Riot Platforms, Inc.

Previous wording

The Company’s business, reputation, results of operations, financial condition and stock price can be affected by a number of factors, whether currently known or unknown, including those described below. When any one or more of these risks materialize from time to time, the Company’s business, reputation, results of operations, financial condition and stock price can be materially and adversely affected. These risk factors do not identify all risks that we face; our operations could also be affected by factors, events, or uncertainties that are not presently known to us or that we currently do not consider to present significant risks to our operations. This section should be read in conjunction with Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report and the consolidated financial statements and accompanying notes.

Current wording

Our business, reputation, results of operations, financial condition and stock price can be affected by a number of factors, whether currently known or unknown, including those described below. When any one or more of these risks materialize from time to time, our business, reputation, results of operations, financial condition and stock price can be materially and adversely affected. These risk factors do not identify all risks that we face; our operations could also be affected by factors, events, or uncertainties not presently known to us or that we currently do not consider to present significant risks to our operations. This section should be read in conjunction with Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and accompanying notes included in this Annual Report.

Previous wording

There is a finite supply of Bitcoin, and the number of new Bitcoin rewarded per block algorithmically decreases over time, which poses a risk to our business.

Current wording

There is a finite supply of bitcoin, and the declining block reward over time presents a risk to our business.

Previous wording

We operate in a highly competitive market and if we fail to grow our hash rate, in a cost-effective manner, we may be unable to compete.

Current wording

Bitcoin mining is a highly competitive market, and if we fail to grow our hash rate in a cost-effective manner we may be unable to compete.

Previous wording

We may be unable to access sufficient additional capital for future strategic growth initiatives.

Current wording

We may be unable to access sufficient additional capital needed to grow our business.

Previous wording

Banks and financial institutions may not provide banking services, or may cut off services, to businesses that engage in crypto-related activities.

Current wording

Banks and financial institutions may not provide, or may discontinue, banking services to businesses engaged in crypto-related activities.

Previous wording

We may be exposed to price volatility and uncertainty in our supply chain due to geopolitical crises and economic downturns such as recessions, rising inflation, tariffs, social, political and economic risks, conflicts and acts of war, sanctions and other restrictive actions by the United States and/or other countries. Changes in policy positions and priorities from the new U.S. government administration could increase this price volatility and uncertainty. Such crises will likely continue to have an effect on our ability to do business in a cost-effective manner. Inflationary pressures, as well as disruptions in our supply chain, have increased the costs of goods, services and personnel, which have in turn caused our capital expenditures and operating costs to rise. Additionally, these crises may discourage investment in Bitcoin and investors may shift their investments to less volatile assets. The effects of such global economic shifts, worsening inflationary issues, changes in policy, and geopolitical events could adversely affect our ability to access the capital and other financial markets, as such, we may be required to consider alternative sources of funding for our growth and operations which may increase our cost of capital. Such events and conditions could have a materially adverse effect on our business, operations, or financial results and the value of the Bitcoin we mine.

Current wording

We may be exposed to price volatility and uncertainty in our supply chain due to geopolitical crises and economic downturns such as recessions, rising inflation, tariffs, social, political and economic risks, conflicts and acts of war, sanctions and other restrictive actions by the United States and/or other countries. Changes in policy positions and priorities from the U.S. government administration could increase this price volatility and uncertainty. Such crises will likely continue to have an effect on our ability to do business in a cost-effective manner. Inflationary pressures, as well as disruptions in our supply chain, have increased the costs of goods, services and personnel, which have in turn caused our capital expenditures and operating costs to rise. Additionally, these crises may discourage investment in bitcoin and investors may shift their investments to less volatile assets. The effects of such global economic shifts, worsening inflationary issues, changes in policy, and geopolitical events could adversely affect our ability to access the capital and other financial markets, as such, we may be required to consider alternative sources of funding for our growth and operations which may increase our cost of capital. Such events and conditions could have a materially adverse effect on our business, operations, or financial results and the value of the bitcoin we mine.

Previous wording

Strategic acquisitions, such as the Block Mining Acquisition and the E4A Solutions Acquisition, both in 2024, and the acquisitions of Whinstone US, Inc. (“Whinstone”) and ESS Metron, both in 2021, are key to our growth strategy. The success of any acquisition depends, in part, on our ability to integrate the acquired business and realize the anticipated synergies. Integration may involve unforeseen difficulties, require a disproportionate amount of our management’s attention, and may necessitate reallocating resources, both financial or otherwise.

Current wording

Strategic acquisitions, such as the Block Mining Acquisition and the E4A Solutions Acquisition, both in 2024, and the acquisition of Whinstone US, Inc. (“Whinstone”) and ESS Metron in 2021, are important components of our growth strategy. The success of any acquisition depends, in part, on our ability to effectively integrate the acquired business and realize anticipated synergies. Integration efforts may involve unforeseen difficulties, require significant attention from management, and necessitate reallocating financial and operational resources. We may encounter challenges in the integration process, including difficulties associated with managing a larger and more complex organization ; aligning administrative, operational, and corporate structures; integrating internal controls, processes, and policies; reconciling differing business cultures; hiring and retaining key employees; harmonizing compensation and benefits programs; coordinating geographically dispersed operations; and executing our business strategy across the combined organization.

Previous wording

Acquisitions may expose us to new liabilities and risks, some of which may be unknown. Although we and our advisors conduct due diligence on the operations of the businesses we acquire, there can be no guarantee that we are aware of all liabilities associated with an acquired company. These liabilities, and any additional risks and uncertainties related to an acquired company not known to us or that we may deem immaterial or unlikely to occur at the time of the acquisition, could negatively impact our future business, financial condition, and results of operations.

Current wording

Acquisitions may also expose us to additional liabilities and risks, some of which may be unknown at the time of acquisition. Although we conduct extensive due diligence, we cannot guarantee that we will identify all material issues, liabilities, or risks associated with an acquired business. Any such unknown or unanticipated liabilities, whether financial, legal, regulatory, operational, or otherwise, could materially and adversely affect our business, financial condition, and results of operations.

Previous wording

We can give no assurance that we will be able to effectively integrate and manage the operations of any acquired business or realize anticipated synergies. Failure to successfully integrate an acquired business could have a material adverse effect on our financial condition and results of operations.

Current wording

We can give no assurance that we will be able to successfully integrate and manage acquired businesses, achieve expected synergies, or realize the benefits we anticipate. Failure to do so could have a material adverse effect on our financial condition, results of operations, and ability to execute our growth strategy.

Previous wording

We have financed our strategic growth primarily by issuing new shares of our common stock in public offerings and the issuance of debt and plan to raise additional capital through similar offerings in the future, and our inability to do so on favorable terms may adversely affect our operations and the market price of our securities.

Current wording

We have financed our strategic growth through issuances of common stock and debt and expect to continue raising additional capital in the future, and our inability to do so on favorable terms could adversely affect our operations and the market price of our securities.

Previous wording

We have raised capital to finance the strategic growth of our business through public offerings of our common stock and the issuance of debt, and plan to raise additional capital through similar offerings to fund current and future expansion initiatives. We may not be able to secure additional debt or equity financing on favorable terms, if at all, which could hinder our growth and adversely impact our operations. In 2022 and 2023, a number of digital asset platforms and exchanges filed for bankruptcy and/or became the subjects of investigation by various governmental agencies for, among other things, fraud. These disruptions in the crypto asset market may impact our ability to obtain favorable financing. If we raise additional equity financing, stockholders may experience dilution of their ownership interests, and the per share value of our common stock could decline. If we are unable to generate sufficient cash flows to support our strategic growth, we may be required to adopt one or more alternatives, such as reducing or delaying investments or capital expenditures, selling assets, or obtaining additional equity financing on terms that may be onerous or highly dilutive. Furthermore, as we engage in debt financing, in the event of bankruptcy, the holders of any debt we issue would likely have priority over the holders of shares of our common stock in terms of order of payment preference. We may be required to accept terms that restrict our ability to incur additional debt or take other actions, including accepting terms that require us to maintain specified liquidity or other ratios that could otherwise not be in the interests of our stockholders.

Current wording

We have historically financed the strategic growth of our business through public offerings of our common stock and the issuance of debt, and expect to raise additional capital through similar financing activities to support our current and future expansion initiatives. We may not be able to obtain additional equity or debt financing on favorable terms, or at all. Any inability to secure necessary financing could hinder our growth and adversely impact our operations. Market disruptions in the digital asset industry may also affect our access to capital. In 2022 and 2023, several digital asset platforms and exchanges filed for bankruptcy or became subject to government investigations relating to, among other things, alleged fraud. These events contributed to volatility and reduced confidence in the digital asset ecosystem and may negatively impact our ability to obtain financing on acceptable terms. If we raise additional equity capital, our stockholders may experience dilution of their ownership interests, and the market price of our common stock may decline. If we are unable to generate sufficient cash flows to support our strategic initiatives, we may be required to implement alternative measures, including reducing or delaying capital expenditures, selling assets, or pursuing additional equity financing on terms that may be onerous or highly dilutive. If we incur additional indebtedness, lenders may have priority over holders of our common stock with respect to repayment and liquidation preferences in the event of bankruptcy or liquidation. Debt financing may also include restrictive covenants that limit our ability to incur additional indebtedness or take other actions, and may require us to maintain certain liquidity or financial ratios that may not align with the interests of our stockholders. Any of these events could adversely affect our business, financial condition, results of operations, and the market price of our securities.

Previous wording

The lack of regulation of digital asset exchanges which Bitcoin, and other cryptocurrencies, are traded on may expose us to the effects of negative publicity resulting from fraudulent actors in the cryptocurrency space and can adversely affect an investment in the Company.

Current wording

The limited regulation of digital asset exchanges on which bitcoin and other cryptocurrencies are traded may expose us to the effects of negative publicity associated with fraudulent or unstable market participants, which could adversely affect an investment in us.

Previous wording

The digital asset exchanges on which Bitcoin is traded are relatively new and largely unregulated. Many digital asset exchanges do not provide the public with significant information regarding their ownership structure, management teams, corporate practices, or regulatory compliance. As a result, the marketplace may lose confidence in, or may experience problems relating to, such digital asset exchanges, including prominent exchanges handling a significant portion of the volume of digital asset trading. In 2022 and 2023, a number of digital asset exchanges filed for bankruptcy proceedings and/or became the subjects of investigation by various governmental agencies for, among other things, fraud, causing a loss of confidence and an increase in negative publicity for the digital asset ecosystem. As a result, many digital asset markets, including the market for Bitcoin, have experienced increased price volatility. The Bitcoin ecosystem may continue to be negatively impacted and experience long term volatility if public confidence decreases.

Current wording

The digital asset exchanges on which bitcoin is traded are relatively new and, in many jurisdictions, remain unregulated. Many such exchanges do not provide the public with comprehensive information regarding their ownership, management, corporate governance, business practices, or regulatory compliance. As a result, the marketplace may lose confidence in these exchanges or experience disruptions associated with their operations, including with respect to exchanges that handle a significant volume of digital asset trading. In 2022 and 2023, several digital asset exchanges filed for bankruptcy protection and/or became subject to investigations by governmental authorities regarding alleged fraud and other misconduct. These events generated significant negative publicity for the

Previous wording

These events are continuing to develop and it is not possible to predict, at this time, every risk that they may pose to us, our service providers, or the digital asset industry as a whole. A perceived lack of stability in the digital asset exchange market and the closure or temporary shutdown of digital asset exchanges due to business failure, hackers or malware, government-mandated regulation, or fraud may reduce confidence in digital asset networks and result in greater volatility in cryptocurrency values. These potential consequences of a digital asset exchange’s failure could have a material adverse effect on the market price for our securities.

Current wording

These developments remain ongoing, and it is not possible to predict all of the risks that may arise for us, our counterparties, our service providers, or the digital asset industry generally. A perceived lack of stability in the digital asset exchange market as well as the failure, temporary shutdown, or restriction of exchanges due to operational issues, cybersecurity breaches, fraud, insolvency, or government-mandated regulation—may erode confidence in digital asset networks and contribute to further volatility in cryptocurrency prices. Any such consequences could materially and adversely affect the market price of our securities.

Previous wording

These factors make it difficult to accurately predict the future market price of Bitcoin and may also inhibit consumer trust in, and market acceptance of, cryptocurrencies as a means of exchange, which could limit the future adoption of Bitcoin and, as a result, our assumptions could prove incorrect. If our assumptions prove incorrect and the future price of Bitcoin is not sufficiently high, our income from our Bitcoin Mining operations may not exceed our costs, and our operations may never achieve profitability.

Current wording

These regulatory factors and changes to laws, regulations, or enforcement priorities make it difficult to accurately predict the future price of bitcoin and mayreduce consumer trustor market acceptance of cryptocurrencies as a means of exchange or store of value. If our assumptions regarding bitcoin’s future price prove incorrect and bitcoin prices are not sufficiently high, revenue from our Bitcoin Mining operations may not exceed our costs, andwe maybe unable to achieveor sustain profitability. Any such developments could materially and adversely affect our business, financial condition, and results of operations*.*

Previous wording

The failure of several crypto platforms has impacted and may continue to impact the broader crypto economy; the full extent of these impacts may not yet be known. Bitcoin is subject to price volatility resulting from financial instability, poor business practices, and fraudulent activities of players in the broader cryptocurrency market. When investors in cryptocurrency and cryptocurrency-based companies experience financial difficulty as a result of price volatility, poor business practices, and/or fraud, it has caused, and may continue to cause, loss of confidence in the cryptocurrency space, reputational harm to cryptocurrency assets, heightened scrutiny by regulatory authorities and law makers, and a steep decline in the value of Bitcoin, among other material impacts. Such adverse effects have affected, and may in the future, affect the profitability of our Bitcoin Mining operations.

Current wording

The failures of several cryptocurrency platforms and related businesses have had, and may continue to have, adverse effects on the broader digital asset ecosystem. The full extent of these impacts may not yet be known. Bitcoin prices have historically been affected by financial instability, poor business practices, and fraudulent activities involving participants in the wider cryptocurrency market. When investors in cryptocurrency or cryptocurrency-related companies experience financial distress due to price volatility, operational failures, or fraud, such events have resulted in loss of confidence in the digital asset sector, reputational harm to cryptocurrency assets, heightened regulatory and legislative scrutiny, and significant declines in the market value of bitcoin. These adverse effects have previously impacted, and may in the future impact, the profitability of our Bitcoin Mining operations. If bitcoin prices decline materially or if reputational or regulatory pressures intensify within the cryptocurrency market, our business, financial condition, and results of operations could be materially and adversely affected.

Previous wording

As disclosed in Part I, Item 1. “Business” of this Annual Report, under the subheading “Halving,” the number of new Bitcoin awarded for solving a block is cut in half – hence, “halving” – at mathematically predetermined intervals. The next halving for the Bitcoin blockchain is currently anticipated to occur in mid-2028. While Bitcoin prices have historically increased around these halving events, there is no guarantee that the price change will be favorable or would compensate for the reduction in mining rewards. If a corresponding and proportionate increase in the price of Bitcoin does not follow future halving events, the revenue we earn from our Bitcoin Mining operations would see a decrease, which could have a material adverse effect on our results of operations and financial condition.

Current wording

As disclosed in Part I, Item 1. “Business” of this Annual Report, under the subheading “Halving,” the number of new bitcoin awarded to miners for solving a block is reduced by 50%—a process known as “halving”—at mathematically predetermined intervals. The next halving event is currently expected to occur in mid-2028. Although bitcoin prices have, at times, increased around prior halving events, there is no assurance that future halving events will result in favorable price movements or that any such price increases would be sufficient to offset the reduction in block rewards. If a corresponding and proportionate increase in the market price of bitcoin does not occur following future halving events, the revenue we earn from our Bitcoin Mining operations will decrease. Any such decline in mining revenue could have a material adverse effect on our business, financial condition, and results of operations.

Previous wording

Bitcoin faces significant scaling obstacles that can lead to high fees or slow transaction settlement times.

Current wording

Bitcoin faces significant scaling obstacles that can lead to high fees or slow transaction settlement times, which may adversely affect demand for bitcoin and our Bitcoin Mining operations.

Previous wording

We have invested substantial capital in acquiring miners using ASIC chips designed specifically to mine Bitcoin and other cryptocurrencies using the 256-bit secure hashing algorithm (“SHA-256”) as efficiently and as rapidly as possible based on our assumption that we will be able to use them to mine Bitcoin and generate revenue from our operations. Therefore, our Bitcoin Mining operations focus exclusively on mining Bitcoin, and our Bitcoin Mining revenue is based on the value of Bitcoin we mine. Accordingly, if the value of Bitcoin declines and fails to recover, for example, because of the development and acceptance of competing blockchain platforms or technologies, including competing cryptocurrencies which our miners may not be able to mine, the revenue we generate from our Bitcoin Mining operations will likewise decline. Moreover, because our miners use these highly specialized ASIC chips, we may not be able to successfully repurpose them in a timely manner, if at all, to other uses, following a sustained decline in Bitcoin’s value or if the Bitcoin blockchain stops using SHA-256 for solving blocks. This would result in a material adverse effect on our business and could potentially impact our ability to continue as a going concern.

Current wording

We have invested substantial capital in acquiring miners that use ASICs designed exclusively to mine bitcoin and other cryptocurrencies that utilize the 256-bit secure hashing algorithm (“SHA-256”). Our Bitcoin Mining operations therefore depend primarily on our ability to use these miners to mine bitcoin and generate revenue based on the market value of the bitcoin we earn. If the value of bitcoin declines and does not recover, the revenue generated from our Bitcoin Mining operations would decline accordingly. Because our miners are highly specialized, we may be unable to successfully repurpose them for alternative uses in a timely or cost-effective manner, if at all. Similarly, if the bitcoin protocol were to discontinue use of the SHA-256 algorithm, our existing miners could become obsolete. Any sustained decline in the value of bitcoin, or any inability to repurpose or redeploy our miners, could materially and adversely affect our business, financial condition, and results of operations, and could raise substantial doubt about our ability to continue as a going concern.

Previous wording

Our reliance on third-party miners may subject our operations to increased risk of design flaws.

Current wording

Our reliance on third-party miners may expose us to operations to increased risk of design flaws.

Previous wording

Our reliance primarily on immersion-cooling exposes us to additional risks.

Current wording

Our reliance primarily on immersion-cooling exposes us to additional operational and performance risks.

Previous wording

We participate in a “Full-Pay-Per-Share” mining pool, which calculates Bitcoin payouts primarily based on the hash rate provided by us to the mining pool as a percentage of total network hash rate, along with other inputs. We currently derive a significant portion of our revenue from our mining pool participation, which accounted for 85.2% and 67.3% of our total revenue for the years ended December 31, 2024 and 2023, respectively. We own all of our miners and accompanying infrastructure, and the only connection between our assets and our mining pool is that the total hash rate capacity of our miners is currently allocated to our mining pool, which we are free to change at any time, in our discretion. Further, the mining pool in which we participate, like most mining pools, is decentralized and has protections in place to prevent malicious actors or technical errors from affecting the pool’s ability to operate; however, these protections are not foolproof, and we may lose access to the mining pool, perhaps permanently. Because of the monitoring systems we have in place, we would become aware within minutes if our mining pool were to suffer downtime or cease to exist altogether, and we would expect to be able to resume mining without a mining pool within minutes, or redirect our hash rate to another mining pool, within an hour of the downtime event. However, self-mining has, historically, been less successful in earning Bitcoin rewards than participating in a mining pool, and our Bitcoin Mining revenue would become more volatile and may decline–perhaps materially–as a result of the loss or unavailability of our mining pool. If such unanticipated circumstances associated with our mining pool arise, and we are unable to quickly switch to another pool, self-mine without a pool or otherwise diversify our sources of Bitcoin Mining revenue, our business, results of operations, and financial condition may suffer as a result.

Current wording

We participate in a “Full-Pay-Per-Share” mining pool, which calculates bitcoin payouts primarily based on the proportion of hash rate we contribute to the mining pool as a percentage of total network hash rate, along with other inputs. A significant portion of our revenue is derived from participation in this mining pool, representing approximately 89.0% and 85.2% of our total revenue for the years ended December 31, 2025 and 2024, respectively. We own all of our miners and accompanying infrastructure, and the only connection between our assets and our mining pool is that the total hash rate capacity of our miners is currently allocated to our mining pool, which we are free to change at any time, in our discretion. Further, the mining pool in which we participate, like most mining pools, is decentralized and has protections in place to prevent malicious actors or technical errors from affecting the pool’s ability to operate; however, these protections are not foolproof, and we may lose access to the mining pool, perhaps permanently. Because of the monitoring systems we have in place, we would become aware within minutes if our mining pool were to suffer downtime or cease to exist altogether, and we would expect to be able to resume mining without a mining pool within minutes, or redirect our hash rate to another mining pool, within an hour of the downtime event. Historically, self-mining without a pool has resulted in greater revenue volatility and may produce lower overall bitcoin rewards than pooled mining. If we are required to self-mine or transition to another mining pool under unfavorable conditions, our Bitcoin Mining revenue may decline—possibly materially—and become less predictable. Any unanticipated disruption or loss of access to our mining pool, or any inability to promptly and effectively diversify our mining methods, could adversely affect our business, financial condition, and results of operations.

Previous wording

We receive Bitcoin rewards from our mining activity through third-party mining pool operators. Mining pools enable miners to combine their processing power, increasing their chances of solving a block and earning Bitcoin rewards from the network. After deducting any applicable pool fees, the pool operator then distributes the rewards proportionally based on our contribution to the pool’s overall mining power. Should the pool operator’s system suffer downtime due to a cyber-attack, software malfunction or other issue, it could negatively impact our ability to mine and receive revenue; particularly if we are unable to quickly switch to another pool or to self-mining without a pool. Additionally, there is a risk that the mining pool operator could fail to accurately record the total processing power provided to the pool for a given Bitcoin mining application, which would inhibit our ability to verify our proportion of the pool’s total processing power. While we track both our hash rate and the total hash rate used by the pool internally, the pool operator uses its own record-keeping system to determine our share of the rewards, which may not align with our calculation. If we are unable to consistently obtain accurate proportionate rewards from our mining pool operators, we may not receive accurate block rewards from the pool, with limited recourse to resolve such inaccuracies. This could lead us to reconsider our participation in a particular mining pool, or mining pools in general, which may affect the predictability of our mining returns and have an adverse effect on our business and operations.

Current wording

solves a block during a given period. Our ability to generate Bitcoin Mining revenue therefore depends in part on the continued stability and accuracy of the mining pools we utilize. If the pool operator’s system suffer downtime due to a cyber-attack, software malfunction, operational failure, or other disruption, our ability to mine and receive rewards may be negatively affected, particularly if we are unable to transition promptly to another pool or to self-mining without a pool. Additionally, there is a risk that the mining pool operator could fail to accurately record the total processing power provided to the pool for a given bitcoin mining application, which would inhibit our ability to verify our proportion of the pool’s total processing power. While we monitor our hash rate and the pool’s total hash rate internally, mining pool operators maintain their own systems to track contributions and calculate payouts. If a pool operator inaccurately records our hash rate contribution or otherwise fails to allocate rewards proportionately, our receipt of accurate and complete rewards may be impaired. Our ability to dispute or recover losses from inaccurate payouts may be limited. If we are unable to consistently obtain accurate and timely rewards from third-party mining pool operators, we may reconsider participation in a particular pool or mining pools generally. Any such change could increase the volatility of our mining returns and adversely affect our business, financial condition, and results of operations.

Previous wording

The Bitcoin blockchain is subject to modification based on a consensus of the users on its network. When a significant minority of users on the network agree to a modification that is not compatible with the prior network protocol, a “fork” of the network results, with one prong running the pre-modified protocol and the other running the modified protocol. The effect of such a fork would be the existence of two “versions” of the blockchain running in parallel that are not interchangeable, which requires exchange-type transactions to convert between the two forks. Additionally, it may be unclear following a fork which of the two protocols represents the original and which is the new protocol. Different metrics adopted by industry participants to determine which is the original asset following a fork in the Bitcoin blockchain may include: referring to the blockchain with the greatest network hash rate, or to the “length” of blockchain (i.e., the time between the first transaction recorded in the blockchain’s distributed ledger and the date of the most recent transaction). Accordingly, it is possible that a fork may occur on the Bitcoin blockchain that results in an asset different from our current Bitcoin holdings, or a protocol different from SHA-256 (which our miners are specifically designed to operate), gaining predominance, and the value of our Bitcoin assets may suffer, or we may not be able to adapt our miners to the new protocol. Therefore, we may not realize the economic benefit of a fork in the Bitcoin blockchain, either immediately or ever, which could adversely affect an investment in our securities.

Current wording

The Bitcoin blockchain is subject to modification based on a consensus of the users on its network. When a significant minority of users on the network agree to a modification that is not compatible with the prior network protocol, a “fork” of the network results, with one prong running the pre-modified protocol and the other running the modified protocol. The effect of such a fork would be the existence of two “versions” of the blockchain running in parallel that are not interchangeable, which requires exchange-type transactions to convert between the two forks. Additionally, it may be unclear following a fork which of the two protocols represents the original and which is the new protocol. Different metrics adopted by industry participants to determine which is the original asset following a fork in the Bitcoin blockchain may include: referring to the blockchain with the greatest network hash rate, or to the “length” of blockchain (i.e., the time between the first transaction recorded in the blockchain’s distributed ledger and the date of the most recent transaction). Accordingly, it is possible that a fork may occur on the Bitcoin blockchain that results in an asset different from our current bitcoin holdings, or a protocol different from SHA-256 (which our miners are specifically designed to operate), gaining predominance, and the value of our bitcoin assets may suffer, or we may not be able to adapt our miners to the new protocol. As a result, we may not realize any economic benefit from a fork in the Bitcoin blockchain, either immediately or at all, and any such fork could adversely affect the value of our bitcoin holdings, the effectiveness of our mining fleet, and investment in our securities.

Previous wording

We may become the subject of third-party intellectual property right infringement claims relating to our own systems and/or the use of third-party equipment and systems. For example, as further identified in Note 17.Commitments and Contingencies to our Consolidated Financial Statements, Green Revolution Cooling, Inc. (“GRC”) has alleged that the immersion cooling systems we use, which were purchased from Midas Immersion Cooling, LLC and Hash House Tech, Inc., infringe on certain of GRC’s patents. While we reasonably rely on the representations and warranties of third-party vendors, such as Midas Immersion Cooling, LLC, it is not possible for us to avoid all potential claims of infringement of third-party intellectual property rights. If such claims are successful, we may be required to pay royalties or be ordered to cease using any technologies found to be infringing on such third-party rights altogether. Additionally, any such legal action would cause the diversion of time, energy, and resources away from our operations and toward defending against such actions.

Current wording

We may become the subject of third-party intellectual property right infringement claims relating to our own systems and/or the use of third-party equipment and systems. For example, as further described in Note 17.Commitments and Contingencies to our Consolidated Financial Statements, Green Revolution Cooling, Inc. (“GRC”) has alleged that the immersion cooling systems we use, which were purchased from Midas Immersion Cooling, LLC and Hash House Tech, Inc., infringe on certain of GRC’s patents. While we rely on the representations and warranties of third-party vendors, such as Midas Immersion Cooling, LLC, it is not possible to avoid all potential claims of infringement of third-party intellectual property rights. If such claims are successful, we may be required to pay royalties or be ordered to cease using technologies found to be infringing on such third-party rights altogether. Additionally, such legal action could cause the diversion of time, energy, and resources away from our operations and toward defending against such actions. Adverse outcomes in these matters could require us to redesign or replace affected systems, obtain licenses on unfavorable terms, or write off certain assets, and could result in significant damage, settlements, or injunctive relief, any of which could have a material adverse effect on our business, results of operations, and financial condition.

Previous wording

We are subject to counterparty risks, including in particular risks and uncertainties relating to our Custodians.

Current wording

We are subject to counterparty risks, including risks and uncertainties relating to our Custodians.

Previous wording

While we believe that each of the NYDIG Custodial Agreement and Coinbase Prime Broker Agreement provide our business with reasonable protections for our operations and the safe storage of our digital assets, we make no assurances that storing our digital assets with either Custodian is free from risk. To the best of our knowledge, each Custodian safely stores our digital assets in segregated accounts as represented in the NYDIG Custodial Agreement and Coinbase Prime Broker Agreement; however, if a Custodian were to be in breach of its agreement, our digital assets could be compromised. Similarly, if a Custodian were to cease operations, declare insolvency or file for bankruptcy, there is a reasonable risk that recovery of our assets, though kept in segregated accounts, would be delayed or unrecoverable. Applicable insolvency law is not fully developed with respect to the holding of digital assets in custodial accounts. If our custodied Bitcoin were considered to be the property of a Custodian’s estate in the event that such Custodian were to enter bankruptcy, receivership or similar insolvency proceedings, there is a risk that we could be treated as a general unsecured creditor of such custodian, inhibiting our ability to access our Bitcoin. Even if we are able to prevent our Bitcoin from being considered the property of a Custodian’s bankruptcy estate as part of an insolvency proceeding, it is possible that we would still be delayed or may otherwise experience difficulty in accessing our Bitcoin held by the Custodian during the pendency of the insolvency proceedings. A delay in our ability to access our Bitcoin could result in the loss of the value related to some or all of our Bitcoin and could have a material adverse effect on our financial condition and the market price of our common stock. We also do not have a readily available additional backup custodians at this time, so if NYDIG or Coinbase were to cease operations, declare insolvency or file for bankruptcy, we would need to self-custody the applicable digital assets using cold storage until we could contract with another adequate custodian for the safe storage of our assets which may have a disruptive effect on our business. In the meantime, our mined Bitcoin would continue to aggregate in our proprietary wallet until we found another suitable cold storage custodian.

Current wording

While we believe that each of the NYDIG Custodial Agreement and Coinbase Prime Broker Agreement provide our business with reasonable protections for our operations and the safe storage of our digital assets, we make no assurances that storing our digital assets with either Custodian is free from risk. To the best of our knowledge, each Custodian safely stores our digital assets in segregated accounts as represented in the NYDIG Custodial Agreement and Coinbase Prime Broker Agreement; however, if a Custodian were to be in breach of its agreement, our digital assets could be compromised. Similarly, if a Custodian were to cease operations, declare insolvency or file for bankruptcy, there is a reasonable risk that recovery of our assets, though kept in segregated accounts, would be delayed or unrecoverable. Applicable insolvency law is not fully developed with respect to the holding of digital assets in custodial accounts. If our custodied bitcoin were considered to be the property of a Custodian’s estate in the event that such Custodian were to enter bankruptcy, receivership or similar insolvency proceedings, there is a risk that we could be treated as a general unsecured creditor of such custodian, inhibiting our ability to access our bitcoin. Even if we are able to prevent our bitcoin from being considered the property of a Custodian’s bankruptcy estate as part of an insolvency proceeding, it is possible that we would still be delayed or may otherwise experience difficulty in accessing our bitcoin held by the Custodian during the pendency of the insolvency proceedings. A delay in our ability to access our bitcoin could result in the loss of the value related to some or all of our bitcoin and could have a material adverse effect on our financial condition and the market price of our common stock. We also do not have a readily available additional backup custodian at this time, so if NYDIG or Coinbase were to cease operations, declare insolvency or file for bankruptcy, we would need to self-custody the applicable digital assets using cold storage until we could contract with another adequate custodian for the safe storage of our assets which may have a disruptive effect on our business. In the meantime, our mined bitcoin would continue to aggregate in our proprietary wallet until we found another suitable cold storage custodian.

Previous wording

While we rely on well-known U.S.-based third-party digital asset-focused custodians to safeguard our Bitcoin, our Bitcoin is not insured by us, including not being subject to Federal Deposit Insurance Corporation or Securities Investor Protection Corporation protection. Accordingly, if our Bitcoin is lost, stolen or destroyed under circumstances rendering a party liable to us, our loss could be significant and the responsible party may not have the financial resources sufficient to satisfy our claim. For example, as to a particular event of loss, the only source of recovery for us might be limited, to the extent identifiable, to responsible third parties, such as a Custodian, or in other instances, a thief, terrorist or others, any of which may not have the financial resources (including liability insurance coverage) to satisfy a valid claim. We believe each Custodian maintains limited insurance policies covering the pool of digital assets it custodies against certain events of loss, such as theft. NYDIG and Coinbase custody the digital assets of hundreds of parties, worth billions of U.S. dollars, and any insurance coverage held by any of these Custodians is likely significantly less than the total value of the custodied digital assets of their customers. Any insurance proceeds received by a Custodian in response to a loss would likely be shared by the Custodian with us and other affected parties, rendering any amount we would receive significantly less than the value of our lost custodied assets. Furthermore, any insurance held by the Custodians may be terminated without notice to us. Any loss of insurance coverage would impede our ability to be compensated for our losses. Therefore, a loss may be suffered with respect to our Bitcoin for which there may be no recourse or adequate remedy, which could have a material adverse effect on our results of operations and financial condition and, consequently, an investment in our securities.

Current wording

While we rely on well-known U.S.-based third-party digital asset-focused custodians to safeguard our bitcoin, our bitcoin is not insured by us, including not being subject to Federal Deposit Insurance Corporation or Securities Investor Protection Corporation protection. Accordingly, if our bitcoin is lost, stolen or destroyed under circumstances rendering a party liable to us, our loss could be significant and the party responsible may not have the financial resources sufficient to satisfy our claim. For example, as to a particular event of loss, the only source of recovery for us might be limited, to the extent identifiable, to responsible third parties, such as a Custodian, or in other instances, a thief, terrorist or others, any of which may not have the financial resources (including liability insurance coverage) to satisfy a valid claim. We believe each Custodian maintains limited insurance policies covering the pool of digital assets it custodies against certain events of loss, such as theft. NYDIG and Coinbase custody the digital assets of hundreds of parties, worth billions of U.S. dollars, and any insurance coverage held by any of these Custodians is likely significantly less than the total value of the custodied digital assets of their customers. Any insurance proceeds received by a Custodian in response to a loss would likely be shared by the Custodian with us and other affected parties, rendering any amount we would receive significantly less than the value of our lost custodied assets. Furthermore, any insurance held by the Custodians may be terminated without notice to us. Any loss of insurance coverage would impede our ability to be compensated for our losses. Therefore, a loss may be suffered with respect to our bitcoin for which there may be no recourse or adequate remedy, which could have a material adverse effect on our results of operations and financial condition and, consequently, an investment in our securities.

Previous wording

Cyber-attacks, data breaches or malware may disrupt our operations and trigger significant liability for us, which could harm our operating results and financial condition, and damage our reputation or otherwise materially harm our business.

Current wording

Cyber-attacks, data breaches, or malware may disrupt our operations andexpose us to significant liability, which could harm our operating results, financial condition, and reputation.

Previous wording

As a publicly traded company, we experience cyber-attacks, such as phishing, and other attempts to gain unauthorized access to our systems on a regular basis, and we anticipate continuing to be subject to such attempts. The volume and sophistication of cyber-attacks may increase if AI capabilities are implemented by malicious actors and there is an ongoing risk that some or all of our Bitcoin could be lost or stolen as a result of one or more of these incursions. As we increase in size, we may become a more appealing target of hackers, malware, cyber-attacks, or other security threats, and, despite our implementation of strict security measures and frequent security audits, it is impossible to eliminate all vulnerabilities. For instance, we may not be able to ensure the adequacy of the security measures employed by third parties, such as our service providers. Additionally, though we provide cybersecurity training for employees, we cannot guarantee that we will not be affected by further phishing attempts. Efforts to limit the ability of malicious actors to disrupt the operations of the internet or undermine our own security efforts may be costly to implement and may not be successful. Such breaches, whether attributable to a vulnerability in our systems or otherwise, could result in claims of liability against us, damage our reputation and materially harm our business.

Current wording

As a publicly traded company, we are regularly subject to cyber-attacks, including phishing attempts and other efforts to gain unauthorized access to our systems. We expect these attempts to continue, and their volume and sophistication may increase as malicious actors deploy enhanced capabilities, including AI-driven tools. Cybersecurity incidents could result in loss or theft of our bitcoin or other sensitive data, disrupt our operations, or otherwise adversely affect our business. As we grow in size and visibility, we may become a more attractive target for hackers, malware, cyber-attacks, or other security threats. Although we implement strict security measures, conduct frequent security audits, and provide cybersecurity training to our employees, no system or process can eliminate all vulnerabilities. For instance, we may not be able to ensure the adequacy of the security measures employed by third parties, such as our service providers. We also rely on the security measures of third-party service providers, including our digital-asset custodians, and we may have limited ability to ensure their effectiveness. If a third-party custodian experiences a security breach or cyber-attack that results in unauthorized access to or loss of our bitcoin, we could lose some or all of our digital assets, which would materially and adversely affect our financial condition and results of operations.

Previous wording

To date, we have not experienced a material cyber incident; however, we continue to encounter ongoing cyber-attacks and the occurrence of any such event in the future could subject us to liability to our customers, suppliers, business partners and others, or give rise to legal and/or regulatory action, which could damage our reputation or otherwise materially harm our business, operating results, and financial condition.

Current wording

Cyber-attacks or other security incidents, whether arising from vulnerabilities in our systems or those of third parties, could result in operational disruption, loss of assets, theft or misuse of sensitive information, significant remediation costs, and diversion of management attention. They could also subject us to liability to customers, suppliers, business partners, or other stakeholders; lead to regulatory inquiries or legal proceedings; and damage our reputation. To date, we have not experienced a material cyber-incident. However, we continue to encounter ongoing cyber-attacks and cannot guarantee that future incidents will not occur. Any such event could materially and adversely affect our business, operating results, financial condition, and the market price of our securities.

Previous wording

Bitcoin transactions are not, from an administrative perspective, reversible without the consent and active participation of the recipient of the Bitcoin from the transaction. Because of the decentralized nature of the Bitcoin blockchain, once a transaction has been verified and recorded in a block that is added to the Bitcoin blockchain, an incorrect transfer of a Bitcoin or a theft thereof generally will not be reversible, and we may not have sufficient recourse to recover our losses from any such transfer or theft. It is possible that, through error, theft, or criminal action, our Bitcoin rewards could be transferred in incorrect amounts, to unauthorized third parties, or to uncontrolled accounts. Though high-profile enforcement actions against individuals laundering stolen Bitcoin have demonstrated some means of bringing malicious actors to justice, the stolen Bitcoin may remain unrecoverable. Furthermore, we utilize a third-party custodian for our Bitcoin, and thus do not maintain our private keys. If they lose access to our wallet, or if a malicious actor successfully denies our Custodians access to our wallet, we may be permanently denied access to the Bitcoin held in the wallet corresponding to the lost, stolen or blocked keys. Though we have taken and continue to take reasonable steps to secure our data and to store our Bitcoin, if we, or our Custodians were to experience data loss relating to our digital wallets, we could effectively lose access to and the ability to use our Bitcoin assets. Moreover, historically, we have been unable to secure insurance policies for our Bitcoin assets. To the extent that we are unable to recover our losses from such action, error or theft, such events could have a material adverse effect on our business, results of operations and financial condition.

Current wording

Bitcoin transactions generally cannot be reversed without the consent and active participation of the recipient. Because the Bitcoin blockchain is decentralized, once a transaction has been verified and included in a block, any erroneous transfer or theft is typically permanent, and we may have limited or no recourse to recover the transferred bitcoin. It is possible that, through error, theft, or criminal activity, our bitcoin rewards could be transferred in incorrect amounts or sent to unauthorized or inaccessible accounts. Although law-enforcement agencies have, in some cases, successfully pursued individuals involved in laundering stolen bitcoin, the stolen assets themselves are often not recoverable. Furthermore, we utilize a third-party custodian for our bitcoin and therefore do not maintain our own private keys. If our custodian experiences a security breach, operational failure, or loss of access to our digital wallet, or if a malicious actor prevents our custodian from accessing the wallet, we may be permanently denied access to the bitcoin held in that wallet. Though we have taken and continue to take reasonable steps to secure our data and to store our bitcoin, any data loss, corruption, or system failure affecting our custodian, or affecting us directly, could similarly result in irreversible loss of our bitcoin. In addition, we have historically been unable to obtain insurance coverage for our bitcoin assets. As a result, any loss arising from error, theft, fraud, or loss of access to private keys may not be recoverable. Any such event could have a material adverse effect on our business, financial condition, and results of operations.

Previous wording

Our operations have required significant amounts of electrical power, and, as we continue to expand our mining fleet and operate our Facilities, we anticipate our demand for electrical power will continue to grow. The fluctuating price of electricity we require for our operations, and to power our expansion, may inhibit our profitability. If we are unable to continue to obtain sufficient electrical power on a cost-effective basis, we may not realize the anticipated benefits of our significant capital investments.

Current wording

Our operations require significant amounts of electrical power, and we expect our power needs to continue to grow as we develop our Facilities. Fluctuations in the price of electricity, or increases in the cost of securing additional capacity to support our expansion, may reduce our profitability. If we are unable to obtain sufficient electrical power on a cost-effective basis, we may be unable to realize the anticipated benefits of our capital investments or achieve our operational objectives.

Previous wording

Additionally, our operations could be materially adversely affected by prolonged power outages. Although certain critical functions of the Rockdale Facility may be powered by backup generators on a temporary basis, it would not be feasible or cost-effective to run miners on back-up power generators for extended periods of time. Therefore, we may have to reduce or cease our operations in the event of an extended power outage, or as a result of the unavailability or increased cost of electrical power. If this were to occur, our business and results of operations could be materially and adversely affected.

Current wording

Our operations are also vulnerable to prolonged power outages or other disruptions in the supply of electricity. Although certain critical functions of the Rockdale Facility can be supported temporarily by backup generators, it is neither feasible nor cost-effective to operate our miners on backup power for extended periods. As a result, we may have to reduce or cease our operations in the event of an extended power outage, or as a result of the unavailability or increased cost of electrical power. Any such interruption in power availability or increase in power costs could materially and adversely affect our business, financial condition, and results of operations.

Previous wording

The Public Utility Commission of Texas (“PUCT”), ERCOT, and Oncor Electric Delivery Company (“Oncor”) collectively oversee the regulatory, administrative, and delivery aspects of our power supply in Texas; MISO oversees our power supply in Kentucky. In recent years, regulatory scrutiny on Bitcoin mining facilities and their energy consumption has intensified as the industry has grown. In April 2022, ERCOT established a task force to review the participation of large flexible loads, including Bitcoin mining data centers, in the ERCOT market. This task force is tasked with developing policy recommendations for ERCOT concerning network planning, market operations, and the interconnection processes for large flexible loads.

Current wording

The Public Utility Commission of Texas (“PUCT”), ERCOT, and Oncor Electric Delivery Company (“Oncor”) collectively oversee the regulatory, administrative, and delivery aspects of our power supply in Texas; MISO oversees our power supply in Kentucky. In recent years, regulatory scrutiny on bitcoin mining facilities and their energy consumption has intensified as the industry has grown. In April 2022, ERCOT established a task force to review the participation of large flexible loads, including bitcoin mining facilities and data centers, in the ERCOT market. This task force is tasked with developing policy recommendations for ERCOT concerning network planning, market operations, and the interconnection processes for large flexible loads.

Previous wording

We may be impacted by natural disasters, wars, health epidemics, weather conditions, the long-term effects of climate change, power outages or other events outside of our control. For example, we voluntarily halted operations at the Rockdale Facility during the severe winter storms in the first quarter of 2022 and 2021 that had a widespread impact on utilities and transportation. Additionally, as previously disclosed, we sustained damage to the Rockdale Facility’s infrastructure during the severe winter storms affecting Texas in December 2022 which caused miners to be offline and impacted approximately 2.5 EH/s of our hash rate capacity. In the future, regulators or power providers may, under new or revised rules, require us to power down our Facilities, during such events. If major disasters such as earthquakes, floods or other climate-related events occur, the Rockdale Facility, the Corsicana Facility, the Kentucky Facility, or our other offices are severely damaged, or our information system or communications break down or operate improperly, our operations may be interrupted. We may incur expenses or delays relating to such events outside of our control, which may not be covered by insurance, and such events could have a material adverse impact on our business, operating results and financial condition.

Current wording

We may be impacted by natural disasters, wars, terrorism, pandemics/epidemics, health epidemics, weather conditions, the long-term effects of climate change, mechanical failure, human error, physical or electronic security breaches, power outages and telecommunications failures, cyber incidents (including computer viruses, ransomware, denial-of-service attacks, and phishing schemes), sabotage, vandalism, or other events outside of our control. For example, we voluntarily halted operations at the Rockdale Facility during the severe winter storms in the first quarter of 2022 and 2021 that had a widespread impact on utilities and transportation. Additionally, as previously disclosed, we sustained damage to the Rockdale Facility’s infrastructure during the severe winter storms affecting Texas in December 2022, which caused miners to be offline and impacted approximately 2.5 EH/s of our hash rate capacity. In the future, regulators or power providers may, under new or revised rules, require us to power down our Facilities during such events. Our systems and facilities may also be susceptible to damage, interference, or interruption from modifications or upgrades, power loss, and other operational issues. If major disasters such as earthquakes, floods, hurricanes, or other climate-related events occur, the Rockdale Facility, the Corsicana Facility, the Kentucky Facility, or our other offices and data or network infrastructure are severely damaged, or our information system or communications break down or operate improperly, our operations may be interrupted. We may incur expenses or delays relating to such events outside of our control, which may not be covered by insurance, and such events could have a material adverse impact on our business, operating results and financial condition.

Previous wording

In addition, the physical risks of climate change may impact the availability and cost of materials and natural resources, sources and supply of energy, demand for Bitcoin and other cryptocurrencies, and could increase our insurance and other operating costs, including, potentially, to repair damage incurred as a result of extreme weather events or to renovate or retrofit facilities to better withstand extreme weather events. If environmental laws or regulations or industry standards are either changed or adopted and impose significant operational restrictions and compliance requirements on our operations, or if our operations are disrupted due to the physical impacts of climate change, our business, capital expenditures, results of operations, financial condition and competitive position could be negatively impacted.

Current wording

Additionally, the physical risks of climate change may affect the availability and cost of materials and natural resources, sources and supply of energy, and demand for bitcoin and other cryptocurrencies, and could increase our insurance and other operating costs, including costs to repair extreme-weather damage or to retrofit facilities. Changes in environmental laws, regulations, or industry standards, or disruption from the physical impacts of climate change, could negatively impact our business, capital expenditures, results of operations, financial condition, and competitive position. Even absent new regulations, adverse publicity or increased scrutiny regarding climate or energy impacts of our industry could harm our reputation. Any of the foregoing could materially and adversely affect our business, financial condition, results of operations, cash flows, and prospects.

Previous wording

Our Bitcoin Mining operations require a substantial amount of power and can only be successful, and ultimately profitable, if the costs we incur, including for electricity, are lower than the revenue we generate from our operations. As a result, any mine we establish can only be successful if we can obtain sufficient electrical power for that mine on a cost-effective basis, and our establishment of new mines requires us to find locations where that is the case. For instance, our plans and strategic initiatives for the Rockdale Facility and the Corsicana Facility are based, in part, on our understanding of current environmental and energy regulations, policies, and initiatives enacted by federal and Texas regulators. If new regulations are imposed, or if existing regulations are modified, the assumptions we made underlying our plans and strategic initiatives may be inaccurate, and we may incur additional costs to adapt our planned business, if we are able to adapt at all, to such regulations.

Current wording

Our Bitcoin Mining operations require substantial electrical power and can only be successful if the costs of that power, together with our operations costs, remain lower than the revenue generated by our operations. Our expansion plans for the Rockdale Facility and the Corsicana Facility depend, in part, on our understanding of current federal, state, and local environmental and energy policies, including those applicable in the States of Texas and Kentucky. If new regulations are enacted, or if existing regulations are modified, the assumptions underlying our strategic initiatives may prove inaccurate, and we may incur additional costs to adapt our operations, if we are able to adapt at all.

Previous wording

Moreover, in the State of Texas, we currently participate in energy demand response programs to curtail operations, return capacity to the electrical grid, and receive funds to offset foregone operational revenue when necessary, such as in extreme weather events. Furthermore, we, as well as other Bitcoin miners operating primarily in the State of Texas, have recently received a mandatory survey from the U.S. Energy Information Administration (the “EIA”), seeking extensive information regarding our Facilities’ use of electricity, and certain information regarding our operations, solely for the month of January 2024. It is possible that mandatory surveys such as this will be used by the EIA to generate negative reports regarding the Bitcoin mining industry’s use of power and other resources, which could spur additional negative public sentiment and adverse legislative and regulatory action against us or the Bitcoin mining industry as a whole. Surveys and other regulatory actions could increase our cost of operations or otherwise make it more difficult for us to operate at our current locations.

Current wording

In Texas, we participate in energy demand-response programs that allow us to curtail operations and return capacity to the electrical grid during certain conditions, including extreme weather events. By curtailing, we then receive funds to offset foregone operational revenue when necessary. These programs can reduce our operational output and may increase our exposure to regulatory oversight of our energy usage. Additionally, bitcoin miners operating in Texas, including us, received a mandatory survey from the EIA requesting detailed information regarding electricity consumption and operations for January 2024. It is possible that information collected through such surveys could be used to produce reports critical of the industry’s energy usage, potentially prompting negative public sentiment or additional legislative or regulatory action directed at our operations. Any such actions could increase our operating costs or make it more difficult to operate at our current locations.

Previous wording

The compliance costs of responding to new and changing regulations could adversely affect our operations at the Rockdale Facility and the Corsicana Facility.

Current wording

The compliance costs of responding to new and changing regulations could adversely affect our operations at the Facilities.