CLSK 10-K & 10-Q changes, risk factors and insider trading

Risks Related to Our Business volatile and unpredictable cycles in the emerging and evolving industries in which we operate;

our exposure to pricing risk and volatility associated with the value of bitcoin because we do not hedge our investment in bitcoin;

bitcoins we mine or hold for our own account may be subject to loss, theft,theft or restriction on access;

increased scrutiny and changing expectations from stakeholders with respect to Environmental, Social, and Governance (“ESG”) practices and the impacts of climate change;

the limited precedent for financial accounting of digital assets, and the possibility of future accounting requirements for transactions involving digital assets; and our limited insurance protection exposes us and our stockholders to the risk of loss of our bitcoin for which no person is liable.

future developments regarding the treatment of digital assets for U.S. federal income and applicable state, local and non-U.S. tax purposes; and potential exposure to specifically designated nationals or blocked persons as a result of our interactions with the bitcoin network.

we have financed our strategic growth primarily by issuing new shares of our common stock, which dilutes the ownership interests of current stockholders; and provisions in the Nevada Revised Statutes and our bylaws could make it very difficult for an investor to bring any legal actions against our directors or officers for violations of their fiduciary duties or could require us to pay any amounts incurred by our directors or officers in any such actions.

The bitcoin miningmining, data center and related industries are emerging and evolving, which may lead to period-to-period variability in our operating results and may make it difficult to evaluate our future prospects. If we are not able to timely and appropriately adapt to changes in our business environment or to accurately assess where we are positioned within a business cycle, our business, financial condition or results of operations may be materially and adversely affected.

The markets in which we participate are highly competitive, and as we mayenter benew unablemarkets, towe successfullyare compete.competing against companies with greater resources and capitalization.

We compete in the highly competitive market for certain operational aspects of our bitcoin mining business, including, but not limited to, the acquisition of new miners, obtaining the lowest cost of electricity, obtaining clean energy sources, obtaining access to energy sites with reliable sources of power and evaluating new technology developments in the industry. Evolving industry standards, rapid price changes and product obsolescence impact the market and its various participants, including us. Our competitors include many domestic and foreign companies, many of which have substantially greater financial, marketing, personnel and other resources than we do, which may cause us to be at a competitive disadvantage. The success of our bitcoin mining business will be dependent upon our ability to purchase additional miners, adapt to changes in technology in the industry,industry and to obtain sufficient energy at reasonable prices, amongst other things.

We rely on a limited number of suppliers for the purchase and delivery of our miners to support our bitcoin mining operations. There can be no assurance that such key suppliers and manufacturers will provide components, products or miners in a timely and cost-efficient manner or otherwise meet our needs and expectations. Any disruption in the operations of such key suppliers or manufacturers could delay our ability to expand our bitcoin mining operations. Our ability to manage such relationships and timely replace suppliers and manufacturers, if necessary, is critical to our success. Our failure to timely replace our manufacturers and suppliers, should that become necessary, could materially and adversely affect our results of operations. For example, we depend on Bitmain, MicroBT, Canaan Crypt Solutions and Sunnyside Digital for our miners and any change in their ability to manufacture or distribute and deliver these products could have a significant impact on our results of operations. Supply chain disruptions resulting from factors such as tariffs, inflation, labor supply and shipping container shortages and the COVID-19 pandemic have impacted, and may continue to impact, us and our third-party manufacturers and suppliers. We are currently in the preliminary stages of building out supplier relationships in respect of our emerging HPC and AI business line. We are reliant on third parties for our expansion efforts, including construction contractors and suppliers of infrastructure, to provide accurate estimates and timelines. If those parties experience delays, cannot access adequate capital,capital or are exposed to inflation pressures or supply chain disruptions, our expansion efforts will be similarly impacted.

We rely heavily on our management team, whose continued service and performance isare critical to our future success. Any failure by management to properly manage growth, including hiring and retaining competent and skilled management and other personnel, could have a material adverse effect on our business, operating results and financial condition.

We currently have sixfour executive officers — our Chief Executive OfficerOfficer, S. Matthew Schultz, our President and President, Zachary Bradford, our Chief Financial Officer, Gary Vecchiarelli, our Chief Development Officer and Executive Chairman,Vice S.President, MatthewScott Schultz,Garrison and our Chief Operating Officer,Officer Scott Garrison, ourand Chief Technology Officer, Taylor Monnig, and our Chief Accounting Officer, Brian Carson — who are responsible for our management functions and are responsible for strategic development, financing and other critical functions. Our future success depends significantly on the continued service and performance of our existing management team. The departure, death, disability or other extended loss of services of any member of our management team, particularly with little or no notice, could cause delays on projects, frustrate our growth prospects and could have an adverse impact on our industry relationships, our project exploration and development programs, other aspects of our business and our financial condition, results of operations, cash flow and prospects. Of note, on August 10, 2025, Zachary K. Bradford resigned as President and Chief Executive Officer of the Company and as a director of the Company. Mr. Bradford’s departure from the Company could have an adverse impact on our business, operating results and financial condition going forward.

Our success, growth prospects and ability to capitalize on market opportunities also depend to a significant extent on our ability to identify, hire, motivate and retain qualified managerial personnel, including additional senior members of management. Our growth may be constrained by resource limitations as competitors and customers compete for increasingly scarce human capital resources. The demand for professionals familiar with bitcoin mining and data center operations and other skilled workers is currently high. Our competitors may be able to offer a work environment with higher compensation or more opportunities than we can. Any new personnel we hire may not be or become as productive as we expect, as we may face challenges in adequately or appropriately integrating them into our workforce and culture. If we are unable to attract and retain a sufficient number of skilled personnel, our ability to successfully implement our business plan, grow our company and maintain or expand our mining operations may be adversely affected, and the costs of doing so may increase, which may adversely impact our business, financial condition and results of operations.

As part of our efforts to grow our hashratehashrate, develop our data center business, and remain competitive in the market,markets we operate in, we have acquired facilities, entered into new and re-negotiated purchased power agreements and invested in additional new and used mining and other data center equipment. We are also reliant on third parties for our expansion efforts, including construction contractors and providers of infrastructure equipment, who may be burdened by tariffs, delays in manufacturing, supply chain problems, lesslimited access to capital due to macro-economic conditions, or inflation. This could increase our costs and/or delay our expansion and acquisition efforts. If we are unable to complete our planned expansions or acquisitions on schedule and within our anticipated cost estimates, our deployment of newly purchased miners and our HPC and AI services may be delayed, which could affect our competitiveness and our results of operation, which could have a material adverse effect on our financial condition and the market price for our securities.

We maintain our cash at financial institutions, often in balances that exceed federally insured limits. We maintain the majority of our cash and cash equivalents in accounts at banking institutions in the United States that we believe are of high quality. Cash held in these accounts often exceedexceeds the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. If such banking institutions were to fail, we could lose all or a portion of the amounts held in excess of such insurance limitations. The FDIC took control of three such banking institutions, Silicon Valley Bank on March 10, 2023, Signature Bank on March 12, 2023 and First Republic Bank on May 1, 2023. While we did not have an account at any of these three banks, in the event of the failure of any of the financial institutions where we maintain our cash and cash equivalents, there can be no assurance that we would be able to access uninsured funds in a timely manner or at all. Any inability to access or delay in accessing these funds could adversely affect our business and financial position. Our ability to open accounts at certain financial institutions is limited by the policies of such financial institutions to not accept clients that are in the digital asset industry.

The value of bitcoin has historically been subject to wide swings. Because we do not currently hedge our investment in bitcoinswings, and do not intend to for the foreseeable future, we are directly exposed to bitcoin’s price volatility and surrounding risks.

As an open-source project, bitcoin does not generate revenues for its contributors, and contributors are generally not compensated for maintaining and updating the bitcoin network protocol. The lack of guaranteed financial incentives for contributors to maintain or develop the bitcoin network and the lack of guaranteed resources to adequately address emerging issues with the bitcoin network may reduce incentives to address the issues adequately or in a timely manner. To the extent that contributors may fail to adequately update and maintain the bitcoin network protocol, there may be a material adverse effect on our business, prospects,prospects or operations and potentially the value of any bitcoin or other cryptocurrencies we mine or otherwise acquire or hold for our own account.

There is a risk that some or all of our bitcoins could be lost or stolen. Bitcoins are stored in and accessed by cryptocurrency sites commonly referred to as “wallets.” A hot wallet refers to any cryptocurrency wallet that is connected to the Internet. Generally, hot wallets are easier to set up and access than wallets in cold storage, but they are also more susceptible to hackers and other technical vulnerabilities. Cold storage refers to any cryptocurrency wallet that is not connected to the Internet. Cold storage is generally more secure than hot storage, but is not ideal for quick or regular transactions. As of September 30, 2024,2025, we held approximately 99%98% of our bitcoin in cold storage and 1%2% in hot wallets. Due to our usage of in cold storage, we may experience lag time in our ability to respond to market fluctuations in the price of our cryptocurrency assets.

In addition, our borrowings under the Master LoanLoans (as defined below) are collateralized by approximately $78,125$294,648 of bitcoin as of September 30, 2024.2025. Pursuant to the terms of the Master LoanLoans and related security agreement, Coinbaseour hasLenders have the right to sell, pledge, rehypothecate, assign, use or otherwise dispose of the bitcoin collateralizing our borrowings under the Master Loan. This could increase our exposure to the risk of a counterparty default since, under such circumstances, we may be unable to recover the posted collateral promptly or may be unable to recover all of the posted collateralcollateral. Any of these events may adversely affect our operations and, consequently, our investments and profitability.

In response to these and other similar events (including significant activity by various regulators regarding digital asset activities, such as enforcement actions, against a variety of digital asset entities, including Coinbase, Kraken and Binance), the digital asset markets, including the market for bitcoin specifically, have experienced extreme price volatility and several other entities in the digital asset industry have been, and may continue to be, negatively affected, further undermining confidence in the digital asset markets and in bitcoin. These events have also negatively impacted the liquidity of the digital asset markets as certain entities affiliated with FTX and platforms such as Coinbase, Kraken and Binance have engaged, or may continue to engage, in significant trading activity. If the liquidity of the digital asset markets continues to beis negatively impacted by these or similar events, digital asset prices (including the price of bitcoin) may continue to experience significant volatility and confidence in the digital asset markets may be further undermined. These events are continuing to develop and itIt is not possible to predict at this time all of the risks that theythese or similar events may pose to us, our service providers or on the digital asset industry as a whole.

Although we had no direct exposure to FTX or any of the above-mentioned cryptocurrency companies (with the exception of Coinbase, which is discussed in the below risk factor entitled, “—Potential that, in the event of a bankruptcy filing by a custodian, bitcoin held in custody could be determined to be property of a bankruptcy estate and we could be considered a general unsecured creditor thereof”), nor any material assets that may not be recovered or may otherwise be lost or misappropriated due to the above-mentioned bankruptcies, the failure or insolvency of large exchanges like FTX or other significant players in the digital asset space may cause the price of bitcoin to fall and decrease confidence in the ecosystem, which could adversely affect an investment in us. Such market volatility has had a material and adverse effect on our results of operations and financial condition, and we expect our results of operations to continue to be affected by bitcoin’s price as the results of our operations are significantly tied to the price of bitcoin. If we do not continue adjusting our short-term strategy to optimize our operating efficiency in the current dynamic market conditions, such market conditions could have a further negative result on our business, prospects or operations.

We design our infrastructure to responsibly secure and support bitcoin,both thebitcoin world’smining mostand recognizedAI digitaland commodity.HPC workloads. We cultivate trust and transparency among our employees,employees and the communities where we operate in and the people around the world who depend on bitcoin.operate.

Bitcoin mining has historically been our principal revenue generating business activity. Factors such as access to computerspecialized processingmining capacity,servers, interconnectivity,energy, electricity cost, environmental factors (such as cooling capacity) and location play important roles in mining. As of September 30, 2024,2025, our operating mining units wereproduced capablean average computing power of producing45.6 overEH/s, 27.6reaching a peak of 50 EH/s ofduring computingthe power.period. In bitcoin mining, “hashrate” is a measure of the computing and processing power and speed by which a mining computer mines and processes transactions on the bitcoin network. We expect to continue increasing our computing power through the end of 20242025 and beyond as we expand our infrastructure at our owned sites in Wyoming, Tennessee,Tennessee and across our portfolio of data centers in Georgia, Mississippi, seekand Wyoming, while also pursuing regional expansion opportunities and evaluating strategic acquisition targets, and through strategic co-location agreements. As of October 31, 2024, we are capable of producing 31.5 EH/s of computing power.targets. A company’s computing powerpower, measured in hashratehashrate, is generallya consideredsignificant driver of its bitcoin mining revenue, and when compared to bethe global hashrate, determines the company’s market share, making hashrate one of the most important metrics for evaluating bitcoin mining companies.

We owned approximately 235,000336,544 minersminers, of which approximately 241,934 were in service as of September 30, 2024,2025. of which approximately 189,000 were in service and theThe remainder mainlyprimarily pertainsconsists toof new machines that are ready tofor installinstallation in theat expansion insites, Wyoming,are Mississippiunder andevaluation Tennessee.for Theserelocation, or are awaiting repair. Our miners range in age from 1-451-57 months and have an average age of approximately 1215 months. Effective,Effective May 2024, we estimate the useful lives of our miners to be 3-yearsthree years (see Note 2 - Summary of Significant Accounting Policies). We do not have scheduled downtime for our miners.miners; Wehowever, we periodically perform unscheduled maintenance and curtailments on our miners, but such downtime has not historically been significant. When performing unscheduled maintenance, we will typically replace the miner with a substitute miner to limit overall downtime. The miners ownedin service as of September 30, 20242025 havehad a range of energy efficiency (watts per terahash – “w/th”) of 15.013.5 to 3429.5 wW/thTH with an average operating energy efficiency of 21.916.7 wW/th.TH.

As of September 30, 2024,2025, we held approximately 6,81910,428 bitcoins and had a receivable for 1,2292,583 bitcoin that was posted as collateral and recorded on our Consolidated Balance Sheets as “Receivable for bitcoin collateral”.collateral. The fair value of our bitcoin as of September 30, 20242025 was $431,661$1,189,443 on our Consolidated Balance Sheets and the fair value of our Receivable for bitcoin collateral was $77,827.$294,648. Effective October 1, 2023, we adopted Accounting Standards Codification (“ASC”) 350-60 - Accounting for and Disclosure of Crypto Assets, which requires bitcoin to be measured at fair value. See Note 2 - Summary of Significant Accounting Policies for more details on the impact of implementation to the consolidated financial statements. As a result, the carrying value of each bitcoin we held aton October 1, 2023 and each subsequent reporting period reflects the price of one bitcoin quoted on the active exchange, Coinbase, at the end of the reporting period. Therefore, decreases in the market price of bitcoin could have a material impact on our earnings and on the carrying value of our bitcoin.

The energy efficiency of a mining fleet helps drive profitability, because the most significant direct expense for bitcoin mining is power. We measure efficiency by the watts (or joules) of energy required to produce each terahash of processing power. We believe we operate a highly efficient fleet of miners.

Energy prices can be highly volatile and global eventsevents. (includingWe thehave wara indiverse Ukraineportfolio and the resulting natural gas shortage) causedof power pricescontracts to increase nationwide in 2022. All ofacross our wholly owned and operated sites in Georgiathe States of Georgia, Mississippi, Tennessee and MississippiWyoming. andThe ourmajority hostedof minersthese in New York Statecontracts are currently subject to variable prices and market rate fluctuations with respect to wholesale power costs. Such prices are governed by power purchase agreements which vary by location, and said prices can change hour to hour. While this renders energy prices less predictable, it also gives us greater ability and flexibility to actively manage the energy we consume with a goal of increasing profitability and energy efficiency. Energy prices are also highly sensitive to weather events, such as winter storms, polar vortices and hurricanes, which increase the demand for power regionally. When such events occur, we may curtail our operations to avoid using power at increased rates. The average power prices we paid in our owned facilities for the years ended September 30, 2024,2025, 2024 and 2023 andwere 2022 were$0.057, $0.046, $0.048 and $0.041$0.048 per KWH,kWh, respectively.

The management team makes real-time determinations on the need and timing during which we should curtail our operations. We curtail when power prices exceed the value we would receive for the corresponding fixed bitcoin reward. This means if bitcoin’s value decreases or energy prices increase, our curtailment will increase; likewise, when bitcoin’s value increases and energy prices decrease, our curtailment will decrease. The management teamand managesoperations thisteams decisionmanage these decisions on an hour-by-hour basis across all our sites, both wholly owned and hosted.sites. The Company did not have significant curtailment and maintained an average uptime greater than 20%90% during the years ended September 30, 2024,2025, 20232024 and 2022.2023. A large portion of the curtailment during the first quarter related to Hurricane Helene which affected our Georgia sites at the end of September 2024 to the beginning of October 2024. The southeast Georgia sites were shut down as the hurricane began impacting the region, thus at the beginning of the October 2024, these sites were operating on approximately 200 MW which gradually increased during the same week to their full 365 MW capacity when utility service was restored to the communities.

The Company records depreciation expense (a non-cash expense) on its miners on a straight-line basis over the miners' expected useful life. Such non-cash depreciation amounts are recorded within the Consolidated Statements of Operations and Comprehensive Income (Loss) as "Depreciation and Amortization".amortization. Although the Company recognizes depreciation with respect to its mining assets, it does not consider depreciation in determining whether it is economical to operate its mining equipment since depreciation expense is not an avoidable operating cost, such as energy costs. The table above presents the non-cash miner depreciation expense on a "“per bitcoin"” basis, calculated by dividing miner depreciation expense in our owned facilities by the number of bitcoin mined in the owned facilities. On a "“cost per bitcoin"” ratio, miner depreciation expense was $17,156,$39,727, $8,208$17,156 and $11,630$8,208 for the years ended September 30, 2024,2025, 20232024 and 2022,2023, respectively. The Company recorded accelerated depreciation on certain of its miners based on the reduction of the estimated useful life from 5 years to 3 years, which equaled $1,170 on a cost per bitcoin ratio for the year ended September 30, 2024.2025. In fiscal 2023, the accelerated depreciation was applicable to certain miners removed from service prior to the conclusion of their originally estimated useful life. The number of bitcoin received by all the Companyminers, including the Company, was reduced by approximately 50% effective April 19, 2024 when the bitcoin algorithm halved the rewards from 6.25 per block to 3.125 per block.

We have financing costs for a limited number of miners in our miner fleetfleet, and such costs are recorded within Interest Expense in our Consolidated Statements of Operations and Comprehensive Loss.Income (Loss). The table above presents financing costs per bitcoin calculated by dividing direct interest expense on our miner financing agreement by the number of bitcoin mined in our owned facilities. On a cost per bitcoin ratio, financing costs were $209,$44, $411$209 and $508$411 for the years ended September 30, 2024,2025, 20232024 and 2022,2023, respectively.

For our hosted facilities,co-locations, hosting fees (which comprise direct operating costs of the third-party operator with energy as the largest cost) and profit sharingprofit-sharing were a combined 71.5%,96.7%, 66.9%71.5% and 42.4%66.9% as a percentage of bitcoin mining revenues for the years ended September 30, 2024,2025, 20232024 and 2022,2023, respectively. As of March 31, 2025, we no longer operated mining at co-location hosted facilities.

At our hosted facilities, the hosting fee as compared to KWHskWh utilized in the hosted facilities was $0.078, $0.067, and $0.064 and $0.098 per KWHkWh for the years ended September 30, 2024,2025, 20232024 and 2022,2023, respectively. We did not have significant curtailment greater than 20% during the years ended September 30, 2024,2025, 20232024 and 2022.2023.

On a "“cost per bitcoin"” ratio, miner depreciation expense was $4, $22,374, $14,872 and $8,958$14,872 for the years ended September 30, 2024,2025, 20232024 and 2022,2023, respectively. The increasedecrease for the fiscal year 20242025 period was mainly due to the decrease of bitcoin production as we ended our last hosting agreement at Massena, NY in December 2024. Fiscal year 2024 had an increase as a result of the bitcoin halving on April 19, 2024 when the bitcoin algorithm halved rewards from 6.25 per block to 3.125 per block. The Company did not have any S19 XP or S21 miners at the hosted facilities during the periods presented and accordingly, there was no accelerated depreciation in the hosted facilities in fiscal 2024 following the reduction in the estimated useful life of our miners from 5 years to 3 years. In fiscal 2023, the accelerated depreciation was applicable to certain miners removed from service prior to the conclusion of their originally estimated useful life.

Results of Operations for the Fiscal Years Ended September 30, 20242025 and 20232024 ($ presented in 000's, except for average bitcoin price)

Our cost of revenues were $165,516 for the year ended September 30, 2024, an increase of $71,936, or 77%, as compared with cost of revenues of $93,580 for the year ended September 30, 2023. These costs were primarily related to energy costs to operate miners within our owned facilities, which was $132,192 for the year ended September 30, 2024, an increase of $69,763 as compared to $65,824 for the year ended September 30, 2023. The increases in energy costs was primarily due to the increase in the volume of miners operating in our owned locations partially offset by the reduction in the average cost per KWHs,kWh, which approximated $0.046/KWHkWh for the year ended September 30, 2024 as compared to an average cost of $0.048/KWHkWh for the year ended September 30, 2023. We continually evaluate energy and bitcoin prices and periodically will curtail our mining operations when it is advantageous to do so.

We also incurred hosting fees of $27,961 and profit sharingprofit-sharing fees of $4,784 for the year ended September 30, 2024, an increase of $4,987 and $793, respectively, as compared to $22,974 and $3,991, respectively for the year ended September 30, 2023. The hosting fees and profit-sharing fees were primarily the result of our co-location agreements with Coinmint and GRIID. The hosting fees increased primarily due to increases in utility rates partially offset by a slight reduction in KWHskWh utilized.

Payroll expenses increased to $74,095 for the year ended September 30, 2024 from $45,714 for the same period ended September 30, 2023. Our payroll expenses include all compensation related expenses for our employees, primarily consisting of salaries, wages, payroll-related taxes and benefits and non-cash stock-based compensation. Payroll expenses, excluding non-cash stock-based compensation, were $44,540 the year ended September 30, 2024, representing an increase of 106% from $21,572 in the prior year ended September 30, 2023. This increase was primarily due to the significant growth in locations, and the increase in employee headcount along with employee bonuses during the year.

We grant stock-based awards to certain employees as a significant portion of our payroll-related costs. Stock-based compensation, which is a non-cash expense, was $29,555 for the year ended September 30, 2024, an increase of $5,413, or 22%, from $24,142 the prior year ended September 30, 2023. Such increase was primarily due to the vesting of market-based restricted stock awards in March 2024 due to achieving the market-based targets.

The following discussion and analysis of our financial condition and results of operations should be read together with the interim Condensed Consolidated Financial Statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and related notes as disclosed in the Form 10-K. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in other parts of this Quarterly Report on Form 10-Q, including in Part II, Item 1A Risk Factors of this report, as well as those identified in the “Risk Factors” section of our Form 10-K. Our historical results are not necessarily indicative of the results that may be expected for any period in the future. See “Forward-Looking Statements.”

We are a data center developer, until recently focused exclusively on bitcoin mining. We focus on providing scalable, energy-efficient digital infrastructure across the United States. We independently own, lease and operate a large portfolio of data centers and power assets with locations in Georgia, Tennessee, Mississippi and Wyoming for a total contracted power capacity of approximately 1,8091,817 megawatts (“MW”) as of MarchJune 31,30, 2026. In FebruaryOctober 20262025 and OctoberFebruary 2025,2026, we acquired properties and related power agreements in Texas to support the development of a next-generation data center campus. In February 2026, we acquired property in Tennessee, and, in December 2025, we acquired property in South Dakota with intentions to build out infrastructure at these sites. We intend to continue our growth in these regions and are actively developing plans for additional capacity in these states and other regions. We have no intention to mine, purchase or hold any crypto assets other than bitcoin at this time or in the foreseeable future, and we did not hold any other crypto asset as of MarchJune 31,30, 2026.

Bitcoin mining has historically been our principal revenue generating business activity. Factors such as access to specialized mining servers, energy, electricity cost, environmental factors (such as cooling capacity) and location play important roles in mining. AsDuring of March 31,June 2026, our operating mining units produced an average computing power of 47.342.6 exahash per second (“EH/s”), following our achievement of a peak hashrate of 50 EH/s during fiscal year 2025. In bitcoin mining, “hashrate” is a measure of the computing and processing power and speed by which a mining computer mines and processes transactions on the bitcoin network. We expect to continue increasing our computing power through 2026 and beyond as we expand infrastructure at our owned sites in Tennessee, Georgia, Mississippi, and Wyoming, while also pursuing regional expansion opportunities and evaluating strategic acquisition targets. A company’s computing power, measured in hashrate, is a significant driver of its bitcoin mining revenue, and when compared to the global hashrate, determines the company’s market share, making hashrate one of the most important metrics for evaluating bitcoin mining companies.

We owned approximately 326,885326,530 miners, of which approximately 224,473225,137 were in service as of MarchJune 31,30, 2026. The remainder primarily consists of new machines that are ready for installation at expansion sites, are under evaluation for relocation, or are awaiting repair. Our miners range in age from 1-631-66 months and have an average age of approximately 2023 months. We estimate the useful lives of our miners to be three years. We do not have scheduled downtime for our miners; however, we periodically perform unscheduled maintenance and curtailments on our miners, but such downtime has not historically been significant. When performing unscheduled maintenance, we will typically replace the miner with a substitute miner to limit overall downtime. The miners in service as of MarchJune 31,30, 2026 had a range of energy efficiency (joules per terahash – “J/TH”) of 13.5 to 29.5 J/TH with an average operating energy efficiency of 16.215.8 J/TH.

The value of bitcoin has historically been subject to wide swings. The following table provides a range of intraday low and intraday high bitcoin prices between October 1, 2024 through MarchJune 31,30, 2026.

As of MarchJune 31,30, 2026, we held approximately 11,92012,205 bitcoins and had a receivable for 1,6411,719 bitcoin that was posted as collateral and recorded on our Condensed Consolidated Balance Sheets as Receivable for bitcoin collateral. The fair value of our bitcoin as of MarchJune 31,30, 2026 was $813,221$714,293 on our Condensed Consolidated Balance Sheets and the fair value of our Receivable for bitcoin collateral was $111,940.$100,607. The fair value of bitcoin for each reporting period reflects the price of one bitcoin quoted on the active exchange, Coinbase, at the end of the reporting period. Therefore, decreases in the market price of bitcoin could have a material impact on our earnings and on the carrying value of our bitcoin.

As of MarchJune 31,30, 2026 and September 30, 2025, the Company did not hold any other cryptocurrency of value other than bitcoin.

Results of Operations for the three and sixnine months ended MarchJune 31,30, 2026 and 2025 ($ presented in 000's, except for per share amounts, bitcoin price and information set forth under the heading “Bitcoin Mining Operations”)

The table below describes our fleet as of MarchJune 31,30, 2026 and 2025 and our miner efficiency and computing power as compared to the global computing power.

As of MarchJune 31,30, 2026, our operating hashrate was approximately 4.66%4.36% of the total global hashrate, and we received approximately the same percentage of the global blockchain rewards, which, as of that date, equaled approximately 20-2119-20 bitcoin per day, excluding the bitcoin earned from network transaction fees. Ultimately, in order to mine profitably, we work to ensure that these mining rewards cover our direct operating costs.

The table below describes the average cost of mining each bitcoin for the three and sixnine months ended MarchJune 31,30, 2026 and 2025 and the total energy usage and cost per each kilowatt hour (“kWh”) utilized within our owned facilities.

(1) Average revenue of each bitcoin mined is calculated by dividing the sum of bitcoin mining revenue for our owned facilities by the total number of bitcoin mined by our owned facilities during the respective periods. We have determined that Coinbase is the principal market for valuing bitcoin transactions and use the closing price of bitcoin at 23:59:59 UTC as the source of recording revenue. See the table “Range of intraday bitcoin prices” for information on the range of intraday bitcoin prices for quarterly periods between October 1, 2024 and MarchJune 31,30, 2026.

Power prices are the most significant cost driver for our wholly owned locations, and energy expense represented 59.9%61.8% and 46.0%45.3% as expressed as a percentage of bitcoin mining revenues during the three months ended MarchJune 31,30, 2026 and 2025, respectively, and 55.8%57.6% and 43.4%44.1% as expressed as a percentage of bitcoin mining revenues during the sixnine months ended MarchJune 31,30, 2026 and 2025, respectively.

Energy prices can be highly volatile and global events can impact energy rates. We have a diverse portfolio of power contracts across our sites in the states of Georgia, Mississippi, Tennessee and Wyoming. These contracts are currently subject to variable prices and market rate fluctuations with respect to wholesale power costs. Such prices are governed by power purchase agreements which vary by location, and said prices can change hour to hour. While this renders energy prices less predictable, it also gives us greater ability and flexibility to actively manage the energy we consume with a goal of increasing profitability and energy efficiency. Energy prices are also highly sensitive to weather events, such as winter storms, polar vortices and hurricanes, which increase the demand for power regionally. When such events occur, we may curtail our operations to avoid using power at increased rates. The average power prices we paid under our power contracts at our owned facilities were $0.052$0.053 and $0.060$0.056 per kWh for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and were $0.054 and $0.055$0.056 per kWh, for the sixnine months ended MarchJune 31,30, 2026 and 2025, respectively.

The management team makes real-time determinations on the need and timing during which we should curtail our operations. We curtail when power prices exceed the value we would receive for the corresponding fixed bitcoin reward. This means if bitcoin’s value decreases or energy prices increase, our curtailment will increase; likewise, when bitcoin’s value increases and energy prices decrease, our curtailment will decrease. The management and operations teams manage these decisions on an hour-by-hour basis across all our sites. The Company did not have significant curtailment and maintained an average uptime greater than 90%87% during the sixnine months ended MarchJune 31,30, 2026. A large portion of the curtailment during the first quarter related to Hurricane Helene which affected our Georgia sites at the end of September 2024 to the beginning of October 2024. The southeast Georgia sites were shut down as the hurricane began impacting the region, thus at the beginning of the October 2024, these sites were operating on approximately 200 MW which gradually increased during the same week to their full 365 MW capacity when utility service was restored to the communities.

The Company records depreciation expense (a non-cash expense) on its miners on a straight-line basis over the miners’ expected useful life. Such non-cash depreciation amounts are recorded within the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income as Depreciation and amortization. Although the Company recognizes depreciation with respect to its mining assets, it does not consider depreciation in determining whether it is economical to operate its mining equipment since depreciation expense is not an avoidable operating cost, such as energy costs. The table above presents the non-cash miner depreciation expense on a “per bitcoin” basis, calculated by dividing miner depreciation expense in our owned facilities by the number of bitcoin mined in the owned facilities. On a “cost per bitcoin” ratio, miner depreciation expense was $55,098$53,977 and $33,552$36,358 for the sixnine months ended MarchJune 31,30, 2026 and 2025, respectively.

A total of 147 bitcoin were mined at hosted facilities during the six months ended March 31, 2025. As of March 31, 2025, the Company had exited all bitcoin mining operations conducted at hosted facilities and since then conducts mining exclusively at owned and leased facilities. Accordingly, no bitcoin were mined at hosted facilities during the comparable periods in the current year. Management no longer evaluates operating performance using hosted-facility metrics, and current-period disclosures reflect only the cost structure and operating statistics of owned and leased mining locations. Prior-year hosted-facility results are discussed only to the extent necessary to explain period-over-period changes.

Results of Operations for the three months ended MarchJune 31,30, 2026 and 2025 ($ presented in 000's, except for average bitcoin price)

We earned $136,408$138,006 in bitcoin mining revenue during the three months ended MarchJune 31,30, 2026, which was a decrease of $45,304,$60,638, or 25%,31%, as compared to $181,712$198,644 for the three months ended MarchJune 31,30, 2025. Bitcoin mining revenues are recorded net of bitcoin mining fees charged by our sole mining pool operator (Foundry) that equaled approximately 0.21%0.26% of gross bitcoin mining revenues for the three months ended MarchJune 31,30, 2026, and are determined by two main drivers: quantity of bitcoin mined and the price of bitcoin on the date the bitcoin is mined. During the three months ended MarchJune 31,30, 2026, we mined 1,7951,920 bitcoin, net of mining pool fees, at an average bitcoin price of $71,881 as compared to 2,012 bitcoin with an average bitcoin price of $75,989 as compared to 1,957 bitcoin with an average bitcoin price of $92,870$98,736 during the three months ended MarchJune 31,30, 2025. The decrease in bitcoin mining revenue for the three months ended MarchJune 31,30, 2026 was attributable to the decrease in the average bitcoin price combined with a decrease in total bitcoin mined during the period as compared to the three months ended MarchJune 31,30, 2025. AlthoughThis thewas number of our miners in operation increaseddue to 224,473an asincrease of March 31, 2026 from 205,412 as of March 31, 2025,in global hashrate grew more rapidly over the samecomparable period,periods, representing increasing competition across the blockchain network.network, Asresulted in a result,decline in our relative share of total network computational power declined,power, which contributed to the decrease in bitcoin mined during the three months ended MarchJune 31,30, 2026.

Our cost of revenues was $81,691$85,480 for the three months ended MarchJune 31,30, 2026, which represents a decrease of $3,733,$4,648, or 4%,5%, as compared with $85,424$90,128 for the three months ended MarchJune 31,30, 2025. This decrease in costs was primarily related to energy costs to operate the miners within our owned facilities, which were $81,648$85,309 for the three months ended MarchJune 31,30, 2026, a decrease of $1,020,$4,586, or 1%,5%, as compared to $82,668$89,895 for the three months ended MarchJune 31,30, 2025. Energy costs were generally consistent in comparison, with the slight decrease reflecting normal changes in our operating footprint and power utilization across ownedour facilities, partially offset by the increase in miners operating at those locations.facilities. Additionally, we continually evaluate energy and bitcoin prices and periodically will curtail our mining operations when it is advantageous to do so.

Professional fees, which consisted primarily of legal, accounting and consulting fees, were $9,652$7,108 for the three months ended MarchJune 31,30, 2026, an increase of $6,669,$4,104, or 224%,137%, from $2,983$3,004 for the three months ended MarchJune 31,30, 2025. This increase was primarily attributable to higher consulting and other professional fees of $7,330$3,962 for the three months ended MarchJune 31,30, 2026, as compared to $1,942$2,008 for the three months ended MarchJune 31,30, 2025. These costs were incurred in connection with evaluating and developing our HPC and AI initiatives.

Payroll expenses were $24,922$27,807 for the three months ended MarchJune 31,30, 2026, an increase of $9,667,$11,409, or 63%,70%, from $15,255$16,398 for the three months ended MarchJune 31,30, 2025. Our payroll expenses include all compensation-related expenses for our employees and mainly include salaries, wages, payroll-related taxes and benefits and non-cash stock-based compensation. Payroll expenses, excluding non-cash stock-based compensation, were $13,785$12,503 for the three months ended MarchJune 31,30, 2026, representing an increase of 13%5% from $12,154$11,911 for the three months ended MarchJune 31,30, 2025, and were mainly attributed to increased headcount due to expansion of operational locations.

Stock-based awards granted to certain employees are a significant portion of our payroll-related costs. Stock-based compensation for employees, which is a non-cash expense, was $11,137$15,304 for the three months ended MarchJune 31,30, 2026, an increase of $8,036,$10,816, or 259%,241%, from $3,101$4,488 for the three months ended MarchJune 31,30, 2025. The lower overall stock-based compensation for the three months ended MarchJune 31,30, 2025 was due to that lack of a formal grant date or service inception date under the 2025 LTIP as of MarchJune 31,30, 2025 and accordingly there was no expense recognized under this plan over that prior year period.

General and administrative expenses increased to $16,105$18,298 for the three months ended MarchJune 31,30, 2026 from $11,736$16,566 for the three months ended MarchJune 31,30, 2025, representing an increase of $4,369$1,732 or 37%.10%. This increase was primarily attributable to increases in corporate overhead, including, but not limited to, property taxes, rent, and maintenance expenses due to the increase in owned assets.

Loss on fair value of bitcoin, net was $116,250 for the three months ended MarchJune 31,30, 20262026, andcompared 2025to wasa $224,107gain andof $127,667,$268,651 respectively,in the prior-year period, resulting in a total variance of $96,440.$384,901. We measuredmeasure crypto assets at fair value and included theinclude gains and losses from remeasurement in net income. The loss for the three months ended MarchJune 31,30, 2026 iswas attributable to the changedecrease in bitcoin’s fair value from approximately $87,500 per bitcoin on December 31, 2025 to approximately $68,200 per bitcoin onas of March 31, 2026 to approximately $58,500 per bitcoin as of June 30, 2026. The lossgain for the three months ended MarchJune 31,30, 2025 pertainswas attributable to the changeincrease in bitcoin’s fair value from approximately $93,400 per bitcoin on December 31, 2024 to $82,500 per bitcoin onas of March 31, 2025 to approximately $107,200 per bitcoin as of June 30, 2025.

Depreciation and amortization expense increased to $115,881$111,037 for the three months ended MarchJune 31,30, 2026, from $78,901$94,880 for the three months ended MarchJune 31,30, 2025, an increase of $36,980,$16,157, or 47%.17%. Depreciation expense increased by $37,332,$16,564, or 48%,18%, during the three months ended MarchJune 31,30, 2026, to $115,265$110,422 from $77,933,$93,858, mainly due to an increase in miners and mining-related equipment being in service during the comparative period.

Amortization expense for the three months ended MarchJune 31,30, 2026 was $616, a decrease of $351,$407, or 36%,40%, from $967$1,023 for the three months ended MarchJune 31,30, 2025. The decrease in amortization expense is primarily due to some of the Company’s intangible assets aging off of the balance sheet.

Other expense was $42,555$10,412 andas $3,811compared to other income of $29,334 for the three months ended MarchJune 31,30, 2026 and 2025, respectively, which represents a change of $38,744.$39,746.

Interest income in the three months ended MarchJune 31,30, 2026 increased by $1,058$1,788 to $3,072$2,143 from $2,014$355 for the three months ended MarchJune 31,30, 2025 due to greater balance of cash retained in short-term interest-bearing accounts.

Interest expense in the three months ended MarchJune 31,30, 2026 increaseddecreased by $787$1,414 to $2,054$2,040 from $1,267$3,454 for the three months ended MarchJune 31,30, 2025 due to the amortizationdecrease ofin deferreddraw issuance costs from the convertible notes andon the lines of credit which the company had a limited volume of outstanding amounts during the comparative period.

Net loss was $239,842, as compared to net income of $257,390 for the three months ended MarchJune 31,30, 2026 and 2025 was $378,343 and $138,792,2025, respectively, anwhich increaserepresents ina net lossvariance of $239,551$497,232 due to the reasons stated above.

Results of continuing operationsOperations for the sixnine months ended MarchJune 31,30, 2026 and 2025 ($ presented in 000's, except for average bitcoin price)

We earned $317,588$455,594 in bitcoin mining revenue during the sixnine months ended MarchJune 31,30, 2026, which was a decrease of $26,430,$87,068, or 8%,16%, as compared with $344,018$542,662 for the sixnine months ended MarchJune 31,30, 2025. Bitcoin mining revenues are recorded net of bitcoin mining fees charged by our sole mining pool operator (Foundry) that equaled approximately 0.20%0.22% of gross bitcoin mining revenues for the sixnine months ended MarchJune 31,30, 2026, and are determined by two main drivers: quantity of bitcoin mined and the price of bitcoin on the date the bitcoin is mined. During the sixnine months ended MarchJune 31,30, 2026, we mined 3,6125,532 bitcoin, net of mining pool fees, at an average bitcoin price of $82,351 as compared to 5,914 bitcoin with an average bitcoin price of $87,916 as compared to 3,902 bitcoin with an average bitcoin price of $88,170$91,765 during the sixnine months ended MarchJune 31,30, 2025. The decrease in bitcoin mining revenue for the sixnine months ended MarchJune 31,30, 2026 was attributable to the decrease in the average bitcoin price combined with a decrease in total bitcoin mined during the period as compared to the sixnine months ended MarchJune 31,30, 2025. AlthoughThis was due to the numberdecrease ofin ouroperating miners in operation increased to 224,473225,137 as of MarchJune 31,30, 2026 from 205,412241,227 as of MarchJune 31,30, 2025, which reflects fleet optimization activities across our operating facilities. Additionally, an increase in global hashrate grew more rapidly over the samecomparable period,periods, representing increasing competition across the blockchain network.network, Asresulted in a result,decline in our relative share of total network computational power declined,power, which contributed to the decrease in bitcoin mined during the sixnine months ended MarchJune 31,30, 2026.

Our cost of revenues was $177,312$262,792 for the sixnine months ended MarchJune 31,30, 2026, which represents an increase of $21,598,$16,950, or 14%,7%, as compared with $155,714$245,842 for the sixnine months ended MarchJune 31,30, 2025. These costs were primarily related to energy costs to operate the miners within our owned facilities, which were $177,184$262,493 for the sixnine months ended MarchJune 31,30, 2026, an increase of $31,442$26,855 or 22%11% as compared to $145,742$235,638 for the sixnine months ended MarchJune 31,30, 2025. TheEnergy costs were generally consistent in comparison, with the slight increase in energy costs was due toreflecting the expansionmodest of our operations since March 31, 2025expansions and thenormal increase in the volume of miners operatingchanges in our ownedoperating locations.footprint and power utilization across our facilities. We continually evaluate energy and bitcoin prices and periodically will curtail our mining operations when it is advantageous to do so.

Professional fees, which consisted primarily of legal, accounting and consulting fees, were $15,058$22,166 for the sixnine months ended MarchJune 31,30, 2026, an increase of $8,190,$12,294, or 119%,125%, from $6,868$9,872 for the sixnine months ended MarchJune 31,30, 2025. This increase was primarily attributable to higher consulting and other professional fees of $10,002$13,964 for the sixnine months ended MarchJune 31,30, 2026, as compared to $4,382$6,389 for the sixnine months ended MarchJune 31,30, 2025. These costs were incurred in connection with evaluating and developing our HPC and AI initiatives.

Payroll expenses were $48,707$76,514 for the sixnine months ended MarchJune 31,30, 2026, an increase of $12,583,$23,992, or 35%,46%, from $36,124$52,522 for the sixnine months ended MarchJune 31,30, 2025. Our payroll expenses include all compensation-related expenses for our employees and mainly include salaries, wages, payroll-related taxes and benefits and non-cash stock-based compensation. Payroll expenses, excluding non-cash stock-based compensation, were $26,486$38,989 for the sixnine months ended MarchJune 31,30, 2026, representing a decrease of 12%7% from $30,002$41,913 for the sixnine months ended MarchJune 31,30, 2025, and were mainly attributed to changes in the composition and timing of payroll costs during the period, partially offset by increased headcount associated with the expansion of operational locations.

Stock-based awards granted to certain employees are a significant portion of our payroll-related costs. Stock-based compensation, which is a non-cash expense, was $22,221$37,525 for the sixnine months ended MarchJune 31,30, 2026, an increase of $16,099,$26,916, or 263%,254%, from $6,122$10,609 for the sixnine months ended MarchJune 31,30, 2025. The lower overall stock-based compensation for the sixnine months ended MarchJune 31,30, 2025 was due to that lack of a formal grant date or service inception date under the 2025 LTIP as of MarchJune 31,30, 2025, and accordingly there was no expense recognized under this plan.

General and administrative expenses increased to $31,547$49,845 for the sixnine months ended MarchJune 31,30, 2026 from $21,790$38,356 for the sixnine months ended MarchJune 31,30, 2025, representing an increase of $9,757$11,489 or 45%.30%. This increase was primarily attributable to increases in corporate overhead, including, but not limited to, property taxes, rent, and maintenance expenses due to the increase in owned assets.

Loss on fair value of bitcoin, net for the sixnine months ended MarchJune 31,30, 2026 was $470,939$587,189 as compared to a gain on fair value of bitcoin of $90,539$359,190 for the sixnine months ended MarchJune 31,30, 2025, a total variance of $561,478.$946,379. The loss for the sixnine months ended MarchJune 31,30, 2026 pertains to the change in bitcoin’s fair value from approximately $114,100 per bitcoin on September 30, 2025 to approximately $68,200$58,500 per bitcoin on MarchJune 31,30, 2026. The gain for the sixnine months ended MarchJune 31,30, 2025 pertains to the change in bitcoin’s fair value from approximately $63,300 per bitcoin on September 30, 2024 to $82,500$107,200 per bitcoin on MarchJune 31,30, 2025.

Depreciation and amortization expense increased to $222,192$333,229 for the sixnine months ended MarchJune 31,30, 2026, from $145,130$240,010 for the sixnine months ended MarchJune 31,30, 2025, aan increase of $77,062$93,219 or 53%.39%. Depreciation expense increased by $77,575,$94,139, or 54%,40%, during the sixnine months ended MarchJune 31,30, 2026, from $143,058$236,916 to $220,633,$331,055, mainly due to an increase in miners and mining-related equipment being in service during the comparative period.periods.

Amortization expense for the sixnine months ended MarchJune 31,30, 2026 was $1,559,$2,174, a decrease of $513,$920, or 25%,30%, from $2,072$3,094 for the sixnine months ended MarchJune 31,30, 2025. The decrease in amortization expense is primarily due to some of the Company’s intangible assets aging off of the balance sheet.

Other expense was $136,127$146,539 for the sixnine months ended MarchJune 31,30, 2026, compared with other income of $42,221$71,555 for the sixnine months ended MarchJune 31,30, 2025, which is a change of $178,348.$218,094.

The $142,458$158,964 loss on bitcoin collateral was the primary reason for the increase in other expense compared to a prior year gain on bitcoin collateral of $42,493.$73,847. The loss in the fair value of collateral for the sixnine months ended MarchJune 31,30, 2026 is attributable to the change in the underlying bitcoin posted as collateral’s fair value during the period from approximately $114,100 per bitcoin on September 30, 2025 to approximately $68,200$58,500 per bitcoin on MarchJune 31,30, 2026. The gain for the sixnine months ended MarchJune 31,30, 2025 pertains to the change in bitcoin’s fair value from approximately $63,300 per bitcoin on September 30, 2024 to $82,500$107,200 per bitcoin on MarchJune 31,30, 2025.

Interest income in the sixnine months ended MarchJune 31,30, 2026 increased to $5,257$7,400 from $3,490$3,845 for the sixnine months ended MarchJune 31,30, 2025, an increase of $1,767$3,555 due to greater balance of cash retained in short-term interest-bearing accounts.

Interest expense in the sixnine months ended MarchJune 31,30, 2026 increased by $2,924$1,510 to $5,750$7,790 from $2,826$6,280 for the sixnine months ended MarchJune 31,30, 2025 due to the amortization of deferred issuance costs from the convertible notes and the lines of credit which the company had a limited volume of outstanding amounts during the comparative period.periods.

Net loss for the sixnine months ended MarchJune 31,30, 2026 was $757,054,$996,896, as compared to net income of $107,999$365,389 for the sixnine months ended MarchJune 31,30, 2025, due to the reasons stated above.

* We have not excluded our Loss (gain) on fair value of bitcoin, net or our (Loss) gain on bitcoin collateral which we record in our Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income as provided in ASC 350-60 and discussed in the Form 10-K. Loss (gain) on fair value of bitcoin, net totaled a loss of $224,107$116,250 and $127,667a gain of $268,651 in the three months ended MarchJune 31,30, 2026 and 2025, respectively, and a loss of $470,939$587,189 and a gain of $90,539$359,190 in the sixnine months ended MarchJune 31,30, 2026 and 2025, respectively. (Loss) gain on bitcoin collateral totaled a loss of $38,838$16,506 and $0a gain of $31,354 in the three months ended MarchJune 31,30, 2026 and 2025, respectively, and a loss of $142,458$158,964 and a gain of $42,493$73,847 in the sixnine months ended MarchJune 31,30, 2026 and 2025, respectively.

As of MarchJune 31,30, 2026, we had total current assets of $1,099,037,$920,827, consisting of cash and cash equivalents, prepaid expenses and other current assets, receivable from bitcoin collateral, and bitcoin. Our total current liabilities and total liabilities as of MarchJune 31,30, 2026 were $133,068$155,752 and $1,927,341,$1,940,916, respectively. We had working capital of $965,969$765,075 as of MarchJune 31,30, 2026. We use a portion of the bitcoin we mine to fund operations and to fund capital expenditures. In addition, we have a total outstanding balance of $1,769,369$1,770,878 zero-coupon convertible notes outstanding and unused lines of credit balances totaling $400,000 with Coinbase and Two Prime as discussed in Note 9 - Indebtedness.

Based on our current plans and business conditions, we believe that existing cash and cash equivalents and bitcoin, together with cash and bitcoin generated from operations and our future investingfinancing activities, will be sufficient to satisfy our anticipated cash requirements for the next 12 months and for the reasonably foreseeable future until we reach consistent profitability, and we are not aware of any trends or demands, commitments, events or uncertainties that are reasonably likely to result in a decrease in the liquidity of our assets. WeTo arefacilitate the build out of the data center being leased under the Sandersville Lease, we will need to raise additional funds, likely through project-based debt financing, and we will be required to requireraise additional capital to respondcontinue to technologicalpursue advancements,our AI and HPC strategy and to support our future development of AI data centers, competitive dynamics or technologies, business opportunities, challenges, acquisitions or unforeseen circumstances and in either the short-term or long-term may determine to engage in additional equity or debt financings. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited. In particular, the ongoing impacts of inflation and fluctuations in interest rates, global conflicts including increases in tariffs, have resulted in, and may continue to result in, significant disruption and volatility in the global financial markets, reducing our ability to access capital. If we are unable to raise additional funds when or on the terms desired, our business, financial condition and results of operations could be adversely affected.

We are a party to many contractual obligations involving commitments to make payments to third parties. These obligations impact our short-term and long-term liquidity and capital resource needs. Certain contractual obligations are reflected on the Condensed Consolidated Balance Sheets as of MarchJune 31,30, 2026, while others are considered future commitments. Our contractual obligations primarily consist of cancelable purchase commitments with various parties to purchase goods or services, primarily mining equipment and construction costs, as well as operating leases. For information regarding our other contractual obligations, refer to Note 15 - Commitments and Contingencies and Note 16 - Subsequent Events in this Quarterly Report on Form 10-Q for the period ended MarchJune 31,30, 2026, and Note 19 - Commitments and Contingencies included in our Form 10-K as filed with the SEC on November 25, 2025.

The Company also generates premium proceeds from the sale of far out-of-the-money call options with low delta exposure. While bitcoin subject to these contracts may get called from time to time, these options typically expire unexercised and provide proceeds without requiring disposition of bitcoin. In the event of an exercise, the Company may adjust the pace of Spot+ and yield activities to replenish bitcoin balances held for long-term investment purposes (“HODL balances”), or use the additional cash generated for operating or capital expenditures. The proceeds generated from these activities provide a steady stream of investing cash flows for the company while acting as economic hedges for the company’s wider operating activities. While the Company’s use of purchased or written put options has been limited to date, these are expected to be a growing portion of the Company’s holistic and growing treasury management and hedging activities.