CLEANSPARK, INC.

Previous wording

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

Current wording

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

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 1,809 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.

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 1,817 megawatts (“MW”) as of June 30, 2026. In October 2025 and February 2026, we acquired properties and related power agreements in Texas to support the development of a next-generation data center campus. In February 2026, we acquired property in Tennessee, and, in December 2025, we acquired property in South Dakota with intentions to build out infrastructure at these sites. We intend to continue our growth in these regions and are actively developing plans for additional capacity in these states and other regions. We have no intention to mine, purchase or hold any crypto assets other than bitcoin at this time or in the foreseeable future, and we did not hold any other crypto asset as of June 30, 2026.

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 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.

Current wording

We continue to evaluate 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.

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 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.

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. During June 2026, our operating mining units produced an average computing power of 42.6 exahash per second (“EH/s”), following our achievement of a peak hashrate of 50 EH/s during fiscal year 2025. In bitcoin mining, “hashrate” is a measure of the computing and processing power and speed by which a mining computer mines and processes transactions on the bitcoin network. 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 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.

Current wording

We owned approximately 326,530 miners, of which approximately 225,137 were in service as of June 30, 2026. The remainder primarily consists of new machines that are ready for installation at expansion sites, are under evaluation for relocation, or are awaiting repair. Our miners range in age from 1-66 months and have an average age of approximately 23 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 June 30, 2026 had a range of energy efficiency (joules per terahash – “J/TH”) of 13.5 to 29.5 J/TH with an average operating energy efficiency of 15.8 J/TH.

Previous 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.

Current wording

As of June 30, 2026, we held approximately 12,205 bitcoins and had a receivable for 1,719 bitcoin that was posted as collateral and recorded on our Condensed Consolidated Balance Sheets as Receivable for bitcoin collateral. The fair value of our bitcoin as of June 30, 2026 was $714,293 on our Condensed Consolidated Balance Sheets and the fair value of our Receivable for bitcoin collateral was $100,607. The fair value of bitcoin for each reporting period reflects the price of one bitcoin quoted on the active exchange, Coinbase, at the end of the reporting period. Therefore, decreases in the market price of bitcoin could have a material impact on our earnings and on the carrying value of our bitcoin.

Previous wording

(2) Joulesof energy required to produce each terahash of processing power, based on the Company’s miner fleet operating at period end.

Current wording

(2) Joules of energy required to produce each terahash of processing power, based on the Company’s miner fleet operating at period end.

Previous 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.

Current wording

As of June 30, 2026, our operating hashrate was approximately 4.36% of the total global hashrate, and we received approximately the same percentage of the global blockchain rewards, which, as of that date, equaled approximately 19-20 bitcoin per day, excluding the bitcoin earned from network transaction fees. Ultimately, in order to mine profitably, we work to ensure that these mining rewards cover our direct operating costs.

Previous 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.

Current wording

The table below describes the average cost of mining each bitcoin for the three and nine months ended June 30, 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 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.

Current wording

Power prices are the most significant cost driver for our wholly owned locations, and energy expense represented 61.8% and 45.3% as expressed as a percentage of bitcoin mining revenues during the three months ended June 30, 2026 and 2025, respectively, and 57.6% and 44.1% as expressed as a percentage of bitcoin mining revenues during the nine months ended June 30, 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 $0.052 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.

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 $0.053 and $0.056 per kWh for the three months ended June 30, 2026 and 2025, respectively, and were $0.054 and $0.056 per kWh, for the nine months ended June 30, 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 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.

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 87% during the nine months ended June 30, 2026. A large portion of the curtailment during the first quarter related to Hurricane Helene which affected our Georgia sites at the end of September 2024 to the beginning of October 2024. The southeast Georgia sites were shut down as the hurricane began impacting the region, thus at the beginning of the October 2024, these sites were operating on approximately 200 MW which gradually increased during the same week to their full 365 MW capacity when utility service was restored to the communities.

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 $55,098 and $33,552 for the six months ended March 31, 2026 and 2025, 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 $53,977 and $36,358 for the nine months ended June 30, 2026 and 2025, respectively.

Previous 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.

Current wording

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 $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.

Current wording

We earned $138,006 in bitcoin mining revenue during the three months ended June 30, 2026, which was a decrease of $60,638, or 31%, as compared to $198,644 for the three months ended June 30, 2025. Bitcoin mining revenues are recorded net of bitcoin mining fees charged by our sole mining pool operator (Foundry) that equaled approximately 0.26% of gross bitcoin mining revenues for the three months ended June 30, 2026, and are determined by two main drivers: quantity of bitcoin mined and the price of bitcoin on the date the bitcoin is mined. During the three months ended June 30, 2026, we mined 1,920 bitcoin, net of mining pool fees, at an average bitcoin price of $71,881 as compared to 2,012 bitcoin with an average bitcoin price of $98,736 during the three months ended June 30, 2025. The decrease in bitcoin mining revenue for the three months ended June 30, 2026 was attributable to the decrease in the average bitcoin price combined with a decrease in total bitcoin mined during the period as compared to the three months ended June 30, 2025. This was due to an increase in global hashrate over the comparable periods, representing increasing competition across the blockchain network, resulted in a decline in our relative share of total network computational power, which contributed to the decrease in bitcoin mined during the three months ended June 30, 2026.

Previous wording

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

Previous 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.

Current wording

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

Previous 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.

Current wording

Payroll expenses were $27,807 for the three months ended June 30, 2026, an increase of $11,409, or 70%, from $16,398 for the three months ended June 30, 2025. Our payroll expenses include all compensation-related expenses for our employees and mainly include salaries, wages, payroll-related taxes and benefits and non-cash stock-based compensation. Payroll expenses, excluding non-cash stock-based compensation, were $12,503 for the three months ended June 30, 2026, representing an increase of 5% from $11,911 for the three months ended June 30, 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 $11,137 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.

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 $15,304 for the three months ended June 30, 2026, an increase of $10,816, or 241%, from $4,488 for the three months ended June 30, 2025. The lower overall stock-based compensation for the three months ended June 30, 2025 was due to that lack of a formal grant date or service inception date under the 2025 LTIP as of June 30, 2025 and accordingly there was no expense recognized under this plan over that prior year period.

Previous 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.

Current wording

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

Previous 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.

Current wording

Loss on fair value of bitcoin, net was $116,250 for the three months ended June 30, 2026, compared to a gain of $268,651 in the prior-year period, resulting in a total variance of $384,901. We measure crypto assets at fair value and include gains and losses from remeasurement in net income. The loss for the three months ended June 30, 2026 was attributable to the decrease in bitcoin’s fair value from approximately $68,200 per bitcoin as of March 31, 2026 to approximately $58,500 per bitcoin as of June 30, 2026. The gain for the three months ended June 30, 2025 was attributable to the increase in bitcoin’s fair value from approximately $82,500 per bitcoin as of March 31, 2025 to approximately $107,200 per bitcoin as of June 30, 2025.

Previous 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.

Current wording

Depreciation and amortization expense increased to $111,037 for the three months ended June 30, 2026, from $94,880 for the three months ended June 30, 2025, an increase of $16,157, or 17%. Depreciation expense increased by $16,564, or 18%, during the three months ended June 30, 2026, to $110,422 from $93,858, 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 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.

Current wording

Amortization expense for the three months ended June 30, 2026 was $616, a decrease of $407, or 40%, from $1,023 for the three months ended June 30, 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

Other expense was $42,555 and $3,811 for the three months ended March 31, 2026 and 2025, respectively, which represents a change of $38,744.

Current wording

Other expense was $10,412 as compared to other income of $29,334 for the three months ended June 30, 2026 and 2025, respectively, which represents a change of $39,746.

Previous 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.

Current wording

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

Previous wording

Net loss for the three months ended March 31, 2026 and 2025 was $378,343 and $138,792, respectively, an increase in net loss of $239,551 due to the reasons stated above.

Current wording

Net loss was $239,842, as compared to net income of $257,390 for the three months ended June 30, 2026 and 2025, respectively, which represents a variance of $497,232 due to the reasons stated above.

Previous wording

We earned $317,588 in bitcoin mining revenue during the six months ended March 31, 2026, which was a decrease of $26,430, or 8%, as compared with $344,018 for the six 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 0.20% of gross bitcoin mining revenues for the six 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 six months ended March 31, 2026, we mined 3,612 bitcoin with an average bitcoin price of $87,916 as compared to 3,902 bitcoin with an average bitcoin price of $88,170 during the six months ended March 31, 2025. The decrease in bitcoin mining revenue for the six 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 six 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 six months ended March 31, 2026.

Current wording

We earned $455,594 in bitcoin mining revenue during the nine months ended June 30, 2026, which was a decrease of $87,068, or 16%, as compared with $542,662 for the nine months ended June 30, 2025. Bitcoin mining revenues are recorded net of bitcoin mining fees charged by our sole mining pool operator (Foundry) that equaled approximately 0.22% of gross bitcoin mining revenues for the nine months ended June 30, 2026, and are determined by two main drivers: quantity of bitcoin mined and the price of bitcoin on the date the bitcoin is mined. During the nine months ended June 30, 2026, we mined 5,532 bitcoin, net of mining pool fees, at an average bitcoin price of $82,351 as compared to 5,914 bitcoin with an average bitcoin price of $91,765 during the nine months ended June 30, 2025. The decrease in bitcoin mining revenue for the nine months ended June 30, 2026 was attributable to the decrease in the average bitcoin price combined with a decrease in total bitcoin mined during the period as compared to the nine months ended June 30, 2025. This was due to the decrease in operating miners to 225,137 as of June 30, 2026 from 241,227 as of June 30, 2025, which reflects fleet optimization activities across our operating facilities. Additionally, an increase in global hashrate over the comparable periods, representing increasing competition across the blockchain network, resulted in a decline in our relative share of total network computational power, which contributed to the decrease in bitcoin mined during the nine months ended June 30, 2026.

Previous 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.

Current wording

Our cost of revenues was $262,792 for the nine months ended June 30, 2026, which represents an increase of $16,950, or 7%, as compared with $245,842 for the nine months ended June 30, 2025. These costs were primarily related to energy costs to operate the miners within our owned facilities, which were $262,493 for the nine months ended June 30, 2026, an increase of $26,855 or 11% as compared to $235,638 for the nine months ended June 30, 2025. Energy costs were generally consistent in comparison, with the slight increase reflecting the modest expansions and normal changes in our operating footprint and power utilization across our facilities. We continually evaluate energy and bitcoin prices and periodically will curtail our mining operations when it is advantageous to do so.

Previous wording

Professional fees, which consisted primarily of legal, accounting and consulting fees, were $15,058 for the six months ended March 31, 2026, an increase of $8,190, or 119%, from $6,868 for the six months ended March 31, 2025. This increase was primarily attributable to higher consulting and other professional fees of $10,002 for the six months ended March 31, 2026, as compared to $4,382 for the six months ended March 31, 2025. These costs were incurred in connection with evaluating and developing our HPC and AI initiatives.

Current wording

Professional fees, which consisted primarily of legal, accounting and consulting fees, were $22,166 for the nine months ended June 30, 2026, an increase of $12,294, or 125%, from $9,872 for the nine months ended June 30, 2025. This increase was primarily attributable to higher consulting and other professional fees of $13,964 for the nine months ended June 30, 2026, as compared to $6,389 for the nine months ended June 30, 2025. These costs were incurred in connection with evaluating and developing our HPC and AI initiatives.

Previous wording

Payroll expenses were $48,707 for the six months ended March 31, 2026, an increase of $12,583, or 35%, from $36,124 for the six 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 $26,486 for the six months ended March 31, 2026, representing a decrease of 12% from $30,002 for the six months ended March 31, 2025, and were mainly attributed to changes in the composition and timing of payroll costs during the period, partially offset by increased headcount associated with the expansion of operational locations.

Current wording

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

Previous wording

Stock-based awards granted to certain employees are a significant portion of our payroll-related costs. Stock-based compensation, which is a non-cash expense, was $22,221 for the six months ended March 31, 2026, an increase of $16,099, or 263%, from $6,122 for the six months ended March 31, 2025. The lower overall stock-based compensation for the six 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.

Current wording

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

Previous wording

General and administrative expenses increased to $31,547 for the six months ended March 31, 2026 from $21,790 for the six months ended March 31, 2025, representing an increase of $9,757 or 45%. 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.

Current wording

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

Previous wording

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

Current wording

Loss on fair value of bitcoin, net for the nine months ended June 30, 2026 was $587,189 as compared to a gain on fair value of bitcoin of $359,190 for the nine months ended June 30, 2025, a total variance of $946,379. The loss for the nine months ended June 30, 2026 pertains to the change in bitcoin’s fair value from approximately $114,100 per bitcoin on September 30, 2025 to approximately $58,500 per bitcoin on June 30, 2026. The gain for the nine months ended June 30, 2025 pertains to the change in bitcoin’s fair value from approximately $63,300 per bitcoin on September 30, 2024 to $107,200 per bitcoin on June 30, 2025.

Previous wording

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

Previous wording

Amortization expense for the six months ended March 31, 2026 was $1,559, a decrease of $513, or 25%, from $2,072 for the six 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.

Current wording

Amortization expense for the nine months ended June 30, 2026 was $2,174, a decrease of $920, or 30%, from $3,094 for the nine months ended June 30, 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

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.

Current wording

Other expense was $146,539 for the nine months ended June 30, 2026, compared with other income of $71,555 for the nine months ended June 30, 2025, which is a change of $218,094.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

Interest income in the nine months ended June 30, 2026 increased to $7,400 from $3,845 for the nine months ended June 30, 2025, an increase of $3,555 due to greater balance of cash retained in short-term interest-bearing accounts.

Previous 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.

Current wording

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

Previous 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.

Current wording

Net loss for the nine months ended June 30, 2026 was $996,896, as compared to net income of $365,389 for the nine months ended June 30, 2025, due to the reasons stated above.