposal.
Recoverability is assessed by comparing the carrying amount of the asset to the sum of the undiscounted futures cash flows expected from its use and disposal. If the carrying amount is not recoverable, the impairment loss is measured as the difference between the carrying amount and the asset's fair value.
The Company expects to make additional payments over the next year in connection with the agreement, subject to the timing of anticipated deliveries. Critical Accounting Estimates The critical accounting estimates, assumptions, judgments and the related policies that we believe have the most significant impact on our consolidated financial statements are described below.
Critical Accounting Estimates The critical accounting estimates, assumptions, judgments and the related policies that we believe have the most significant impact on our consolidated financial statements are described below. Property, Plant, and Equipment The Company has made significant investments in Bitcoin mining equipment, which constitutes a substantial portion of its property, plant, and equipment.
Under these contracts, customers pay fixed payments (based on electric capacity) and variable payments on a recurring basis. HPC hosting power fees are passed through to the customer without markup and are included on a gross basis in HPC hosting revenue.
Under our contracts, customers generally pay fixed monthly fees based on billable customer power capacity and variable usage‑based charges and other billable services. P ower fees are passed through to customers without markup and are recognized as revenue on a gross basis, with a corresponding charge to cost of colocation services.
Business Strategy Our business strategy is to grow our revenue and profitability by expanding our existing large-scale data center infrastructure portfolio configured for specialized computers performing specific, high-value applications such as cloud computing, machine learning and artificial intelligence, and maximizing the portion of our existing infrastructure portfolio contracted for HPC hosting.
Business Strategy Our strategy is to grow our revenue and profitability by converting and expanding our large-scale data center infrastructure portfolio to deliver high-density colocation services for artificial intelligence and HPC workloads.
These new agreements leverage the Company’s existing digital infrastructure and expertise in third-party hosting solutions. We believe that using our existing infrastructure for HPC hosting operations will provide more consistent dollar-based revenue and represents substantially less risk than our traditional hosted bitcoin mining or our bitcoin self-mining operations.
We believe leveraging our existing infrastructure for high-density colocation services will provide more stable and predictable revenue streams, and represents substantially less risk over time than our traditional hosted bitcoin mining or self-mining operations.
The Monte Carlo simulation model was used to determine their fair value, which required inputs that were both unobservable and significant to the overall fair value measurement, including expected volatility, which reflects anticipated variability in the Company’s stock price over time.
The model incorporates assumptions that are both unobservable and significant to the overall fair value measurement, including expected volatility of the Company’s common stock and its correlation with the Russell 2000 Index, which reflect anticipated variability and relative performance of the Company’s stock price over the performance period.
Our Business Model Business Overview As a large-scale owner and operator of high-power digital infrastructure for digital asset mining and hosting services, we believe that we are well positioned to serve customers in digital asset mining and an expanding market for HPC operations.
Our Business Model Business Overview As a large-scale owner and operator of high-power digital infrastructure, we generate revenue primarily through (i) Colocation services (ii) Digital Asset Self‑Mining, and (iii) Digital Asset Hosted Mining services. We are in the process of r eallocating significant portions of our infrastructure and capital from bitcoin mining to HDC services for AI and HPC workloads.
Our HPC Hosting operation segment provides colocation, facilities operations, security and other services to third-party HPC customers to support workloads for machine learning and artificial intelligence. As of December 31, 2024, we have operational capacity of approximately 784 MW to support of our existing and planned HPC operations.
Prior to April 1, 2024, we operated primarily in the Digital Asset Self-Mining and Digital Asset Hosted Mining segments. Our Colocation segment provides space, power, cooling, facilities operations, security and other services to third-party customers to support workloads for machine learning and artificial intelligence.
If the carrying amount is not recoverable, the impairment loss is measured as the difference between the carrying amount and the asset's fair value. Potential impairment triggers include a significant decline in the market price of Bitcoin or the introduction of new technologies that reduce the efficiency or profitability of the Company’s existing equipment.
Potential impairment triggers include a significant decline in the market price of Bitcoin or the introduction of new technologies that reduce the efficiency or profitability of the Company’s existing equipment. These assessments rely on significant judgment and require assumptions about future events and conditions, including Bitcoin prices, mining difficulty rates, electricity costs, and anticipated technological advancements.
Digital asset hosted mining revenue from customers and related parties is based on electricity-based consumption contracts with our customers and related parties. Most contracts are renewable, and our customers are generally billed on a fixed and recurring basis each month for the duration of their contract, which vary from one to three years in length.
Digital asset hosted mining revenue Digital asset hosted mining revenue represents fees earned for providing infrastructure, power and related services to third‑party miners. Under our hosting contracts, customers are generally billed monthly based on power capacity and/or power consumption over the term of the arrangement, which typically ranges from one to three years.
If we had used different assumptions or estimates, the estimated fair value and expense recognition of the MSUs could have been materially different. Management believes its estimates are reasonable based on the information available.
These assumptions involve judgment and are based on a combination of historical data and market information. If different assumptions had been used, the resulting grant-date fair value of these awards, and the related stock- based compensation expense recognized over the requisite service period, could have been materially different.
For digital asset mining, our proprietary thermodynamic structural design manages heat and airflow to deliver best-in-class uptime and, ultimately, increased mining rewards to us and our customers.
For digital asset mining, our proprietary thermodynamic structural design manages heat and airflow to deliver reliable operations to us and our customers. As part of our go-forward strategy, w e are in the process of converting our entire data center portfolio to support our high-density Colocation operations for AI and HPC workloads.
The Company depreciates its Bitcoin mining equipment using the straight-line method over an estimated useful life of three years. This estimate reflects management’s judgment based on the current state of technology and industry practices. However, the actual useful life of this equipment is uncertain due to the rapid pace of technological advancements in the Bitcoin mining industry.
However, the actual useful life of this equipment is uncertain due to the rapid pace of technological advancements in the Bitcoin mining industry . 63 The Company evaluates its Bitcoin mining equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of the equipment may not be recoverable.
The decrease in hosted mining revenue from customers was primarily driven by the termination of contracts with several customers since 2023, due primarily to our shift to HPC hosting. Total digital asset hosted mining revenue from related parties was nil for the year ended December 31, 2024, compared to $10.1 million for the year ended December 31, 2023.
The year over year decrease in hosted mining revenue from customers was primarily driven by our shift to our Colocation operations.
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(“we,” “us,” “our,” the “Company,” “Core Scientific,” or “Core”) is a leader in designing, building and operating digital infrastructure for high-performance computing.
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Unless otherwise indicated, references to “2025” and “2024” in this MD&A refer to the years ended December 31, 2025 and 2024, respectively.
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Since our inception in 2018, we have been a premier provider and operator of dedicated, purpose-built facilities and software solutions for digital asset mining for ourselves and our third-party 44 customers. and in March 2024, we announced the provision of digital infrastructure colocation services to a third party engaged in high-performance computing (“HPC”).
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As described in Note 3 — Restatement of Previously Issued Financial Statements in Part II, Item 8 to the consolidated financial statements included in this Annual Report, during the preparation of the consolidated financial statements for the year ended December 31, 2025, the Company identified errors in its previously issued consolidated financial statements related to the accounting for property, plant and equipment demolished in connection with the conversion of certain facilities from digital asset mining operations to high-density colocation infrastructure.
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In May 2024, we expanded our relationship with CoreWeave, Inc. (“CoreWeave”) the artificial intelligence (“AI”) hyperscaler, to provide approximately 200 megawatts (“MW”) of digital infrastructure to host CoreWeave’s HPC operations and provided CoreWeave options with respect to the Company’s existing facilities to provide approximately 500 MW of digital infrastructure on similar terms.
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The Company is concurrently filing an amended Annual Report on Form 10-K/A for the year ended December 31, 2024 and amended Quarterly Reports on Forms 10-Q/A for the quarterly periods ended March 31, 2025, June 30, 2025, and September 30, 2025. The discussion that follows presents 2024 comparative data on an as-restated basis .
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In June and August 2024, the Company announced CoreWeave’s execution of options to secure an additional 70 MW and 112 MW, respectively, of infrastructure to host its HPC operations. In October 2024, the Company announced that CoreWeave had exercised its final option for an additional 120 MW of infrastructure.
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(“we,” “us,” “our,” the “Company,” “Core Scientific,” or “Core”) designs, builds and operates large-scale purpose-built data centers that support high-density colocation services and digital asset mining for b oth our own account and to a lesser extent, third-party customers.
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As a result, we intend to focus our business development and marketing efforts on expanding our HPC hosting customer base. As a result, we initiated a significant strategic transition from bitcoin mining to hosting and colocation services for customers employing hosting services for HPC workloads such as artificial intelligence-related applications.
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Our data centers are optimized for power-intensive, mission-critical computing workloads, with a focus on artificial intelligence (“AI”) and other high-performance computing (“HPC”) applications. In 2024, the Company announced its first high-density colocation contract with CoreWeave, Inc.
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Currently, the vast majority of our revenue is from mining bitcoin for our own account (‘self-mining”). We remain committed to maintaining the efficiency of our digital asset mining while capitalizing on the opportunities presented by the growing HPC hosting business. We had an average hourly operating power demand of approximately 572 megawatts (“MW”) for the year ended December 31, 2024.
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(“CoreWeave), a provider of high-performance computing (“HPC”) services, which subsequently had been expanded to 590 megawatts (“MW”) of leased customer power capacity over the exercise of several contractual options.
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We had secured approximately 1,317 MW of contracted power capacity at our sites as of December 31, 2024. We also operate and manage one of the largest data center infrastructure asset bases among publicly listed North American miners with operational capacity of approximately 784 MW in support of our mining and HPC operations.
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This will be done as circumstances allow and in a manner designed to retain access to electrical power under our control, maximize the value of our digital asset mining equipment to third parties, and fulfill existing obligations to suppliers and customers. We intend to convert every megawatt in our portfolio to high-density colocation infrastructure over the next three years .
Removed
Our average self-mining fleet energy efficiency for the year ended December 31, 2024 was 25.1 joules per terahash, compared to 27.9 joules per terahash for the year ended December 31, 2023. Self-mining fleet energy efficiency is a measure of our fleet’s average actual energy efficiency over the period presented.
Added
In addition to converting our existing portfolio, we are actively pursuing the acquisition of new sites, including land and power capacity, to expand our data center footprint beyond our current facilities. Currently, the vast majority of our revenue is from mining bitcoin for our own account (“self-mining”).
Removed
Our total revenue was $510.7 million, $502.4 million and $640.3 million for the years ended December 31, 2024, 2023, and 2022, respectively. We generated an operating loss of $19.2 million and operating income of $9.0 million for the years ended December 31, 2024 and 2023, respectively, and an operating loss of $2.11 billion for the year ended December 31, 2022.
Added
We will continue to mine digital assets and manage our self-mining fleet with a focus on power expense coverage and cash generation while we convert our data centers for alternative high-density colocation service business opportunities.
Removed
We incurred net loss of $1.32 billion, $246.5 million and $2.15 billion for the years ended December 31, 2024, 2023 and 2022, respectively. Our adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) was $157.4 million, $169.5 million and $(11.6) million for the years ended December 31, 2024, 2023 and 2022, respectively. Adjusted EBITDA is a non-GAAP financial measure.
Added
We expect to increase revenue derived from high-density colocation (“HDC”) services as capacity gets delivered to our current end customer as well as when we sign and begin generating revenue from new colocation customers. 50 As of December 31, 2025, we operated a diversified portfolio of ten data centers across seven U.S. states, representing approximately 1.4 gigawatts (“GW”) of gross utility power capacity, or approximately 920 megawatts (“MW”) of total leasable customer power capacity.
Removed
Following the commencement of operations in the Austin, Texas facility, on June 3, 2024, the Company entered into a series of long-term contracts with CoreWeave to deliver approximately 200 MW of infrastructure to host CoreWeave’s HPC operations, which will require the Company to modify multiple existing sites.
Added
We continue to be in active discussions with both our existing and future potential utility providers regarding additional power allocations.
Removed
The site modifications commenced in the second half of fiscal 2024 and operational status is expected to begin in the first half of fiscal 2025. On June 25, 2024, the Company announced CoreWeave’s execution of an option to secure an additional 70 MW of infrastructure to host its HPC operations.
Added
During 2025, total revenue decreased to $319.0 million from $510.7 million , primarily due to lower digital asset self-mining revenue and digital asset hosted mining revenue as we shifted capital and infrastructure toward colocation , partially offset by higher colocation revenue from incremental billable customer power capacity. Operating loss increased to $245.6 million in 2025 from $142.1 million in 2024.
Removed
Operational status for the additional 70 MW is expected in the second half of 2025. Further, on August 6, 2024, the Company announced that CoreWeave had executed an option to secure an additional 112 MW of infrastructure to host its 45 HPC operations.
Added
Net loss was $288.6 million in 2025 and included significant non-cash items, including changes of $33.1 million in the fair value of warrants and contingent value rights. Adjusted EBITDA decreased to $29.7 million in 2025 from $157.4 million in 2024. Adjusted EBITDA is a non-GAAP financial measure.
Removed
On October 22, 2024, the Company announced that CoreWeave had exercised its final option for an additional 120 MW of infrastructure. Convertible Notes Offerings On December 5, 2024, the Company completed a private offering (the “2031 Convertible Notes Offering”) of $625.0 million aggregate principal amount of 0.00% Convertible Senior Notes due 2031 (the “2031 Convertible Notes”).
Added
(“CoreWeave”) pursuant to which CoreWeave would acquire the Company in an all-stock transaction, subject to stockholder approval and other customary closing conditions. On October 30, 2025, the Company terminated the Merger Agreement in accordance with its terms following Company stockholder rejection of the terms of the Merger Agreement at a special meeting of stockholders on that date.
Removed
The net proceeds from the 2031 Convertible Notes Offering were approximately $608.7 million, after deducting the initial purchasers’ discounts and commissions and the Company’s estimated offering expenses.
Added
The Company incurred $21.6 million of advisory, legal, and other professional or consulting fees related to the proposed transaction which are reflected in our results of operations for the year ended December 31, 2025.
Removed
The Company intends to use the net proceeds from the 2031 Convertible Notes Offering for general corporate purposes, including working capital, operating expenses, capital expenditures, acquisitions of complementary businesses or assets, or other repurchases of its securities.
Added
Other than these costs , the termination of the Merger Agreement did not result in any termination fees and did not have a material impact on the Company’s financial position or results of operations.
Removed
On August 19, 2024, the Company completed a private offering (the “2029 Convertible Notes Offering”) of $460.0 million aggregate principal amount of 3.00% Convertible Senior Notes due 2029 (the “2029 Convertible Notes”). The net proceeds from the 2029 Convertible Notes Offering were approximately $447.6 million, after deducting the initial purchasers’ discounts and commissions and the Company’s estimated offering expenses.
Added
We focus primarily on contracting our digital infrastructure for Colocation, mining bitcoin , and enhancing efficiencies in our operations. In self‑mining, we earn bitcoin by operating our owned mining fleet through mining pool arrangements, and in hosted mining and colocation we earn fees for providing infrastructure, power and related services to third parties.
Removed
The Company used approximately $62.0 million of the net proceeds from the 2029 Convertible Notes Offering to repay in full the outstanding loans under the Exit Credit Agreement, of which $0.8 million was paid for interest.
Added
We plan to develop and bring online the infrastructure required to meet our existing contractual commitments to our high-density colocation customer, expand our infrastructure portfolio by securing additional land and power at new and existing sites, and sign additional colocation customers to diversify our revenue base.
Removed
Additionally, the Company used approximately $154.1 million of the net proceeds from the 2029 Convertible Notes Offering to redeem all of the outstanding Secured Notes, of which $4.1 million was paid for interest.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeRisk Regarding the Price of Bitcoin Our business and development strategy is focused on maintaining and expanding our bitcoin Mining operations to maximize the amount of new bitcoin rewards we earn. As of December 31, 2024, we held 255.9 bitcoin, with a carrying value of $23.9 million, all of which were produced from our bitcoin mining operations.
Biggest changeOur market risk exposure is primarily the result of fluctuations in the price of bitcoin and commodities. Risk Regarding the Price of Bitcoin As of December 31, 2025 , we held 2,537 bitcoin, with a carrying value of $222.0 million , all of which were produced from our bitcoin mining operations.
The future value of bitcoin will affect the amount of revenue recognized from our operations, and any changes in the future value of bitcoin while we hold it in our account would also be reported in our net income (or loss), either of which could have a material adverse effect on the market price for our securities. 71 Bitcoin prices for the year ended December 31, 2024 ranged from a low of $38,515 to a high of $108,253, with an average price of $65,894.
The future value of bitcoin will affect the amount of revenue recognized from our operations, and any changes in the future value of bitcoin while we hold it in our account would also be reported in our net income (or loss), either of which could have a material adverse effect on the market price for our securities.
Removed
Item 7A. Quantitative and Qualitative Disclosures About Market Risk The following discussion about our market risk exposures involves forward-looking statements. Actual results could differ materially from those projected in our forward-looking statements.
Added
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates.
Removed
For more information regarding the forward-looking statements used in this section and elsewhere in this Annual Report on Form 10-K, see the section titled “Cautionary Note Regarding Forward-Looking Statements” included at the forepart of this Annual Report on Form 10-K. Foreign Currency and Exchange Risk The vast majority of our cash generated from revenue is denominated in U.S. dollars.
Added
Bitcoin p rices for the year ended December 31, 2025 ranged from a low of $74,485 to a high of $126,210 , with an average price of $101,639 . Commodity Price Risk Certain operating costs incurred by us are subject to price fluctuations caused by the volatility of underlying commodity prices, the most significant of which is electricity.
Removed
A hypothetical 10% increase or decrease in the price of bitcoin produced during the year ended December 31, 2024, would have increased or decreased net loss by approximately $40.9 million. Commodity Price Risk Certain of our operating costs are subject to price fluctuations caused by the volatility of the underlying commodity prices, including electricity used in our data center operations.
Added
We closely monitor the cost of electricity at all of our locations. Our colocation customer agreements include power pass-through provisions that allow us to recover the cost of customer power usage. We did not have commodity derivative instruments outstanding as of December 31, 2025. 64
Removed
The Company manages the commodity price risk by entering into derivative instruments to manage the variability in future cash flows from forecasted energy purchases. Management considers energy prices, weather forecasts, forecasted energy purchases, and other factors when determining the extent of its risk management strategy over commodity price risk.
Removed
A hypothetical 10% change in commodity prices would have resulted in an immaterial change in the fair value of our commodity-based derivatives as of December 31, 2024 and 2023.
Removed
For more information, refer to Note 2 — Summary of Significant Accounting Policies to our consolidated financial statements in Item 8 of Part II of this Annual Report on Form 10-K. 72

Other CORZW 10-K year-over-year comparisons