CLEANSPARK, INC.

Previous wording

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 1,455 megawatts (“MW”) as of December 31, 2025. In October 2025, we acquired property and secured long-term power supply agreements in Texas to support the development of a next-generation data center campus. In December 2025, we acquired property in South Dakota with the intention to build out infrastructure. 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 December 31, 2025.

Current wording

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 1,809 megawatts (“MW”) as of March 31, 2026. In February 2026 and October 2025, 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 March 31, 2026.

Previous wording

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. As of December 31, 2025, our operating mining units produced an average computing power of 47.1 exahash per second (“EH/s”), following our first 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 2025 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.

Current wording

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. As of March 31, 2026, our operating mining units produced an average computing power of 47.3 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.

Previous wording

We owned approximately 318,776 miners, of which approximately 245,199 were in service as of December 31, 2025. 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 3-60 months and have an average age of approximately 18 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 December 31, 2025 had a range of energy efficiency (watts per terahash – “W/TH”) of 13.5 to 29.5 W/TH with an average operating energy efficiency of 16.8 W/TH.

Current wording

We owned approximately 326,885 miners, of which approximately 224,473 were in service as of March 31, 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 1-63 months and have an average age of approximately 20 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 March 31, 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 16.2 J/TH.

Previous wording

We obtain bitcoin from our mining operations by contributing all of our computing power to a single mining pool operator, which is currently our sole customer under a contract terminable at any time by either party. In exchange, we earn variable consideration in the form of bitcoin rewards, determined daily using a predetermined formula based on our contributed computing power. The consideration is included in revenue once it is no longer constrained, when we can reasonably estimate the rewards and determine a significant reversal is unlikely, and our sole performance obligation of providing computing power is satisfied. Revenue is not disaggregated into block rewards and transaction fees. From time to time, we sell bitcoin to support operations and strategic growth, and we may also use bitcoin as collateral for lending arrangements. In April 2025, we launched an institutional-grade in-house trading function as we shift to a balanced approach between monetizing new production and building long-term holdings, and we plan to continue to integrate these strategies into our regular treasury management activities. As part of this strategy, we began entering into bitcoin-linked derivative contracts to economically hedge the volatility of bitcoin prices and to generate liquidity in support of core operating activities. These contracts serve as a strategic alternative to selling bitcoin directly and are intended to monetize our bitcoin holdings while managing exposure to adverse price movements. The types of derivatives utilized for this purpose may include bitcoin futures, options, and other structured instruments. These contracts are typically short-term in nature and may be cash-settled or settled in-kind. Treasury management activities may serve cash management, strategic growth, or bitcoin balance hedging, incremental other income or other general corporate purposes. Currently, we do not employ a fixed formula for when or how much bitcoin to sell, and decisions are made by management based on working capital needs, real-time market conditions, risk management objectives, and broader strategic considerations.

Current wording

We obtain bitcoin from our mining operations by contributing all of our computing power to a single mining pool operator, which is currently our sole customer under a contract terminable at any time by either party. In exchange, we earn variable consideration in the form of bitcoin rewards, determined daily using a predetermined formula based on our contributed computing power. The consideration is included in revenue once it is no longer constrained, when we can reasonably estimate the rewards and determine a significant reversal is unlikely, and our sole performance obligation of providing computing power is satisfied. Revenue is not disaggregated into block rewards and transaction fees. From time to time, we sell bitcoin to support operations and strategic growth, and we may also use bitcoin as collateral for lending arrangements. In April 2025, we launched an institutional-grade in-house trading function as we shift to a balanced approach between monetizing new production and building long-term holdings, and we plan to continue to integrate these strategies into our regular treasury management activities. As part of this strategy, we began entering into bitcoin-linked derivative contracts to economically hedge the volatility of bitcoin prices and to generate liquidity in support of core operating activities. These contracts serve as a strategic alternative to selling bitcoin directly and are intended to monetize our bitcoin holdings while managing exposure to adverse price movements. The types of derivatives utilized for this purpose may include bitcoin forwards, options, and other structured instruments. These contracts are typically short-term in nature and may be cash-settled or settled in-kind. Treasury management activities may serve cash management, strategic growth, or bitcoin balance hedging, incremental other income or other general corporate purposes. Currently, we do not employ a fixed formula for when or how much bitcoin to sell, and decisions are made by management based on working capital needs, real-time market conditions, risk management objectives, and broader strategic considerations.

Previous wording

As of December 31, 2025, we held approximately 11,452 bitcoins and had a receivable for 1,648 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 December 31, 2025 was $1,001,997 on our Condensed Consolidated Balance Sheets and the fair value of our Receivable for bitcoin collateral was $144,163. 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.

Current wording

As of March 31, 2026, we held approximately 11,920 bitcoins and had a receivable for 1,641 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 March 31, 2026 was $813,221 on our Condensed Consolidated Balance Sheets and the fair value of our Receivable for bitcoin collateral was $111,940. 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.

Previous wording

Leveraging our power optimization, land acquisition, engineering, operations and construction expertise, we have been actively pursuing opportunities to develop portions of our sites and power pipeline for AI, HPC and other advanced data-center hosting and leasing applications. The expansion of AI technologies and the increasing electricity requirements of AI and HPC workloads have positioned our infrastructure as a competitive platform for hyperscalers, cloud service providers and AI and HPC companies seeking reliable and energy-efficient capacity. As of December 31, 2025 and September 30, 2025, we have not had material revenue from our AI and HPC services business, and operating results from this business are not reflected in historical results of operations, including our results of operations.

Current wording

Leveraging our power optimization, land acquisition, engineering, operations and construction expertise, we have been actively pursuing opportunities to develop portions of our sites and power pipeline for AI, HPC and other advanced data-center hosting and leasing applications. The expansion of AI technologies and the increasing electricity requirements of AI and HPC workloads have positioned our infrastructure as a competitive platform for hyperscalers, cloud service providers and AI and HPC companies seeking reliable and energy-efficient capacity. As of March 31, 2026 and September 30, 2025, we had earned no revenues from our AI and HPC services business.

Previous wording

We are evaluating existing properties for potential conversion or dual-use development to support AI and HPC tenants and are advancing design and permitting activities for greenfield data-center sites. On October 27, 2025, we acquired property in Austin County, Texas and executed long-term power supply agreements totaling 285 megawatts to support the development of a next-generation data-center campus. This transaction marked the Company’s entry into the Texas market and expanded our power portfolio for future AI and HPC development.

Current wording

We are evaluating existing properties for potential conversion or dual-use development to support AI and HPC tenants and are advancing design and permitting activities for greenfield data-center sites. On February 27, 2026, we acquired property in Brazoria County, Texas and secured a framework for approximately 300 megawatts for power capacity, with potential expansion to approximately 600 megawatts, to support the development of a next-generation data center campus. On October 27, 2025, we acquired property in Austin County, Texas and secured approximately 285 megawatts of planned power capacity to support a similar purpose. These transactions mark the Company’s entry into the Texas market and have expanded our portfolio of land and power-related infrastructure for future AI and HPC development.

Previous wording

Results of Operations for the three months ended December 31, 2025 and 2024

Current wording

Results of Operations for the three and six months ended March 31, 2026 and 2025

Previous wording

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.

Current wording

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 joules (or watts) of energy required to produce each terahash of processing power. We believe we operate a highly efficient fleet of miners.

Previous wording

As of December 31, 2025, our operating hashrate was approximately 4.46% of the total global hashrate, and we received approximately the same percentage of the global blockchain rewards, which as of that date equaled approximately 20-21 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.

Current wording

As of March 31, 2026, our operating hashrate was approximately 4.66% of the total global hashrate, and we received approximately the same percentage of the global blockchain rewards, which, as of that date, equaled approximately 20-21 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.

Previous wording

The table below describes the average cost of mining each bitcoin for the three months ended December 31, 2025 and 2024 and the total energy usage and cost per each kilowatt hour (“kWh”) utilized within our owned facilities.

Current wording

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

Previous wording

Power prices are the most significant cost driver for our wholly owned locations, and energy expense represented 52.7% and 40.4% as expressed as a percentage of bitcoin mining revenues during the three months ended December 31, 2025 and 2024, respectively.

Current wording

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

Previous wording

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 $0.056 and $0.049 per kWh for the three months ended December 31, 2025 and 2024, respectively.

Current wording

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 and $0.060 per kWh for the three months ended March 31, 2026 and 2025, respectively, and were $0.054 and $0.055 per kWh, for the six months ended March 31, 2026 and 2025, respectively.

Previous wording

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% during the three months ended December 31, 2025. 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.

Current wording

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% during the six months ended March 31, 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.

Previous wording

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 $52,209 and $31,949 for the three months ended December 31, 2025 and 2024, respectively.

Current wording

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 and $33,552 for the six months ended March 31, 2026 and 2025, respectively.

Previous wording

We have financing costs for a limited number of miners in our miner fleet, and such costs are recorded within Interest Expense in our Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income. 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, there were no financing costs for three months ended December 31, 2025 and $98 for the three months ended December 31, 2024.

Current wording

In the prior period ended March 31, 2025, we had financing costs for a limited number of miners in our miner fleet, and such costs were recorded within Interest expense in our Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income. 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, for the three and six months ended March 31, 2025 the financing costs per bitcoin mined was $60 and $78, respectively.

Previous wording

During the prior year, the Company exited all bitcoin mining operations conducted at hosted facilities and now conducts mining exclusively at owned and leased facilities. During the three months ended December 31, 2024, hosted mining operations produced 128 bitcoin, while no bitcoin were mined at hosted facilities during the three months ended December 31, 2025. As a result of the exit of hosted operations, no bitcoin mining revenue or hosting-related operating costs were generated in the current-year quarter. 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.

Current wording

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.

Previous wording

We earned $181,180 in bitcoin mining revenue during the three months ended December 31, 2025, which was an increase of $18,874, or 12%, as compared to $162,306 for the three months ended December 31, 2024. Bitcoin mining revenues are recorded net of bitcoin mining fees charged by our sole mining pool operator (Foundry) that equaled approximately 0.19% of gross bitcoin mining revenues for the three months ended December 31, 2025, 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 December 31, 2025, we mined 1,817 bitcoin (gross of Foundry fees) with an average bitcoin price of $99,697 as compared to 1,945 bitcoin with an average bitcoin price of $83,443 during the three months ended December 31, 2024. The increase in bitcoin mining revenue for the three months ended December 31, 2025 was attributable to the increase in the average bitcoin price despite a decrease in total bitcoin mined during the period as compared to the three months ended December 31, 2024. This occurred as we increased the number of our miners in operation, which rose to 245,199 compared to 201,808, an expansion of 43,391 or 22% between December 31, 2024 and December 31, 2025. The increase in our miners in operation increases our hashrate, which is our total computational power, and which when understood in the context of global hashrate, determines how much bitcoin we are able to mine.

Current wording

We earned $136,408 in bitcoin mining revenue during the three months ended March 31, 2026, which was a decrease of $45,304, or 25%, as compared to $181,712 for the three months ended March 31, 2025. Bitcoin mining revenues are recorded net of bitcoin mining fees charged by our sole mining pool operator (Foundry) that equaled approximately 0.21% of gross bitcoin mining revenues for the three months ended March 31, 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 March 31, 2026, we mined 1,795 bitcoin with an average bitcoin price of $75,989 as compared to 1,957 bitcoin with an average bitcoin price of $92,870 during the three months ended March 31, 2025. The decrease in bitcoin mining revenue for the three months ended March 31, 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 March 31, 2025. Although the number of our miners in operation increased to 224,473 as of March 31, 2026 from 205,412 as of March 31, 2025, global hashrate grew more rapidly over the same period, increasing competition across the blockchain network. As a result, our relative share of total network computational power declined, which contributed to the decrease in bitcoin mined during the three months ended March 31, 2026.

Previous wording

Professional fees, which consisted primarily of legal, accounting and consulting fees, were $5,406 for the three months ended December 31, 2025, an increase of $1,521, or 39%, from $3,885 for the three months ended December 31, 2024. This increase was primarily attributable to consultant fees for operations, legal, and other professional fees during the three months ended December 31, 2025. Legal expenses were $2,139 for the three months ended December 31, 2025, as compared to $1,445 for the three months ended December 31, 2024. Other professional fees, namely accounting and consulting, were $2,672 for the three months ended December 31, 2025, as compared to $2,445 for the three months ended December 31, 2024, representing an increase of $227.

Current wording

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

Previous wording

Payroll expenses were $23,785 for the three months ended December 31, 2025, an increase of $2,916, or 14%, from $20,869 for the three months ended December 31, 2024. 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 $12,700 for the three months ended December 31, 2025, representing a decrease of 29% from $17,847 for the three months ended December 31, 2024, mainly attributed to the reduction in bonus accruals in the three months ended December 31, 2025, partially offset by increased headcount due to expansion of operational locations.

Current wording

Payroll expenses were $24,922 for the three months ended March 31, 2026, an increase of $9,667, or 63%, from $15,255 for the three months ended March 31, 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 for the three months ended March 31, 2026, representing an increase of 13% from $12,154 for the three months ended March 31, 2025, and were mainly attributed to increased headcount due to expansion of operational locations.

Previous wording

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 $11,085 for the three months ended December 31, 2025, an increase of $8,064, or 267%, from $3,021 for the three months ended December 31, 2024 primarily due to no stock based compensation related to the 2025 Long Term Incentive Program in the comparable period.

Current wording

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 for the three months ended March 31, 2026, an increase of $8,036, or 259%, from $3,101 for the three months ended March 31, 2025. The lower overall stock-based compensation for the three months ended March 31, 2025 was due to that lack of a formal grant date or service inception date under the 2025 LTIP as of March 31, 2025 and accordingly there was no expense recognized under this plan over that prior year period.

Previous wording

General and administrative expenses increased to $15,442 for the three months ended December 31, 2025 from $10,054 for the three months ended December 31, 2024, representing an increase of $5,388 or 54%. This increase was primarily attributable to increases in corporate overhead, including, but not limited to, property taxes and insurance premiums (primarily due to the substantial increase in owned assets), rent, and maintenance expenses.

Current wording

General and administrative expenses increased to $16,105 for the three months ended March 31, 2026 from $11,736 for the three months ended March 31, 2025, representing an increase of $4,369 or 37%. 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.

Previous wording

Loss on fair value of bitcoin, net for the three months ended December 31, 2025 was $246,832 as compared to a gain on fair value of bitcoin of $218,206 for the three months ended December 31, 2024, a total variance of $465,038. We measured crypto assets at fair value and included the gains and losses from remeasurement in net income. The loss for the three months ended December 31, 2025 is attributable to the change in bitcoin’s fair value from approximately $114,100 per bitcoin on September 30, 2025 to approximately $87,500 per bitcoin on December 31, 2025. Meanwhile the gain for the three months ended December 31, 2024 pertains to the change in bitcoin’s fair value from approximately $63,300 per bitcoin on September 30, 2024 to $93,400 per bitcoin on December 31, 2024.

Current wording

Loss on fair value of bitcoin, net for the three months ended March 31, 2026 and 2025 was $224,107 and $127,667, respectively, a total variance of $96,440. We measured crypto assets at fair value and included the gains and losses from remeasurement in net income. The loss for the three months ended March 31, 2026 is attributable to the change in bitcoin’s fair value from approximately $87,500 per bitcoin on December 31, 2025 to approximately $68,200 per bitcoin on March 31, 2026. The loss for the three months ended March 31, 2025 pertains to the change in bitcoin’s fair value from approximately $93,400 per bitcoin on December 31, 2024 to $82,500 per bitcoin on March 31, 2025.

Previous wording

Depreciation and amortization expense increased to $106,311 for the three months ended December 31, 2025, from $66,229 for the three months ended December 31, 2024, an increase of $40,082, or 61%. Depreciation expense increased by $40,243, or 62%, during the three months ended December 31, 2025, to $105,368 from $65,125, mainly due to an increase in miners and mining-related equipment being in service during the comparative period.

Current wording

Depreciation and amortization expense increased to $115,881 for the three months ended March 31, 2026, from $78,901 for the three months ended March 31, 2025, an increase of $36,980, or 47%. Depreciation expense increased by $37,332, or 48%, during the three months ended March 31, 2026, to $115,265 from $77,933, mainly due to an increase in miners and mining-related equipment being in service during the comparative period.

Previous wording

Amortization expense for the three months ended December 31, 2025 was $942, a decrease of $161, or 15%, from $1,104 for the three months ended December 31, 2024. The decrease in amortization expense is primarily due to some of the Company’s intangible assets aging off of the balance sheet.

Current wording

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

Previous wording

(Loss) gain on bitcoin collateral was the primary reason for the decrease in Other (expense) income since in the prior year there was no collateral held by Coinbase. The loss in the fair value of collateral of $103,620 for the three months ended December 31, 2025 is attributable to the change in the underlying collateral that was posted while bitcoin’s fair value fell during the period from approximately $114,100 per bitcoin on September 30, 2025 to approximately $87,500 per bitcoin on December 31, 2025.

Current wording

The loss on bitcoin collateral was the primary reason for the increase in other expense since in the prior year there was no collateral held by Coinbase or other counterparties. The loss in the fair value of collateral of $38,838 for the three months ended March 31, 2026 is attributable to the change in the underlying collateral that was posted while bitcoin’s fair value fell during the period from approximately $87,500 per bitcoin on December 31, 2025 to approximately $68,200 per bitcoin on March 31, 2026.

Previous wording

Interest income in the three months ended December 31, 2025 increased by $709 to $2,185 from $1,476 for the three months ended December 31, 2024 due to greater balance of cash retained in short term interest bearing accounts.

Current wording

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

Previous wording

Interest expense in the three months ended December 31, 2025 increased by $2,137 to $3,696 from $1,559 for the three months ended December 31, 2024 due to the amortization of deferred issuance costs from the convertible notes and the lines of credit which the company had smaller volumes of outstanding amounts during the comparative period.

Current wording

Interest expense in the three months ended March 31, 2026 increased by $787 to $2,054 from $1,267 for the three months ended March 31, 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.

Previous wording

Our cost of revenues was $95,621 for the three months ended December 31, 2025, which represents an increase of $25,331, or 36%, as compared with $70,290 for the three months ended December 31, 2024. This increase in costs was primarily related to energy costs to operate the miners within our owned facilities, which were $95,536 for the three months ended December 31, 2025, an increase of $32,461, or 51%, as compared to $63,075 for the three months ended December 31, 2024. The increase in energy costs was due to the expansion of our operations since December 31, 2024 and the increase in the volume of miners operating in our owned locations. We continually evaluate energy and bitcoin prices and periodically will curtail our mining operations when it is advantageous to do so.

Current wording

Our cost of revenues was $177,312 for the six months ended March 31, 2026, which represents an increase of $21,598, or 14%, as compared with $155,714 for the six months ended March 31, 2025. These costs were primarily related to energy costs to operate the miners within our owned facilities, which were $177,184 for the six months ended March 31, 2026, an increase of $31,442 or 22% as compared to $145,742 for the six months ended March 31, 2025. The increase in energy costs was due to the expansion of our operations since March 31, 2025 and the increase in the volume of miners operating in our owned locations. We continually evaluate energy and bitcoin prices and periodically will curtail our mining operations when it is advantageous to do so.

Previous wording

Other expense was $93,572 for the three months ended December 31, 2025, compared with other income, net of $46,032 for the three months ended December 31, 2024, which is a change of $139,604 or 303%.

Current wording

Other expense was $136,127 for the six months ended March 31, 2026, compared with other income of $42,221 for the six months ended March 31, 2025, which is change of $178,348.

Previous wording

Net loss for the three months ended December 31, 2025 was $378,711, as compared to net income of $246,791 for the three months ended December 31, 2024, for the reasons stated above.

Current wording

Net loss for the six months ended March 31, 2026 was $757,054, as compared to net income of $107,999 for the six months ended March 31, 2025, due to the reasons stated above.

Previous wording

We have not excluded our Loss (gain) on fair value of bitcoin, net totaling a loss of $246,832 and a gain of $218,206 in the three months ended December 31, 2025 and 2024, respectively, or our (Loss) gain on bitcoin collateral totaling a loss of $103,620 and a gain of $42,493 in the three months ended December 31, 2025 and 2024, respectively, 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.

Current wording

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 and $127,667 in the three months ended March 31, 2026 and 2025, respectively, and a loss of $470,939 and a gain of $90,539 in the six months ended March 31, 2026 and 2025, respectively. (Loss) gain on bitcoin collateral totaled a loss of $38,838 and $0 in the three months ended March 31, 2026 and 2025, respectively, and a loss of $142,458 and a gain of $42,493 in the six months ended March 31, 2026 and 2025, respectively.

Previous wording

Our primary requirements for liquidity and capital are working capital, capital expenditures, loan payments, public company costs and general corporate needs. We expect these needs to continue as we further develop and grow our business. Our principal sources of liquidity have been and are expected to be our cash and cash equivalents, bitcoin inventory, proceeds from our convertible note and line of credit.

Current wording

Our primary requirements for liquidity and capital are working capital, capital expenditures, loan payments, public company costs and general corporate needs. We expect these needs to continue as we further develop and grow our business. Our principal sources of liquidity have been and are expected to be our cash and cash equivalents, bitcoin, proceeds from our convertible note and line of credit.

Previous wording

As of December 31, 2025, we had total current assets of $1,470,646, consisting of cash and cash equivalents, prepaid expenses and other current assets, and bitcoin. Our total current liabilities and total liabilities as of December 31, 2025 were $139,497 and $1,943,923, respectively. We had working capital of $1,331,149 as of December 31, 2025. 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 $1,767,861 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.

Current wording

As of March 31, 2026, we had total current assets of $1,099,037, consisting of cash and cash equivalents, prepaid expenses and other current assets, and bitcoin. Our total current liabilities and total liabilities as of March 31, 2026 were $133,068 and $1,927,341, respectively. We had working capital of $965,969 as of March 31, 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 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.

Previous wording

Based on our current plans and business conditions, we believe that existing cash and cash equivalents and bitcoin, together with bitcoin generated from operations and our future investing 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. We are likely to require additional capital to respond to technological advancements, 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 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.

Current wording

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 investing 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. We are likely to require additional capital to respond to technological advancements, 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 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.

Previous wording

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 December 31, 2025, while others are considered future commitments. Our contractual obligations primarily consist of cancelable purchase commitments with various parties to purchase goods or services, primarily miners and equipment, entered into in the normal course of business and operating leases. For information regarding our other contractual obligations, refer to Note 15 - Commitments and Contingencies in this Quarterly Report on Form 10-Q for the period ended December 31, 2025, and Note 19 - Commitments and Contingencies included in our Form 10-K as filed with the SEC on November 25, 2025.

Current wording

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 March 31, 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 in this Quarterly Report on Form 10-Q for the period ended March 31, 2026, and Note 19 - Commitments and Contingencies included in our Form 10-K as filed with the SEC on November 25, 2025.

Previous wording

During the fiscal year ended September 30, 2025, the Company instituted a Digital Asset Management (“DAM”) treasury strategy designed to enhance liquidity and generate incremental income from the Company’s bitcoin holdings. The Company selectively engages in derivative transactions, primarily covered call and put option contracts, that are collateralized by bitcoin held in treasury or cash, respectively. These transactions are structured to manage operating liquidity and monetize near-term volatility while maintaining long-term exposure to bitcoin price appreciation.

Current wording

During 2025, the Company instituted a Digital Asset Management (“DAM”) treasury strategy designed to enhance liquidity and generate incremental income from the Company’s bitcoin holdings. The Company selectively engages in derivative transactions, primarily covered call and put option contracts, that are collateralized by bitcoin held in treasury or cash, respectively. These transactions are structured to manage operating liquidity and monetize near-term volatility while maintaining long-term exposure to bitcoin price appreciation.

Previous wording

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 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.

Current wording

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.

Previous wording

These activities provided approximately $13.2 million of proceeds from premiums and incremental Spot+ trading during the fiscal year, supplementing operating cash flows from bitcoin mining. Management views DAM activities as an integrated component of its treasury strategy and liquidity management, rather than as speculative trading. The Company expects to continue its Spot+ and yield strategies at measured levels relative to its total bitcoin balance and operating requirements. The Bitmain options are bitcoin-linked derivatives but were not a result of the Company’s DAM strategy and are not included in DAM activity.

Current wording

During the three and six months ended March 31, 2026 activities provided approximately $4.0 and $17.2 million, respectively, of proceeds from premiums and incremental Spot+ trading. These premiums are used to supplement operating cash flows from bitcoin mining. Management views DAM activities as an integrated component of its treasury strategy and liquidity management, rather than as speculative trading. The Company expects to continue its Spot+ and yield strategies at measured levels relative to its total bitcoin balance and operating requirements. The Bitmain options are bitcoin-linked derivatives but were not a result of the Company’s DAM strategy and are not included in DAM activity.

Previous wording

(2) Annualized premium yields from Forwards represent expected settlement premium on inception of $85.

Current wording

(2) Annualized premium yields from Forwards represent expected settlement premium on inception of $106.