Cipher Digital Inc.

NOTE 1. ORGANIZATION

Nature of operations

Cipher Digital Inc. (“Cipher,” “CDI,” or the “Company”) is focused on the development and operation of industrial-scale data centers for high-performance compute (“HPC”) hosting and bitcoin mining. The Company has a 300 MW data center in Wink, Texas that draws power from the power grid (the “Black Pearl Facility”) that was used for bitcoin mining through February 2026, and in August 2026 commenced phased delivery to an HPC tenant. The Company is also in the process of constructingtwo other sites for HPC tenants, with the 300 MW Barber Lake Facility for Fluidstack USA II Inc. (“Fluidstack”), expecting phased commencement in the fourth quarter of 2026 and the 100 MW Stingray data center (the “Stingray Facility”) expecting commencement in 2027. The Company’s portfolio as of September 30, 2026 also consists ofseven additional sites expected to be built out for HPC. The Company also operatesone wholly owned bitcoin mining data center, a 207 MW site located in Odessa, Texas that draws fixed priced power from a power purchase agreement with its electricity provider (the “Odessa Facility”).

Risks and uncertainties

Liquidity and capital resources

The Company has historically experienced net losses and negative cash flows from operations; however, proceeds from sales of bitcoin are categorized as cash flows from investing activities to the extent bitcoin is sold after seven days from receipt. As of September 30, 2026, the Company had approximate balances of Cash and cash equivalents of $656.0 million, working capital of $1,016.8 million, Total stockholders’ equity of $600.3 million and an Accumulated deficit of $1,353.9 million. The Company uses a combination of short-term and long-term financing arrangements, proceeds from sales of bitcoin earned by or received from its bitcoin mining data centers, and strategic sales of shares through “at-the-market” offerings to support its operating expenses and capital expenditures.

The Company monitors its balance sheet on an ongoing basis to determine the proper mix of bitcoin retention and bitcoin sales to support its cash requirements, ongoing operations, and capital expenditures. Bitcoin is classified as a current asset on the Company’s balance sheets due to its intent and ability to sell bitcoin to support operations when needed. Approximately $283.2 million of cash was used in operating activities during the nine months ended September 30, 2026.

During the nine months ended September 30, 2026, the Company sold bitcoin for proceeds of approximately $168.9 million. The Company paid approximately $2,517.2 million for property and equipment primarily related to the build-out of various facilities.

The Company has a master loan agreement with Coinbase Credit, Inc., as Lender, and Coinbase, Inc., as Lending Service Provider (the “Coinbase Master Loan Agreement”). Pursuant to the master loan agreement, the Company has a secured line of credit, with capacity to be determined, subject to credit review (the “Coinbase Overnight Credit Facility”). The borrowings are collateralized by bitcoin transferred to the Lending Service Provider’s platform.

On May 22, 2025, the Company issued $172.5 million of principal amount of convertible notes due in 2030 with an interest rate of 1.75% (the “2030 Convertible Notes”). The 2030 Convertible Notes are senior, unsecured obligations with interest due semiannually on May 15 and November 15 each year beginning on November 15, 2025. On October 16, 2026, the Company exchanged approximately $165.9 million of principal amount of the 2030 Convertible Notes for approximately 40.7 million shares of the Company’s common stock. Following this exchange, approximately $6.6 million aggregate principal amount of the 2030 Convertible Notes remains outstanding.

On September 30, 2025, the Company issued $1,300.0 million of principal amount of convertible notes due in 2031 with an interest rate of 0.00% (the “2031 Convertible Notes”). The 2031 Convertible Notes are senior, unsecured obligations.

On March 23, 2026, the Company entered into a $200.0 million revolving credit facility (the “Revolving Credit Facility”) with Morgan Stanley Senior Funding, Inc. as administrative agent and collateral agent, and a syndicate of lenders. The Revolving Credit Facility also provides for an additional accordion option of up to $50.0 million. The Revolving Credit Facility matures on March 23, 2030 (the fourth anniversary of the closing date); provided, however, that if any of the 2030 Convertible Notes (or certain refinancing indebtedness in respect thereof) are outstanding on the date that is 91 days prior to the maturity date thereof, the maturity date of the Revolving Credit Facility will spring to such earlier date (the “Springing Maturity Date”).

On October 16, 2026, the Company issued $850.0 million aggregate principal amount of 0.00% convertible senior notes due in 2032 (the “2032 Convertible Notes”). The 2032 Convertible Notes are senior, unsecured obligations of the Company and will mature on November 1, 2032, unless earlier repurchased or converted. Refer to Note 21, Subsequent Events for additional information.

Refer to Note 14. Debtfor more details on all debt arrangements.

Management believes that the Company’s existing financial resources, ability to obtain project level financing, projected cash and bitcoin inflows from its data centers, ability to sell bitcoin received or earned, and its intent and ability to sell common stock through at-the-market offerings will be sufficient to enable the Company to meet its operating and capital requirements for at least 12 months from the date these condensed consolidated financial statements are issued.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation and principles of consolidation

The Company prepares its unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the U.S. (“GAAP”) as determined by the Financial Accounting Standards Board (“FASB”) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (“SEC”).

The unaudited condensed consolidated financial statements include the accounts of the Company and its controlled subsidiaries. All intercompany transactions and balances have been eliminated.

The Company had no items of other comprehensive income or loss for any of the periods presented. Accordingly, comprehensive loss equals net loss for all periods presented, and a separate statement of comprehensive loss has not been presented.

Certain prior year amounts have been reclassified for consistency with the current period presentation.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. The most significant estimates inherent in the preparation of the Company’s financial statements include, but are not limited to, those related to equity instruments issued in share-based compensation arrangements, valuation of its Level 3 assets and liabilities, useful lives of property and equipment, asset retirement obligations and the valuation allowance associated with the Company’s deferred tax assets, among others. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

Unaudited condensed consolidated financial statements

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of the Company’s management, these unaudited condensed consolidated financial statements reflect all adjustments, which consist of only normal recurring adjustments necessary for the fair presentation of the balances and results for the periods presented. These unaudited condensed consolidated financial statement results are not necessarily indicative of results to be expected for the full fiscal year or any future period.

A detailed description of the Company’s significant accounting policies is included in the Company’s 2025 Form 10-K as filed with the SEC on February 24, 2026. The Company’s unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes in the Company’s 2025 Form 10-K. There have been no material changes to the Company’s significant accounting policies from those disclosed in the notes to the Company’s audited consolidated financial statements included in the Company’s 2025 Form 10-K, except for the addition of our HPC leasing described below.

Revenue recognition - bitcoin mining

The Company recognizes revenue related to bitcoin mining under Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

The Company recognizes revenue on the same day that the control of the contracted service of providing hashrate transfers to the mining pool operator, which is the same day as contract inception. The noncash consideration received in the form of bitcoin is measured at 0:00:00 Coordinated Universal Time (“UTC”) using the Company’s principal market for bitcoin.

The contract is terminable at any time by either party with no substantive termination penalty. The Company’s enforceable right to compensation begins when, and lasts for as long as, the Company provides computing power to the mining pool operator; the Company’s performance obligation extends over the contract term given the Company’s continuous provision of hashrate. This period of time corresponds with the period of service for which the mining pool operator determines compensation due to the Company. Given the terms of the contract, and the Company’s customary business practice, the contract effectively provides the Company with a contract that continuously renews throughout the day.

Revenue recognition - HPC leasing

The Company generates revenue by leasing data center capacity and providing related services to customers including hyperscalers, AI labs, and neoclouds for high-performance computing. These arrangements generally include lease components related to the right to use specified data center space and associated infrastructure and nonlease components, including power delivery, environmental controls, physical security, connectivity products, operations and maintenance services and certain other operating services.

The Company evaluates each arrangement under ASC 842, Leases (“ASC 842”), to determine whether the arrangement contains a lease and whether the Company is acting as lessor. For its HPC data center assets, the Company has elected the practical expedient available under ASC 842 to combine nonlease components that have the same pattern of transfer as the related lease components into a single combined component. The combined component is accounted for under ASC 842 when the lease component is predominant and under ASC 606 when the nonlease component is predominant. The lease components are the predominant components in the Company's HPC lease arrangements and, accordingly, the combined components are accounted for as operating leases under ASC 842. As a result, all of the consideration within the HPC lease arrangement is presented as HPC leasing revenue on the condensed consolidated statements of operations. Recognition of HPC leasing revenue begins upon lease commencement, which occurs for each lease component when the applicable facility or phase is delivered to the customer and made available for its intended use.

The Company has concluded that it is probable that substantially all of the payments will be collected over the term of the arrangements. For each lease component, the Company recognizes the total fixed payments allocated to the component on a straight-line basis over the noncancellable term. The difference between lease revenue recognized on a straight-line basis and contractual lease payments is recorded as an accrued rent receivable or deferred rent liability on the condensed consolidated balance sheets. Certain arrangements include options to extend the term. These extension options are not reasonably certain to be exercised and are excluded from the lease term and calculation of lease payments at lease commencement.

The lease arrangements generally require the Company to provide power delivery, environmental controls, physical security, connectivity, operations and maintenance and certain other operating services throughout the lease term. Any fixed monthly payments associated with these services are allocated to the related lease components and recognized as lease revenue on a straight-line basis over the lease term.

Certain arrangements also provide for reimbursement of electricity, taxes, insurance, maintenance and other operating costs incurred on behalf of tenants. These amounts are generally variable and are recognized as HPC leasing revenue in the period earned. Reimbursement-related lease payments are presented on a gross basis in the condensed consolidated statements of operations.

Certain lease arrangements also include customer-requested change orders to the lease component during the construction period. Recognition of HPC leasing revenue begins upon lease commencement, which occurs for each lease component when the applicable facility or phase is delivered to the customer and made available for its intended use.

Segment information

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company currently hastwo operating segments, Bitcoin Mining, which through operations produces bitcoin to generate revenue, and HPC Leasing through which data centers are constructed and leased to tenants for HPC. The Chief Operating Decision Maker (“CODM”) for the Company consists of the chief executive officer (“CEO”), and chief financial officer (“CFO”). The CODM reviews the performance of its segments primarily based on operating income when deciding on allocating resources. Refer to Note 19. Segment Reporting for more details on the Company’s significant segment expenses.

Restricted cash

Restricted cash primarily relates to proceeds from various senior secured notes offerings which the Company is restricted from using for general corporate purposes outside of financing specific site developments. As these funds are expected to be used in the short term to build out the various sites, this restricted cash is classified in current assets on the Company’s condensed consolidated balance sheets.

Restricted cash classified as noncurrent on the Company’s condensed consolidated balance sheets represents cash required to be held in debt service accounts related to various senior secured notes, as well as amounts pledged as collateral to Luminant ET Services Company LLC (“Luminant”), and Vistra Operations Company, LLC (“Vistra”), a Luminant affiliate, primarily related to the Luminant Power Agreement (defined below in Note 4. Derivative Assets).

Accounts receivable

The Company’s accounts receivable balance as of September 30, 2026 consists primarily of amounts due related to rent, operating expense reimbursements, and change orders requested from tenants for its HPC data centers. Amounts recorded in accounts receivable consist of the amount invoiced, but not yet received from the tenant.

The Company’s accounts receivable balance as of December 31, 2025 consists of amounts due from its mining pool operator. Amounts recorded in accounts receivable consist of the block rewards and transaction fees earned on the last day (last contract period) of the period, but not yet received from the mining pool operator.

No allowance was recorded as of September 30, 2026 or December 31, 2025.

Fixed assets

As a result of fixed assets placed into service related to the Black Pearl Facility, the Company established estimated useful lives for Buildings from 10 to 40 years, and Infrastructure assets from 10 to 40 years.

Long-term borrowings, net

Long-term borrowings, net represents the Company’s convertible senior notes and senior secured notes. The Company records the aggregate principal amount of each of its long-term debt instruments as a liability on the balance sheet, offset by the instrument’s issuance costs. The issuance costs are amortized to interest expense using the effective interest rate method over the expected term of each instrument. The Company records contractually obligated payments due within one year as short term liabilities.

Earnings (Loss) per share

Basic earnings (loss) per share is computed by dividing net income (loss) allocated to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per common share adjusts net income (loss) and net income (loss) per common share for the effect of all potentially dilutive shares of Common Stock. Potentially dilutive common shares consist of the Company’s outstanding warrants to purchase Common Stock, Common Stock to settle convertible notes, as well as unvested restricted stock units (“RSUs”).

The dilutive effect of RSUs is calculated using the treasury stock method. The dilutive effect of PSUs is calculated using the contingently issuable share method. For warrants that are liability-classified, during periods when the impact is dilutive, the Company assumes share settlement of the instruments as of the beginning of the reporting period and adjusts the numerator to remove the change in fair value of the warrant liability and adjusts the denominator to include the dilutive shares calculated using the treasury stock method. The dilutive effect of the convertible notes was determined using the if-converted method. Under the if-converted method, net income (loss) is adjusted to reflect the assumption that the convertible notes were converted at the beginning of the period.

The Company’s potentially dilutive common shares have been excluded from the computation of diluted net loss per common share when the effect would be to reduce the net loss per common share, or increase the net income per common share.

The following is a reconciliation of the numerator and denominator of the diluted earnings (loss) per share computations for the periods indicated below:

The following table presents the common share equivalents that are excluded from the computation of diluted earnings (loss) per common share for the three and nine months ended September 30, 2026 and 2025, because including them would have been antidilutive.

(1) Amounts assume conversion at the maximum conversion rates of 292.3976 and 85.7632 shares of the Company’s common stock per $1,000 principal amount of the 2030 Convertible Notes and 2031 Convertible Notes, respectively.

Recently adopted accounting pronouncements

In November 2024, the FASB issued Accounting Standard Update (“ASU”) 2024-04, Debt - Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments (“ASU 2024-04”). ASU 2024-04 seeks to improve the relevance and consistency in application of Subtopic 470-20 around when the terms of convertible debt instruments are changed to incentivize conversion. The Company adopted ASU 2024-04 on January 1, 2026. Adoption did not have a material impact on the Company's financial statements and disclosures.

Recently issued accounting pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 seeks to improve disclosures around expenses and provide more detail to investors about certain types of expenses in commonly presented captions. The updated guidance is effective for the Company for annual periods beginning January 1, 2027, and interim periods beginning January 1, 2028. The Company is currently evaluating the impact this amended guidance may have on its consolidated financial statements and disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). ASU 2025-06 seeks to modernize the internal-use software guidance, primarily by removing the project-stage framework (preliminary/application development/post-implementation) in favor of a principle focused on when it is probable that the software will be completed and used as intended. The updated guidance is effective for the Company for annual periods beginning January 1, 2028. The Company is currently evaluating the impact this amended guidance may have on its consolidated financial statements and disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”). ASU 2025-11 is intended to improve the navigability of the guidance in ASC 270 and clarify when it applies. Under the amendments, an entity is subject to ASC 270 if it provides interim financial statements and notes in accordance with GAAP. ASU 2025-11 also addresses the form and content of interim financial statements, provides a comprehensive list of required interim disclosures, and establishes a principle under which an entity must disclose events since the end of the last annual reporting period that have a material impact on the entity. The updated guidance is effective for the Company for interim periods beginning January 1, 2028, and early adoption is permitted. The Company is currently evaluating the impact this guidance may have on the notes to its condensed consolidated financial statements.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements (“ASU 2025-12”). ASU 2025-12 contains 33 amendments intended to correct errors in, clarify, and make narrow-scope improvements to various Codification topics, including clarifications to the calculation of diluted earnings per share when a loss from continuing operations exists, the permissible methods for accounting for treasury stock retirements, and the accounting for transfers of receivables from contracts with customers. The updated guidance is effective for the Company for fiscal years beginning January 1, 2027, including interim periods within those years. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements and disclosures.

The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes to determine the consequences of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financial statements properly reflect the change. The Company reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on its condensed consolidated financial statements.

NOTE 3. BITCOIN

The following table presents information about the Company’s bitcoin (in thousands):

The Company held approximately 310 and 1,433 bitcoin at September 30, 2026, and December 31, 2025, respectively. The associated fair values and cost bases of bitcoin held were $25.9 million, and $21.6 million, respectively, at September 30, 2026, and $125.4 million, and $154.1 million, respectively at December 31, 2025. Fair value of bitcoin is estimated using the closing price at 23:59:59 UTC in the Company’s principal market, which is a Level 1 input (i.e., an observable input such as a quoted price in an active market for an identical asset). The Company accounts for bitcoin on a first-in-first-out (“FIFO”) basis.

Additionally, the Company may pledge bitcoin as collateral related to bitcoin trading strategies. As of September 30, 2026, the Company had 10 bitcoin with a fair value of $0.8 million pledged as part of trading strategies. As of December 31, 2025 the Company hadno bitcoin pledged as part of trading strategies.

NOTE 4. DERIVATIVE ASSETS

On June 23, 2021, the Company entered into a power purchase agreement with Luminant, which was subsequently amended on July 9, 2021, and further amended on February 28, 2022, August 26, 2022, and August 23, 2023 (as amended, the “Luminant Power Agreement”), for the supply of a fixed amount of electric power to the Odessa Facility at a fixed price for a term offive years, subject to certain early termination exemptions. The Luminant Power Agreement provides for subsequent automatic annual renewal unless either party provides written notice to the other party of its intent to terminate the agreement at leastsix months prior to the expiration of the then current term.

The Company’s management determined that the Luminant Power Agreement meets the definition of a derivative under ASC 815, Derivatives and Hedging (“ASC 815”). Accordingly, the Luminant Power Agreement is recorded at its estimated fair value each reporting period with the change in the fair value recorded in change in fair value of power purchase agreement in the condensed consolidated statements of operations. See additional information regarding valuation of the Luminant Power Agreement derivative in Note 18. Fair Value Measurements.

The Company may opportunistically sell electricity in the ERCOT market in exchange for cash payments, rather than utilizing the power to mine for bitcoin at the Odessa Facility to manage the Company’s operating costs. From power sales, the Company earned approximately $4.3 million and $2.3 million for the three months ended September 30, 2026, and 2025, respectively, and $8.7 million, and $4.7 million for the nine months ended September 30, 2026, and 2025, respectively, and recorded this amount within Costs and operating (expenses) income on the condensed consolidated statements of operations, with the corresponding cost of the power sold recorded in Cost of revenue - bitcoin mining.

NOTE 5. PROPERTY AND EQUIPMENT

Property and equipment, net, including leased property and equipment, consisted of the following (in thousands):

As of September 30, 2026, the Company had approximately $3,357.4 million of construction-in-progress related to construction at various sites related to building data centers for leasing to HPC tenants.

Depreciation expense was approximately $18.6 million and $59.3 million for the three months ended September 30, 2026 and 2025, respectively, and included approximately $0.6 million and $0.8 million of accretion expense related to the Company’s asset retirement obligations, and $56.5 million, and $146.5 million for the nine months ended September 30, 2026, and 2025, respectively, and included approximately $1.8 million and $1.9 million for the nine months ended September 30, 2026, and 2025, respectively, of accretion expense related to the Company’s asset retirement obligations.

The Company completed a quantitative assessment during the fourth quarter of 2025 in connection with a substantial decline in the price of bitcoin with increased network hashrate, and concluded an impairment existed on the miners and leasehold improvements at the Odessa Facility as of the assessment date. The Company recorded an impairment of $45.3 million on these long-lived assets at the Odessa Facility in Other operating losses in the year ended December 31, 2025. There wasno impairment recognized for the nine months ended September 30, 2026.

NOTE 6. MINERS HELD FOR SALE

As of September 30, 2026, the Company hasno equipment classified as held for sale. As of December 31, 2025, the Company presented separately from Property and equipment, net $94.9 million of mining rigs that the Company determined met the criteria to be classified as held for sale and were presented in Miners held for sale on the Company’s condensed consolidated balance sheets.

The Company recognized a loss of $7.4 million on the fair value of the miners during the nine months ended September 30, 2026. The loss is recorded in Other operating income (losses) on the Company’s condensed consolidated statements of operations.

NOTE 7. INVESTMENTS IN JOINT VENTURES

The Company accounted for its 49% equity ownership in each of Alborz LLC, Bear LLC, and Chief Mountain LLC (the “WindHQ JV sites”) using the equity method of accounting. The book value of these investments was included in Investment in equity investees on the Company’s condensed consolidated balance sheets, with the Company’s portion of income included in Equity in losses of equity investees on the Company’s condensed consolidated statements of operations.

Activity in the Company’s investments in equity investees during the nine months ended September 30, 2026, and 2025, consisted of the following (in thousands):

On February 19, 2026, the Company sold its 49% interests in the WindHQ JV sites to Canaan Inc (“Canaan”) in exchange for $29.4 million of Canaan common stock. In the year ended December 31, 2025, the Company recorded an additional expense in Equity in losses of equity investees to adjust the carrying value of its investments to the negotiated sale price.

In October 2025, the Company purchased 53% of the equity in Colchis LLC (“Colchis”), a joint venture of a potential 1 GW site in Texas, the “Colchis Site.” The Company is the managing member and consolidates Colchis, and records redeemable noncontrolling interest for the minority interest in the site. The Company deems the noncontrolling interest to be redeemable due to certain clauses in the agreement, which could trigger the redemption of the noncontrolling shares upon events outside of the Company's control.

Since the original purchase of Colchis, the Company made capital contributions to Colchis, which increased the Company’s ownership to 76% as of September 30, 2026.

NOTE 8. INTANGIBLE ASSETS

The Company’s intangible assets consisted of the following (in thousands):

The Company recorded amortization expense related to intangible assets of $0.2 million for both of the three months ended September 30, 2026 and 2025, and $0.7 million and $0.4 million for the nine months ended September 30, 2026 and 2025, respectively. The Company expects to record amortization expense as follows over the next five subsequent years:

NOTE 9. SECURITY DEPOSITS

The Company’s security deposits consisted of the following (in thousands):

As part of various transactions to acquire wholly owned sites, the Company has deposits with Oncor Electric Delivery Company LLC (“Oncor”), Lower Colorado River Authority (“LCRA”), City Public Service Board (“CPS Energy”), and American Electric Power (“AEP”) to construct infrastructure to provide the ability to energize each data center. These deposits are eligible to be returned to the Company if the data centers energize an agreed upon capacity within an agreed upon timeframe. As of September 30, 2026 the Company believes these deposits will be returned.

NOTE 10. SUPPLEMENTAL FINANCIAL INFORMATION

Prepaid expenses and other current assets were $56.3 million as of September 30, 2026, primarily consisting of receivables from utilities for cash deposits replaced with letters of credit, as well as the fair value of the 806,439,900 shares of Canaan Inc. common stock, acquired on February 19, 2026, as part of the sale of the Company’s WindHQ JV sites and certain mining rigs located at the Black Pearl Facility to Canaan.

Prepaid expenses and other current assets were $8.0 million at December 31, 2025, consisting primarily of prepaid insurance.

Other noncurrent assets were $555.1 million, and $562.0 million as of September 30, 2026, and December 31, 2025, respectively. The balance primarily consisted of an asset of $544.5 million at both periods representing the value of Google agreeing to make the lease payments from Fluidstack in the event of Fluidstack not fulfilling its obligations under the lease. The Company will amortize this asset over the life of the lease on a straight-line basis to recognize the benefit over the term of the benefit derived from the backstop.

The Company’s accrued expenses and other current liabilities consisted of the following (in thousands):

NOTE 11. RELATED PARTY TRANSACTIONS

Related party receivables

The Company hadno related party receivables as of September 30, 2026, and recorded related party receivables of approximately $0.3 million as of December 31, 2025, representing amounts owed to the Company from its equity method investees.

NOTE 12. LEASES

Lessor Accounting

In September 2025, the Company, through its wholly owned subsidiary Cipher Barber Lake LLC, entered into an agreement with Fluidstack for the development, construction and lease of an HPC data center facility for a 10-year term, withtwo five-year extension options, which lease was subsequently amended and restated in November 2025 (as so amended and restated, the “Fluidstack Lease”). As part of the Fluidstack Lease, the Company is required to provide certain services for the data center including supplying power, environmental controls, physical security and connectivity products to the tenant, and failure to provide these services may result in additional costs under the lease.

In connection with the Fluidstack Lease, Google LLC (“Google”) agreed to support certain payment obligations under the lease upon the occurrence of specified events. See additional information regarding this agreement in Note 16. Warrants.

In September 2026, the Company amended the Fluidstack Lease to provide for an updated phased delivery schedule, with individual data halls expected to be delivered between the fourth quarter of 2026 and the first quarter of 2027 and remove thetwo five-year extension options. Concurrently with the execution of the amendment to the Fluidstack Lease, the Company entered into a binding agreement with a leading AI lab to lease the facility for 10 years to commence following the term of the Fluidstack Lease. In connection with the amendment to the Fluidstack Lease and related tenant-modification change orders, the Company, Fluidstack and the leading AI lab established a cost reimbursement framework under which the Company will bear the first $359.3 million of costs in excess of the initial budgeted amount under the Fluidstack Lease. The tenant will reimburse the Company over the aggregate 20-year contracted term for 50% of any such costs above that amount, payable as additional rent and calculated in a manner to provide the Company with a contracted rate of return on such reimbursed amounts.

In October 2025, the Company, through its wholly owned subsidiary Cipher Black Pearl LLC, entered into a 15-year lease agreement with an investment grade hyperscaler tenant to deliver approximately 300 gross MW of turnkey data center capacity at the Black Pearl Facility (the “Black Pearl Facility Lease”). Delivery of the facility occurs on a phased basis, with the initial phase commenced in August 2026. The Black Pearl Facility Lease provides three five-year extension options, as well as a short-term extension option under specified conditions. The Company is required to provide ongoing services including power, operations and maintenance, and other operating services, and may be subject to rent credits or other remedies for failure to achieve specified milestones. Between November 2025 and July 2026, the parties entered into three amendments to the Black Pearl Facility Lease that, among other things, revised the data hall configuration and milestone delivery dates.

In March 2026, the Company, through a wholly owned subsidiary, entered into a data center lease agreement with an investment grade hyperscaler tenant for the development, construction and lease of an additional HPC data center facility at one of the Company’s existing sites in Texas. The initial term of the lease is 15 years, with multiple extension options at the tenant's election. The Company is responsible for construction of the facility, with phased delivery expected to begin in 2027. Base rent is abated prior to the first phase commencement date and commences on a per-phase basis as each phase is delivered. The Company is required to provide ongoing services including power, operations and maintenance, and other operating services, and may be subject to rent credits or other remedies for failure to achieve specified delivery milestones.

The components of the Company’s HPC leasing revenue for its commenced operating leases were as follows (in thousands):

The difference between lease revenue recognized on a straight-line basis and contractual lease payments billed is recorded as accrued rent receivable or deferred rent liability. As of September 30, 2026, the Company had accrued rent receivables of $1.4 million, included in Other noncurrent assets, and deferred rent liabilities of $46.2 million included in Deferred revenue, in the Company’s condensed consolidated balance sheets. There wereno accrued rent receivables or deferred rent liabilities as of December 31, 2025.

The following table presents the Company’s future minimum operating lease payments expected to be received from commenced lease components as of September 30, 2026. The table includes only base rent and excludes reimbursements and variable lease components:

Lessee Accounting

Odessa Facility Lease

The Company entered into a series of agreements with affiliates of Luminant, including the Lease Agreement dated June 29, 2021, as amended on July 9, 2021 and August 23, 2023 (as amended, the “Luminant Lease Agreement”). The Luminant Lease Agreement leases a plot of land to the Company for the data center, ancillary infrastructure and electrical system (the “Interconnection Electrical Facilities” or “substation”) of the Odessa Facility. The Company entered into the Luminant Lease Agreement and the Purchase and Sale Agreement dated June 28, 2021 with Vistra Operations Company LLC (the “Luminant Purchase and Sale Agreement”) to build the infrastructure necessary to support its Odessa Facility operations. The Company determined that the Luminant Lease Agreement and the Luminant Purchase and Sale Agreement should be combined for accounting purposes under ASC 842, Leases (collectively, the “Combined Luminant Lease Agreement”) and that amounts exchanged under the combined contract should be allocated to the various components of the overall transaction based on relative fair values. The Combined Luminant Lease Agreement is classified as a finance lease.

The Combined Luminant Lease Agreement commenced on November 22, 2022 and has an initial term of approximately five years, with renewal provisions that are aligned with the Luminant Power Agreement. Financing for use of the land and substation is provided by Luminant affiliates.

At the end of the lease term for the Interconnection Electrical Facilities, the substation will be sold back to Luminant’s affiliate, Vistra Operations Company, LLC, at a price to be determined based upon bids obtained in the secondary market.

Mikeska Ground Lease

In August 2026, the Company, through its wholly-owned subsidiary Mikeska LLC, entered into a Second Amendment to Ground Lease with Purchase Option with the property owner to expand the optioned land, and extend term during which the purchase option is exercisable. The Company determined that it is reasonably certain to exercise the purchase option and classified the lease as a finance lease. At the amendment date, the Company recognized a finance lease ROU asset of $18.2 million and a lease liability of $18.0 million.

Reveille Facility Lease

The Company, through its wholly owned subsidiary, Cipher Reveille LLC, assumed a lease for up to 52 acres of land in LaSalle, Texas, in October 2024 for the purpose of constructing a data center, and ancillary infrastructure. The initial term of the lease isten years, and includestwo consecutive renewal options forten years each.

Office and warehouse leases

The Company leases office space for its headquarters in New York, New York, and office space in Charleston, South Carolina, and Denver, Colorado. In September 2026, the Company entered into an agreement to terminate the license for its One Vanderbilt Avenue office effective January 30, 2027, and remeasured the related lease liability and right-of-use asset.

In April 2025, the Company entered into a commercial lease for a warehouse in Odessa, Texas.

In April 2026, the Company entered into an operating lease for office space in New York, New York.

All of the Company's office leases are classified as operating leases.

Additional lease information

Components of the Company’s lease expenses are as follows (in thousands):

The Company didnot incur any variable lease costs during any of the periods presented.

Other information related to the Company’s leases is shown below (dollar amounts in thousands):

(1)As of September 30, 2026, the Company recorded accumulated amortization of $8.9 million for the Odessa finance lease ROU asset. Finance lease ROU assets are recorded within property and equipment, net on the Company’s condensed consolidated balance sheets. The Mikeska finance lease ROU asset is not amortized, as the underlying asset is land.

As of September 30, 2026, future minimum lease payments are as follows (in thousands):

NOTE 13. COMMITMENTS AND CONTINGENCIES

Commitments

In the normal course of business, the Company enters into contracts that contain a variety of indemnifications with its employees, licensors, suppliers and service providers. The Company’s maximum exposure under these arrangements, if any, is unknown as of September 30, 2026. In the normal course of business, the Company enters into contracts with suppliers, primarily related to construction, and has commitments of approximately $1,610.1 million as of September 30, 2026. The majority of commitments relate to construction at sites with leases to HPC tenants.

Contingencies

The Company, and its subsidiaries, are subject at times to various claims, lawsuits and governmental proceedings relating to the Company’s business and transactions arising in the ordinary course of business. The Company cannot predict the final outcome of such proceedings. Where appropriate, the Company vigorously defends such claims, lawsuits and proceedings. Some of these claims, lawsuits and proceedings seek damages, including consequential, exemplary or punitive damages, in amounts that could, if awarded, be significant. Certain of the claims, lawsuits and proceedings arising in the ordinary course of business are covered by the Company’s insurance program. The Company maintains property and various types of liability insurance in an effort to protect the Company from such claims. In terms of any matters where there is no insurance coverage available to the Company, or where coverage is available and the Company maintains a retention or deductible associated with such insurance, the Company may establish an accrual for such loss, retention or deductible based on current available information. In accordance with accounting guidance, if it is probable that an asset has been impaired or a liability has been incurred as of the date of the financial statements, and the amount of loss is reasonably estimable, then an accrual for the cost to resolve or settle these claims is recorded by the Company in the accompanying condensed consolidated balance sheets. If it is reasonably possible that an asset may be impaired as of the date of the financial statements, then the Company discloses the range of possible loss. Expenses related to the defense of such claims are recorded by the Company as incurred and included in the accompanying condensed consolidated statements of operations. Management, with the assistance of outside counsel, may from time to time adjust such accruals according to new developments in the matter, court rulings, or changes in the strategy affecting the Company’s defense of such matters. On the basis of current information, the Company does not believe there is a reasonable possibility that a material loss, if any, will result from any claims, lawsuits and proceedings, to which the Company is subject to either individually, or in the aggregate.

Litigation

The Company is not a party to any material legal proceedings and is not aware of any pending or threatened claims. From time to time, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of its business activities.

NOTE 14. DEBT

Short-term borrowings

Coinbase Master Loan Agreement

The Company has the Coinbase Master Loan Agreement, under which the Company established the Coinbase Overnight Credit Facility with capacity to be determined, subject to credit review. The Company will not incur commitment fees for unused portions of the Coinbase Overnight Credit Facility. The borrowing rate on amounts drawn against the Coinbase Overnight Credit Facility is determined based on the Federal Funds Target Rate - Upper Bound, plus 2.5%, calculated daily based on a 365-day year and payable monthly for the duration of the loan, and market demand. Borrowings under the Coinbase Overnight Credit Facility are available on demand, open term, and collateralized by bitcoin transferred to the Lending Service Provider’s platform.

Current Portion of Long-term debt

As of September 30, 2026, the Company recorded $112.7 million in short-term borrowings on the Company’s condensed consolidated balance sheet as these scheduled principal payments are due within one year based on contractual terms.

Long-term borrowings

The following summarizes the Company’s long-term borrowings, net of debt issuance costs as of the period presented:

2030 Convertible Notes

On May 22, 2025, the Company issued $172.5 million of principal amount of the 2030 Convertible Notes with an interest rate of 1.75%. The 2030 Convertible Notes are senior, unsecured obligations with interest due semiannually on May 15 and November 15 each year beginning on November 15, 2025. The 2030 Convertible Notes will mature on May 15, 2030, unless earlier repurchased, redeemed or converted.

Before February 15, 2030, noteholders will have the right to convert their 2030 Convertible Notes only upon the occurrence of certain events. On and after February 15, 2030, noteholders may convert their 2030 Convertible Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. The Company will settle conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election. As the Company has the option to settle in shares, these shares are considered potentially dilutive for the calculation of diluted earnings per share. The initial conversion rate is 224.9213 shares of the Company’s common stock per $1,000 principal amount of 2030 Convertible Notes, which represents an initial conversion price of approximately $4.45 per share of the Company’s common stock.

The 2030 Convertible Notes will be redeemable, in whole or in part (subject to certain limitations), at the Company’s option at any time, and from time to time, on or after May 22, 2028 and on or before the 30 th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (2) the trading day immediately before the date the Company sends such redemption notice. However, the Company may not redeem less than all of the outstanding 2030 Convertible Notes unless at least $50.0 million aggregate principal amount of 2030 Convertible Notes are outstanding and not called for redemption as of the time the Company sends the related redemption notice. The 2030 Convertible Notes have an effective interest rate of 2.430%.

On October 16, 2026, the Company exchanged approximately $165.9 million of principal amount of the 2030 Convertible Notes for approximately 40.7 million shares of the Company’s common stock. Following this exchange, approximately $6.6 million aggregate principal amount of the 2030 Convertible Notes remains outstanding.

2031 Convertible Notes

On September 30, 2025, the Company issued $1.3 billion of principal amount of the 2031 Convertible Notes with an interest rate of 0.00%. The 2031 Convertible Notes are senior, unsecured obligations and will be equal in right of payment with the Company’s existing and future senior, unsecured indebtedness, including the 2030 Convertible Notes. The 2031 Convertible Notes will mature on October 1, 2031, unless earlier repurchased, redeemed or converted.

Before July 1, 2031, the 2031 Convertible Notes will be convertible only upon satisfaction of certain conditions and during a certain period. On or after July 1, 2031, the 2031 Convertible Notes will be convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date (the “2031 Note Conversion

Option”). The Company will settle conversions by paying or delivering, as applicable, cash, shares of its common stock, or a combination of cash and shares of its common stock, at the Company’s election. The initial conversion rate is 62.3733 shares of the Company’s common stock per $1,000 principal amount of the 2031 Convertible Notes, which represents an initial conversion price of approximately $16.03 per share of the Company’s common stock.

The 2031 Convertible Notes will be redeemable, in whole or in part (subject to certain limitations described below), for cash at the Company’s option at any time, and from time to time, on or after October 5, 2028 and on or before the 30 th scheduled trading day immediately before the maturity date, but only if (i) the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice and (2) the trading day immediately before the date the Company sends such redemption notice, and (ii) certain “liquidity conditions” (as defined in the indenture) having been satisfied. However, the Company may not redeem less than all of the outstanding 2031 Convertible Notes unless at least $100.0 million aggregate principal amount of 2031 Convertible Notes are outstanding and not called for redemption as of the time the Company sends the related redemption notice. The 2031 Convertible Notes have an effective interest rate of 6.890%.

The following table summarizes the components of interest expense recognized on the Company's convertible notes for three and nine months ended September 30, 2026 and 2025 (in thousands):

Cipher Compute 2030 Senior Secured Notes

On November 13, 2025, Cipher Compute LLC (“Cipher Compute”), a wholly owned indirect subsidiary of the Company, issued an aggregate principal amount of $1.4 billion of 7.125% Senior Secured Notes due 2030 (the “Cipher Compute 2030 Senior Secured Notes”). The Cipher Compute 2030 Senior Secured Notes are senior secured obligations of Cipher Compute and bear interest at a rate of 7.125% per year payable semiannually in arrears on May 15 and November 15 of each year, beginning on May 15, 2026. The Cipher Compute 2030 Senior Secured Notes will mature on November 15, 2030, unless earlier redeemed or repurchased in accordance with their terms. On November 24, 2025, Cipher Compute issued an additional $333.0 million aggregate principal amount of the Cipher Compute 2030 Senior Secured Notes.

The principal amount of the Cipher Compute 2030 Senior Secured Notes will amortize on a semi-annual basis on May 15 and November 15 of each year in amounts based on schedules in the indenture. No amortization will be payable prior to the completion of the Barber Lake Facility. Required amortization shall be subject to adjustment in case of partial redemption or repurchase.

On or after November 15, 2027, Cipher Compute may redeem the Cipher Compute 2030 Senior Secured Notes at its option, in whole at any time or in part from time to time, at the redemption prices set forth in the indenture. Prior to November 15, 2027, Cipher Compute may redeem the Cipher Compute 2030 Senior Secured Notes at its option, in whole at any time or in part from time to time, at a redemption price equal to 100% of the principal amount of the Cipher Compute 2030 Senior Secured Notes redeemed, plus a “make-whole” premium and accrued and unpaid interest, if any. In addition, prior to November 15, 2027, Cipher Compute may redeem up to 40% of the aggregate principal amount of the Cipher Compute 2030 Senior Secured Notes in an amount not to exceed the amount of the proceeds of certain equity offerings, at the redemption price set forth in the indenture, plus accrued and unpaid interest.

Black Pearl 2031 Senior Secured Notes

On February 11, 2026, Black Pearl Compute LLC (“BP Compute”), a wholly owned indirect subsidiary of the Company, issued an aggregate principal of $2.0 billion of 6.125% Senior Secured Notes due 2031 (the “Black Pearl 2031 Senior Secured Notes”). The Black Pearl 2031 Senior Secured Notes are senior secured obligations of BP Compute and bear interest at a rate of 6.125% per year payable semiannually in arrears on February 15 and August 15 of each year, beginning on August 15, 2026. The Black Pearl 2031 Senior Secured Notes will mature on February 15, 2031, unless earlier redeemed or repurchased in accordance with their terms.

The principal amount of the Black Pearl 2031 Senior Secured Notes will amortize on a semi-annual basis on February 15 and August 15 of each year in amounts based on schedules in the indenture. No amortization will be payable prior to the completion of the Black Pearl Facility. Required amortization shall be subject to adjustment in case of partial redemption or repurchase.

On or after February 15, 2028, BP Compute may redeem the Black Pearl 2031 Senior Secured Notes at its option, in whole at any time or in part from time to time, at the redemption prices set forth in the indenture. Prior to February 15, 2028, BP Compute may redeem the Black Pearl 2031 Senior Secured Notes at its option, in whole at any time or in part from time to time, at a redemption price equal to 100% of the principal amount of the Black Pearl 2031 Senior Secured Notes redeemed, plus a “make-whole” premium and accrued and unpaid interest, if any. In addition, prior to February 15, 2028, BP Compute may redeem up to 40% of the aggregate principal amount of the Black Pearl 2031 Senior Secured Notes in an amount not to exceed the amount of the net proceeds of certain equity offerings at the redemption price set forth in the indenture, plus accrued and unpaid interest, if any.

Stingray 2031 Senior Secured Notes

On June 15, 2026, Stingray Compute LLC (“Stingray Compute”), a wholly owned indirect subsidiary of the Company, issued an aggregate principal of $810.0 million of 6.000% Senior Secured Notes due 2031 (the “Stingray 2031 Senior Secured Notes”). The Stingray 2031 Senior Secured Notes are senior secured obligations of Stingray Compute and bear interest at a rate of 6.000% per year payable semiannually in arrears on June 15 and December 15 of each year, beginning on December 15, 2026. The Stingray 2031 Senior Secured Notes will mature on June 15, 2031, unless earlier redeemed or repurchased in accordance with their terms.

The principal amount of the Stingray 2031 Senior Secured Notes will amortize on a semi-annual basis on June 15 and December 15 of each year based on the consolidated net operating income of Stingray Compute and its subsidiaries. No amortization will be payable prior to the completion of the Stingray Facility.

Revolving Credit Facility

On March 23, 2026, the Company entered into a $200.0 million revolving credit facility (the “Revolving Credit Facility”) with Morgan Stanley Senior Funding, Inc. as administrative agent and collateral agent, and a syndicate of lenders. The Revolving Credit Facility also provides for additional accordion option of up to $50.0 million. The Revolving Credit Facility matures on March 23, 2030 (the fourth anniversary of the closing date); provided, however, that if any of the 2030 Convertible Notes (or certain refinancing indebtedness in respect thereof) are outstanding on the date that is 91 days prior to the maturity date thereof, the maturity date of the Revolving Credit Facility will spring to such earlier date (the “Springing Maturity Date”).

During the period prior to the first to occur of the commencement of operations at the Barber Lake Facility and the Black Pearl Facility (the “Pre-Completion Availability Period”), aggregate borrowings under the Revolving Credit Facility are limited to $50.0 million (the “Pre-Completion Availability Cap”). The Revolving Credit Facility includes a letter of credit sublimit of $50.0 million, which is part of, and not in addition to, the total revolving commitment.

Borrowings under the Revolving Credit Facility bear interest at a rate per annum equal to, at the Company’s election, either Adjusted Term SOFR plus an applicable margin or the Alternate Base Rate (“ABR”) plus an applicable margin. The applicable margin for Initial Revolving Loans is initially 1.750% per annum for Term SOFR borrowings and 0.750% per annum for ABR borrowings, in each case through the date the Company delivers its first compliance certificate following the fiscal quarter ending September 30, 2026. Thereafter, the applicable margin is subject to adjustment based on the Company’s Consolidated Total Debt to Market Capitalization Ratio, ranging from 1.250% to 1.750% per annum for Term SOFR borrowings. The Company is also required to pay a commitment fee of 0.500% per annum on the daily average unfunded revolving commitments, payable quarterly.

The Company’s obligations under the Revolving Credit Facility are secured on a first-priority basis by security interests in substantially all of the assets of the Borrower and each guarantor, including pledges of equity interests in the Borrower’s material subsidiaries.

The Revolving Credit Facility contains a financial maintenance covenant requiring the Company to maintain minimum Liquidity (as defined in the credit agreement) as of the last day of each fiscal quarter of: (i) $100.0 million prior to the commencement of all phases of the first of the Barber Lake Facility or the Black Pearl Facility; (ii) $150.0 million following commencement of all phases of the first such facility but prior to commencement of the second; and (iii) $200.0 million following commencement of all phases of both facilities. The Company has the right to cure a liquidity shortfall by issuing equity and designating the net proceeds thereof as cure proceeds within 15 business days following the date on which the related compliance certificate is required to be delivered. Each borrowing under the Revolving Credit Facility is also conditioned upon, among other things, the Company’s market capitalization meeting a specified minimum as of the trading day immediately preceding such borrowing. As of September 30, 2026, the Company was in compliance with all covenants under the Revolving Credit Facility.

Debt issuance costs associated with the Revolving Credit Facility are presented as a deferred asset within other noncurrent assets on the condensed consolidated balance sheets and are amortized to interest expense on a straight-line basis over the term of the Revolving Credit Facility.

As of September 30, 2026, there were $40.6 million of letters of credit outstanding under the Revolving Credit Facility andno revolving borrowings outstanding.

As of September 30, 2026, aggregate future required minimum principal payments based on the terms of the long-term borrowings were as follows:

NOTE 15. STOCKHOLDERS’ EQUITY

As of September 30, 2026,1,010,000,000 shares with a par value of $0.001 per share are authorized, of which 1,000,000,000 shares are designated as Common Stock and 10,000,000 shares are designated as preferred stock (“Preferred Stock”).

Common Stock

Holders of each share of Common Stock are entitled to dividends when, as and if declared by the Board. As of the issuance of these condensed consolidated financial statements, the Company had not declared any dividends. The holder of each share of Common Stock is entitled toone vote. The voting, dividend, liquidation and other rights and powers of the Common Stock are subject to and qualified by the rights, powers and preferences of any outstanding series of Preferred Stock, for which there currently arenone outstanding.

During the nine months ended September 30, 2026, the Company issued 4,902,606 shares of Common Stock to officers, employees and consultants in settlement of an equal number of fully vested RSUs awarded to these individuals,2,709,999 shares of Common Stock upon the vesting and settlement of performance-based stock awards, and 53,656 shares of Common Stock to directors, pursuant to grants made under the Cipher Mining Inc. 2021 Incentive Award Plan (the “Incentive Award Plan”). The Company immediately repurchased 3,033,490 shares of Common Stock from officers and employees, with a fair value of approximately $68.7 million, to cover taxes related to the settlement of vested RSUs and PSUs, as permitted by the Incentive Award Plan. The Company placed the repurchased shares in treasury stock.

At-the-Market Sales Agreement

On September 21, 2022, the Company filed with the SEC a shelf registration statement on Form S-3, which was declared effective on October 6, 2022 (the “Registration Statement”).

On August 3, 2023, the Company entered into a Controlled Equity Offering SM Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co., Canaccord Genuity LLC, Needham & Company, LLC and Compass Point Research & Trading, LLC (each, an “Original Agent” and, together, the “Original Agents”), pursuant to which the Company may offer and sell, from time to time through or to the Agents, shares of its Common Stock, for aggregate gross proceeds of up to $250.0 million. The offering and sale of up to $250.0 million of the shares has been registered under the Registration Statement, the base prospectus contained within the Registration Statement, and a prospectus supplement that was filed with the SEC on August 4, 2023 (the “Prospectus Supplement”).

On March 6, 2024, the Company entered into an amendment (the “Amendment”) to the Sales Agreement (as amended, the “Amended Sales Agreement”) by and among the Original Agents, Stifel, Nicolaus & Company, Incorporated (“Stifel”) and Virtu Americas LLC (“Virtu”). The Amendment modifies the Sales Agreement to include Stifel and Virtu as additional agents under the Amended Sales Agreement. On March 6, 2024, the Company also filed an amendment to the Prospectus Supplement (i) increasing the dollar amount of shares available to be sold pursuant to the Amended Sales Agreement, to $296,560,661, which consists of $96,560,661 remaining as originally authorized under the Prospectus Supplement and an additional $200,000,000, and (ii) including Stifel and Virtu as additional agents.

On September 3, 2024, the Company amended and restated the Amended Sales Agreement (as amended and restated, the “Amended and Restated Sales Agreement”) with the Original Agents, Keefe, Bruyette & Woods, Inc. (“KBW”), Virtu and BTIG, LLC (“BTIG”) (each, an “Agent” and, together, the “Agents”). The Amended and Restated Sales Agreement modified the Amended Sales Agreement to, among other things, include BTIG as an additional Agent under the Amended and Restated Sales Agreement and to replace Stifel with KBW as an Agent under the Amended and Restated Sales Agreement.

Pursuant to the Amended and Restated Sales Agreement, the Company may offer and sell, from time to time through or to the Agents, shares of the Company’s Common Stock, for aggregate gross proceeds of up to $725.7 million (the “Shares”), which consists of up to $600.0 million of Shares, which can be issued and sold pursuant to the Company’s shelf registration statement on Form S-3ASR, filed with the SEC on September 3, 2024, which became immediately effective upon filing, and a prospectus supplement dated September 3, 2024, filed by the Company with the SEC.

Pursuant to the Amended and Restated Sales Agreement, the Agent selected by the Company (such Agent, the “Designated Agent”) may sell the Shares in sales deemed to be “at-the-market offerings” as defined in Rule 415(a)(4) promulgated under the Securities Act. The Company has no obligation to sell any of the Shares under the Amended and Restated Sales Agreement and may at any time suspend or terminate the offering of the Shares pursuant to the Amended and Restated Sales Agreement upon notice and subject to other conditions. The Agents will act as sales agents and will use commercially reasonable efforts to sell on the Company’s behalf all of the Shares requested to be sold by it, on mutually agreed terms between the Agents and the Company. Under the terms of the Amended and Restated Sales Agreement, the Company agreed to pay the Designated Agent a commission up to 3.0% of the aggregate gross proceeds from any Shares sold through such Designated Agent pursuant to the Amended and Restated Sales Agreement. In addition, the Company agreed to reimburse certain expenses incurred by the Agents in connection with the Amended and Restated Sales Agreement. During the nine months ended September 30, 2026, the Company received proceeds of $129.2 million, net of issuance costs, from the sale of 5,496,993 shares of common stock, with an average net selling price of $23.50 per share.

NOTE 16. WARRANTS

On September 24, 2025, as consideration for Google agreeing to backstop certain obligations of Fluidstack in connection with the Fluidstack Lease, the Company entered into an agreement with Google, amended and restated on November 20, 2025 (the “Google Warrant Agreement”), pursuant to which the Company issued to Google a warrant to purchase 24,178,576 shares (the “Warrant Shares”) of the Company’s Common Stock for an exercise price of $0.01 per share of Common Stock (the “Google Warrants”), subject to adjustments related to delivery of shares to settle the 2030 Convertible Notes and the 2031 Convertible Notes. The Google Warrants have an exercise period beginning on the commencement date of the Fluidstack Lease and expiring on November 20, 2030. Additionally, if, on the business day prior to the beginning of the exercise period under the Google Warrant Agreement, the value of the Warrant Shares does not equal or exceed $435.0 million, the Company shall be obligated to issue additional Warrant Shares and/or make a cash payment equal in the aggregate to such shortfall amount on the terms set forth in the Google Warrant Agreement. The Google Warrants are recorded at fair value in Warrant liability on the Company’s condensed consolidated balance sheets and changes in the fair value are recorded in Change in fair value of warrant liability on the Company’s condensed consolidated statements of operations. See additional information regarding valuation of the Google Warrants in Note 18. Fair Value Measurements.

On October 16, 2026, the Company delivered shares to settle a portion of the 2030 Convertible Notes, resulting in an increase of approximately 2.0 million underlying Warrant Shares.

The Company recorded an asset of $544.5 million in Other noncurrent assets on the condensed consolidated balance sheets at the initial fair value of the Google Warrants at issuance to represent the value of Google agreeing to make the lease payments from Fluidstack in the event of Fluidstack not fulfilling its obligations under the lease. The Company will amortize this asset over the life of the lease on a straight-line basis to recognize the benefit over the term of the benefit derived from the backstop.

NOTE 17. SHARE-BASED COMPENSATION

The Incentive Award Plan provides for the grant of stock options, including incentive stock options and nonqualified stock options, stock appreciation rights, RSUs and other stock or cash-based awards to employees, consultants and directors. Upon vesting of an award, the Company may either issue new shares or reissue treasury shares.

Initially, up to 19,869,312 shares of Common Stock were available for issuance under awards granted pursuant to the Incentive Award Plan. In addition, the number of shares of Common Stock available for issuance under the Incentive Award Plan is increased on January 1 of each calendar year beginning in 2022 and ending in 2031 by an amount equal to the lesser of (a) three percent (3%) of the total number of shares of Common Stock outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares determined by the Board. On January 1, 2026, this resulted in an increase of 12,148,892 shares of Common Stock available for issuance under the Incentive Award Plan. As of September 30, 2026,26,765,571 shares of Common Stock were available for issuance under the Incentive Award Plan.

The Company recognized total share-based compensation in Compensation and benefits on the condensed consolidated statements of operations for the following categories of awards as follows (in thousands):

Service-based RSUs

A summary of the Company's unvested Service-Based RSU activity for the nine months ended September 30, 2026 is shown below:

As of September 30, 2026, there was approximately $41.2 million of unrecognized compensation expense related to unvested Service-Based RSUs, which is expected to be recognized over a weighted-average vesting period of approximately 0.7 years.

If not fully vested upon grant, service-based RSUs awarded generally vest over a period ranging from three tofour years in installments as determined by the Board.

Vesting is subject to the award recipient’s continuous service on the applicable vesting date; provided, that if the award recipient’s employment is terminated by the Company without “cause”, by award recipient for “good reason” (if applicable, as such term or similar term may be defined in any employment, consulting or similar service agreement between award recipient and the Company) or due to award recipient’s death or permanent disability, all unvested service-based RSUs will vest in full (unless otherwise specified in the agreement between the award recipient and the Company). In addition, in the event of a change in control, any unvested service-based RSUs will vest subject to the award recipient’s continuous service to the Company through such change in control.

Performance-Based RSUs

In 2021, the Company issued 4,257,710 performance-based RSUs (the “2021 Performance-Based RSUs”) at a weighted average grant date fair value of $7.76.

There wasno unrecognized compensation expense related to unvested 2021 Performance-Based RSUs at September 30, 2026.

In June 2026, the last of the 2021 Performance-Based RSUs vested as the Company achieved a market capitalization equal to or exceeding $10 billion.

On February 26, 2025, the Company issued an additional 2,490,943 Performance-Based RSUs (the “2025 Performance-Based RSUs”) to the Company’s senior management team under the Incentive Award Plan at a weighted average grant date fair value of $5.01. There was approximately $1.4 million in unrecognized compensation expense related to the 2025 Performance-Based RSUs at September 30, 2026, which is expected to be recognized over a weighted-average vesting period of approximately 0.27 years, regardless of whether the market conditions required for vesting are achieved.

As of the end of the performance period, the Compensation Committee of the Board of Directors certified that the Company’s common stock achieved the necessary Total Shareholder Return (“TSR”) relative to the TSR of peer companies identified in the grant agreements and overall TSR for the performance period, and earned 225% of the 2025 Performance-Based RSUs originally granted, resulting in the issuance of 5,604,621 shares. One-third of the earned PSUs vested on December 31, 2025, and the remaining two-thirds of the earned PSUs will vest in equal quarterly installments over the followingtwo years.

On February 25, 2026, the Company issued an additional 2,179,406 Performance-Based RSUs (the “2026 Executive Officer PSU Agreement”) to the Company’s senior management team under the Incentive Award Plan at a weighted average grant date fair value of $26.80. None of the 2026 Performance-Based RSUs were vested as of September 30, 2026. There was approximately $31.0 million in unrecognized compensation expense related to the 2026 Performance-Based RSUs at September 30, 2026, which is expected to be recognized over a weighted-average vesting period of approximately 0.98 years, regardless of whether the market conditions required for vesting are achieved.

On or about December 31, 2026, the Company will calculate the number of PSUs expected to vest (the “Earned PSUs”), based upon the Company’s common stock achieving certain TSR relative to the TSR of peer companies identified in the grant agreements and the overall TSR of the Company for the 2026 calendar year. The number of Earned PSUs will range from 0% to 225% of the number of 2026 Performance-Based RSUs originally granted. Subject to the employee’s continuous service through the vesting date, one-third of the Earned PSUs will vest on December 31, 2026 and the remaining two-thirds of the Earned PSUs will vest in equal quarterly installments over the followingtwo years with the first such vesting date occurring on March 31, 2027.

The grant date fair value of the Performance-Based RSUs was measured using a Monte Carlo simulation model based on the following assumptions:

On February 25, 2026, the Company also issued additional 132,660 Performance-Based RSUs (the “2026 Key Service Provider PSU Equity Grants”) to other senior employees under the Incentive Award Plan. The awards vest upon the achievement of pre-established operational, infrastructure and execution-based milestones, as approved and certified by the Compensation Committee of the Board of Directors. Performance milestones include, but are not limited to, data center delivery, timely lease payments, interconnection progress with respect to company sites, execution of additional HPC leases, and securing additional megawatts as established by the Compensation Committee at the time of grant. No awards will vest unless at leastone milestone is certified as achieved by the Compensation Committee.

Following the conclusion of the performance period, the Company will calculate the number of PSUs expected to vest based upon the level of milestone attainment. The number of Earned PSUs will range from 0% to 200% of the target award amount based on the extent to which specified performance milestones are achieved during the performance period. For 94,757 of the awards, the applicable performance period ends on December 31, 2026, and for 37,903 of the awards, the applicable performance period ends on March 31, 2027. Subject to the employee’s continuous service through the vesting date, one-third of the Earned PSUs will vest at the end of the applicable performance period and the remaining two-thirds will vest in equal quarterly installments over the followingtwo years with the first such vesting date occurring on March 31, 2027.

Compensation expense is recognized over the requisite service period based on the grant-date fair value of the award and the probability of achieving the applicable performance conditions, in accordance with ASC 718, Compensation — Stock Compensation. The Company reassesses the probability of milestone achievement at each reporting date. If a milestone is deemed not probable of achievement, any previously recognized compensation expense associated with that milestone is reversed in the period of the change in estimate, regardless of whether service has been rendered to date.

As of September 30, 2026, there was approximately $3.2 million of unrecognized compensation expense related to unvested PSUs, which is expected to be recognized over a weighted-average remaining service period of 0.98 years.

NOTE 18. FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets and liabilities measured at fair value are classified and disclosed in one of the following categories based on the inputs used to derive the fair value:

Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 — Quoted prices in markets that are not active and financial instruments for which all significant inputs are observable, either directly or indirectly; or

Level 3 — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable

The Company’s financial assets and liabilities subject to fair value measurement on a recurring basis and the level of inputs used for such measurements were as follows as of the dates indicated (in thousands):

The Company’s financial assets and liabilities not subject to fair value measurement on a recurring basis and the level of inputs used for such measurements were as follows as of the dates indicated (in thousands):

The carrying values reported in the Company’s condensed consolidated balance sheets for cash (excluding cash equivalents which are recorded at fair value on a recurring basis), accounts payable and accrued expenses and other current liabilities are reasonable estimates of their fair values due to the short-term nature of these items.

There were no transfers of financial instruments between Level 1, Level 2 and Level 3 during the periods presented.

Power purchase agreement

The Company’s power purchase agreement, related to the Luminant Power Agreement, is divided between current and noncurrent assets, and was initially recorded on its condensed consolidated balance sheets on the derivative asset’s effective date of July 1, 2022, with an offsetting amount recorded to change in fair value of derivative asset in costs and operating expenses on the condensed consolidated statements of operations. Subsequent changes in fair value are also recorded to change in fair value of derivative asset. The Luminant Power Agreement was not designated as a hedging instrument. The estimated fair value of the Company’s derivative asset was derived from Level 2, and Level 3 inputs, due to a lack of quoted prices for similar type assets and as such, is classified in Level 3 of the fair value hierarchy. Specifically, the discounted cash flow estimation models contain quoted spot and forward prices for electricity, as well as estimated usage rates consistent with the terms of the Luminant Power Agreement, the initial term of which isfive years, and a remaining term of approximately 0.8 years. The valuations performed by the third-party valuation firm engaged by the Company utilized pre-tax discount rates of 5.52% and 4.80% as of September 30, 2026 and December 31, 2025, respectively, and include observable market inputs, but also include unobservable inputs based on qualitative judgment related to company-specific risk factors. Unrealized gains and losses associated with the derivative asset within the Level 3 category include changes in fair value that were attributable to amendments to the Luminant Power Agreement, changes to the quoted forward electricity rates, as well as unobservable inputs (e.g., changes in estimated usage rates and discount rate assumptions).

The following table presents the changes in the estimated fair value of the power purchase agreement measured using significant unobservable inputs (Level 3) for the nine months ended September 30, 2026 and 2025 (amounts in thousands):

Level 3 liabilities

Google Warrants

The Company’s Google Warrants (as defined in Note 16. Warrants) were classified within Level 3 of the fair value hierarchy because the fair value is based on significant inputs that are unobservable in the market. The valuation of the Google Warrants used assumptions and estimates the Company believes would be made by a market participant in making the same valuation. The initial valuation of the Google Warrants was recorded to Warrant liability on the Company’s condensed consolidated balance sheets, and subsequent changes in fair value are also recorded to Change in fair value of warrant liability in the Company’s condensed consolidated statements of operations.

The Company engaged a third-party valuation firm to determine the fair value of the Google Warrants using a Black-Scholes option-pricing model and the quoted price of Common Stock. The following table presents significant assumptions utilized in the valuations of the Google Warrants as of the date indicated:

The following table presents changes in the estimated fair value of the Google Warrants (amounts in thousands):

NOTE 19. SEGMENT REPORTING

Prior to the third quarter of 2026, the Company hadone operating and reportable segment, Bitcoin Mining. In connection with the commencement of the initial phase of the Black Pearl Facility Lease in August 2026, the CODM began regularly reviewing discrete financial information for the Company’s HPC leasing activities to assess performance and allocate resources. As a result, beginning in the third quarter of 2026, the Company hastwo operating segments, Bitcoin Mining, which through operations produces bitcoin to generate revenue, and HPC Leasing through which data centers are constructed and leased to tenants for HPC. The CODM for the Company consists of the CEO and CFO. The CODM reviews the performance of the Company’s operating segments primarily based on operating income when deciding on allocating resources. As a result, the Company retrospectively recast prior period results by segment to conform to the current period presentation. Asset information by reportable segment is not regularly provided to the CODM for resource allocations and, accordingly, segment asset information is not presented.

The Company’s revenues, significant expenses, operating income, and net income by segment for the three months ended September 30, 2026, and 2025 are summarized in the following table (in thousands):

The Company’s revenues, significant expenses, operating income, and net income by segment for the nine months ended September 30, 2026, and 2025 are summarized in the following table (in thousands):

NOTE 20. INCOME TAXES

The determination of income tax expense in the unaudited condensed consolidated statements of operations is based upon the estimated effective tax rate for the year, adjusted for the impact of any discrete items which are accounted for in the period in which they occur. The Company recorded an income tax benefit of approximately 0.2% of income before taxes and 8.4% of loss before taxes for the three months ended September 30, 2026 and 2025, respectively, and income tax expense of approximately 0.2% and 0.9% of loss before taxes for the nine months ended September 30, 2026 and 2025, respectively.

The Company’s income tax expense is primarily driven by state income taxes.

NOTE 21. SUBSEQUENT EVENTS

The Company has evaluated subsequent events for adjustment to or disclosure in its condensed consolidated financial statements through the date of this report. No subsequent events have been identified other than those disclosed in these condensed consolidated financial statements except for the following:

On October 16, 2026, the Company exchanged approximately $165.9 million of principal amount of the 2030 Convertible Notes for approximately 40.7 million shares of common stock. Following this exchange, approximately $6.6 million aggregate principal amount of the 2030 Convertible Notes remains outstanding.

On October 16, 2026, the Company issued $850.0 million aggregate principal of the 2032 Convertible Notes. The 2032 Convertible Notes are senior, unsecured obligations of the Company and will mature on November 1, 2032, unless earlier repurchased, redeemed or converted. The initial conversion rate is 65.3211 shares of the Company’s common stock per $1,000 principal amount of the 2032 Convertible Notes, which represents an initial conversion price of approximately $15.31 per share of the Company’s common stock. The Company granted the initial purchasers an option to purchase up to an additional $150.0 million aggregate principal amount of the 2032 Convertible Notes, which expired without being exercised. In connection with the pricing of the 2032 Convertible Notes, the Company entered into privately negotiated capped call transactions (the “Capped Call Transactions”). The Capped Call Transactions cover, subject to customary anti-dilution adjustments, the number of shares of the Company’s common stock that initially underlie the 2032 Convertible Notes. The Capped Call Transactions are generally expected to reduce the potential dilution to the Company’s common stock upon any conversion of the 2032 Convertible Notes, and/or offset any potential cash payments the Company is required to make in excess of the principal amount of converted 2032 Convertible Notes, as the case may be with such reduction and/or offset subject to a cap. The cost of the Capped Call Transactions was approximately $89.7 million. With the net proceeds of the 2032 Convertible Notes, the Company funded capped call transactions, and the Company expects to use the remaining proceeds to fund the additional equity investment at Barber Lake, continue to develop its sites, and for general corporate purposes.